HB 172 :###ifil^#^^^####%^^»^^^ ^ .S24 1^ Copy 1 PRICE. 10 CENTS. 1^ ,y ■ ^^ I PracticalEconomics I Z WHO GETS THE BENEFIT OF THE INCREASED PRODUCTIONS , T ^ 1# ^ OF HUMAN LABOR DUE TO MODERN INVENTIONS? # #j WHAT DETERMINES VALUE? # ^1 Money. Panics. ^ Tp" I ^^ t Labor and Capital. Trusts. ^ Copyright, 1900, by Arthur Louis Sardy. CHICAGO : DONOHTJK BROS., 40T-42n DEARBORN STREET. Government Ownership of Railroads # Interest. Taxes. t Protection and Free Trade. | # 1000. ^ # 1^ ####»#•# ^%^^###^^%#^j^#%#^ The following- works are for sale by all News Dealers, or will be sent to any address in the U. S., Canada or Mexico, postage paid, on receipt of 25 cents, or five books for $1.00. DONOHUE BROTHERS, CHICAGO. Abbe Constantin, Tbe Ludovic Helevy Afloat in the Forest Capt. Mayne Reid Alhambra, The Washington Irving Allen Quartermain H. Rider Haggard Antoinette George Ohnet Ardath Marie Corelli Auld Licht Idylls J. M. Barrie Bailiff's Maid, The E. Marlitt Beyond Pardon Bertha M. Clay Beyond the City A. Conan Doyle Black Beauty Anna Sewall Blue Veil, The ... , F. DuBoisgobey Bondman, The Hall Caine Broken Wedding Ring, A. Bertha M. Clay 3y Order of the King Victor Hugo Called Back Hugh Conway Camille Alexandre Dumas Chouans, The Honore de Balzac Claribel's Love Story Bertha M. Clay Cleopatra — H. Rider Haggard Corsican Brothers, The.. Alexandre Dumas Count of Monte Cristo . . . Alexandre Dumas Crooked Path Mrs. Alexander Daniel Boone G. Canning Hill Dark Days Hugh Conway Dark Marriage Morn, A. .Bertha M. Clay Deemster, The . Hall Caine Desert Home Capt. Maync Reid Dick's Sweetheart The Duchess Donovan Edna Lyall Dora Thorne Bertha M. Clay Dream Life D. G. Mitchell Dream of Love, A Emile Zola Duke's Secret, The Bertha M. Clay Earle's Atonement,5The. .Bertha M. Clay East Lynne Mrs. Henry Wood Edmund Dantes Alexandre Dumas Egyptian Princess, An .. George Ebers Evil Genius, The Wilkie Collins First Violin, The Jessie Pbthergill Flames E. Werner Toiled by Loving Bertha M. Clay Fortune of the Rougons . Emile Zola From Out the Gloom Bertha M. Clay Frontier Humor Palmer Cox Frozen Pirate, The W. Clarke Russell Gertrude's Marriage W. Heimburg Gold Elsie E. Marlitt Golden Heart, A Bertha M. Clay Hand of Destiny, The. . .Ossip Schubin Handy Andy Samuel Lover Hania Henryk Sienkiewicz Hans of Iceland Victor Hugo Hardy Norseman, A Edna Lyall Heiress, The Mrs. M. E. Holmes Heir of Linne, The Robert Buchanan Her Martyrdom Bertha M. Clay Her Only Sin Bertha M. Clay Her Second Love Bertha M. Clay Her Sister's Betrothed. .Bertha M. Clay History of a Crime Victor Hugo Hon. Mrs. Vcreker The Duchess House of the Wolf, The. Stanley J. Weyman Hypatia Charles Kingsley Idle Thoughts of An Idle Fellow . J. K. Jerome In the Golden Days Edna Lyall "\- Iron Master, The George Ohnet Ivanhoe Sir Walter Scott Jane Eyre Charlotte Bronte Jess ..H^Rider Haggard John Halifax, Gentleman, Miss Mulock Kenilworth Sir Walter Scott King Solomon's Mines .H. Rider Haggard King's Talisman, The. . .Sylvanus Cobb, Jr. Knight Errant Edna Lyall Lady Branksmere The Duchess ^ Lady Hutton's Ward Bertha M. Clay Lady Valworth's Diamonds. .The Dilchess Lamplighter, The Maria Cummins Last Days of Pompeii. . .Bulwer Lytton Last of the Mohicans. . .J. Fenimore Cooper Lecoq, The Detective. . .Emile Gaboriau Lerouge Case, The Emile Gaboriau Let us Follow Him Henryk Sienkiewicz Life's Remorse, A The Duchess Light of Love, The Bertha M. Clay Light That Failed, Thc.Rudyard Kipling' Lone Ranch, The Capt. Mayne Reid Lora, the Major's Daughter. . W. Heimburg Lord Linn's Choice Bertha M. Clay Lorna Doone R. D. Blackmore Love'sChainBrolien Bertha M. Clay Lover or Friend Rosa N. Carey ' Louise de la Valliere Alexandre Dumas Mad Love, A Bertha M. Clay Madcap Violet William Black Man in the Iron Mask. . .Alexandre Dumas Marriage M Sea, A W. Clarke Russell Marvel The Duchess Mary St. John Rosa N. Carey Master of Ballantrae Robt. L. Steve^^sor Melancholy Hussar, The. Thos. Hardy Miawa's Revenge H. Rider Haggarf" Micah Clark A. Conan Doyle Mildred Trevanion The Duchess Misjudged W. Heimburg Money Emile Zola My Danish Sweetheart. W. Clarke Russell My Sister Kate Bertha M. Clay Mystery of a Hansom Cab . . Fergus Hume Natural Law in the Spiritual World. . . Henry Drummond New Magdalen, The Wilkie Collins Ninety-Three Victor Hugo Notre Dome de Paris Victor Hugo Old Age of Lecoq, The. .F. Du Boisgobey Old Mam'selle's Secret. .E. Marlitt On Her Wedding Morn. .Bertha M. Clay Onlv One Sin Bertha M. Clay Pair of Blue Eyes, A Bertha M. Clay Pathfinder,' The J. Fenimore Cooper Pastor's Daughter, The.W. Heimburg Phantom Rickshaw,The . Rud yard Kipling Pioneers, The J. Fenimore Cooper Prairie, The J. Fenimore Cooper Prince of the House of David . J. H. Ingraham Prue and I Geo. Wm. Curtis Queenie's Whim Rosa N. Carey PracticalEconomics WHO GETS THE BENEFIT OF THE INCREASED PRODUCTIONS OF HUMAN LABOR DUE TO MODERN INVENTIONS? WHAT DETERMINES VALUE? Money. Panics. Labor and Capital. Trusts. Government Ownership of Railroads Interest. Taxes. Protection and Free Trade. BY ARTHUR LOXJIS S-A.R3DY. 1900. Copyright, 1900, by Arthur Louis Sardy. CHICAGO I DONOHX^E BROS., 40r-420 X>EARBORX STREBTT, u 34684 Library of ConQreae Two Copies '^fCEc.'ED AUG 15 1900 Copyright entry SECOND COPY. Delivered to ORDER DIVISION, OCT 2d 1900 COPYRIGHTED BY Abthur L. Sakdy. INTRODUCTORY. The discussions of economic subjects in newspapers and legislative bodies, as well as in private conversa- tion, which we all read and hear, show that Economic Science has not kept pace with other sciences, and that the knowledge of it which does exist is not as widely diffused as information on most subjects, even those which are of far less importance. Nearly every one is willing to admit that something is wrong with modern civilization, and almost every one has some remedy to propose. Millions believe that the free coinage of silver would put us right, as though the kind of counters used in making exchanges were a matter of vital consequence, or the kind of chips used in playing poker would affect the result of the game, and ignoring the obvious fact that countries where silver is the only circulating medium are worse off than we are, just as are those where only gold, or only paper, is used. Others think free trade is all that is needed, but the masses in England are no better fed or clothed than here. Still others think we need more protection, but I have never heard that the working classes in Ger- many or France are more contented, happy or inde- pendent than with us. Others denounce trusts and combinations of capitalists as the chief cause of our troubles, while some think trades unions and combi- 6 ECONOMICS. nations among workers detrimental to the general good, as though co-operation, mutual good-will and help were injurious, and fierce competition and opposition, every man trying to injure, instead of help, his neigh- bor were a good thing. Many of the changes proposed would aggravate the evils they were intended to remedy. Some of the more radical remedies might cure some of the ills we have, but would bring in others which would be found still more unbearable. It is easy to see that under state so- cialism production could be increased to such a point that while all would have to work, the hours of labor could be so shortened that all would enjoy ample leisure and none need ever want, but in order to accomplish this all but a few would have to sacrifice that personal liberty which is far dearer to every true American than any degree of ease or comfort. It is, perhaps, justifiable to experiment with all sorts of proposed cures while trying to ascertain what the disease is, but while this is being done efforts to discover the causes of the trouble should not be relaxed, and it is in the hope that I may be able to give some slight assistance in pointing out some of these causes that I have under- taken this little work, devoting comparatively little attention to the more congenial task of proposing rem- edies because I believe that progress and improvement must unavoidably be gradual and painfully slow in the future, as they have been in the past, and that, at best, a generation or two must elapse before any really high degree of civilization can be found anywhere; so the chief step which I take the liberty of advocating is the better education of our children, especially on ECONOMICS. 7 economic subjects, with the view of teaching them to think deeply, intelligently, independently and continu- ously for themselves. For centuries, and until very recently, children, and their parents also, were sys- tematically educated not to think for themselves, but to accept without question what was taught them by "their betters," the severest means being resorted to for the purpose of repressing originality and inde- pendence of thought and action. A start has been made in the opposite direction, but it is only a begin- ning. As a matter of economy it would be cheaper to spend a given amount of money on education and the devel- opment of intellect than in the suppression of crime and the support of criminals, either free or in confine- ment. In all countries crime and ignorance go to- gether, the comparatively few crimes committed by educated persons being usually due to natural defi- ciency of intellect, which education could only remedy to a limited extent, or to some sudden impulse, and this latter is infinitely less likely to result in crime in persons of trained intellect than in the untaught. Every dollar spent on education could be made to save two or more in taxes, thefts, waste, the support of criminals and of those dependent upon crime directly or indirectly for a living. There is an immense num- ber of people, both male and female, who are not strong enough physically to earn a living by manual labor, who have not been taught any profession, and who have not leceived sufficient mental training to enable tlicm tc compete successfully for positions where the continued exercise of the mental faculties is required. 8 ECONOMICS. Nrtwithstanding the stock jokes about the appetites and other indications of robust health in tramps, a majority of those whom I have met have been weak physically as well as mentally. There are hundreds of thousands of men and women in this country whose muscles have not been developed by sufficient work or exercise while young to enable them to do severe manual work, and who have never been educated to do anything useful, thoroughly and well. I believe it is chiefly from this class that the army of young women on the streets of all large cities at night is chiefly recruited, many of whom have, when thrown on their own resources, found all other means of obtaining a livelihood closed to them because of lack of physical strength to do hard work, and of education to do any- thing for which there is a remunerative demand. And the same is true of many young men, who have drifted into crime after unsuccessful efforts to secure, or hold, useful positions. Many of both sexes would go wrong under any conceivable conditions, but thorough prac- tical education would vastly reduce the number. Great good has sometimes come from violent up- heavals; an incalculable amount having been accom- plished by our Revolution; much resulted from the French Revolution, but it was mixed with so much evil that the strongest sincere advocates of the welfare of the people agree that it is incomparably better to ac- complish the same results by education than by force. Any amount of money is better spent for schools and competent teachers to educate the next generation than for arms and soldiers in the hope of keeping the masses down. When the majority of our people come ECONOMICS. 9 to understand that the chief reason why they have to work so hard and receive so little in return is because each worker has to support so many who do not work at all, or who work unproductively ; that there are too few workers, not too many, remedies will be found. But before this can come about the great mass of the people will have to be educated to reason more clearly than many of their teachers can reason now. In our public schools it takes seven or eight years to go through a course of study which any intelligent child could, under favorable conditions, master in half that time. Some things are taught as facts which are simply matters of opinion, and others which are so obviously untrue as to excite the ridicule of an intelli- gent and observant child of eight or ten years of age. We can never cure the ills which afflict us until we know what those ills are, and the first step toward discovering them is to develop our intellects to such a point that we can reason clearly. This development must, unavoidably, be gradual, but with better oppor- tunities it might proceed much 'faster than at present. The waste of labor and capital attributable solely to ignorance is appalling. Millions of dollars are ex- pended annually in producing, handling, transporting, storing and selling materials of no intrinsic value, and used solely to adulterate, cheapen or give a false ap- pearance to goods which the consumer buys only because, in his ignorance, he thinks them "cheap." Millions are spent by people who are not ill for medi- cines which would not cure them if they were. Other millions are wasted in gambling by men and women who may have been told that gambling is "wicked," IP ECONOMICS. but who can learn only by experience that the per- centage against them renders ultimate loss a certainty. Independence, originality and practicability are, I believe, now encouraged in the higher institutions of learning to a greater extent than ever before, but this idea should be carried much further, and should be introduced into the public schools. Most of us have met men who cannot write a sen- tence correctly and who habitually use two negatives in conversation, but in whom the ability to think for themselves, and to put their ideas into practice, has been so thoroughly developed that they have been able to organize and manage industries employing hun- dreds of workers, and to cause the production or dis- tribution of wealth at a far more rapid rate than it could have been produced or transported without them. It looks a little as though these men were better edu- cated than many who have received what is termed a classical education, which has resulted in total inability to take care of themselves. A decided change for the better seems to be goif^ on in public opinion regard- ing what constitutes a good education in both men and women, and the sooner it comes to be generally under- stood that useful education consists more in develop- ing to the fullest extent the natural ability of the pupil to think and reason on practical subjects than in com- mitting to memory a multitude of things, many of which are not true, the better it will be for all. Most of us know entirely too much that is not so. The most learned and the totally untutored fre- quently share the same opinions, the greatest bar to progress, it appears to me, being the conservativeness ECONOMICS. II of those who have been educated, in the accepted sense of the term, but who allow newspapers to form most of their opinions for them because their minds have not been sufficiently trained to enable them to think for themselves without a degree of effort which is too painful to be long continued. It being usually more profitable to newspapers to advocate what is than what should be, erroneous opinions on economic matters held by a majority of their readers prevent any but the most gradual advance, and as the changes which must take place before all can enjoy even a moderate degree of comfort are very great, including important modifications of the present generally re- ceived ideas of Right and Wrong, Honor, Justice, Charity and Patriotism, it is idle to expect quick results. Time alone can bring about the requisite conditions, but their approach is hastened by the cor- rection of each popular error, and if I can succeed in pointing out even a few of these the time spent in writing this little book will not have been wasted. No attempt will be made to go deeply into the inexhaust- ible subject of Political Economy. We shall confine our attention chiefly to those matters on which I believe the prevailing popular opinion to be erroneous, in the hope of discovering the real causes of some of the ills which afflict us, and of demonstrating that some things which are popularly regarded as serious evils in reality do little or no harm, while some others which are generally thought harmless, or even bene- ficial, accomplish much evil. My aim will be to state positively only that which is so clear that any one who can read can understand it, 12 ECONOMICS. and which is so evidently true that it cannot be con- troverted. Figures cannot lie, but it is so very easy to lie with figures, and this is so often done, that I place little reliance on statistics, and none will be used in the book. WHO GETS THE BENEFIT OF THE IN- CREASED PRODUCTIVENESS OF HUMAN LABOR DUE TO MODERN INVENTIONS? John Stuart Mill wrote "Hitherto it is questionable whether all the mechanical inventions yet made have lightened the day's toil of any human being," which has been often approvingly quoted, but a greater amount of error has seldom been condensed into so few words. Not only has the labor of millions been light- ened, but other millions have been enabled to live in luxury without ever engaging in any useful occupation or doing anything which could correctly be denomi- nated as labor; and in every civilized country there are today hundreds of thousands who "toil not, neither do they spin," and who, but for modern inventions, would have been earning their bread by the sweat of their brows. Mechanical inventions have not only lightened the labor of the producing class, but they have enabled every worker to carry far more non- producers on his back than he could possibly have done without their aid. By continually increasing the effec- tiveness of his work they have enabled him to accept in payment for that work a constantly decreasing pro- portion of its results without lowering his own stand- ard of living. Seeing that those who work with mod- ern machinery are comparatively little better off than ECONOMICS. 13 their ancestors were without these inventions, those who do not look beneath the surface of things are at a loss to see where the results of the increased effi- ciency of labor finally land ; but a little reflection on the subject enables one to see that if modern inventions had not made it possible for real workers to live on a comparatively small proportion of what they produce they could never have supported the vast armies and navies of Europe, paid enormous and constantly increasing rent for land, paid the interest on almost incalculable national debts, and created millionaires by the thousand. By far the greatest part of the surplus of wealth created, over and above the subsistence of those who produce it, goes to the owners of land. Fifty years ago a tenant farmer was a rarity in this country, but with the increase in population, the consequent aug- mented supply of labor and the proportionately reduced amount of land, a continually increasing proportion of the produce of the soil went to the farmer as land- lord and a continually diminishing proportion went to him as farmer. The shrewd American farmer has not been slow to perceive this state of affairs, and as it has become apparent to him that in tilling his own land he is merely earning the wages of an intelligent laborer and that all he receives over and above that could be realized by renting his farm, he has, by the thousand, rented it and moved to town, the renter thenceforth supporting the landlord and the landlord's family, as well as himself and his own family. This he never could have done, to anything like the extent he is doing it, without the help of improved agricultural machinery, 14 ECONOMICS. every dollar saved by the use of such machinery going intact to the landlord, the tenant rarely being benefited to the extent of a single cent by its use, although he, of course, must own and use it industriously, or a competitor who does will be able to offer a higher rent than he can pay, and thus supplant him. In every little town throughout the west there are ex-farmers and their families living in comfort on the rent paid them by the men now tilling the land which they tilled, and partially exhausted, without paying any rent. In every city the finest residences and the hand- somest turnouts are owned by the people who, or whose parents, happened to own the land. I say happened because the land was there and some one had to own it, and it was about as likely to be one as another. Thousands of able-bodied men and women in every large city are living today on the results of other peo- ple's labor because they happened to own a piece of land which has risen in value. Without the help of modern machinery it would be impossible for* the productive classes to support one-tenth the number of landlords in the way they are now being supported. When improvements in architectural science make office buildings sixteen to twenty stories high prac- ticable neither the general public, the tenants nor the owner of the building, as such, is benefited. The increased income goes to the owner of the land on which the building stands. This is so well understood that it is becoming more and more the custom with owners of land in the busiest portions of large cities to refuse to sell it at any price, but to rent it for long terms, thus securing a large and perpetual income on ECONOMICS. 15 capital which does not represent work ever done by any one. To enumerate the various ways in which the owners of land appropriate the results of inventions and improvements would increase the size of this little work beyond the limits set for it, and the whole subject has been so thoroughly explained by Henry George and other writers of ability and attainments so far beyond my own that the reader is referred to their works for a full and clear exposition of the subject. To superficial observers the true state of the case is somewhat obscured by the fact that capital invested in land does not, apparently, yield a higher rate of income than other investments, but, as shown in the chapter on value, it is the value which makes the cost, and not the cost the value, so the value of land, as that of any other investment, is raised to the point where the rent amounts to the usual rate of interest on cap- ital ; but there are millions of acres of farming land throughout the west rented at three or four dollars an acre per annum which was purchased for twenty-five cents to two dollars an acre less than fifty years ago, so that it pays from one hundred to one thousand per cent per annum on the original cost. And it would be an interesting problem for a mathematician to calcu- late what percentage an acre, say on Wall street. New York, has paid on its original cost since the first time it was sold. Next to private ownership of land probably the most successful device yet discovered for enabling one class to ride on the backs of others, and even for the citizens of one country to live largely on those of others, is the government bond (mortgages on land are ignored, 1 6 ECONOMICS. because I regard the mortgagee as the real owner and the mortgagor as merely a tenant). The interest paid annually on the national, state and municipal debts of the world computed in dollars and expressed in figures would represent a sum far beyond the capacity of any human mind to form any definite conception of. If it were not for the vastly increased productiveness of labor due to mechanical inventions it would be far beyond the power of the productive classes to produce enough, in addition to their own support, to pay the interest on these bonds. Bondholders probably come next to landowners as the receivers of the results of improved methods. When one gives serious thought to the matter a hundred dollars appears like a ridicu- lously small sum to pay for a bond insuring the pay- ment by the public of three dollars annually to one's- self and one's heirs forever. Surely the labor of land- lords and bondholders has been lightened by mechan- ical inventions. Hundreds of thousands of both classes who now live in luxury on their rents or their interest would, but for these inventions, be toiling for their daily bread, because without these the working classes would be unable to support them. Fifty years ago the owner of property to the value of a hundred thousand dollars was regarded a rich man. Now there are thousands worth from one to fifty millions each. The accumulation of so much wealth within so short a time has been made possible by the use of modern inventions. Railroads have doubtless created more great fortunes than anything else except the increase in the value of land, the various methods by which any one in control of a railroad can ECONOMICS. 17 enrich himself being so simple and obvious that they have been very generally availed of. The armies of the world are fed and clothed by the producing classes. Whether the money paid for their support be raised by direct taxation or by selling bonds, every article of clothing worn by them and every morsel of food which they consume must be produced by working men and women, and is con- sumed by able-bodied men who do not work. The increased productiveness of labor due to modern inven- tions, therefore, goes largely to the support of soldiers in idleness and for building and maintaining warships which if unemployed are useless, and if used are often infinitely worse than useless. When the money to pay for these things is raised by direct taxation it is bad enough, but when it is raised by selling bonds it is still worse, for in the latter case the interest on the bonds must, thereafter, be added to the cost of supporting the army and the navy, making an army of bond- holders as well as an army of soldiers to be supported. As fast as the march of improvement in machinery and labor-saving appliances makes it possible for the pro- ductive portion of the population to support more non- producers new issues of bonds are floated and rents are raised, thus always keeping a load on the backs of the people as heavy as they can carry with the aid of the latest inventions. The sums now paid annually for rent, interest on state, county and municipal bonds, and for the main- tenance of armies and navies, as compared with the amounts expended for similar items a century ago will, I think, pretty nearly account for what becomes of l8 ECONOMICS. the difference in the productiveness of labor then and now. The fortunes made by the rise in the value of land and in managing railroads, and by monopolizing a few natural opportunities will account for the rest. VALUE. The best definition of the word value which I re- member to have seen is "a relative term meaning the amount of other things which a given thing will exchange for." This is merely another form of the expression so often used by business men that "a thing is worth just what it will bring," price being value expressed in money. Economists have usually as- sumed some relation between utility and value, but there is no real connection between them. Every one can readily think of many useful things which have no value and of many valuable things which have little or no use. The value of a thing at a given time and place is just what it will exchange for at that time and place ; its value tomorrow may be double, or only half, what it is today; or, in some other location, its value would, perhaps, be many times as great as where it is. All talk of a thing selling for more or less than its value is meaningless; it is worth, then and there, just what it brings. Having stated what is meant by value, I will try to show that the amount of other things which a given thing will exchange for is determined solely by the amount of the available supply as compared with the urgency of the demand existing for it at the time and place where it is located. No particular supply of any commodity is necessary, and there is practically no ECONOMICS. 19 limit to the demand for it if the price be low enough. A small supply at a high price completely satisfies the demand which exists for it at that price, while a supply many times as large would be all used up at a lower price. The available quantity determines the price and the price determines the consumption. The price, when the supply is large, compared with the demand, always being reduced, step by step, till consumption overtakes production. On the other hand, if the sup- ply is small prices are raised gradually to the point where the demand is as small as the supply. Thus a small crop lasts till the next harvest, or a large one is all consumed, the price regulating consumption to a nicety ; and every hat, coat and shoe manufactured is, sooner or later, used up, those not meeting with ready sale being finally reduced in price till some one takes them. All attempts by the aid of corners, combina- tions, trusts, protective tariflFs and other devices to market a large product at a high price always have resulted, and always must result, in failure. As the price is raised the consumption is diminished, and in order to effect the consumption of the entire stock the price must, sooner or later, be reduced not only to the natural value of the commodity, but enough below it to cause an increased demand sufficient to offset the economy or substitution practiced by the consumers while the value was artificially maintained above its natural level, so that if the commodity cornered be a crop or a by-product the entire crop or product will sell for about the same amount of money, or exchange for the same amount of other things, as though no comer had been attempted. But if the article cornered 20 ECONOMICS. be one the amount of which is not limited by nature the temporarily increased value will cause an aug- mented supply to be produced which must eventually be disposed of, and the average price for a given period will be lower than if the corner had not been undertaken. No man with a thorough knowledge of practical economics ever undertook to run a comer in a commodity with his own money. The popular idea that cost of production determines value is plausible but untenable. John Stuart Mill wrote that there was nothing more to be learned about value and then proceeded to say that value is usually determined by cost of production; but a little study on the subject will, I think, demonstrate that the reverse is often true, value frequently determining cost of production. It is not that goods always sell close to the cost of production, but that the cost of production is raised to a point approximating the value of the product. If the crops from a piece of land sell for more than the cost of the labor required to produce them the excess is added to the rent or value of the land and ever after is a part of the cost of producing crops upon it. The only reason why it costs more to raise wheat in England than in Dakota is because wheat is worth more in England and the cost of production is increased to correspond with the value of the product by charging a high rent for the land. When a mine yields abundantly of valuable ore the mine is capitalized at a high figure and the interest on this capitalization becomes a part of the cost of the ore, so that its cost and its value thereafter closely correspond. If a racehorse distinguishes itself on the ECONOMICS. 21 turf the value of all its relatives is enhanced to a point which brings the cost of producing another of the same blood fully up to, or above, its value. It costs no more to raise a pound of beef or mutton from the hindquarter than from the forequarter, or a ham than a shoulder, but the meat from the hindquarter is always more valuable than that from the fore. Competition among sellers has far less to do with fixing values than is generally supposed. Even though the entire supply of an article be in the hands of a single individual, as was very nearly the case a couple of years ago with wheat in this country, no higher price can be obtained for the entire amount than if the usual competition existed. The public can only take a certain quantity at a certain price; nothing short of a reduction in price will induce it to take more. A person's income being appropriated in a certain way, an increased expenditure for one item would necessitate a reduction on one or all of the others. Assuming the most extreme case it is possible to conceive — namely, that a single individual owned and controlled absolutely all the means of production, every farm and every factory on earth, it would be impossible for him to exact any higher prices for his products than they now bring, because the most he could require would be the entire earnings of all the people, and that is precisely what they pay now for lodging, food, drink, clothing and amusement. A general rise in the value of everything being, obviously, an impossibility, when a rise in one article takes place a majority of the consumers of it prefer to curtail the use of it, substituting something cheaper, or do with- 22 ECONOMICS. out altogether, rather than appropriate a larger part of their incomes to that article and reduce the appro- priation for others. The law of Supply and Demand is the sole regulator of values, and while its action is often harsh, and ignorance of its inexorable nature brings frequent loss, and even financial ruin, to indi- viduals, and sometimes to whole communities, it is doubtful whether the human intellect in its present state of development is capable of devising any plan which would so effectually adjust production and con- sumption to each other, thereby preventing famine and many other serious disasters. Without the re- straining influence of a high price a small crop of wheat or cotton would not last till the next harvest. Many a man of more than average intelligence and energy, and possessed of abundant wealth, but un- aware of the absolute sway of the law of Supply and Demand, has lost every dollar of his own, and all the capital he could beg, borrow (and in some instances steal) in well-planned and executed, but futile, efforts to control values. Such a man can put up prices as long as he has sufficient money or credit to take all offerings at the high prices which he himself has fixed, but while he is doing this consumers of the commodity are using less of it than usual, substitutes are being used to a great extent, and supplies come in from unexpected sources, so that when he gets ready to, or must, unload the market goes lower than it would have gone if the artificially high price had not caused a curtailment of consumption. When the entire supply of a commodity comes from a single source, or when all the sources are controlled ECONOMICS. 33 by one individual, trust or syndicate, it is possible for those in control to decide whether they will limit pro- duction to what the market will take at a high price, or whether they will sell a larger quantity at a more moderate price. Sometimes one ct)urse is adopted, and sometimes the other. When the policy of doing a comparatively small business at an exorbitant price is adopted the monopoly is directly and positively det- rimental to the public welfare, but after trying both plans it is usually found to be more profitable to produce on a large scale and sell at a comparatively reasonable profit. It should be clearly understood that it is neither supply nor demand alone which determines value, but the ratio of one to the other, and in many things the whole world must be reckoned with. For instance, wheat may sell higher in a year when we have a larger crop in this country than usual, providing the crop in other countries is small, than it sold in some other year when we had a small crop and other countries had large ones. An increased demand for an article does not, by any means, always result in an advanced price ; the reverse is frequently the case, because production increases faster than consumption does. Bicycles are a good illustration of this. Their use has increased enor- mously in the last few years, and simultaneously their price has fallen considerably. It takes a wider fluc- tuation in the wholesale price of an article, the profit on which, between the wholesaler and the retailer, is large, to affect its consumption than it does in one which is sold on a close margin, narrow fluctuations 24 ECONOMICS. being absorbed by the retailer when he has sufficient margin of profit to admit of it. The value of money is determined by supply and demand, the same as all other values are. In pros- perous times owners of money are ready and willing to spend it; in other words, the demand for goods exceeds that for money, and prices rise, that is to say, money declines in value. On the other hand, in hard times the majority of people want money rather than goods, and prices fall, or money advances in value. It is not high prices and cheap money which make good times, and low prices and dear money which make hard times, but good times make money cheap, and hard times make it more valuable by increasing the demand for it while the available supply is not increased. MONEY. Money was invented for the purpose of avoiding the inconvenience of the direct exchange of commodities. This is its only use, and that which accomplishes this best and easiest is the best money. The amount of money in existence is a matter of small consequence. It is a mistake to suppose there is not sufficient money in any country to supply the needs of its business. The value of money, like that of everything else, being determined by its amount as compared with the de- mand existing for it, it amounts to the same thing whether the money in use is large in volume and small in value, or of high value and small volume. Prices of everything, labor included, speedily adjust them- selves to either condition, and paper substitutes for real money are, in all civilized countries, used to such ECONOMICS. 25 an extent that even in the matter of convenience in handling it makes but Httle difference whether a sub- stance of high or one of comparatively low value be adopted as the standard of value. The one important consideration is stability. The substance the least liable to fluctuations in value is the best adapted for use as money. Injustice is done to creditors when the value of money depreciates or when a substitute for real money is made a legal tender and enough of it issued to cause its value to fall below par. This has often been done in all parts of the world, notably in this country when debts contracted prior to the revolution where paid in continental currency, none of which was ever redeemed ; and when, during the civil war, debts were paid in depreciated greenbacks. On the other hand injustice is done the debtor class when the value of money, or its legal tender substitutes, appreciates, as was the case with the greenbacks and national bank notes after the civil war, and as was doubtless the case with gold for a number of years recently. But the ingenuity of man has not proved equal to the task of finding a measure of value which does not itself fluctuate in value, and which is not, to that extent, an imperfect measure, just as a yardstick subject to expansion and contraction would be. The question whether gold or silver fluctuates the least, and is consequently the better standard, is discussed by newspapers and politicians to an extent far beyond its real importance. It matters very little to the com- munity in general whether gold, silver or a mixture of the two be employed as the unit of value, but it should be understood that it is impossible to maintain 26 ECONOMICS. a parity between any two standards, and that no such parity has ever been or ever will be maintained any- where for a single day, even if all the governments on earth should pass laws establishing it. Such laws would have no effect; the relative values of the two metals would change as often as those of corn and wheat do. I am somewhat doubtful whether any one really wants a double standard, but if such were wanted it could be secured in either of two very simple ways — the two metals to be employed could be melted to- gether in the desired proportions and all coins made of the composite metal, or else different and distinct names could be given to the coins made of the different metals, no ratio being established by law between the two. All contracts would, in the latter event, neces- sarily state the kind of money in which payment would be made, and no injustice could be done. If either of these plans had been adopted in the beginning, and governments had not attempted the impossible in try- ing to fix values by law, much time and vexation would have been saved. It is customary for economists to teach that there are two kinds of real money, gold and silver, and in reading the report of a speech made in Richmond some time ago by our secretary of the treasury, I noticed he made the same statement, which, however, I think erroneous. There is never more than one kind of real money in existence at any one time in any country. When the market value of the gold in a gold dollar is greater than that of the silver in a silver dollar gold disappears from circulation and the two dollars can ECONOMICS. TTJ only be maintained on an apparent parity providing the government will redeem the silver dollar, directly or indirectly, with a gold one whenever asked to do so. As the same process keeps paper notes at par, the silver dollar in this case becomes a mere promise to pay, just the same as a paper dollar is; the promise could as well have been printed on paper as on silver, and the capital sunk in the silver is, consequently, a loss to the community except that the holder of a silver dollar has security to the extent of the market value of the metal which it contains; but this fact never prevents its presentation for redemption when gold is wanted, and paper would answer every pur- pose better, even to the difficulty of counterfeiting, because it is possible to make dollars of real silver, in all respects equal to those stamped by the government, at a profit to the maker of more than fifty cents each, and it does not appear unreasonable to suppose that some of those in circulation have been so made. At times, as for some years after the discovery of gold in California and Australia, the market value of the gold in a gold dollar has fallen below that of the silver in a silver dollar, and at such times silver has disappeared from circulation, and the relative posi- tions of the two metals have been the reverse of what they are now except that the difference in value be- tween the two kinds of dollars has not been as great. In the present stage of enlightenment a metallic standard of value is doubtless a necessity, and gold, all things considered, is almost unquestionably the metal best adapted for the purpose, but the greater the extent to which paper substitutes are used in a 28 ECONOMICS. given country the more capital is released for other and more productive uses. The substitution of a million dollars in paper for a million in gold or silver, and the sending of the latter abroad in payment of a debt, or in exchange for commodities, adds a^ million dollars to the productive capital of the country, pro- viding the issue of paper be not carried to such a point that it depreciates below its face value, as is usually the case in countries where paper currency is issued by the government, the temptation to issue excessive amounts being usually irresistible, but the fact that the authority has often been abused does not appear to be a valid reason for delegating it to individuals or to banks. The saving effected by the substitution of paper notes for metallic currency rightfully belongs to all the people, and the arguments used to justify its donation to banks in nearly all countries are fallacious and refutable. Much has been published in the newspapers about the folly of the government going into the banking business, but it appears to me that, while there is not the slightest prospect of the government assuming any of the functions of a bank, the banks are fast getting into the government business, a branch of which is issuing currency, while the legitimate business of a bank is the receiving of deposits, the loaning of money or credit, the collection of business paper and dealing in foreign and domestic exchange. Even if confined within these limits, there is no more profitable business than banking. You deposit your money with a banker, in other words you loan it to him, you ask for no security, and you give him full permission to ECONOMICS, 29 use the money as he Hkes, make all he can with it, and give you, in most cases, nothing in return except your money back when you want it. When you wish to use some of the money in his possession the case is different ; you give him ample security, pay him inter- est, and leave a considerable part of the money which you have borrowed from him in his charge, with liberty to reloan seventy-five per cent of it to some one else on interest. This looks, to an outsider, like a pretty good business, but the enterprising banker is by no means satisfied with it; like David Copperfield he wants more. He wants, besides the privilege of borrowing money without security or interest and loaning it on both, the additional privilege of com- pelling you to accept his note without interest and payable on Doomsday as money when he discounts your sixty or ninety day note with ample security at six per cent interest, and expects you to leave about half the proceeds with him. In explaining the advan- tages of this plan our secretary of the treasury did not state the case in this blunt way; with his greater command of language he expressed it far more neatly, putting it something like this : A farmer in the remote west or south is known only within a small radius ; he is solvent, and in every way worthy of credit, but no one outside of his immediate neighborhood knows this, and he has no collateral which a city bank would accept ; he could, or thinks he could, profitably employ more capital on his farm ; the bank in his town would take great pleasure in accommodating so worthy, in- dustrious and enterprising a man, but it really hasn't the money. The bank has, of course, a wider circle 30 ECONOMICS. of acquaintance than the farmer has, and its credit is estabHshed over a greater extent of territory than his is, so the proper thing for it to do under the circum- stances is to loan the farmer its credit, which is so much better established than his, but here an obstacle comes into view, the pig-headed farmer refuses to pay the discount on the bank's note as well as that on his own, and if the bank itself should pay it the bank would make nothing on the transaction except what it is rightly entitled to, which is the difference in in- terest between the rate it can get from the farmer and the rate it would have to pay on the farmer's note with its indorsement. So small a profit not being to his taste, the banker looks around for a way out of the dilemma, and by a sudden inspiration it occurs to him that it would be all right if our government would just guarantee the payment of his notes and make them legal tender, then the farmer and everyone else would have to accept them whether they liked it or not. In view of the disinterested patriotism and philanthropic spirit by which the banks have always been actuated in their dealings with the people, the latter cannot, surely, refuse so reasonable a request. There are three little points, however, which Mr. Gage did not apparently think worth explaining. One is that in this transaction the bank is loaning and re- ceiving interest on the government credit, not its own ; another is that the bank's note, issued by government authority and on the people's credit, displaces a gov- ernment note for a like amount, and an interest-bearing bond has to be issued in its place, so that the banks get interest on all the government paper which can be ECONOMICS. 31 floated without interest, while the people pay interest whenever they use the national credit for their own benefit; and the third is that so large a borrower as our government entering the loan market greatly helps to sustain the rate of interest on loanable capital. No new law was requisite to enable a bank to loan its own credit. It can do this in ways well known to all bankers. In political speeches and newspaper discussions all sorts of arguments have been used to convince wage- workers that their prosperity or adversity depends upon the kind of money used, newspaper articles being fre- quently illustrated with absurd pictures showing a workingman receiving his pay in silver on a gold basis and paying it out for family supplies on a silver basis, and the like. Gold advocates tell these people they would receive, under free coinage of silver, the same number of silver dollars for a week's work as they now receive on a gold basis, while the prices of all they consume would be doubled. Champions of silver tell them equally absurd tales. The truth of the matter is that so long as every one is paid in the same kind of money as he or she spends, and it is spent practically as soon as received, which is usually done, it makes no difference what that money is. The few dollars which a person has on hand in actual cash, not the property owned or the debts due him, represents the difference between what he has received and what he has spent, or invested, during his whole lifetime, and with most of us this is so trifling a sum that a slight increase or diminution in its value would make no difference to us. As already stated, the only people 32 ECONOMICS. affected by a change in the value of money are debtors and creditors, and they have alternately had the better Qi each other in the ups and downs of the value of the currency in use. PANICS. During the past hundred and fifty years there have occurred eighteen commercial crises of considerable severity, namely: in 1758, 1764, 1772, 1776, 1778, 1793, 1801, 1810, 1816-17, 1826, 1831, 1837, 1847, 1857, 1866, 1873, 1882, 1893. It is interesting to note how nearly the intervals between those in the past and those in the present century correspond. Each has been followed by a period of depression and dull busi- ness, and between the regular panics have occurred constant minor alternations of activity and depression. Those who have attempted to discover the causes of commercial panics have variously attributed them to good crops and consequent low prices, to poor crops and consequent high prices, to overproduction, to the building of too many railroads, to overspeculation, to the investment of too much capital in productive ma- chinery, to too little money or too' much in circula- tion, but have with singular unanimity avoided all mention of what appears to me the simplest and most obvious explanation, which is the too unequal division of the products of industry. To simplify matters let us assume a community consisting of only one land owner owning all the land, one capitalist owning all the buildings, machinery and implements of produc- tion, and the remainder of the community consisting of farmers, laborers, operatives and mechanics and ECONOMICS. 33 their families. If all the workmen worked steadily and received sufficient pay for their work to enable them to buy all they produced except what was needed for the use of the land-owner, the capitalist and their families, is it not obvious that all could live in com- fort and even luxury; that no one need ever be out of employment, and that production could go on un- interruptedly forever? But if the land-owner took from the workingmen, for rent, so large a proportion of their earnings that they only had enough money left to buy from the capitalist three-quarters of what they produced, is it not equally obvious that produc- tion must periodically stop till the accumulated stock be consumed? And is it not equally apparent that while the stoppage lasts those who, through improvi- dence, misfortune or owing to the number of those dependent upon them have not laid by anything, must either starve, steal, or exist upon charity? And that the prices of the accumulated commodities must be reduced to a figure which will enable the workingmen to buy them? And after having disposed of his accumulated stock at a loss (the difference between what it cost and what it brought having gone to the land-owner in rent), the capitalist will naturally pro- ceed to replace it slowly and cautiously, and the panic will be followed by the inevitable period of dull trade and hard times. Is it not clear that the panic could have been avoided and all could have been better off, the capitalist and the land-owner included, if the pay of the workers had been sufficient to enable them and their families to consume all they produced, with the exception of what was needed by the capitalist and the 34 ECONOMICS. land-owner? The latter would, in any event, have been a useless burden on the backs of the others, and his elimination would have amounted to the same thing as a vast increase in the wages of the workers and in the profits of the capitalist. To attribute hard times to overproduction is equivalent to saying that poverty is caused by a superabundance of wealth, and is too absurd for serious consideration. When a panic has occurred soon after a period of exceptional activity in railroad building, the panic has been attributed to this cause, but the possession of even useless wealth cannot cause poverty. If so much labor and capital were consumed in building railroads or fac- tories as not to leave enough available for the produc- tion of food, clothing and other necessities, then it might be truthfully said that the overbuilding of rail- roads and factories had caused hard times, but such is never the case. There is always a glut of goods of all kinds in panicky times, the harder the times the greater the glut. And even in times of so-called famine, there is always an abundance of food for all who have money to pay for it. In countries where the people receive for their labor in good times barely enough to support life, a slight shortage in the crops, sufficient to raise prices somewhat, causes the starva- tion of thousands, but there is always plenty of food obtainable by those who have the money to pay for it at the increased price. Speculation is usually regarded as a cause of hard times, but in nearly all forms of speculation some one must gain what others lose, and the community could only be impoverished by speculation if a suffi- ECONOMICS. 35 cient number of workers withdrew from productive occupation and engaged in speculation to cause a serious diminution in the production of wealth, which is never the case, the ranks of speculators not being recruited from those of the workers to a sufficient extent to materially affect the volume of the social product. But while speculation does not reduce the real wealth of the country, it does play a part in pre- cipitating panics. During every period of exceptional prosperity prices of stocks, bonds and real estate, as well as those of most commodities, rise. Thousands of holders of these forms of property, believing them- selves to be rich, adopt a new and more expensive standard of living, production being thereby stimu- lated, but wealth created by merely marking up the value of what was already in existence is a very differ- ent thing from that created by well-directed labor, be- cause it does not represent any real increase in the wealth of the country, and because it may, at any moment, have to be marked down again. When this marking down occurs many people who thought them- selves rich find they are not, and they immediately cur- tail consumption, thereby throwing working people out of employment ; these in turn must also consume less, throwing still more out of work, and we have the phenomenon of dull times. LABOR AND CAPITAL. There is no natural conflict between labor and capi- tal except as to the division of the product of both. Their interests are identical except in this one respect, and even in this they are not as widely divergent as 36 ECONOMICS. is often thought. Obviously it is not for the best in- terest of labor, as a whole, to consume so large a share of what is produced that the amount of capital in existence would be diminished, and on the other hand it is as clearly not to the interest of capitalists, as a whole, that laborers should be so poorly paid that they cannot buy, and consume, all that is produced for their use. Capital cannot, anywhere, be productively employed except in connection with labor, and in what are called civilized communities, labor, as a general thing, is of little use except in connection with capital. The two must be employed together, and the greater the amount of capital the more productive the labor employed in connection with it will be. Theoretically, the result of all labor is divided be- tween three classes of persons, namely : workers, capi- talists and land-owners. A single individual may fill all three or any two of those positions, but the profits which he derives from his occupation may be separated into three parts: wages for his work, interest on his capital, and rent for his land. In one respect the interests of all three classes are identical; it is to the interest of all that production should go on unin- terruptedly, in order that the amount to be divided may be as large as possible. Clearly, the greater the amount of wealth produced the more each partner in the division can get. But, as explained in the chapter on panics, production under modern conditions can proceed uninterruptedly only when the total production is divided with a reasonable degree of equity. It is, therefore, to the interest of all that a fair division ECONOMICS. 37 should be made, so that the working class, which is always by far the largest, can consume all that is pro- duced for its consumption. To this extent the interests of all classes are identical just as it is to the interest of every individual in a community that the whole com- munity should be prosperous, and as it is to the inter- est of every nation that all other nations should thrive. The consuming power of an individual, or that of a nation, is in proportion to its prosperity, and one's best customer is he who consumes the most of what one produces. A reasonable degree of thrift is commendable, and it is to the interest of an individual to get all he can and save all he gets, as long as too many others do not attempt to do the same, but nothing would be more detrimental to the community in general, and to the working classes in particular, than for every one to become suddenly economical and thrifty. This is precisely what happens after a financial panic, and is largely what produces the long periods of dull times which always follow them. The faster wealth is consumed the more demand there is for labor and capital, and the better both are remunerated. History shows that even where enormous amounts of wealth have been destroyed with the greatest rapidity by con- flagrations, war, earthquakes and similar disasters, it has been replaced so fast that in a few years the recovery has been complete, and everyone as well off as though no calamity had occurred. The interests of laborers and capitalists are identical in another respect; it is to the interest of both that the third partner (the land-owner) should receive the 38 ECONOMICS, smallest possible share of the total product. But when it comes to a division between themselves it is, as already shown, to the interest of both that an equitable division should be made; otherwise consumption will not keep pace with production, we will have the absurd phenomenon of "overproduction," stocks will accumu- late, prices will fall and both labor and capital will to a great extent be unemployed. While it is best for employers as a class that their employes should be well paid, it is of vital importance to each individual employer to get his work done as cheaply as his competitors get theirs. It makes but little difference how high the wages paid as long as all other similar establishments have to pay the same, but if one competitor succeeds in grinding down his employes to a lower scale of wages all must do the same, and it is here that labor organizations are of incalculable benefit, not only to their own members, but to the whole community, by enforcing a uniform, and reasonably high, rate of pay from all employers for a given amount of work. A wise employer of produc- tive labor does not worry when he has to pay high wages if he knows that his competitors are paying the same, for well paid laborers not only produce more, but they and their families also consume far more than those who are ill paid, and as all production is intended for consumption, the laborer and the capi- talist are happiest when both production and consump- tion are at their maximum. While this is true under present conditions, it would not be so in an ideal state of civilization, where- production would go on only at such a rate that while everyone's wants were well ECONOMICS. 39 provided for all would have abundant leisure, and no one would be overworked. That most things are used up about as fast as pro- duced, is shown by the small amount of wealth in existence, considering the length of time it has taken to accumulate it. There are probably millions of peo- ple in this country who do not possess property to the value of a cent for each day they have lived. It has been estimated that the total wealth of the world could, with the aid of modern machinery, be produced in three or four years. If the total wealth accumulated in countless thousands of years amounts only to the total product of three or four, the addition each year must have been exceedingly slight. Statistics in- tended to show the wealth of a country or of the world are, like most other statistics, misleading. The same wealth is counted over and over again, and much purely fictitious wealth is included. Thus, a farm and the mortgage on it, or a railroad, its stock and its bonds, paper money, promissory notes, stocks, insur- ance policies, book accounts and the like are all esti- mated as wealth, and yet the total wealth of the world would not be diminished if they were all destroyed, because the loss on each item, to some one, would be balanced by a corresponding gain on the part of someone else. To illustrate this matter of wealth existing purely on paper, when a railroad is built, stock may be issued upon it, then preferred stock, then successively first, second, third, fourth and fifth mort- gage bonds, and income bonds, all or part of which may be sold to a company which, wishing to borrow money on them, deposits them with a trust company 40 ECONOMICS. and issues collateral trust bonds against them. The purchaser of these latter hypothecates them with the bank where he keeps his account, borrowing perhaps 80 per cent of their face value on them, and giving his note for the amount, which note thereby becomes a part of the bank assets. Here are seven pieces of paper all representing the same piece of property, and yet each is counted separately in estimating the coun- try's wealth. If all the wealth existing purely on paper, and all which has been created by simply "marking up" the value of land were eliminated, it would be found that the wealth of the world is very small, considering the time it has required to accumu- late it. In countries where the producing classes receive but a very small share of what they produce, employment is found for the "surplus" labor by keeping standing armies, and by the employment of large numbers of men and women as domestic and personal servants, and in other capacities where they consume but do not produce, and the more non-productive consumers there are, the smaller the share of what is produced goes to the producers. Capitalists whose capital is productively employed are almost as useful and necessary in a modern com- munity as workers are, but the bondholder whose capi- tal has been destroyed in war, or wasted in supporting soldiers, royalty and the like, and now exists only on paper; and the land-owner who produces nothing — they and their dependents and servants are a dead weight on the backs of productive labor and capital It is sometimes argued, and I formerly entertained ECONOMICS. 41 the same opinion, that there would be nearly as many people out of employment as at present if intemper- ance, dishonesty and incompetence did not exist; it is maintained that the search for work is like a race in which all cannot win, and if all were honest, temperate and industrious, as many of these would have to be constantly idle as there are now idle among the drunken, lazy and dishonest. But, after longer obser- vation, I think this is a mistake. In almost every large establishment, and in many small ones, there are posi- tions unfilled because the right people cannot be found to fall them ; places where a competent and industrious man or woman would earn enough for his or her own support and a profit for the employer, but where the employment of a drunkard or a thief would result in loss. As a consequence these latter are left almost constantly out of work, where they live on the earnings of the rest of the community, and both production and consumption are smaller than if they worked. Ob- viously, if three persons work and support a fourth in idleness, all four must collectively be worse off than if all worked. Although a criminal, whether in confinement or at liberty, usually eats two or three meals a day, always wears clothes of some sort, and consumes more or less whisky, beer and tobacco, his average consumption is nothing like what it would be if he were constantly and productively employed, but as he produces noth- ing, all that he does consume must be provided for him by those who do work. It is unfortunate that it is not more generally understood that criminals who do not work add materially to the burdens of produc- 42 ECONOMICS. tive labor and capital. If this were understood by all members of trades unions they would not urge the compulsory idleness of the prisoners confined in our prisons and reformatories, which is cruel to the prison- ers themselves, injurious to their physical and moral welfare, and makes their support a tax which is paid in part by land-owners and capitalists, but largely by the laboring classes. While it is best for the whole community that labor and capital should all be constantly employed, it would be well if many of the forms of production in which both are at present engaged could be changed, and that they will be changed with the spread of knowl- edge I have no doubt. When a man sends his bare- footed child to the saloon with a dime for a bucket of beer, he starts the dime in circulation and benefits the saloon-keeper, the brewer and their employes, but if he spent the dime for stockings for the child he would benefit labor and capital to the same extent and the child would have the stockings besides. In buying the stockings instead of the beer he causes the diversion of a certain amount of labor and capital from the man- ufacture of beer to that of stockings. All the capital and labor now devoted to useless or worse than useless purposes, such as the manufacture of articles prejudicial to the general welfare, and the support of armies and navies, could be profitably em- ployed in cleaning and improving the dirty streets and filthy alleys in our cities and towns, in making good country roads, in irrigating our immense areas of arid lands in the West, which need only water to make them capable of supporting millions of inhabi- ECONOMICS. 43 tants, in building better dwellings, in building ship canals within the borders of our own country, and in many ways from which all would derive benefit. When the majority of our people come to understand these things they will not deem it necessary to subjugate natives in the antipodes to provide markets for our manufactures. It appears to me that we sadly need more original- ity and diversity in the investment of capital and the employment of labor, that we should provide for the satisfaction of wants, of which there are many now unsatisfied, and perhaps, to a large extent unrealized, instead of adding quite as rapidly as is now being done, to the means of producing articles which are already being produced in abundance, and could easily be still more rapidly produced by the plants already in existence. Too many of us, both capitalists and laborers, are engaged in trying to crowd others out of fields of industry already fully occupied instead of seeking new forms of investment and employment, or those only partially filled, of which there are still many in our country, although they are by no means as plenty or as obvious as they were a generation ago, when the general run of business men in America amassed, if not great wealth, at least comfortable com- petence with a rapidity and ease uncommon at the present day. Much has been said and written on the evil of ad- mitting all sorts of immigrants to this country, and it appears to be generally considered detrimental to the interests of those already here to bring in the poor and ignorant, even if strong and industrious. While 44 ECONOMICS. I am not prepared to assert that this opinion is in- correct, there is something to be said on the other side of this, as of most questions. Is it not possible that poor and ignorant immigrants of a low order of intelli- gence, but possessing good health, bodily strength and a disposition to work, on their arrival in this country, crowd their way in at the bottom, forcing those already here into higher positions ? Most of the kinds of work which were done in this country a generation ago by Irishmen ar*? now performed by a less intelligent class of immigrants, and the Irish have not suffered thereby. They have been pushed up- stairs, not down. No one, I am sure, will more read- ily admit than my Irish friends, that it is both pleas- anter and more profitable to be an alderman, a police- man, a fireman, or even to keep a well-paying saloon, than to wield a pick or push a wheelbarrow. Many who were themselves formerly laborers are now fore- men over less intelligent workmen who have since come in. It seems fair to assume that these new comers are better off than where they came from or they would not continue to come, and if we, too, are better off for their presence, there appears no valid reason for keeping them out. This view does not con- flict with the ground already taken that all would be benefitted by more knowledge and education. The fact that the ignorant immigrants referred to would be better off if they knew more, does not conflict with the other fact that they are better off here than at home, and that their presence here is beneficial to those who came before, because they take their places at the bottom of the social pyramid, slightly raising all ECONOMICS. 45 above them. But this reasoning applies only to physical welfare. The probable effects of lowering the average intelligence of the community by the admission of large numbers of ignorant immigrants furnishes a very strong argument on the other side of the case. While I believe the thorough education of the masses, and the greater development of intellect in all classes, to be the means by which the condition of all will be gradually improved, it is perhaps true that the connection between education and refinement be- comes less apparent as education grows more general ; and it is undeniable that if all were educated and in- telligent the advantage to the individual derivable from educaton and superior intellect would be much less than at present and in all past times, when their chief use is, and has been, to enable their possessors to get the better of those who lack them. If all possessed them, their possession would not, as at pres- ent, give one individual any advantage over another, but collectively the community would be vastly better off. It is obvious that if all were educated, then edu- cated people would have to do all kinds of work, in- cluding that now done only by the lowest and most ignorant classes, but the productiveness of labor would be so much increased, and the distribution of wealth so much less unequal than at present, that such work would have to be much better remunerated than it is now, in order to induce anyone to do it. Disagreeable and hard work might then command higher pay than that which is light and pleasant, instead of the reverse, as now. 46 ECONOMICS. TRUSTS. In view of the popular opinion that the large aggre- gations of capital and consolidations of many different companies and firms into gigantic trusts and combi- nations are detrimental to the general welfare, and of the applause which usually follows their denunciation by politicians, and of the laws which have been passed in many states to discourage their formation, and if possible break them up, it may be regarded as a bold assertion to say that a well-managed trust contributes largely to the public good, and as one which is badly managed does not last long, there is little danger to be apprehended from any of them. In a recent conversa- tion with an acquaintance, one of whose friends' busi- ness was being ruined by a trust, it was explained to me that the trust made it impossible for him to com- pete with it by paying its laborers more than he could afford to pay and at the same time selling its product cheaper than he had ever been able to sell his. If the trust pays its employes more and sells its output cheaper than its competitors can, it looks to me as though a great many more people were benefitted than are injured by its existence . It must be admitted that the community in general is better off for the many labor-saving devices and machines which have come into use during the past century, and in all countries patent laws are in force for the encouragement of inventors. Yet no invention is of any value unless it enables fewer persons to do a given amount of work than were required to do a like amount before, thereby depriving the others of their former means of obtain- ing a livelihood, and the more people whom a given ECONOMICS. 47 invention throws out of employment the more valuable it is, and the greater the wealth and honor accorded its inventor. The formation of a successful trust accomplishes the same end ; fewer persons do the work formerly done by a larger number, and usually do it better. The members of the trust, its employes an . the consumers of its products are benefited, while those deprived of employment suffer for the time being, all of which results are precisely similar to those brought about by the introduction of any other labor-saving device. It is undeniably true that up to the present time the result of all such devices has been to enable a comparatively few to live in extreme luxury, and to amass great wealth rather than to lighten the labor and increase the comforts of all, but all have unques- tionably derived some benefit from the larger output and receive more goods in exchange for a given amount of work than in any former time. Many trusts have been formed, and others doubtless will be, by men ignorant of economic laws, who be- lieve that with the command of enormous amounts of capital they can eliminate all competition and then buy the raw materials needed for their establishments and sell the manufactured products at almost any prices they choose to establish, but, as shown in the chapter on value, the effect of competition in fixing values is more apparent than real, and all trusts man- aged on this theory have resulted in disaster unless, profiting by experience, the policy has been changed before the passing of the concern into the hands of a receiver. It is absurd to suppose that competition could be done away with for long by widening the 48 ECONOMICS. margin of profit in this way. No more effectual way could be adopted for increasing- it. To drive out com- petition, one must pay more for the raw material and sell the product cheaper than competitors can. What- ever the motives actuating the managers of a concern which does this, the public is benefited. Those trusts which have been successful do not owe their success to the elimination of competition, but have incidentally eliminated competition because they have relied for their profit, not upon any ability to buy cheaper or sell dearer than their competitors, but upon the cheap- ening of production by doing everything on a vast scale, the use of the most effective machinery, the utilization of by-products, the saving in freight effected by having several plants conveniently located and fill- ing each order from the plant nearest the consumer, the economy of management resulting from consoli- dation, the greater efficiency of labor, both physical and mental, resulting from discipline and from the possibility of the greater subdivision of labor, thereby keeping each employe always at that which he can do best, so that nothing is wasted owing to anyone having to spend a part of his time in idleness or in doing a lower or cheaper grade of work than the best he is fitted for. Trusts, depending on these factors for suc- cess, have succeeded and will continue to succeed; those which rely upon any supposed ability to widen the margin of profit by depressing the prices of crude materials and raising the prices of the manufactured products; those whose managers expect to market a large output at a high price, and those who make the ECONOMICS. 49 profits of the business secondary to manipulation of the stock market, will all, sooner or later, come to grief. It is true that a trust, having driven all competitors from the field, could for a time, do a small business at a high rate of profit rather than a large business at a small margin; but even if attempted for a time, this could not be continued long. New competitors would spring up; old ones would resume operations; it would be necessary to suspend production at frequent intervals to avoid producing a glut, the only way to sustain the market being by limiting the supply, and managers of large concerns have found by experience that it is more economical to run, even at a small loss, than to close down. Machinery rusts out faster than it wears out, skilled labor moves away, high salaried officers, superintendents, salesmen and the like must be kept on the payrolls; taxes, interest, and insurance go on just the same ; operatives must live all the time even though they work only a part, so demand higher pay for irregular than for steady work. It is therefore soon learnt that it is, in the long run, more profitable to continue production on a scale suited to the capacity of the works, and dispose of the output at such prices as the public will pay, than to attempt to maintain high prices by limiting production. Several thousand persons using the most effective machinery, doing everything in the quickest and most economical known way, each doing all the time that which he knows best how to do, working in an estab- lishment where strict discipline is maintained, under constant and skillful supervision, all under one man- agement, having control of unlimited capital, produce 50 ECONOMICS. SO much more than an equal number working in the old-fashioned way, that it is perfectly possible for them to be as well, or even better paid, than if the trust had never existed, and at the same time for a few persons to derive very large incomes from the excess of wealth produced, over and above what the same number of workers would have produced, each working for him- self, or if employed in small establishments. In the present stage of civilization this excess belongs to those who, by their energy and ability for organiza- tion, cause its production. When, generations hence, a higher civilization becomes general, all those who do their best may be considered entitled to the same re- ward, regardless of whether the result be failure or success, but we are still a long way from that. We have seen that the public, the operative and the stockholder may all be benefited by the consolidation of many businesses into one, the only parties injured being the proprietors of smaller establishments, which are left out of the combines and are unable to compete with them. If the motto of "the greatest good to the greatest number" be accepted, their welfare is not to be taken into the account; but let us consider them. Some must find other employment, and, unfortunately, it is likely to be those least capable of doing so. Others, owing to their ability to influence a certain amount of business, or to skill in some branch of manufac- ture, are, upon giving up the struggle, frequently offered positions with the trust at salaries nearly, or quite, equal to their former average incomes, and while, perhaps, longer hours may be exacted and a degree of discipline enforced which is irksome, these ECONOMICS. 51 disadvantages are, to some extent, compensated by the lack of care and anxiety, and by the certainty of a regular income. It sometimes happens that a large establishment can afford to, and does, pay a man who has been moderately successful in business for him- self, a larger salary than the income he previously earned for himself, because the value of his services are greater to a large than to a small concern, or he may be lacking in some point which, while preventing great success in an enterprise under his sole manage- ment, is not brought into play at all in the larger sphere, where the division of labor places is under the direction of some one strong in that particular. Many men who have failed in business for themselves, have afterward been eminently successful as heads of de- partments in large establishments where a general line of policy is mapped out for them, or where some one else passes on credits or regulates expenditures. Such a man may know far more than the president or man- ager of the trust about his particular department and yet be incapable of running it successfully without a certain slight amount of guidance from the latter source. This slight guidance may apparently amount to little, and is doubtless often deemed a hindrance by the department manager, and yet it may make all the difference between a handsome profit and a round loss at the end of the year. In a very large establishment it is possible to econo- mize to the fullest extent the time of high-salaried em- ployes, and no one competent to fill an important position need be kept long in an inferior one. The managers of a trust wishing to get its work done as 52 ECONOMICS. cheaply as possible, err much oftener by putting too cheap a man into an important position than by keep- ing one of marked ability in an inferior one. But the longer a trust exists, the more liberal its managers usually become in the payment of salaries. Concerns which have grown to enormous size with mushroom rapidity under the control of men of great energy and executive ability, who give close personal attention to details, and are impatient of any division of au- thority, sometimes get on for a considerable time with very cheap help, even in important positions, resort- ing to all sorts of devices to cause employes to think their own services of little value, adopting a system of bookkeeping whereby every department is made to show a loss, making the most of every error in judg- ment and belittling every success. But this policy usually results in the accumulation of a corps of em- ployes whose abilitiy lies chiefly in the direction of fooling those above them, rather than in making money for the company, and after a longer experience it is found more profitable to pay higher salaries to men capable of taking greater responsibilities, and on whom more dependence can be placed, so that many of the latter class receive as high remuneration for their work as similar men in business for themselves, before the advent of trusts, realized from their own establish- ments. It is the economics possible in production and dis- tribution on a large scale rather than any ability to buy cheap and sell dear, which enable trusts to sup- plant smaller establishments. A very large buyer entering the market finds it more difficult to supply ECONOMICS. 53 his wants without advancing prices than a smaller buyer would, and a very large holder of goods de- presses the market more in unloading than a small producer would. Large buyers often resort to the most ingenious expedients to conceal the magnitude of their wants, and nearly always find it possible to buy a moderate amount of goods at a lower price than a very large amount, so that up to that point the small dealer is not at a disadvantage as compared with the larger one, and where it is merely a question of resell- ing goods in practically the same condition as they were bought, as in the competition between very large stores and smaller shops, I confess to an inability to discover wherein the former has any great advantage outside of greater skill in management, and the ability to both buy and sell for cash. It may be true that the small dealer does not, as a rule, sell as cheap as the large store does, but this, I think, is less owing to his inability to do so than to the fact that the small dealer who buys and sells only for cash and on the same margin of profit as his larger neighbor, soon ceases to be small. If my reasoning is correct, the same policy which makes a trust a success from its stockholders' point of view, also makes it a useful institution to the com- munity. But there is another side to the picture. When a trust is organized, by men who believe it is easier to acquire wealth than to produce it, for the purpose of unloading on the public all the stock and bonds which can be floated, as several have been, and then wrecking the whole concern, the transaction is one of pure and 54 ECONOMICS. simple robbery; but if stockholders put robbers and wreckers in charge of their properties, they should not be surprised when they are robbed and their en- terprises wrecked. Those who buy stock in these speculative trusts often understand that the whole business is eventually going to the dogs, but expect to unload their holdings onto someone else while the market is up, and it is not worth while wasting much sympathy on those who fail in doing so, any more than on any other gambler who knowingly takes a chance and loses. If the public will insist on playing with the fire it must expect occasionally to get burnt. The gambling spirit is innate in the human race, and stock speculation is, perhaps, as good a way as any other for giving it vent. At this game one makes what another loses, and the wealth of this community, as a whole, is not affected, except that it pays for its amusement and excitement to the extent of the brokers' commission just as it pays for any other form of amusement. The percentage against the player is larger than in faro, but smaller than in horse-racing, and the game is lawful and considered respectable. Trusts formed for the purpose of regulating the market values of the crude materials which they use, or of the goods which they manufatcure, either change their policy or come to grief sooner or later, as already stated, but while they last they do some harm. They usually restrict production for a time, thereby use- lessly throwing working people out of employment and compelling economy in consumption. The arti- ficial scarcity is always followed by a glut, and the higher prices go under the trust's manipulation, the ECONOMICS. 55 lower they go when it has to let go, as it always does in the end. In the meantime, the consumer who has been compelled to put up with an insufficient supply is not compensated by having it in his power, afterwards, to buy more than he wants ; and the working man or woman who has been out of work for some time is not recompensed for weeks of privation and anxiety by simply being taken on again. Of the hundreds of trusts of all kinds lately formed comparatively few will, probably, fulfill the expecta- tions of their stockholders, and many will result in failure, more or less complete, owing to the causes just outlined ,to lack of experience, incompetence, dis- honesty, speculation, extravagance, and want of knowl- edge of economic laws, on the part of those in charge, for there are, apparently, more trusts and very large corporations already in existence than there are men with the intelligence, knowledge and experience requis- ite for their successful management. The less experi- enced the managers, the more they try to bring about the desired results by openly aggressive means, the more confidence they have in their ability to control values, crush their rivals and otherwise accomplish the impossible, and their efforts in these directions not in- frequently result in their own downfall. The trusts which succeed will, I think, gradually accomplish much good as object lessons illustrating the benefits derivable from co-operation as compared with competition. The competitive instinct is born not only in the human race, but extends to the animal kingdom; colts playing in a field try to outrun one another, and male animals of most species fight, often 56 ECONOMICS. - to the death, on their first meeting, but even animals and savages learn that "in union is strength," and tribes of both are formed for co-operatiOn in warfare, offensive and defensive. That the desirability of co-operation among business men must have been understood at a comparatively early date is shown by the formation of guilds and corporations, but its ad- vantages were afterwards, to a large extent, lost sight of, and until very recently competition was in this country almost universally regarded as "the life of trade." In this, as in many other ways, the maximum of happiness can only be attained by the repression of our natural impulses and instincts. Trusts formed by capitalists on one hand and trade- unions composed of workers on the other, when wisely and honestly managed, may both prove of incalculable benefit as object lessons demonstrating the advantages of co-operation and the absurdity of competition. May we not hope that it will eventually dawn on the minds of the members of both that their interests are recip- rocal, and the result be a fair division of a vastly increased product? GOVERNMENT OWNERSHIP OF RAILROADS The reasoning in the chapter on trusts, that only those which are beneficial to the public will survive, while those which are detrimental will bring about their own downfall, is not applicable to railroad com- panies. The power which these possess to enrich or impoverish not only individuals, but whole communi- ties, is too great to be safely intrusted to any corpora- ECONOMICS. 57 tion or set of men who have no check on their greed except their own consciences. The enormous waste caused by competition among railroads is a great and unnecessary strain upon the resources of the country, and the bribery and corrup- tion by which their managers obtain desired legisla- tion, influence decisions, and secure the election of officials of their choosing, has a demoralizing influence upon the morality of the whole nation. The oft quoted remark, that "the question of the government taking the railroads has been settled by the railroads taking the government," is apparently true at present, but great revulsions of public opinion are not unknown in this country, and it is within the possibilities that, at some future time, possibly sooner than now appears probable, our people will refuse to listen longer to arguments got up by politicians, osten- sibly to prove that the kind of money in use makes them rich or poor, but in reality to distract their minds from issues of real and great importance; or to have their attention diverted from these real issues by such devices as a foreign war, this latter having been one of the stock tricks of governments in all past times for quieting discontent at home, and will make the government ownership of railroads a prominent issue in politics. A few of the advantages derivable from such ownership are economy in operation, better and quicker service, lower and equal rates of freight and fare to all, the less unequal distribution of wealth, avoidance of waste of capital by building parallel lines, and the employment of more labor consequent upon heavier traffic. 58 ECONOMICS. A vast saving in the expense of operating the rail- roads of the country would be effected by eliminating competition, and placing all under one management. At present the lowest freight and passenger rates are made by the most indirect lines. Under natural con- iditions all freight and nearly all passengers would go from one given point to another by the line combining the most advantages, such as short distance and easy grades, but under existing traffic agreements such lines are compelled either to charge higher rates or bring their service down to the level of the line hand- ling the business at the greatest disadvantage. If a straight line with easy grades and up-to-date equip- ment puts on a faster train, say from New York to Chicago, than its competitors can conveniently run, the latter combine and force the progressive road to abandon the train or else charge extra fare. So it is with freight, the most indirect lines, and those pos- sessing the poorest facilities for handling the business, make the lowest rates. If this were not the case they would not get any business at all. By this system the public never gets the best service of which the best line is capable, and always pays rates based on the cost to the poorest equipped line handling any part of the busi- ness. Under government ownership goods would be forwarded by the most direct line, and rates would be based on the cost of the service by that line, not by the poorest, as at present. Shipments between important points would go by trainloads, not carloads, as now. If a hundred cars of freight, on an average, move daily from one city to another, distributed among ten different routes, each getting ten carloads, these ECONOMICS. 59 cars are put into trains composed of cars destined to many different points, the trains are taken apart at frequent intervals, all along the route, and much time and labor wasted in switching the cars back and forth, taking one train apart, and, after an interval of hours, or perhaps days, making up another. With all the roads under one management, shipments between large cities could be routed so as to insure solid trains from point of shipment to destination. I have no means of ascertaining what proportion of the total number of passengers are furnished free transportation, but everyone who travels much, knows the number to be enormous. Obviously, those who pay must pay for their own transportation and for that of those who do not pay. An enormous saving would be effected by not hauling any deadheads. In means of travel and transportation, as in many other things, we are too apt to compare the present with the past, rather than with what might be. We are too easily satisfied. For instance, a Pullman sleep- ing car may be a luxurious mode of conveyance com- pared with a stagecoach, but compared with what can easily be imagined in the way of a luxurious car, or with other sleepers which have been invented and suppressed, it is a long way behind the age. There are few more uncomfortable places on earth on a hot summer night, on a dusty road in the South, than a berth in a Pullman sleeper. Under government own- ership it would be perfectly practicable to furnish a clean, well-ventilated, private apartment, where com- fort and privacy could be secured, and where neither decency nor the laws of health need be violated, for a 60 ECONOMICS. lower charge than is now exacted for a shelf in a car where gaudy furnishings are the chief attraction, and where everything else is sacrificed to arrangements for carrying the greatest number of passengers at the minimum cost. The large sums spent in advertising would all be saved. The army of intelligent and industrious men now wasting their energies as freight solicitors could be far more usefully and productively employed in other ways. A large amount of clerical work would be saved which is now necessitated by each road having to keep accounts with the others. All freight would go through without transfer. The labor of all the people at present employed by fast freight lines would be released for more produc- tive employment. The profit now going to owners of private cars, both passenger and freight, in mileage paid on sleeping cars, parlor cars, refrigerator cars, etc., would be all saved; so would the excessive bridge tolls, terminal charges, and the arbitraries now paid for short hauls. Small roads would not have to handle their business expensively for want of modern equipment. The presidents of some railroad companies are said to receive salaries as high as $50,000 a year. No such salaries would have to be paid under government ownership. The best railroad talent could be obtained for half the money. The sums spent annually to influence legislation, bribe officials, and defend damage suits would all be ECONOMICS. 6l saved, as would also the enormous losses sometimes caused by strikes. Better service would be secured because, under gov- ernment ov/nership, no one would be a gainer by fur- nishing poor service. There could be no conceivable reason for crowding cars or having trains by different routes between the same points start all at the same time. Where the distance between given points is shorter by one route than by others, the fare by the shortest and quickest route would be the lowest, not the highest, as now. Sleeping car and dining car accommodations would be within the reach of all. Economy in management and operation and in- creased traffic would make far lower rates possible, and the increased traffic in conjunction with the shorter hours of labor which would be required of government employees would render necessary the em- ployment of many more operatives than now, better wages would be paid, and the market value of all labor throughout the country would be raised. Prob- ably the greatest of all the benefits derivable from government ownership is that the rates of freight would be alike to all. Discriminations in freight rates have probably built up more lai^e fortunes in this country than any other cause except the increase in the value of land, and nothing short of government ownership can entirely prevent such discriminations. The ways by which anyone filling an important posi- tion in the management of a railroad can enrich him- self and his friends are many, easy, and obvious. The process consists merely in making contracts between oneself in one's official capacity and oneself as an 62 ECONOMICS. individual. This may be done to a moderate extent, so the individual is gradually enriched to the extent of a few millions while his company continues to prosper and pay dividends, or it may be carried to the length of appropriating the entire net earnings of the company and gradually absorbing its capital. By the latter method, carried to its extreme length, it has been possible for property worth fifty or sixty mil- lions to be accumulated during the life of a single individual. Under the most corrupt political admin- istration it could be no worse than this, and it could not be carried on as long by the same men, for suc- cessive politicians would have a chance at the stealing and the wealth would be more widely distributed. Under present conditions the "cinch" is handed down from father to son, and may remain indefinitely in the same family. The fact that in those European countries where the railroads are owned by the government the rates are not lower or the service better than here, proves nothing. I have never heard it claimed that any at- tempt was ever made to run those roads for the good of the people. And conditions over there are so differ- ent from those prevailing here as to render any intelli- gent comparison impossible. Neither can I see that the fact of our already hav- ing lower freight rates than exist in other countries is a valid reason for not trying to get still lower ones. Coming to the question of how to raise the capital to pay for the railroads, nothing is simpler. No new capital would be required. It is only a question of the transfer of capital already in existence, not alto- ECONOMICS. 63 gether unlike that which takes place when a railroad company is reorganized, and the holders of the old securities exchange them for new and better ones. As explained in the chapter on interest, there is hardly a railroad in the country, if any at all, which does not pay running expenses and some profit on the capital in- vested. This profit is usually absorbed in the payment of unreasonable interest on bonds, or in other ways best known to railroad accountants; but, taken as a whole, the railroads of the country pay a fair net profit on their total capitalization, water and all, under their present management. If acquired by our gov- ernment at a just valuation it would be a difficult mat- ter to keep them from paying more than 5 per cent. Our present 3 per cent bonds sell at a premium. With the additional assets of all the railroads in the country behind them, bonds paying 2^ per cent would sell at par, or higher. All the railroad bonds and stock now in existence would be canceled, and the present holders of those securities would be invited to take govern- ment bonds in their stead. The net earnings of the railroads would be devoted to the payment of the interest on the bonds, and the surplus over and above the amount required for this purpose could be applied towards the payment of the principal. Not only would nearly all the holders of the present railroad bonds and stock be glad to exchange them on equitable terms for government bonds, but thousands of capitalists, large and small, throughout the country, would be glad to invest in diese bonds, and they should be issued in such denominations as to make 64 ECONOMICS. them a practicable investment for the savings of the poor, thereby furnishing a government savings bank without the objectionable feature of anyone having to be taxed to pay the interest. While opposed to the issue of government bonds to raise money to pay current expenses, pensions, or for military and naval equipment, I can see no objection to their issue where the proceeds are applied to the purchase of property yielding a larger annual net income than the interest on the bonds, so that a sur- plus is applicable to the extinguishment of the debt, and no one need ever be taxed for the payment of interest or principal. If the government ownership of the railroads should prove undesirable, the roads could be sold at a profit because, when consolidated under one management, the advantages and economies of such consolidation would be so apparent, and the net earning capacity of the roads would be so increased, that the value of the property as a whole would be thereby vastly in- creased. INTEREST. Interesting as the subject is, it would perhaps be out of place, when discussing economics of the prac- tical variety, to argue the question of whether the exaction of interest at all is justifiable ; whether, when a lender receives back all he loaned, in as good condi- tion as when he loaned it, he has not received all to which he is justly entitled; but the average rate of interest in this country to-day being not much more than half what it was within my own memory, and the rate everywhere being much lower than it was ECONOMICS. 65 a generation ago, makes it appear within the possi- bilities that a time may come when it will not be un- usual for capital to be loaned "flat" even on purely business principles, where the security is absolute and no risk is involved. Nearly all forms of property deteriorate rapidly and must be repaired or replaced at short intervals, so that a lender who gets back exactly what he loaned is often a gainer by the transac- tion. Capital increases faster than population, and with the march of improvement it will, as time goes on, doubtless mcrease proportionately still faster, while the increase in population seems likely to be less rapid in the future than in the past. As the relative propor- tion of capital to labor increases, a smaller share of what is produced will go to capital and a larger share to labor. The next generation will, I think, regard 2 per cent per annum as a fair rate of interest, and that would have been about the current rate now if governments throughout the world had not absorbed almost incalculable amounts of capital and wasted it in the maintenance of armies, navies, royalty, nobility, and other equally useless things, and at the same time sustained the rate of interest by being always in the market for capital, bidding against all comers for it. As long as national, state and city governments stand ready to pay 3 per cent and upwards for all capital offered, companies and individuals cannot bor- row for less, but with the extension of knowledge of finance and economics it is not unlikely that people will gradually realize the extent of the burden which government bonds impose, and their issue will become 66 ECONOMICS. SO unpopular with the masses that governments will not attempt to issue them to the same extent as has been done in the past. In borrowing capital there is a very general tend- ency, as there frequently is in making purchases, to pay for what one hopes may be the result of the transaction rather than for what may legitimately be expected to result from it, and this general hopeful- ness has a tendency to keep rates of interest above what the borrower can pay in addition to fair pay for his time and reasonable interest on his own capital. If a man living in Julius Caesar's time had invested a sum equal to a dollar of our money at compound interest, and had given instructions that it be kept invested in that way at the current rates of interest and be handed down to the eldest son in the direct line of descent, and his wishes had been carried out^ all the property now in existence would belong to the present owner of the fund, and the earth's other in- habitants would be helplessly in debt to him. This tends to show that rates of interest have hitherto been too high — that borrowers have paid more for the use of capital than it is, on an average, worth to them. Many a business man, inexperienced in the manage- ment of large amounts of capital, has thought he could use additional capital to great advantage, and has undertaken to pay rates of interest so high that the borrowed capital, as well as his own, has been gradually absorbed in the payment of interest, so that after a lifetime of hard and honest work, and after he has really paid back both principal and a fair rate of interest, he has found himself bankrupt. ECONOMICS. 67 This same thing has happened to nearly all the railroad companies in this country. They have, with hardly an exception, earned a fair rate of interest on the capital invested in them, but they have also, with few, if any, exceptions, been enormous borrowers of capital at higher rates of interest than the business, as usually managed, pays; and a large majority of them have, after defaulting in the payment of these impossible rates of interest, passed into the hands of receivers ; when this occurs a "reorganization" takes place ; each bondholder is given a new piece of paper in exchange for his old one, usually at a lower, but still too high, rate of interest; each stockholder pays into the treasury a certain number of dollars (to be again absorbed by the interest on the bonds ahead of him) per sliare of stock which he holds, for which he also usually gets a new piece of paper of some sort. Most of the roads in this country have passed through this process at least once, and many of them half a dozen times or more, and each time the game is worked some influential financier gets an enormous "rake-off" from the new capital which he succeeds in getting paid in. I do not know of a railroad in the country which does not pay its running expenses and some return on the capital invested in it, and if this capital had been contributed as stock, instead of bonds, every road in America would to-day be paying dividends, and not one would be in the hands of a receiver. The interest on their bonds takes all the net earnings of most railroads and gradually absorbs the capital con- 68 ECONOMICS. tributed by the stockholders, just the same as the payment of too much interest ruins any other business. Government three per cent bonds command a pre- mium ; money in Wall Street loans on stock collateral at two to three per cent, and in London commercial bills are discounted at these rates. All these invest- ments involve a certain slight risk of loss, so it does not appear unreasonable to assume that the actual rate of interest, leaving out all risk, is, at present, not more than two per cent per annum; and, conse- quently, anything paid above that rate is for risk — for what economists designate as "insurance," but it appears to me that in this kind of insurance the wrong person pays the premium. If a business man borrows capital at six per cent he pays two per cent interest and four per cent for the risk which the lender is supposed to take, but if the borrower loses the money he is not released from the debt ; he has, there- fore, paid for insurance which he did not get. Even though he pay the four per cent insurance until it amounts to enough to pay off the principal, he is not released. In other words, those who borrow at interest pay not only the interest on what they borrow, but also pay both interest and principal for those who borrow and never pay, just as a man pays his tailor for his own coat arid for that of the customer who never pays. This is injustice, and I think that when the subject is more generally understood, capi- tal furnished for use in business will be considered at the risk of such business and if sunk therein the lender will have no recourse on the borrower beyond re- quiring him to show that he used the money as he ECONOMICS. 69 agreed to use it, and that it was really and honestly lost. Then King Solomon's remark that "the bor- rower is servant to the lender" would no longer be true, for they would be partners. Honesty and in- dustry could not then result in bankruptcy, as they often have in the past. If all such devices as bonds and preferred stock were abolished and only one kind of paper, namely, common stock, were allowed to be issued by compa- nies, there would not be one in the hands of a receiver for every hundred there now. I have no quarrel with any capitalist who embarks his capital in any kind of enterprise he sees fit; so long as he takes all the risk he is fairly entitled to all the profit to which he is entitled if he win. But the other kind, who want all the profit, and more, while some one else takes all the risk and does all the work, should not be protected by law in their efforts to ac- complish the desired result. It is undeniable that many men have succeeded in amassing wealth for themselves while paying the usual rate of interest on borrowed capital, and have been enabled to enlarge their business much faster than it would have been possible to have done if they could have increased their operations only as fast as their own capital increased ; but these would have done just as well for themselves and those who furnished them capital if it had been understood that the cap- ital was, directly, at the risk of the business, and it is equally true that most men have an exaggerated idea of the percentage to be made on capital by men of average business ability and opportunities. One rea- 70 ECONOMICS. son for the very general overestimate of the value of the use of capital is the underestimate of the value of personal services in connection with it; thus, a man who has $10,000 invested in his business, and is making an annual average income of $3,500, is apt to think he is making thirty-five per cent on his capital, whereas the truth, very likely, is that he could com- mand a salary of $2,500, and is really making only ten per cent on his capital, and it' is quite possible that he could not make even this on a larger amount. While many individuals and corporations have be- come bankrupt by paying higher rates of interest than the profits of their business warranted, many a lender has suffered from the same cause. Millions of dol- lars are annually invested by persons inexperienced in finance, in bonds on which the borrowing company or individual agrees to pay, and for a few years, per- haps, does pay, a higher rate of interest than its or his business warrants. Suddenly the interest stops, and an investigation discloses the fact that both bor- rower and lender are bankrupt — the borrower because he has paid more for the capital than his business admitted of, and the lender because he has adjusted his expenses to a fictitious income. No such result need have come about if it had been understood that the remuneration for the use of the capital consisted of a share of the profit, instead of a fixed annual sum irrespective of the profits or losses of the business. All capital used in any business is in reality at the risk of the business in which it is used, and it would be better for borrower, lender and the whole com- munity if this fact were generally understood and ECONOMICS. 71 legally recognized. It is true, theoretically, that the borrower's own capital must be exhausted before that of the lender is trenched upon, but in most cases the former is invested in plant and other fixed invest- ments, so that it is not immediately available for the payments of debts, and in the case of railroads and other large corporations the common stock is usually pure water, so that the capital contributed by the bond- holders is immediately and directly at the risk of the business, although it is not always so understood by them. Instead of passing usury laws to regulate the rate of interest, which are often unjust, and can al- ways be evaded, it would be better to educate the prospective borrowers and lenders of capital so they could intelligently estimate its value, and the risk involved in its use for various purposes. And it would be better for both borrowers and lenders if all investments of capital, except, perhaps, temporary loans for short periods, were made for a share of the profits instead of a fixed rate of interest. Investors would then take a more direct and personal interest in the management of the enterprises in which their capital was ^embarked, thereby, frequently, checking waste, extravagance and fraud ; while, on the other hand, the energetic, enterprising men who are the largest borrowers of capital would get its use for about what it is worth, and would not, as is often the case under present conditions, pay the owners of the capital a good share of the profits when successful, and stand all the losses when such occur. ^2. ECONOMICS. TAXES. To go thoroughly into the subject of taxation would increase the size of this little book beyond the limits set for it, and every public library contains so many valuable works devoted to that subject that I am only going to write a very short chapter on it. I believe in the single tax idea, not to the point of con- fiscating for the general good all past increase in land values, as advocated by Henry George in "Prog- ress and Poverty," but that a single tax on land is the fairest, the simplest, the most natural, the easiest and cheapest collected, and in every way the best form of taxation ever devised. And as some of my readers may not have had the time or inclination to read the able and exhaustive works of Mr. George and others, some of them written a century or more ago, advocating a single tax, I will try to show, in a few words, its justice and some of its advantages, in the hope that some who have not given serious thought to the subject may be induced to investigate it. To begin at the beginning, it is difficult to conceive how any human being ever got, or could get, a valid and exclusive title to any piece of land. Most titles run back to grants from some pope, lord, king, queen or other government who granted away what never belonged to them, and in the very nature of things could not have belonged to them, and a thing which was originally wrong cannot, by lapse of time, become right. What are called "Vested Rights" are almost, or quite, invariably "Vested Wrongs," and private ownership of land is the greatest of them. ECONOMICS. 73 But we are discussing practical economies, and as it is not practicable in the present condition of public opinion to abolish such private ownership we will go no further in that direction than to advance as one reason why landowners should bear the whole burden of taxation the fact that they are using, or compelling others to pay them for the use of, that which of right belongs to all. The land owner is a sort of residuary legatee, who receives all the profits of nearly all industries over and above the usual rate of interest on loanable cap- ital and moderate wages for those engaged in them, and no injustice is perpetrated when he is required to give back to the public in the form of taxes a part of the income derived, without effort on his part, from that which he never produced. A tax on land is one of the few taxes which cannot be shifted from the shoulders of the rich onto those of the poor, or comparatively poor. A tax on buildings has a tendency to restrict their number, thereby help- ing their owners to obtain high rents for them. A duty on imports is always and immediately added to the selling price of the goods; obviously no one would engage in the import business unless this could be done. When a law is passed requiring a stamp to be attached to telegraphic messages, express re- ceipts and the like the company requires the sender of the package or the message to pay for the stamp. When a workingman votes that a street car company shall pay a part of its earnings into the city treasury as compensation for the use of the streets he, as a rule, has no idea that he is voting to shift a part of the 74 ECONOMICS. expenses of the city government from the shoulders of land owners onto his own, but a very little reflec- tion shows that "compensation to the city" is simply an ingenious device for shifting the burden of taxa- tion from the backs of those who should bear it to those of the masses who ride to and from their daily work in the street cars. Supposing the companies to be required to pay twenty per cent of their gross re- ceipts into the city treasury, it is obvious that when a passenger hands a nickel to the conductor he is paying four cents car fare and one cent tax. I have seen it stated in the newspapers that Glasgow is a "city without taxes" because the income from the street railways pays the entire cost of running the city government. If this is true, which I believe it is not, then Glasgow should not be described as a "city with- out taxes," but as a city where the patrons of the street cars pay all the taxes, and where those who use more aristocratic modes of conveyance pay none. But a tax on land must be borne by the owner; he cannot shift it onto anyone else. As explained in the chapter on values, all values are determined by supply and demand. The amount of land in existence could not be decreased nor could the demand for it be increased by the fact that its owners had to pay more or less taxes, and rents would, therefore, not be affected except that owing to the fact that taxes would be the same on unimproved as on improved property owners of the former would find it to their interest to improve it, thereby increasing the supply and di- minishing the rent of improved property, so that if all other taxes were removed, and a single tax on land ECONOMICS. 75 substituted for all others, the masses, who live in rented houses or flats, would be doubly benefited. They would be saved the sums they now pay indi- rectly in duties on imports, in taxes on their personal property, etc., and would obtain the same houses or apartments, which they now occupy, or better ones, at lower rents. The owner of a home in the city or of a farm of reasonable size in the country would not find his taxes increased, because a large part, perhaps the larger part, of the taxes which he now pays are assessed on his buildings and improvements, and not on the land proper. If the single tax were in force the land would be taxed entirely irrespective of the improvements on it, a vacant lot just the same as one on which stood a sixteen-story building, and we should soon see fewer vacant lots. I am unable to under- stand why the owner of a piece of land who refuses to use it himself or to let anyone else use it should, for that reason, pay a smaller tax than the man who builds a home or otherwise makes use of his land must pay. PROTECTION AND FREE TRADE. Every country must, in the long run, import as much as it exports, except that creditor countries, like Eng- land, can import more, in value, than they export to the extent of the interest on the obligations of the citizens of other countries which are held by its citi- zens ; and debtor countries, such as the United States, must export more than they import, to the extent of the interest on the obligations of its citizens held by the citizens of other countries. y(> ECONOMICS. The interest on debts, public and private, due from one nation to another is nearly always paid in com- modities, not in money, so that debtor nations export more than they import, while creditor nations import more than they export. With the increase of wealth in this country, and as opportunities for the profitable investment of capital become fully occupied, American capital will probably be more and more invested in other and less advanced countries where higher rates of interest can be ob- tained; then those countries will have to send us more than we send them, and our imports will regu- larly exceed our exports ; but until then we must con- tinue to send them more than they send us. If, for a time, the exports from any particular nation exceeded in value its imports to such an extent that gold is imported, the increased supply of gold in that country will cause the value of that metal to decline there, or, in other words, prices there will rise, thereby checking exports. If, on the other hand, imports exceed exports to such an extent that gold is exported, the diminished supply of gold will cause its value to rise so that prices of commodities will fall, whereby exports will be stimulated and imports checked. If those simple facts were generally and clearly under- stood it is probable that fewer efforts would be made to artificially stimulate exports than are now made by the governments and citizens of most countries. It is sometimes advantageous for a country to im- port a commodity which it could produce more cheaply than that commodity can be produced in the country from which it is imported, because the labor and cap- ECONOMICS. yj ital of the importing country can be more profitably employed in other ways, on the same principle as a farmer who can plow better than his hired man may still find it profitable to hire his plowing done because he, himself, can employ his time more profitably at something else. Protection causes the diversion of labor and capital from their natural channels to others which, but for the protection, would be less remunerative, and the community is a loser to the extent of the difference between the profit which would be derived from the former as compared with the latter under natural conditions, without the protection. It is a mistake to suppose that any part of the labor and capital em- ployed in protected industries would remain idle if the protection were withdrawn from these industries. They would simply flow into their natural channels whereby the community in general would be benefited, the laborers would be as well, or better, off, but some capitalists might receive a somewhat smaller return on their capital. A community, as a whole, cannot be better off because of the diversion of its labor and capital from employments which are profitable under natural conditions to others which only pay capital- ists the average rate of profit, or more, by compelling consumers to pay a higher price for goods of domestic production than imported goods would cost if it were not for the protective tariff. If all duties on imports were removed we would, undoubtedly, import many more goods than at present, but we would also export vastly more. We would buy from other countries such goods as they can Lore. 78 ECONOMICS. produce better or cheaper than we can, and we would sell to them everything which we could, under nat- ural conditions, produce better and cheaper than they can. The division of labor among nations, if free trade prevailed, would be like that in a well-regulated factory. Each would do that for which it, and its citizens, are best adapted ; all would enjoy many things which are now within the reach of only the rich, and all would get many things cheaper and of better quality than at present. I cannot see anything in free trade to cause a re- duction in wages. Admitting that we would import some things which we nnow produce for^ ourselves, we would have to produce, for export, much that we do not now produce at all, because, obviously, the foreigners would not give us their goods, and, conse- quently, every import would have to be paid for by an export of corresponding value. We could not con- tinually import more than we exported if we tried; but the exchange of commodities between any two countries does not, by any means, necessarily balance. It is the grand total of exports and imports between any one country and all others which must, in the long run, come out even. We may export to A and only import from B, in which event the imports from B will balance the exports to A except that we must, as already stated, export enough in addition to bal- ancing our imports to pay the interest on our indebt- edness to other countries. The policy adopted by many governments, of trying to stimulate foreign trade by encouraging exports, and simultaneously doing all in their power to prevent ECONOMICS. 79 it by imposing high tariffs, is like the argument of those people who advocate protection because it raises prices, and at the same time denounce trusts for their efforts to accomplish the same result. If foreign trade is a bad thing both exports and imports should be discouraged. If it is desirable, then both should be encouraged because they are inseparable ; one cannot long exist without the other. Free trade would do more than any other legislation could do to defeat the ends of those trusts and com- binations which try to raise prices by restricting pro- duction, because the unrestricted introduction of for- eign goods would make such restrictions futile. It is sometimes argued that American consumers have to pay more for goods of American manufacture because these same goods are sold for lower prices in foreign than in domestic markets, but the reverse is often true. This state of affairs demonstrates the correctness of the argument that there is no necessary connection between the cost of production and value; hut it does not, by any means, prove that the domestic consumers pay more than they would otherwise have to pay because of the comparatively lower prices at which the foreign consumer is supplied. No Ameri- can manufacturer would be so foolish as to sell his goods below cost in foreign markets, and then try to recoup the loss by raising the price to domestic bvyers. It would be more profitable for him to pro- duce only as much as the home market would take at the same price as though the foreign trade existed. What the shrewd manufacturer really does is to sell all he can to the home trade at the highest prices he 80 ECONOMICS. can charge without bringing in foreign competition, and then he disposes of the remainder of his output, further away, in open competition, at such prices as he can get, as long as they cover the actual net cost of manufacture and transportation, and pay something towards fixed charges, and as long as the average of the prices obtained for the goods sold in both foreign and domestic markets is higher than he could obtain by selling an output of the same magnitude at home. If this latter were attempted prices of many commodi- ties would go so low that their production would soon have to stop altogether; and if production were re- stricted to what the home market would take at a fair profit the cost of production would be so increased that prices would have to be raised higher than those now paid by the domestic consumer even though the foreigner is supplied for much less. This same line of reasoning applies to all lines of business. A merchant whose usual gross profit is ten per cent on the amount of his sales, and whose annual fixed expenses absorb seven per cent of his average business, still finds it profitable to make certain sales for a gross profit of five per cent, after having satisfied himself that a higher rate cannot be obtained. All his expenses go on the same whether these particular sales are made or not, so that the gross profit on them is all net gain in the same sense as the amount which a manufacturer receives from the sale of a by-product is all profit, although the business in both cases is, in another sense, done at a loss; for if all the business done were on the same basis a disastrous loss would be shown by the balance sheet at the end of the year. ECONOMICS. 8l I know nothing about the actual cost of operating a railroad, but, to illustrate this same principle in the business of transportation, let us assume that the average cost of running a freight train is fifty cents per mile, including maintenance of way, of rolling stock, interest on bonds, and all other expenses; and that thirty cents per mile covers the net cost of fuel, wear on track and rolling stock, and wages of train- men, the remaining cost being made up of maintenance of roadbed, bridges, signals, wages of station agents, clerks and officers, and interest on the company's in- debtedness. Obviously, if the revenue from all busi- ness amounted, on an average, to only forty cents per mile for each train the company would lose money, but if a dollar or more per mile can be obtained for hauling first-class freight it will be found profitable to haul cheap and bulky goods, which would not move at all, or only in small volume, at a higher rate, for forty or even thirty-five cents per train per mile, be- cause that rate will pay the net cost of running the train and something towards the fixed charges, thereby materially reducing the cost of handling the more profitable business. This principle was long ago given expression by railroad men in their maxim of charging "all the traffic will stand," in which there is less in- justice than is at first sight apparent. The same is often true of the custom of selling goods for export cheaper than for domestic consumption, and we often, doubtless, get the benefit, on this principle, of lower prices for goods which we import than the consum- ers in the countries where they are produced pay for them. Quo Vadis Henryk Slenkiewlcz Reproach of Annesley.. Maxwell Gray Reveries of a Bachelor. D. G. Mitchell Romance of Two Worlds. .Marie Corelli Rouiola Georpe Eliot Saddle and Sabre Ha wley Smart Samantha at Saratoga. Marietta Holley Scarlet Letter, The Hawthorne Secrets of the BastilcWm. Parmiter Kent Shadow of a Sin Bertha M. Clay Shadowed to Europe.. .James Mooney Ships that Pass in the Night. .Harraden She H. Rider Haggard Sign of the Four, The. ..A. Couan Doyle Silas Marner George Eliot Sister's Love, A W. Heiml)urg Sketch Book Washington Irving Son of Clemenceau.The. Alex. Dumas, Jr. Son of Porthos, The Alexandre Dumas Spy, The J. Fenimore Cooper Squire's Darling, The. .Bertha M. Clay Story of An African Farm. .Olive Schreiner Story of a Wedding Ring. .Bertha M. Clay Strange Case of Dr. Jekyll and Mr. Hyde. Robt. L. Stevenson Strange World, A M. E. Braddou Study in Scarlet A. Conan Doyle Sunshine and Roses The Duchess Terrible Temptation, A.Charles Reade Thelma Marie Corelli Thorns and Orange Blossoms. .B. M. Clay Three Guardsmen Alex. Dumas Three Men in a Boat. . .Jerome K. Jerome Three Red Knights. The. DeFeval Thrown on the World. . .Bertha M. Clay Tillyloss Scandal J. M. Barrie Toilers of the Sea Victor Hugo Tour of the World in Eighty Days. . Verxie Tourmaline's Time Chequss.F Anstey Tramp Actor Elliott F. Barnes Treasure Island Robt. L. Stevensoa True Magdalen Bertha M. Clay Trumpet Major Thos. Hardy Twenty Thoiisand Leagues Under the Sea. Jules A'erne Twenty Years After Alexandre Dumaa Two Orphans R. D'Ennery Uarda George Ebers Umlercurrents The Duchess Undine De LaMotte Fouque Urania Camille Flammarion Vendetta Marie Corelli Vicomte de Bragelonne. Alexandre Dumas Walter's Wooing Bertha M. Clay Weaker Than a WomanBertha M. Clay Wedded and Parted Bertha M. Clay Wee Wifie Rosa N.Carey We Two Edna Lyall W^hat'sBred in the Bone. Grant Allen When a Man's Single... J. M. Barrie White Company, The.. .A. Conan Doyle Wife in Name Only Bertha M. Clay Wife's Sacrifice, A R. D'Ennery Window in Thrums J. M. Barrie Winsome but Wicked. ..Maud Meredith Woman Against Woman Mrs. M. E. Holme* Woman's Error, A Bertha M. Clay Woman's Face, A Florence Warden Woman's War, A Bertha M. Clay Won at Last Beatrice Marean Won by Waiting Edna Lyall Wooed and Married Rosa N. Carey Wormwood Marie Corelli Worth Winning Mrs. Lovett Cameron Young Girl's Love. A. . . .Bertha JLClay The above works will be sent to any address in U. S., Canada or Mexico upon receipt of 25 cents each copy, or five copies for $1.00, post paid by us. M Fast SeiiiQO Wm Hovels THE MARIE ST. FELIX BOOKS. A LITTLE GAME WITH DESTINY TWO BAD BROWN EYES PATRICIA Over one million of these books have been sold. For cleverness and originality nothing better has been written in the English language. New editions— illustrated covers— 50 cents each or the three books for 51.00, postpaid. DONOHUE BROTHERS, 407-429 Dearborn St., CHICAGO. LIBRARY OF CONGRESS 013 721 228 6