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AN EQUITABLE 
 EXCHANGE SYSTEM 
 
 ALFRED R. JUSTICE. 
 
 ^f)ilaticlpf)ta: 
 
 ALFRED J. FERRIS. 
 
 1898. 
 
4 
 
 5r<!56 
 
 COPYRIGHT, 189.3, P-Y ALFRED R. JUSTICE 
 
 JUN 
 
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PREFACE, 
 
 In the consideration of nearly all 
 economic questions, we are met at 
 the very threshold with confusion and 
 want of accurate definition, due to 
 ambiguity in the use of words, and to 
 attempts to reconcile existing condi- 
 tions with certain preconceived theories. 
 
 Common observation shows that in- 
 crease in the number of laborers 
 tends to lower wages, hence there 
 springs up the theory that wages 
 depend upon the relation between the 
 number of laborers and the amount 
 of capital devoted to their employ- 
 ment. Certain writers, in reflecting 
 on this theory, saw that this ought 
 
PREFACE. 
 
 not to be ; that wages shoitld depend 
 upon the ability to produce wealth. 
 
 Likewise in considering the ques- 
 tion of what is the cause of value, 
 one class of writers insist that sup- 
 ply and demand alone is the deter- 
 mining cause of value, others say 
 that human effort should be the basis 
 of value. If, under a competitive sys- 
 tem, prices conform to supply and 
 demand, it does not thereby prove" 
 that, under another system, values 
 could not be based upon human effort. 
 
 So with the question as to the 
 origin and justification of interest. 
 It is easy to show that interest is 
 natural under the competitive system, 
 as it is clear that the possession 
 of capital gives a power to accumu- 
 late wealth to the owner. It seems, 
 
PREFACE. 5 
 
 therefore, perfectly just and proper 
 that money should bear interest, and 
 it is not generally questioned until 
 one examines into its origin and 
 calls into question the competitive 
 system itself. 
 
WAGES. 
 
 The current theory of wages starts 
 with the proposition that wages, in 
 the aggregate, depend upon the ratio 
 between capital and population ; hence 
 the idea of a Wages Fund out of 
 which the laborers are remunerated. 
 It therefore becomes impossible for 
 wages, considered in the aggregate, to 
 increase without a corresponding aug- 
 mentation of the Wages Fund, or a 
 decrease in the number of laborers. 
 
 This position, it is true, has not 
 been without its opponents ; attacks 
 upon the doctrine have been made by 
 W. T. Thornton, "On Labor, Its 
 
8 AN EQUITABLE EXCHANGE SYSTEM. 
 
 Wrongful Claims and Rightful Dues ; " 
 Prof. F. A. Walker, - The Wages 
 Question," Henry George, " Progress 
 and Poverty" and others. Mr. Thorn- 
 ton's reasons were so potent as to 
 cause John Stuart Mill to abandon 
 the Wages Fund Theory. Prof. F. A. 
 Walker and Henry George have 
 demonstrated that the wages of the 
 laborer are paid out of the product 
 of his industry. Notwithstanding the 
 arguments of these able writers, the 
 idea that wages depend upon supply 
 and demand clings with remarkable 
 tenacity to the average newspaper 
 editor and politician. It is reflected 
 in the laws restricting immigration and 
 the prohibition of the importation of 
 contract labor, in the efforts made 
 by the labor unions to prevent the 
 
WAGES. 9 
 
 sale of prison-made goods, and In the 
 selfishness of trades-unions when they 
 restrict the number of apprentices In 
 certain trades. 
 
 The doctrine of Protection Is 
 grounded upon this false theory of 
 wages. The protectionist asserts that 
 when foreign-made goods are per- 
 mitted to come into the country in 
 competition with the domestic product, 
 without restriction, the sale of the 
 domestic product Is Interfered with 
 and wages must necessarily fall, and, 
 on the other hand. If tariff duties are 
 levied sufficiently high to restrict im- 
 portations, just to that extent will the 
 demand for domestic goods increase, 
 and washes rise. When trade between 
 the states is considered, every en- 
 couragement is given to facilitate ex- 
 
10 AN EQUITABLE EXCHANGE SYSTEM. 
 
 changes. State tariffs and discrimi- 
 nation are prohibited by law. When 
 the Supreme Court decided that it 
 was unconstitutional for states to levy 
 a tax upon commercial travelers from 
 other states, it was hailed with delight 
 by merchants and manufacturers every- 
 where. While it is looked upon as 
 desirable to encourage free trade be- 
 tween the North and South and the 
 East and West, it is considered wrong 
 in principle to admit Canada to the 
 same privilege. So soon as the imagi- 
 nary boundary line is passed, com- 
 petition is assumed to be of a kind 
 which will interfere with American in- 
 dustry. 
 
 The difference in the rate of wages 
 which exists between workmen of the 
 southern states and those of the 
 
WAGES. II 
 
 North is greater than the difference 
 existing between the Canadian and 
 the resident of Maine. If we investi- 
 gate the reason why the American 
 Federation of Labor should petition 
 Congress to throw out the machines 
 proposed to be used by the Bureau 
 of Engraving, we shall find the same 
 fundamental fallacy which is at the 
 root of the Protection theory, which 
 advocates restricted immigration, and 
 the prevention of the sale of con- 
 vict-made products. This fallacy is, 
 "That demand for labor is a fixed 
 quantity." I am willing to admit 
 that so long as the competitive 
 system of exchange continues, the 
 demand for labor will be interfered 
 with sufficiently to justify the position 
 of the protectionist and the labor 
 
12 AN EQUITABLE EXCHANGE SYSTEM. 
 
 unions. But with a system of ex- 
 change which will insure to every 
 worker the full value of his labor, 
 demand in the aggregate will keep 
 pace with production in the aggregate. 
 
 Let us consider these subjects in 
 detail. A very little reflection will 
 show that, as our criminals must be 
 fed and clothed, the means for their 
 support must be supplied, and the 
 common-sense way is to let them 
 work and be self-supporting. If 
 society is taxed to support them In 
 Idleness, the workers must pay the 
 taxes. It is fallacious to say the rich 
 pay the taxes. All wealth is the pro- 
 duct of labor, and the wage-earner 
 furnishes the means with which the 
 wealthy pay. 
 
 Next, why should additional num- 
 
WAGES. 13 
 
 bers lower wages ? Let us suppose 
 one hundred men engaged in produc- 
 tion. If they are producing for them- 
 selves, the quantity of their products 
 will fix their aggregate wages. Now 
 suppose the arrival of one hundred 
 immigrants. If each man is able to 
 produce as much wealth as each of 
 the original one hundred, why should 
 wages decline ? If the new arrivals 
 happen to be more inventive or more 
 industrious than the natives and turn 
 out more wealth, why should not 
 wages advance ? 
 
 Next is the question of machinery. 
 The opposition to the use of machin- 
 ery has always been based upon the 
 ground that the machine displaced the 
 laborer. If it does so, remember it is 
 the fault of our system of exchange, 
 and not of the machine. 
 
14 AN EQUITABLE EXCHANGE SYSTEM. 
 
 To return to our one hundred men 
 engaged in production. I have stated 
 that their wages are determined by 
 the amount of wealth they produce. 
 Now if one of their number invents 
 a machine which enables him to pro- 
 duce ten times as much wealth as be- 
 fore, is not the aggregate wealth 
 thereby increased ? and should not 
 wages advance ? 
 
 The reasons why machinery and im- 
 provement in methods of production 
 fail to produce the improvement in 
 the condition of the workers which 
 we would naturally expect, and that 
 the facts seem to harmonize with the 
 wage fund theory, are : 
 
 First, That land is monopolized. 
 
 Second, The wage-earner only re- 
 ceives what is left after the landlord 
 
WAGES. 15 
 
 gets his rent, the capitalist his Inter- 
 est, and the merchant his profits, con- 
 sequently he Is enabled to purchase 
 but a fraction of the wealth he him- 
 self produces. Given a system under 
 which the wai^e-earner will secure all 
 that he Is entitled to, the full value 
 of his own labor, and the anomaly of 
 an apparent overproduction of wealth, 
 accompanied by inability on the part 
 of the producers to create demand, 
 will be a thing of the past. Produc- 
 tion will never be so great in the 
 aggregate that demand will not keep 
 pace with it. Supply and demand 
 will then be equivalent terms. 
 
l6 AN EQUITABLE EXCHANGE SYSTEM. 
 
 PROFIT. 
 
 Profit is the term used in trade to 
 express the sum received for a com- 
 modity in excess of its cost. Strictly 
 speaking, there is no profit until 
 wages, rent, and interest on capital 
 invested, are paid. I take the ground 
 that profit is inconsistent with an 
 equitable distribution of wealth. All 
 profit is a deduction from what would 
 otherwise go to the producer. 
 
 If we suppose a community en- 
 gaged in production, the first essen- 
 tial to an equitable exchange would 
 be to determine the values of the 
 various commodities. To eet at the 
 
PROFIT. 17 
 
 values, the cost of production must 
 be ascertained. Now, if each indi- 
 vidual exchanged his goods at the 
 cost of production, it is clear that no 
 one would derive a profit by ex- 
 change. Each would be benefited, 
 however, by exchanging a commodity 
 for something more useful to himself, 
 but the values of the commodities 
 would be the same. Now, suppose 
 some of the producers, in some way, 
 manage to exchange their goods at 
 double their cost. Is it not clear that 
 their profit would be at the expense 
 of the rest of the community ? If all 
 the producers doubled the price of 
 their goods, no one w^ould derive any 
 profit therefrom ; it would be simply 
 figuring values in a different ratio. 
 The essential idea of profit is that an 
 
1(5 AN EQUITABLE EXCHANGE SYSTEM. 
 
 owner secures more wealth for his 
 goods than he gives. Now, it is per- 
 fectly manifest that two parties to an 
 exchange cannot both get more wealth. 
 One man's gain is the other's loss. 
 
 Our present mercantile system was 
 probably the outgrowth of the incon- 
 venience each producer would expe- 
 rience in hunting up a man who 
 wanted his wares. This difficulty 
 would at once suggest the plan of 
 each man depositing his wares at 
 some common center, where each 
 could find what he wanted. Some 
 one must be employed to attend to 
 the distribution, and his pay must 
 come out of the common stock. In- 
 stead of this method, which seems the 
 natural one, the distributors or mer- 
 chants found they could fix their own 
 
PROFIT. 19 
 
 compensation by buying the goods 
 from the producers, and adding a 
 profit to suit themselves. Those mer- 
 chants who could control the most 
 money, and who were the sharpest 
 in making bargains, became the most 
 successful. As the profit system ex- 
 tended, individuals combined in order 
 to monopolize the natural sources of 
 wealth and to obtain control of fran- 
 chises, and finally, as a natural evo- 
 lution from such a beginning, we 
 have the present competitive system. 
 We are so accustomed to look upon 
 this system as equitable and just, 
 that the average man is somewhat 
 shocked if you even suggest a pos- 
 sible change for the better. The 
 profit system is everywhere accepted 
 as a natural law. 
 
20 AN EQUITABLE EXCHANGE SYSTEM. 
 
 Prof. Walker says : " Men pro- 
 duce wealth not for the sake of pro- 
 ducing it, but with a view to a profit. 
 There is," he says, "doubtless a sat- 
 isfaction in conferrinor benefits on the 
 dependent, a pride in directing great 
 operations, an enthusiasm of work, 
 which make up a part of the com- 
 pensation of many employers ; but it 
 is evident that these cannot be relied 
 upon to any great extent as motives 
 to the systematic and sustained pro- 
 duction of wealth through wage-labor. 
 Individual profit is and must remain 
 the great reason for production. If a 
 person have wealth, that of itself con- 
 stitutes no reason at all to him why 
 he should expend any portion of it 
 on labor, on machinery, or on ma- 
 terials." 
 
PROFIT. 21 
 
 On the contrary, I assert that profit 
 is in no way essential to the pro- 
 duction of wealth. If all goods were 
 exchanged at the cost of production, 
 without one iota of profit in the eco- 
 nomic sense, there would be every 
 incentive to create wealth. Men will 
 produce to procure wealth for use 
 and enjoyment. It is because men 
 have wants that wealth is produced. 
 Necessity is the primary cause of 
 production, not profit. Under our 
 competitive system profit is doubtless 
 a cause of production, but I hope to 
 show that an equitable exchange sys- 
 tem is within our reach, one which, 
 with profit abolished, will yet bring 
 about the greatest possible produc- 
 tion of wealth. 
 
 The late Henry George, following 
 
22 AN EQUITABLE EXCHANGE SYSTEM. 
 
 in the footsteps of earlier economic 
 writers, states : "It seems to me 
 that in itself exchange brings about 
 a perceptible increase in the sum of 
 wealth." In the Yankee story of the 
 two schoolboys, so 'cute at a trade 
 that, when locked in a room, they 
 made money by swapping jack-knives, 
 there is the exaggeration of a truth. 
 Each of the two parties to an ex- 
 change aims to get, and as a rule 
 does get, something that is more 
 valuable to him : — a greater power of 
 labor to satisfy desire. Thus there is 
 in the transaction an actual produc 
 tion of wealth. 
 
 A trading vessel, for instance, 
 penetrating to the Arctic regions, ex 
 changes fish-hooks, harpoons, powder 
 and guns, knives and mirrors, green 
 
PROFIT. 23 
 
 spectacles and mosquito nets, for pel- 
 tries. Each party to the exchange 
 gets, in return for what costs com- 
 paratively little labor, what would cost 
 it a great deal of labor to get by 
 either of the other modes of produc- 
 tion. Each gains by the act. The 
 sum total of the wealth of the world 
 is increased by the exchange itself." 
 
 Mr. George first defines wealth 
 as "the concrete result, the tangible 
 embodiment by change wrought in 
 material things, of labor exerted 
 towards the satisfaction of desire." 
 " To talk of immaterial wealth, as 
 some professed economists now talk, 
 is as much a contradiction in terms 
 as it would be to talk of square cir- 
 cles or triangular squares." "Nothing 
 can be wealth that is not tano^ible to 
 
24 AN EQUITABLE EXCHANGE SYSTEM. 
 
 the senses. Nor can wealth include 
 any natural substance or form or 
 power unmodified by man's exertion, 
 nor any human power or capacity of 
 exertion. To talk of natural wealth, 
 or to talk of human skill, knowledge 
 or energy, as included in wealth, 
 is also a contradiction in terms." 
 "Wealth is the product of labor 
 applied to land or its products." 
 "Only such things can be wealth, the 
 production of which increases and the 
 destruction of which decreases the 
 aggregate of wealth." 
 
 Accepting this definition of wealth, 
 how is it possible to admit that 
 wealth increases through exchange ? 
 The two boys exchanging jack-knives 
 do not add to the sum total of jack- 
 knives. Members of the Stock Ex- 
 
PROFIT. 25 
 
 change and speculators do not in- 
 crease the wealth of the country by 
 buying and selHng stocks. Nor do 
 gamblers playing poker add to the 
 number of dollars in existence. Ex- 
 changes carried on under the profit 
 system differ in no essential particu- 
 lar from exchanging stocks, or from 
 exchanging dollars by gambling, in so 
 far as they affect the sum total of 
 wealth. Just as the stock broker and 
 the gambler profit at the expense of 
 others, so do merchants profit at the 
 expense of the producers. Men can 
 exchange until doomsday without the 
 sum total of the wealth increasing a 
 jot. 
 
 All products- of labor which are in 
 demand have a normal value. Prices 
 may oscillate on either side of this 
 
26 AN EOUITAIU.E EXCHANGE SYSTEM. 
 
 line of normal value by reason of 
 variations in supply and demand. 
 This Mr. Georee admits. Then it fol- 
 lows, all the wealth of the country has 
 a certain value, and such wealth in 
 the aggregate can only increase by 
 an actual addition to the valuable 
 things. Exchange adds nothing what- 
 ever. The addition which Mr. George 
 claims is immaterial and imaginary."^' 
 A similar fallacy shows itself in the 
 contention that wealth increases or 
 diminishes when general prices rise 
 or fall. If the nominal prices of 
 all commodities were to be doubled, 
 say by an increase in the volume of 
 money, the real wealth of the country 
 would not be altered thereby ; and 
 when stocks tumble one thousand 
 
 *This does not deny that the labor of transportation 
 adds to value. 
 
PROFIT. 27 
 
 millions, owing to a war scare, wealth 
 in the aggregate has not changed. 
 
 I have seen it stated that the 
 losses this country sustained by the 
 depreciation following the demonetiza- 
 tion of silver have amounted to billions 
 of dollars. The real loss here is not 
 the general fall in prices, which sim- 
 ply transfers wealth from the debtor 
 to the creditor classes, but the loss 
 in production due to the enforced 
 idleness of the workers. 
 
 If profit is a deduction from 
 the wealth-producers' earnings, it will 
 seem strange if such a system can 
 endure ; nor will it if the waofe-earn- 
 ers become intelligent enough to com- 
 prehend it. 
 
 Adam Smith's saying that "The 
 produce of labor constitutes the natu- 
 
28 AN EQUITABLE EXCHANGE SYSTEM. 
 
 ral recompense or wages of labor," is 
 as true to-day as when he wrote it. 
 It may be claimed that profits under 
 competition tend to a minimum, — that 
 the majority of merchants fail to 
 receive any profit over and above what 
 might be considered a fair compensa- 
 tion for their services. This is true, 
 and it is the result of too many being 
 engaged in distribution. When we 
 consider the enforced idleness of the 
 employees of our mercantile establish- 
 ments during a considerable portion 
 of the day, it will be seen that much 
 more business could be transacted 
 with half the number of employees, if 
 the work could be distributed through 
 the day, instead of being crowded 
 into a few hours. A more costly 
 method of distribution it would be 
 
PROFIT. 29 
 
 difficult to imagine than the competi- 
 tive system. Needless expenses are 
 multiplied in every direction. Un- 
 necessary, costly display, useless ad- 
 vertising, expensive book-keeping, due 
 to the credit system, and waste effort 
 in order to get trade away from com- 
 petitors, are but suggestions of the 
 immense savings which would accrue 
 to society by the adoption of a 
 proper method of distribution. 
 
30 AN EQUITABLE EXCHANGE SYSTEM. 
 
 INTEREST. 
 
 Probably no subject of economic 
 discussion has occasioned greater di- 
 versity of opinion, as to its origin, 
 than interest. 
 
 The feehncr that interest is a de- 
 duction from what would otherwise 
 go to the wage-earner, is widespread 
 at the present time ; nor is it of 
 recent origin. The Mosaic Code for- 
 bade the lending, at interest, between 
 Jews, although it permitted its accept- 
 ance by Jews from strangers. In 
 Rome, interest between Roman citi- 
 zens was forbidden by the Lex 
 Genucia, B. C. 322. 
 
INTEREST. 31 
 
 The early Christian Church also 
 opposed interest. In the writings of 
 the Scriptures were to be found pas- 
 sages which lent powerful support to 
 the feeline against it. From Luke 6 : 
 35 : " Lend, hoping for nothing 
 again." From Deuteronomy 23 : 19 : 
 "Thou shalt not lend upon usury to 
 thy brother, usury of money, usury of 
 victuals, usury of anything that is lent 
 upon usury." 
 
 The taking of interest was for- 
 bidden to the clergy. This was after- 
 wards extended so as to include the 
 laity as well. For 1500 years the 
 hostility to interest is manifest in the 
 theoloofical and leeal literature of the 
 Church. Pope Clement V., at the 
 Council of Vienna, in 131 1, went so 
 far as to threaten excommunication 
 
32 AN EQUITABLE EXCHANGE SYSTEM. 
 
 to those magistrates who passed laws 
 favorable to interest. Gradually the 
 Church consented to a practical com- 
 promise, as it could not be entirely 
 eradicated, and so it was thought bet- 
 ter to allow it within certain limits. 
 This view was taken by Zwingli, Me- 
 lancthon, and by Luther in his later 
 days. In the reign of Henry VII., 
 Parliament, in making laws legalizing 
 interest, still thought it necessary to 
 comment thus : " That all usury was 
 damnable, contrary to the law of God, 
 and detestable." 
 
 About the middle of the sixteenth 
 century numerous writers, in oppo- 
 sition to the prohibition of interest, 
 found the mercantile community very 
 willing to listen to their arguments, 
 and a chano-e in sentiment soon be- 
 
INTEREST. 33 
 
 came manifest. By the end of the 
 eighteenth century interest had be- 
 come so firmly estabHshed as to have 
 but few opponents. 
 
 Calvin is said to have been the 
 first theoloo-ian to dissent from the 
 views of the canonists respecting in- 
 terest. In a letter to his friend 
 CEkolampadius, he says : 
 
 ''It is with money as it is with a 
 house or field ; the roof and walls of 
 a house cannot, properly speaking, 
 beget money, but where the use of 
 the house is exchanged for money a 
 legitimate money gain may be drawn 
 from the house. In the same way 
 money can be made fruitful. When 
 land is purchased for money, it is 
 quite correct to think, of the money 
 as producing other sums of money in 
 
34 AN EQUITABLE EXCHANGE SYSTEM. 
 
 the shape of the yearly revenue from 
 the land. 
 
 " Unemployed money is certainly 
 barren, but the borrower does not let 
 it lie unemployed. The borrower, 
 therefore, is not defrauded in having 
 to pay interest ; he pays it, ex pro- 
 ve7itu, out of the gain that he makes 
 with the money. A rich man, who 
 has plenty of landed property and 
 general income, but little ready 
 money, applies for a loan to one 
 who is not so wealthy, but happens 
 to have a great command over ready 
 money. The lender could, with the 
 money, purchase land for himself. If, 
 instead of doing so, he contents him- 
 self with the interest, the fruit of the 
 money, how could this be blame- 
 worthy? He concludes that the tak- 
 
INTEREST. 35 
 
 ing of interest cannot be universally 
 condemned ; but neither is it to be 
 universally permitted, but only so far 
 as it does not run counter to fairness 
 and charity. Thus no interest is to 
 be asked from men who are in 
 urgent need ; that due consideration 
 should be paid to the ' poor breth- 
 ren ' ; that the welfare of the State 
 should be considered, and that the 
 maximum rate of interest, established 
 by the laws, should in no case be 
 exceeded." 
 
 Lord Bacon v/ould permit interest 
 on the ground of expediency. "Since, 
 of necessity, men must give and take 
 money in loan, and since they are so 
 hard of heart that they will not lend it 
 otherwise, there is nothing for it but 
 that interest should be permitted." 
 
36 AN EQUITABLE EXCHANGE SYSTEM. 
 
 John Locke, the eminent philoso- 
 pher, in " Some consideration of the 
 consequences of lowering- the interest 
 and raising the value of money," says: 
 "Money is a barren thing and produces 
 nothing, but by compact transfers that 
 profit, that was the reward of one man's 
 labor, into an other man's pocket." 
 Later he justifies interest as a neces- 
 sity, owing to the constitution of human 
 society, and ''it is as equitable to re- 
 ceive interest for a loan, as to receive 
 rent from land." 
 
 To Turgot we are indebted for the 
 first attempt at a scientific solution of 
 the problem, known as the " Fructi- 
 fication Theory." As capital may be 
 invested in land, and the possession 
 of land guarantees the obtaining of a 
 permanent income or rent without 
 
INTEREST. 37 
 
 labor, this gives to capital a power 
 of increase which is interest proper. 
 In other words, "A definite capital 
 must yield a definite interest, because 
 it may buy a piece of land bearing a 
 definite rent." 
 
 But, as Dr. Bohm-Bawerk very 
 justly remarks : *' Why can a person 
 with capital buy a rent-bearing piece 
 of land ? Turgot, in anticipation of 
 this natural question, appeals to the 
 relation of demand and supply as at 
 any moment furnishing the ground 
 for a definite relation of price be- 
 tween capital and labor. But is this 
 a full and satisfactory answer to the 
 question ? Certainly not. The man 
 who, when asked what determines a 
 certain price, answers, ' Demand and 
 supply,' offers a husk for a kernel." 
 
38 AN EQUITABLE EXCHANGE SYSTEM. 
 
 Henry George's explanation of In- 
 terest Is similar to Turgot's. He 
 states that '' interest springs from 
 the reproductive powers of nature." 
 Thus, " If I put away money, It will 
 not Increase ; but suppose I put away 
 wine ; at the end of a year I will 
 have an Increased value, for the wine 
 win have improved In quality. Or, 
 suppose I set out bees. At the end 
 of the year I will have more swarms 
 of bees, and the honey which they 
 have made. Or, supposing I turn 
 out sheep, or hogs, or cattle ; at the 
 end of the year I will, upon the 
 average, have an increase." 
 
 *' Now," says George, "What gives 
 the increase in these cases Is some- 
 thing which, though It generally re- 
 quires labor to utilize It, is yet dis- 
 
INTEREST. 39 
 
 tinct and separable from labor : the 
 active power of nature, the principle 
 of growth, of reproduction, which 
 everywhere characterizes all the forms 
 of that thing or condition we call life, 
 and it seems to me this is the cause 
 of interest." 
 
 '' This attempt to separate produc- 
 tion into two classes, in one of which 
 the natural elements assist in produc- 
 tion while in the other they do not, 
 is untenable. The co-operation of 
 nature is universal ; all production 
 rests on the fact that by the appli- 
 cation of natural forces we put im- 
 perishable matter into useful forms. 
 Whether the natural power of which 
 we avail ourselves in this be vege- 
 tative or inorganic, mechanical or 
 chemical, makes no difference what- 
 
40 AN EQUITABLE EXCHANGE SYSTEM. 
 
 ever in the relation In which natural 
 power stands to our labor." (Dr. 
 Bohm-Bawerk.) 
 
 George insists that all capital must 
 bear interest, because it may be ex- 
 changed for corn, cattle, bees or 
 wine ; but is the increase in the value 
 of a quantity of corn or cattle or 
 bees, which time brings about, with 
 the help of nature, worth more than 
 the original quantity of such corn, 
 cattle or bees, plus the labor ex- 
 pended in attending to the increase ? 
 There Is nothing in George's explana- 
 tion to prove it. Unless the repro- 
 ductive powers of nature be monopo- 
 lized, it is difficult to see how any 
 gain can accrue to the user thereby. 
 If the soil is accessible to everyone, 
 no one will obtain any advantage 
 
INTEREST. 41 
 
 over his neighbor. The laborer is 
 entitled to the full value which his 
 work, plus the reproductive power of 
 nature, creates. 
 
 Senior justifies interest by claiming 
 it as the reward of abstinence. But 
 abstinence is not productive. If the 
 whole world refrained from using 
 wealth, capital would not, by virtue 
 of such abstinence, increase. In loan- 
 ing capital, you are doing the recipi- 
 ent a service, but it may also be true 
 that the borrower is doing you a ser- 
 vice in taking care of it. Capital, in 
 most of its forms, is more or less 
 perishable, and use may tend to 
 preserve it. A vacant house soon 
 deteriorates, as many owners well know. 
 
 Bastiat thinks it only necessary to 
 point to the increased efficiency of 
 
42 AN EQUITABLE EXCHANGE SYSTEM. 
 
 labor, due to the possession of tools, 
 to show the justice of interest. That 
 the possession of tools increases the 
 productive power of labor, and raises 
 general wages, is evident. But the 
 question is. Where tools are in uni- 
 versal use, and there is no monopoly, 
 do the users of tools secure increased 
 prices for their products which enable 
 them to pay interest ? Does not the 
 competition of sellers compel a man 
 who pays interest to sell his goods 
 as low as a man who owns his 
 tools, and has no interest to pay ? 
 If the opportunity to create their own 
 capital is offered to everyone, very 
 few men will pay interest for the use 
 of what their own labor will create 
 for them. 
 
 That the power that exists in 
 
INTEREST. 4-^ 
 
 machinery and tools to increase the 
 productive power of labor is not 
 the cause of interest, is conclusively 
 proven by the fact that during the 
 past fifty years, which marks the most 
 important era in the age of invention, 
 interest has declined. 
 
 Dr. Bohm-Baw^erk, whose criticism 
 of the various interest theories has 
 earned for him a world-wide reputa- 
 tion, takes the ground that interest 
 has its origin in the fact that present 
 goods have a different value from 
 future goods. '' If one were to 
 give a thousand persons the choice 
 whether they would rather take a oift 
 of $100.00 to-day, or take it fifty 
 years hence, surely all the thousand 
 persons w^ould prefer to take the 
 $100.00 now^ Or, if one were to 
 
44 AN EQUITABLE EXCHANGE SYSTEM. 
 
 ask a thousand persons, who wished 
 a horse, and were disposed to give 
 $100.00 for a good one, how much 
 they would give now for a horse that 
 they would only get possession of In 
 ten or In fifty years, although as 
 good an animal were guaranteed at 
 that time, surely they would all name 
 an Infinitely smaller sum. If they 
 named one at all, and thereby they 
 would surely prove that everybody 
 considers present goods to be more 
 valuable than future ooods of the 
 same kind." 
 
 But is this true of all capital ? Let 
 us see. Here is a business property 
 centrally located. If one thousand 
 persons were asked if they would 
 take its value now or ten years 
 hence, would they all prefer it now ? 
 
INTEREST. 45 
 
 Here is a quantity of whiskey and 
 wine. Is it manifest that everyone 
 would prefer the vaUie of the present 
 goods to that of the future goods ? 
 It is true of most capital that its 
 present value is greater than future 
 value, but it is not true of all capital. 
 It is no unusual matter for the 
 owners of present wealth to prefer 
 its future use, and to pay storage 
 and safe-deposit companies to deliver 
 it to them at a future date. 
 
 To me it seems clear that interest 
 can be accounted for, first, by our 
 laws, which permit men to buy land 
 and thus control the natural sources 
 of wealth ; second, by our exchange 
 system, which enables men to invest 
 capital in a profit-making business ; 
 third, by the unequal distribution of 
 
46 AN EQUITABLE EXCHANGE SYSTEM. 
 
 capital, due to the monopoly of 
 natural opportunities. 
 
 If the land were owned by the 
 State, as it should be, and the profit 
 system abolished, capital could no 
 longer be invested so as to bring in 
 a return in interest. The only source 
 left for the capitalist to derive an in- 
 come from would be production, and so 
 long as capital is in the hands of the 
 few interest will obtain ; but even this 
 source will gradually disappear as cap- 
 ital becomes more uniformly diffused. 
 If it be asked what inducement is left 
 to the capitalist to engage in produc- 
 tion, I reply, profit is not the cause of 
 production. Men will produce because 
 they are in want of something, and in 
 order to produce they will accumulate 
 capital. 
 
INTEREST. 47 
 
 If there be a normal or natural 
 interest rate, why should the laws of 
 nations prohibit usurious rates ? It is 
 looked upon as perfectly right and 
 proper to take six per cent, interest, 
 and yet it is made a criminal act to 
 take seven per cent. 
 
 That interest is not a natural thing 
 is proven by the fact that it never 
 has, nor ever can, continue uninter- 
 ruptedly for a long period. Edward 
 Kellogg says : '* Suppose, when Vir- 
 ginia was settled in 1607, England 
 had sold to the first settlers the 
 whole of the United States for ^1000, 
 and had taken a morto-aoe for this 
 sum, with the understanding that the 
 interest was not to be paid off, but 
 to be added annually to the principal ; 
 in two hundred and fifty years the 
 
48 AN EQUITABLE EXCHANGE SYSTEM. 
 
 debt would have reached the enor- 
 mous sum of $33,554,432,000. All 
 the increase in the wealth of the 
 nation, due to labor, would not 
 equal this sum." 
 
 Says Arthur Kitson : " It is not 
 necessary to go back so many years 
 to show the impossibility of usury as a 
 scientific principle. Usury is always in- 
 creasing more rapidly than wealth. It 
 knows no period of depression, no time 
 of stagnation, no failure of crops, no 
 unfortunate speculation, no condition of 
 ill-health and inability to produce. It 
 forever goes on as regular as time, 
 and as relentlessly as gravitation, count- 
 ing and adding to men's burdens, pil- 
 ing them higher and higher, until the 
 load becomes too great and they fall, 
 crushed by the weight of oppression." 
 
INTEREST. 49 
 
 Says Mr. I. W. Bennett, in The 
 Arena, March, 1894: ''The borrowed 
 capital of this country claims more in 
 remuneration than the country can 
 produce. Every dollar invested in 
 business claims a return called inter- 
 est ; every dollar representing debts 
 unpaid claims a like remuneration. 
 This must all be paid out of the 
 production of each year, and from 
 each year's product men must be fed 
 and clothed and sheltered. The 
 wealth of the world must be kept 
 up ; buildings, machinery, everything, 
 must be kept in repair ; and improve- 
 ments for use in the future must be 
 taken from the stock of the present. 
 
 " There is not wealth enough to 
 meet all these obligations, and the 
 business of the world must go into 
 
50 AN EQUITABLE EXCHANGE SYSTEM. 
 
 the hands of a receiver every now 
 and then, so that a new start in 
 business may be made. The coun- 
 try, with its alHed industries, is analo- 
 gous to a mammoth business con- 
 cern. When it contracts greater 
 HabiHties than it can meet it fails, 
 and we have a financial panic. This 
 state of bankruptcy is chronic. 
 Counting everything, the liabilities of 
 the country are always greater than 
 its assets. The industrial world is 
 always in a state of potential bank- 
 ruptcy, but credit tends to keep it 
 out of the hands of a receiver." 
 
 Interest is unquestionably the chief 
 cause of the inequality in the distri- 
 tribution of wealth. The possession 
 of money enables men to live in idle- 
 ness from the labor of others. Pro- 
 
INTEREST. 51 
 
 hibit the monopoly of land, the 
 natural source of all wealth, and 
 do not permit men to secure by 
 exchange a portion of the value 
 created by others, and the interest 
 problem will settle itself 
 
52 AN EQUITABLE EXCHANGE SYSTEM. 
 
 RENT. 
 
 Rent springs from what Ricardo 
 calls the " original and indestructible 
 properties of the soil." It is deter- 
 mined "by the excess of the produce 
 of land, over that which the same 
 application can secure from the least 
 productive land in use." As applied 
 to agricultural land, there is no dis- 
 puting this definition ; the mere state- 
 ment is sufficient to bring conviction. 
 But when we investigate the cause 
 of store rents, we find they are due 
 to competition amongst merchants for 
 an opportunity to make profit. 
 
 It is clear that economic rent is 
 
RENT. 53 
 
 the result of land monopoly, and in 
 justification we must assume that men 
 have the right to take possession, 
 and demand rental for the use of the 
 land. The question of the private 
 ownership of land must be considered 
 in relation to the best interest of the 
 entire community. No one can dis- 
 pute the right of a community, or 
 an individual, to take possession of 
 a tract of land not previously occu- 
 pied, and make use of it ; but this 
 right must always take into con- 
 sideration the rights of future genera- 
 tions. Says Henry George : "As 
 for the deduction of a complete and 
 exclusive individual right to land from 
 priority of occupation, that is, if 
 possible, the most absurd ground 
 on which land ownership can be 
 
54 AN EQUITABLE EXCHANGE SYSTEM. 
 
 defended. Priority of occupation give 
 exclusive and perpetual title to the 
 surface of the globe on which, in the 
 order of nature, countless generations 
 succeed each other ! Had the men 
 of the last generation any better right 
 to the use of this world than we of 
 this ? Or the men of a hundred 
 years ago, or of a thousand years 
 ago ? Had the mound-builders, or 
 the cave-dwellers, the contemporaries 
 of the mastodon and the three-toed 
 horse ; or the generations still further 
 back, who, in the dim a^ons that we 
 can only think of as geologic periods, 
 followed each other on the earth we 
 now tenant for our little day? 
 
 " Has the first-comer at a banquet 
 the right to turn back all the chairs, 
 and claim that none of the other 
 
RENT. 55 
 
 guests shall partake of the food pro- 
 vided, except as they may make 
 terms with him ? Does the first man 
 who presents a ticket at the door of 
 a theatre, and passes in, acquire by 
 his priority the right to shut the 
 doors and have the performance go 
 on for him alone ? Does the first 
 passenger who enters a railroad car 
 obtain the right to scatter his bag- 
 gage over all the seats, and compel 
 the passengers who come in after 
 him to stand up ? The cases are 
 perfectly analogous. We arrive and 
 we depart, guests at a banquet con- 
 tinually spread ; spectators and par- 
 ticipants in an entertainment where 
 there is room for all who come ; pas- 
 sengers from station to station on a 
 car that whirls through space, our 
 
56 AN EQUITABLE EXCHANGE SYSTEM. 
 
 rights to take and possess cannot be 
 exclusive ; they must be bounded 
 everywhere by the equal rights of 
 others." 
 
 Private property in land had its 
 origin in conquest. In our own coun- 
 try it is easy to trace titles. The 
 kings of England, France and Spain, 
 by virtue of the right of might, took 
 possession of the land, made grants 
 of immense tracts to certain favorites, 
 by whom in turn it was parceled out 
 to various settlers, and thus we buy 
 and sell the land regardless of how 
 the title was acquired. In Pennsyl- 
 vania we pride ourselves on the fact 
 that William Penn purchased the land 
 from the Indians, and, as Henry 
 George remarks, "there is not much 
 doubt they would have sold him the 
 
RENT. 57 
 
 moon if he had thrown in another 
 barrel of rum." As we are not 
 believers in the divine right of kings, 
 how can we admit the claims of 
 the present owners derived from this 
 source ? 
 
 The right of property in wealth 
 which is the product of human labor, 
 is absolute, both legally and morally, 
 provided it has been honestly ac- 
 quired ; but the land is not of man's 
 creation. The right to its use belongs 
 to the living ; our ancestors could 
 convey no valid title to deprive us 
 of it. The fact that innocent holders 
 have paid for their land in honest 
 earnings, may rightfully claim con- 
 sideration when the people make up 
 their minds to claim their heritage, 
 but the right to the possession is 
 
58 AN EQUITABLE EXCHANGE SYSTEM. 
 
 inalienable. I have seldom met a man 
 but would acknowledge the rightful 
 ness of this position, yet they are 
 always ready to defend private own- 
 ership on the ground of expediency. 
 
 The question of tenure would be 
 just as important if the public owner- 
 ship of land were established, and 
 we need have no fears but that a 
 method would be devised which would 
 give a fair and equal chance to 
 everybody. 
 
 Henry George's Single Tax would 
 solve the difficulty if the competitive 
 system is to continue ; but if the 
 people can understand that it is 
 possible to establish a system which 
 will insure an equitable distribution 
 of wealth, and, at the same time, 
 virtually do away with land values, 
 
RENT. 59 
 
 there will be but little use for the 
 Single Tax. 
 
 The total amount paid in rents is 
 prodigious, and there is no disputing 
 the fact that, as a factor in the dis- 
 tribution of wealth, it is second in 
 importance only to interest. The 
 various sources which make up the 
 sum total of rentals are : 
 
 Business properties. 
 
 Residence properties. 
 
 Farm properties. 
 
 The rent of business properties is 
 due, almost entirely, to competition 
 amongst merchants for an oppor- 
 tunity to make profits. A portion of 
 the sum demanded represents the in- 
 terest on the capital invested in the 
 house, plus the sum necessary to keep 
 it in repair ; but by far the greater 
 
6o AN EQUITABLE EXCHANGE SYSTEM. 
 
 portion is due to the profit system. 
 Abolish the profit system, and what 
 becomes of these land values ? 
 
 The rent of the second class, or 
 residence properties, is partially due 
 to competition for desirable sites, 
 and chiefly due to their proximity to 
 the business centres and places of 
 amusement. Do away with the profit 
 system, and the speculative value, 
 due to location, would disappear. 
 
 The rents of farm lands owe their 
 existence to convenience of access to 
 the best markets, or to difference in 
 fertility. This latter cause, which Ri- 
 cardo calls the ''original and inde- 
 structible properties of the soil," is 
 chiefly the result of the application 
 of labor and fertilizers. While there 
 is doubtless considerable difference in 
 
RENT. 6 1 
 
 the natural productiveness of the 
 soil, this difference may be almost 
 annulled by human ingenuity and 
 natural agents. Even the desert may 
 be made to blossom by conveying 
 water from the mountain, and the 
 rocky hillsides used to great advan- 
 tage in raising apples, potatoes, or 
 valuable timber. 
 
 The taxing, by the State, of the 
 value of farm land, would thus be a 
 very difficult problem. The question 
 would constantly arise whether the 
 difference in fertility were due to 
 natural causes, or the expenditure of 
 capital and labor. The difference in 
 values arising from location of farms, 
 in reference to markets, is being 
 gradually eliminated by improved 
 transportation facilities. 
 
62 AN EQUITABLE EXCHANGE SYSTEM. 
 
 The Single Tax confines its opera- 
 tions to the taxing of land values, 
 and would place no restraint upon 
 the production of wealth by taxing 
 the products of labor. The question 
 arises, If its operations are to be so 
 confined, how can they find any land 
 values to tax which are not due to 
 the labor of man? All land in its 
 natural state is the gratuitous offering 
 of nature to mankind. The valuable 
 qualities which arise through the ex- 
 penditure of labor, — the draining of 
 the swamps, the clearing of the for- 
 ests, removal of stones, and the appli- 
 cation of fertilizers, — are property, and 
 to tax these is essentially the same 
 as to tax the value of a house. 
 
 Land values, apart from the real 
 values due to the expenditure of 
 
RENT. 63 
 
 labor, are not wealth. If every land 
 value due to competition were to fall 
 to zero to-morrow, the sum total of 
 wealth, according to Mr. George's 
 definition, would not be affected in 
 the least. As all wealth is the prod- 
 uct of human labor, all taxes must 
 come from labor. It is impossible to 
 shift it to any other source. Tax in- 
 comes if you will, but then inquire 
 what is the source of incomes. You 
 can tax wealth where you find it, but 
 wealth, the product of labor, is the 
 only value which can be taxed. 
 Changes in values, like the "un- 
 earned increment " of land, are purely 
 imaginary. A general advance in 
 such values does not affect wealth. 
 It appears to me our language re- 
 quires some other word than value to 
 
64 AN EQUITABLE EXCHANGE SYSTEM. 
 
 express the difference between such 
 values and those which increase the 
 sum total of wealth. 
 
 The question of how the people are 
 to get possession of their inheritance, 
 the land, is, as Herbert Spencer de- 
 clares, one of the most intricate prob- 
 lems society will one day have to 
 solve. 
 
 John Stuart Mill advocated the tak- 
 ing by the State of the future un- 
 earned increment, by fixing the value 
 at the present time and appropriating 
 the future increase. This is, as 
 Henry George states, a cumbersome 
 method, and all that can be said in 
 its favor is, that it might be better 
 than no plan. 
 
 Herbert Spencer says : '' Had we 
 to deal with the parties who originally 
 
RENT. 65 
 
 robbed the human race of its heri- 
 tage, we might make short work of 
 the matter." 
 
 A plan which seems to me to be 
 feasible, is for the State to assess the 
 value of the land and the improve- 
 ments separately. The State shall 
 then purchase the land from the pres- 
 ent owners at the assessed valuation, 
 payments to be made annually. Such 
 payments are to remain as an incum- 
 brance against the property. By this 
 method the State will gradually ac- 
 quire title without the shock which 
 would follow more radical measures. 
 In order to meet these annual pay- 
 ments, the State will levy a tax upon 
 land values and incomes. 
 
 There is no way by which State 
 ownership can be accomplished, ex- 
 
66 AN EQUITABLE EXCHANGE SYSTEM. 
 
 cept by appropriation. Call it taxes, 
 or disguise it as you may, it is still 
 appropriation. To meet the payments 
 we must tax wealth where we find it. 
 In securing possession of the land no 
 one will be dispossessed. The own- 
 ers of the improvements will still own 
 them, and can buy and sell such im- 
 provements at their values, as will be 
 explained in the exchange system 
 proposed. 
 
OVERPRODUCTION. 6/ 
 
 OVERPRODUCTION. 
 
 The belief that panics and dull times 
 are due to overproduction is wide- 
 spread. It has its basis in the fallacy 
 that demand is a fixed quantity, 
 whereas men's wants increase with the 
 ability to gratify them. Overproduc- 
 tion of material things is not an incon- 
 ceivable condition, but it could only 
 be possible when the wants of the 
 whole community were supplied ; and 
 it is absurd to say this is the case 
 when so many are suffering from actual 
 want. A man may be able by his 
 labor to produce more than enough 
 to purchase food, clothing, and shelter; 
 if he does so, and saves a part of his 
 
68 AN EQUITABLE EXCHANGE SYSTEM. 
 
 earnings, we do not look upon this as 
 overproduction ; we call it accumula- 
 tion, and look upon it as a commend- 
 able and worthy act. Most men would 
 want, besides food, clothing and shelter, 
 various objects of wealth which might 
 add to their pleasure. If a man were 
 of a literary turn, he might desire a fine 
 library ; if musical, a piano ; or if he 
 had a taste for art, he could create 
 a demand for paintings, statuary, etc. 
 Very few men but would desire a 
 beautiful home ; others might want 
 leisure to devote to study. As long 
 as such wants exist and remain un- 
 satisfied, there is no overproduction. 
 Carried to its logical conclusion, over- 
 production would do away with the 
 necessity for work ; if it were the true 
 cause of our trouble there would be 
 
OVERPRODUCTION. 69 
 
 no satisfactory solution of the labor 
 problem. 
 
 To be consistent, the overproduc- 
 tionist should rejoice in fires, floods, 
 shipwrecks, wars, and other calamities 
 which cause a destruction of wealth : 
 he must discourage invention, depre- 
 cate the use of labor-saving machinery, 
 and advocate restricted production. 
 
 I have no doubt you have all heard 
 such ideas advanced as — " Do not fires 
 create a demand for labor ? " or, ''If 
 we have war, will there not be a great 
 demand for supplies of all kinds ? " 
 If fires create a demand for labor, 
 why not burn up our city ; and if this 
 would not be sufficient to give em- 
 ployment to the idle, we might create 
 a still greater demand for labor, by 
 burning up New York City and 
 
70 AN EQUITABLE EXCHANGE SYSTEM. 
 
 Chicago. Whatever destroys wealth 
 already produced, whether it be by 
 means of fire, flood, shipwreck, war, 
 or strikes, deducts from the sum total 
 of wealth, and each one is a loser in 
 proportion to his interest. 
 
 When labor-saving machinery was 
 first introduced, the poor, half-starved 
 workers naturally looked upon the 
 machine as depriving them of the 
 opportunity to work. They saw in 
 numerous instances how machinery at 
 the outset actually brought people to 
 want, and hence the aversion to the 
 employment of machinery which even 
 now is not entirely dispelled. 
 
 A machine which does the work of 
 ten men, apparently throws nine of 
 the ten out of employment. What it 
 really does, or should do, is to increase 
 
OVERPRODUCTION. 71 
 
 the productive power of labor tenfold. 
 
 The greater the production of wealth 
 the more there is to divide. If by a 
 false wage system the workers fail to 
 receive their share of the advantage 
 which improved methods of production 
 bring about, don't blame the machine. 
 If consumption fails to keep pace with 
 production, there is but one explana- 
 tion of it, which is, that the wao-e- 
 earners only get a fraction of the 
 wealth they produce. It is impossible 
 for a wage class to create a demand 
 for ten billions of wealth with five 
 billions in wages to do it with. Give 
 the producer in wages that which he 
 is entitled to,— the full value of his 
 labor, — and there can be no general 
 overproduction. 
 
 It is possible to create a glut in 
 
*J2 AN EQUITABLE EXCHANGE SYSTEM. 
 
 almost any commodity if sufficient 
 labor and capital be devoted to its 
 production ; but general overproduc- 
 tion means too much of everything. 
 The reason why men work and pro- 
 duce wealth is to satisfy their wants, 
 and when all wants are supplied there 
 is no longer any reason why men 
 should work. But don't count too 
 heavily on the ability of mankind to 
 produce too much wealth. 
 
 The following article, taken from 
 Bastiat's ''Political Economy," edited 
 by David A. Wells, will show how slow 
 has been the accumulation in the past, 
 and may serve as an antidote to 
 those who fear overproduction : * 
 
 ''By the census of 1890 the aggre- 
 gate wealth of the United States, 
 
 *A few changes are made in the figures to make them 
 correspond with later census reports. 
 
OVERPRODUCTION. 73 
 
 making all due allowances for dupli- 
 cation in valuation, was probably not 
 in excess of seventy-two thousand mil- 
 lions of dollars. But vast as the sum 
 is, and difficult as it certainly is for 
 the mind to form an adequate con- 
 ception of it in the aggregate, it is 
 nevertheless most interesting to in- 
 quire what it is that, measured by hu- 
 man effort, it represents. And the 
 answer is that it represents, first, a 
 value, supposing the whole sum to be 
 apportioned equally among an as- 
 sumed population of seventy millions, 
 of about one thousand and twenty- 
 five dollars to each individual : — not a 
 large amount if one were to depend 
 on its interest at six per cent, as a 
 means of support ; and second, it rep- 
 resents the surplus result of all the 
 
74 AN EQUITABLE EXCHANGE SYSTEM. 
 
 labor, skill and thought exerted, and 
 all the capital earned and saved, or 
 brought into the country, for the last 
 two hundred and fifty years, or ever 
 since the country became practically 
 the abode of civilized men. 
 
 *' But, with capital, or the instru- 
 mentalities for creating abundance, in- 
 creasing thus slowly, it certainly 
 stands to reason that we need to be 
 exceedingly careful, lest by doing any- 
 thing to impair its security, we impair 
 also its rate of increase ; and we ac- 
 cordingly find, as we should naturally 
 expect from the comparatively high 
 education of our people, that the idea 
 of any direct interference with the 
 rights of property meets with but lit- 
 tle favor upon this side of the Atlan- 
 tic. But, at the same time, we cannot 
 
OVERPRODUCTION. 75 
 
 deny that many of the most intelli- 
 gent men and women interested in 
 the various labor reform movements 
 in this country, taking as the basis of 
 their reasoning the large nominal ag- 
 gregate of the national wealth, and 
 the large advance which has recently 
 been made in the power of produc- 
 tion, and considering them in the ab- 
 stract, irrespective of time or distribu- 
 tion, have nevertheless adopted the 
 idea, vague and shadowy though it 
 may be, that the amount of the pres- 
 ent annual product of labor and capi- 
 tal is sufficient for all ; and that all 
 that it is necessary to do to insure 
 comfort and abundance to the masses 
 is for the State somehow to inter- 
 vene, either by fixing the hours of 
 labor, or the rates of compensation 
 
"J^ AN EQUITABLE EXCHANGE SYSTEM. 
 
 for service, or the use of capital, and 
 compel its more equitable distribution. 
 " Now, that a more equitable dis- 
 tribution of the results of production 
 is desirable, and that such a distribu- 
 tion does not at present take place 
 to the extent that it might without 
 impairing the exercise of individual 
 freedom, must be admitted ; but, be- 
 fore undertaking to make laws on the 
 subject, is it not of importance to first 
 find out how much we have really 
 got to divide ? Let us see. Stated 
 in money, the maximum value of the 
 annual product of the United States 
 is not in excess of $10,000,000,000 
 (probably less) ; of which the value of 
 the annual product of all our agricul- 
 ture, our cotton and our corn, our 
 beef and our pork, our hay, our 
 
OVERPRODUCTION. 'J'J 
 
 wheat, and all our fruits, is returned 
 by the last census, with undoubted ap- 
 proximate accuracy, at less than one- 
 half that sum, or in round numbers 
 at $5,000,000,000. 
 
 *' But, while this sum of estimated 
 yearly income, like the figures which 
 report the aggregate of our national 
 wealth, is so vast as to be almost be- 
 yond the power of mental conception, 
 there is yet one thing about it which 
 is certain and can be readily compre- 
 hended, and that is, that of this whole 
 product, whether we measure it in 
 money or in any other way, fully 
 nine-tenths, and probably a larger' 
 proportion, must be immediately con- 
 sumed in order that we may simply 
 live, and make good the loss and 
 waste of capital previously accumu- 
 
78 AN EQUITABLE EXCHANGE SYSTEM. 
 
 lated, leaving not more than one-tenth 
 to be appHed in the form of accumu- 
 lation for effecting a future increased 
 production and development. 
 
 " Or, to state the case differently, 
 and at the same time illustrate how 
 small, even under the most favorable 
 circumstances, can be the annual sur- 
 plus of production over consumption, 
 it is only necessary to compare the 
 largest estimate of the value of our 
 annual product with our largest of 
 the aggregate national wealth to see 
 that, practically, after two hundred 
 and fifty years of toiling and sav- 
 ing, we have only managed as a 
 nation to get about three and a 
 half years ahead in the way of 
 subsistence ; and that now if, as a 
 whole people, we should stop work- 
 
OVERPRODUCTION. 79 
 
 ing and producing, and repairing 
 waste and deterioration, and devote 
 ourselves exclusively to amusement 
 and idleness, living on the accumula- 
 tion of our former labors or the 
 labor of our fathers, four years would 
 be more than sufficient to starve 
 three-fourths of us out of existence, 
 and reduce the other one-fourth to 
 the condition of semi-barbarism ; a re- 
 sult, on the whole, which it is well to 
 think of in connection with the pro- 
 mulgation of certain new theories, 
 that the best way of increasing abun- 
 dance, and promoting comfort and 
 happiness, is by decreasing the aggre- 
 gate and opportunities of production. 
 In fact, there are few things more 
 transitory and perishable than that 
 which we call wealth ; and, as spe- 
 
80 AN EQUITABLE EXCHANGE SYSTEM. 
 
 cifically embodied in the ordinary 
 forms we see about us, its duration is 
 not, on the average, in excess of the 
 life of a generation. 
 
 '' The railroad system of the coun- 
 try is estimated to have cost more 
 than nine thousand millions of dol- 
 lars, but if left to itself without re- 
 newals or repairs, its value as prop- 
 erty in ten years would entirely van- 
 ish ; and so also with our ships, our 
 machinery, our tools and implements, 
 and even our land, when cultivated 
 without renovation. For it is to be 
 remembered that those same forces of 
 nature which we have mastered and 
 made subservient for the work of pro- 
 duction, are also our greatest natural 
 enemies, and if left to themselves will 
 tear down and destroy much more rap- 
 
OVERPRODUCTION. 8l 
 
 idly than, under our guidance, they will 
 aggregate and build up. A single 
 night was sufficient in Chicago to ut- 
 terly destroy what was equivalent to 
 one-quarter of the whole surplus 
 product which during the preceding 
 year the nation had accumulated ; and 
 of all the material wealth of the great 
 and rich nations of antiquity, of Egyp- 
 tian, Assyrian, Tyrian and Roman 
 civilization, nothing whatever has come 
 down to us, except, singularly enough, 
 those things which, like their tombs 
 and public monuments, never were 
 possessed of money valuation. But 
 the inferences which we are warranted 
 in drawinof from these facts and hg;- 
 ures are by no means exhausted. 
 Supposing the value of our annual 
 product, — ten thousand millions, — to 
 
82 AN EQUITABLE EXCHANGE SYSTEM. 
 
 be equally divided amongst our pres- 
 ent population of seventy millions, 
 then the average income of each indi- 
 vidual would be ^142.50 per annum, 
 out of which food, clothing, fuel, shel- 
 ter, education, traveling expenses, and 
 means of enjoyment, are to be pro- 
 vided, all taxes paid, all waste, loss 
 and depreciation made good, and any 
 surplus available as new capital added 
 to former accumulations. 
 
 '' Now, if at first thought this de- 
 duction of the average individual in- 
 come of our people seems small, it 
 should be remembered that it is 
 based on an estimate of annual na- 
 tional product greater both in the ag- 
 gregate and in proportion to num- 
 bers than is enjoyed by any other na- 
 tion, our compeers in wealth and civ 
 
OVERPRODUCTION. 83 
 
 ilization ; and further, that this $142.50 
 is not the sum which all actually re- 
 ceive as income, but the average sum 
 which each would receive were the 
 whole annual product divided equally. 
 But, as a practical matter, we know 
 that the annual product is not divided 
 equally ; and, furthermore, that as 
 long as men are born with different 
 natural capacities it never will be so 
 divided. Some will receive and do 
 receive as their share of the annual 
 product the annual average we have 
 stated, multiplied by hundreds or 
 even thousands, which of course ne- 
 cessitates that very many others shall 
 receive proportionately less. And 
 how much less is indicated by recent 
 investigations, which show that for the 
 whole country the average earnings of 
 
84 AN EQUITABLE EXCHANGE SYSTEM. 
 
 laborers and unskilled workmen are 
 not in excess of $500 per annum, the 
 maximum amount being received in 
 New England, and the minimum in 
 the Southern, or former slave-holding 
 States, which sum, assuming that the 
 famiHes of all these men consist of 
 five — two adults and three children — 
 would give $100 as the average 
 amount which each individual of the 
 class referred to produces, and also 
 the amount to which each individual 
 must be restricted in consumption ; 
 for it is clear that no man can con- 
 sume more than he or his capital pro- 
 duces, unless he can in some way ob- 
 tain the product of some other man's 
 labor without giving him an equiva- 
 lent for it. 
 
 *'We are thus led to the conclu- 
 
OVERPRODUCTION. 85 
 
 sion that, notwithstanding the wonder- 
 ful extent to which we have been en- 
 abled to use and control the forces 
 of nature, for the purpose of increas- 
 ing the power of production, the time 
 has not yet come when society in the 
 United States can command such a 
 degree of absolute abundance as to 
 justify and warrant any class or indi- 
 vidual, rich or poor, and least of all 
 those who depend upon the product 
 of each day's labor to meet each 
 day's needs, in doing anything which 
 can in any way tend to diminish 
 abundance ; and, furthermore, that the 
 agency of law, even if invoked to the 
 fullest extent in compelling distribu- 
 tion, must be exceedingly limited in 
 its operations. 
 
 '* Let the workingman of the United 
 
86 AN EQUITABLE EXCHANGE SYSTEM. 
 
 States, therefore, in every vocation, 
 demand and strive if he will for the 
 largest possible share of the joint 
 products of labor and capital ; for it 
 is the natural right of everyone to 
 seek to obtain the largest price for 
 that which he has to sell. But if, in 
 so doing, he restricts production, and 
 so diminishes abundance, he does it 
 at his peril ; for, by a law far above 
 any legislative control or influence, 
 whatever increases scarcity not only 
 increases the necessity but diminishes 
 the rewards of labor. 
 
 " Street processions, marching after 
 flags and patriotic mottoes, even if 
 held every day in the week, will 
 never change the conditions which 
 govern production and compensation. 
 Idleness produces nothing but weeds 
 
OVERPRODUCTION. 87 
 
 and rust ; and such products are not 
 marketable anywhere, though society 
 often pays for them most dearly." 
 
88 AN EQUITABLE EXCHANGE SYSTEM. 
 
 INFLUENCE OF POPULATION. 
 
 The Malthusian doctrine, or the ten- 
 dency of population to increase faster 
 than the means of subsistence, is a 
 recognized principle in economics. 
 While some attach great importance to 
 the theory, others, like Henry George, 
 refuse to recognize it even as a ten- 
 dency ; or, if recognized, to be classed 
 in the same category as the return of 
 the glacial period, or the exhaustion 
 of the supply of oxygen. 
 
 It appears to me that in Mr. 
 George's efforts to disprove the doc- 
 trine, he has gone to the other ex- 
 treme: he has taken Mr. Malthus too 
 literally ; for instance, Mr. Malthus 
 
INFLUENCE OF POPULATION. 89 
 
 simply supposes a case when he 
 speaks about population increasing in 
 a geometrical ratio, while the means of 
 subsistence only increase in an arith- 
 metical ratio ; he did not lay it down as 
 a law. In fact, Mr. Malthus insists that 
 the principle of population must be 
 looked upon as a tendency only. He 
 says ; '' We have already seen that 
 the limit to the population of commer- 
 cial nations, is the period when, from 
 the actual state of foreign markets, 
 they are unable regularly to import an 
 increasing quantity of food. And the 
 limit to the population of a nation 
 which raises the whole of its food on 
 its own territory is, where the land 
 has been so fully occupied and worked, 
 that the employment of another 
 laborer on it, will not, on an average, 
 
90 AN EQUITABLE EXCHANGE SYSTEM. 
 
 raise an additional quantity of food, 
 sufficient to support a family of such 
 a size as will admit of an increase of 
 population. This is evidently the ex- 
 treme practical limit to the progress 
 of population, which no nation has 
 ever reached, nor indeed ever will." 
 
 ''There is, however, a limit which, 
 if the capital and population of a 
 country continue increasing, they must 
 ultimately reach, and cannot pass ; and 
 that, upon the principle of private 
 property, must be far short of the 
 utmost capacity of the earth to produce 
 food." "That the ultimate check to 
 population (want of food) is never the 
 immediate check except in cases of 
 actual famine." 
 
 It seems to me that it is no reflec- 
 tion on the bounty of nature to admit 
 
INFLUENCE OF POPULATION. 9I 
 
 a mere tendency; and with the qualifi- 
 cations made by Mr. Malthus it seems 
 to need no proof ; it is self-evident 
 there is a limit to the production of 
 food. With all the improvements 
 which have come down from past ages, 
 we are still unable to produce more 
 than a certain quantity of cattle to a 
 given area. 
 
 The mind assents to a possible limit 
 in this direction, but not so with popu- 
 lation. When considering the possi- 
 bility of population increasing, we must 
 admit that there must be some natural 
 check ; and, as Malthus states, this 
 check is not the limit set by the 
 inability to raise food. The stationary 
 period would be reached when the in- 
 creasing effort necessary to support a 
 family in that degree of comfort which 
 
92 AN EQUITABLE EXCHANGE SYSTEM, 
 
 Is considered essential, is no longer 
 effective. 
 
 I agree with Henry George, that it 
 is absurd to claim that poverty, as it 
 exists to-day, is due to such tendency; 
 we have not come anywhere near to 
 the stage of diminishing returns : the 
 earth abounds with natural wealth, 
 millions of acres are uncultivated. 
 Even in England the limit of cultiva- 
 tion is nowhere near attained. " The 
 soil now produces eight times as much 
 food as it produced hve hundred years 
 ago. In those days half the arable 
 land lay in fallow, the amount of wheat 
 produced averaging but eight bushels 
 to the acre. 
 
 There was no artificial grass ; clover 
 was unknown, cattle were small and 
 stunted by the privation and hard fare 
 
INFLUENCE OF POPULATION. 93 
 
 of winter ; the average weight of a 
 good ox was under four cwt." (Rog- 
 ers, Pol. Econ.) 
 
 Prof. Senior states that ''of the 
 37,000,000 acres in England and 
 Wales, not over 85,000, less than one 
 four-hundredth part, are in a state of 
 high cultivation, and that 5,000,000 
 acres are waste." He estimates the 
 possibilities of production, with proper 
 application of fertilizers, deep-soil plow- 
 ing, drainage, etc., to be more than 
 ten times the present output. 
 
 Edvvard Atkinson states : " It is 
 absurd to attempt to measure the 
 power of subsistence. No man yet 
 knows the productive capacity of a 
 single acre of land anywhere in re- 
 spect to food. The whole existing 
 population of the globe, estimated at 
 
94 AN EQUITABLE EXCHANGE SYSTEM. 
 
 1,400,000,000 persons, could find com- 
 fortable standing room within the limits 
 of a field ten miles square." Penn- 
 sylvania could give each person twelve 
 hundred square feet of space. We 
 can raise wheat enough on a small 
 part of the territory of the United 
 States to feed the world. 
 
 Our farmers complain of the fact 
 that they are compelled to sell their 
 produce at prices which enable them 
 to make but a scant living. Fruit is 
 permitted to rot on the trees, rather 
 than to go to the expense and risk 
 of shipping It to market. I know of 
 one instance of a farmer within ten 
 miles of Philadelphia, who raised 1200 
 bushels of sweet potatoes, and could 
 not sell the lot for as much as would 
 pay the cost of transportation. 
 
INFLUENCE OF POPULATION. 95 
 
 Of course such cases are excep- 
 tional, but they go to show that the 
 trouble is not due to a shortage of 
 food. Tens of thousands of worthy 
 people in the city want the food, but 
 through inability to market the one 
 commodity they have for sale, — their 
 labor, — are prevented from purchasing 
 the farmer's supplies. 
 
96 AN EQUITABLE EXCHANGE SYSTEM. 
 
 MONEY AND VALUE. 
 
 The need of money springs out of 
 what Prof. Jevons calls a double co- 
 incidence in barter. Thus, if a tailor 
 desired to exchange a coat for a pair 
 of shoes, he must first find a party 
 who has shoes to exchange, and sec- 
 ondly, a party who has shoes to ex- 
 change who wants a coat. Another 
 difficulty in barter is to settle differ- 
 ences in value. Thus, if the parties 
 to the exchange should agree that 
 the coat was worth twice as much as 
 the shoes, it would be necessary for 
 the tailor to accept, in settlement of 
 the balance, articles he did not re- 
 
MONEY AND VALUE. 97 
 
 quire, or to give credit to the shoe- 
 maker until such time as he might 
 require another pair of shoes. 
 
 An amusing incident illustrating the 
 need of money is mentioned by Prof. 
 Jevons: ''Some years since, Mile. Zehe, 
 a singer in the Theatre Lyrique, in 
 Paris, made a professional tour around • 
 the world, and gave a concert in the 
 Society Islands. In exchange for an 
 air from Norma and a few other 
 sones she was to receive a third of 
 the receipts. When counted, her 
 share was found to consist of three 
 pigs, twenty-three turkeys, forty-four 
 chickens, five thousand cocoanuts, be- 
 sides considerable quantities of ba- 
 nanas, lemons and oranges. In Paris, 
 as the prima donna remarks in her 
 lively letter printed by Mons. Wolow- 
 
98 AN EQUITABLE EXCHANGE SYSTEM. 
 
 ski, this amount of live-stock and 
 vegetables might have brought four 
 thousand francs, which would have 
 been good remuneration for five 
 songs. In the Society Islands, how- 
 ever, pieces of money were very 
 scarce, and as Mademoiselle could not 
 consume any considerable portion of 
 the receipts herself, it became neces- 
 sary in the meantime to feed her pigs 
 and the poultry with the fruit." 
 
 In order for exchange relations to 
 exist, it will be necessary to devise a 
 method whereby a comparison can be 
 made of the various commodities and 
 thereby determine the value relation. 
 Our present method is to make a 
 definite quantity or weight of gold a 
 standard of value. By comparing the 
 value of any commodity with the gold. 
 
MONEY AND VALUE. 99 
 
 we are supposed to arrive at the 
 value of any other commodity. But 
 how do we get at the value of the 
 gold ? Place a piece of gold by the 
 side of a pair of shoes. You can 
 compare their weight, color or other 
 physical properties, but this will not 
 give you their value relations. The 
 idea of a standard is something which 
 is invariable. The standard of weight 
 is the pound avoirdupois, which is 
 equal to 27.7 cubic inches of distilled 
 water ; the standard of measure is the 
 yard, which is equal to the length of 
 a pendulum beating sixty seconds to 
 the minute ; but you might as well 
 fix on a block of ice in summer as a 
 standard of weight as upon gold as a 
 standard of value. Value is a rela- 
 tion which must be compared in order 
 
lOO AN EQUITABLE EXCHANGE SYSTEM. 
 
 to be ascertained. If you should 
 double the number of pound weights 
 or yardsticks, would that alter the re- 
 lation between a pound weight or 
 yardstick and the thing that is to be 
 weighed or measured ? Manifestly, no. 
 But now suppose that you double the 
 quantity of your standard of value — 
 gold. In so doing, do you alter the 
 relation between the goods and the 
 gold? Unquestionably, yes. It will, 
 therefore, be seen that there is no 
 such thing as a standard of value. If 
 gold itself possessed value in the 
 same sense that a pound of iron pos- 
 sesses weight, then it would be an 
 easy matter to compare values ; but 
 it is essential to the existence of 
 value that something else be present 
 to compare it with, whereas with the 
 
MONEY AND VALUE. lOI 
 
 pound of iron it exists by virtue of 
 the force of gravity. 
 
 There are two ways to determine 
 value relations, but before considering 
 these methods let us inquire into the 
 character of the various commodities 
 which constitutes a nation's wealth. 
 We can separate these into two 
 classes : 
 
 First, Those which are strictly lim- 
 ited in quantity, and by their nature 
 cannot be increased or reproduced, 
 such as rare coins, old books, curiosi- 
 ties, antiquities, statuary, paintings, 
 and objects of a similar nature. 
 
 Second, Those which can be indefi- 
 nitely increased in quantity by the 
 application of labor and capital. To 
 this class belong all the manufactured 
 wealth and agricultural products of 
 
102 AN EQUITABLE EXCHANGE SYSTEM. 
 
 every description. While we may ad- 
 mit that, theoretically, there is a limit 
 to the products of the soil, this limit 
 has never yet been attained, so they 
 may be properly included in this 
 class. The second class is by far the 
 more important of the two, and in- 
 cludes probably ninety-nine per cent, 
 of the entire wealth of the country. 
 
 Let us now consider the two meth- 
 ods of determining the value relation 
 with the view of reaching a conclu- 
 sion as to which of the two will best 
 promote the interests of the pro- 
 ducers. The first is the supply and 
 demand method. 
 
 It is evident that it would be very 
 unjust for exchanges to be based on 
 quantity alone. Because there hap- 
 pened to be fifty pairs of shoes in 
 
MONEY AND VALUE. IO3 
 
 the market to one hat, is no reason 
 why one hat should be worth fifty 
 pairs of shoes. And it is equally 
 clear that demand alone should not 
 determine the rate of exchange. 
 
 How can you compare the demand 
 for a steam yacht with the demand 
 for a suit of clothes ? Everyone 
 would want a suit of clothes ; very 
 few want a steam yacht. If demand 
 alone were to settle value, a suit of 
 clothes would be worth more than a 
 steam yacht. If we consider both 
 supply and demand, without taking 
 into consideration the cost of produc- 
 tion, it will bring about grave injus- 
 tice in exchange, as this system offers 
 no incentive for industry and thrift, 
 but, on the contrary, places a pre- 
 mium on laziness. 
 
104 AN EQUITABLE EXCHANGE SYSTEM. 
 
 Let one class of producers invent 
 machinery, work industriously, and use 
 every method which we would uphold 
 as commendable and desirable, and 
 what is the result ? An increased 
 production, and consequently a fall in 
 its value as compared with other com- 
 modities. Now, if the makers of any 
 other commodity are lazy and thrift- 
 less, they will receive in the higher 
 price due to restricted production as 
 much as if they had used all the 
 energy possible. This is the ten- 
 dency under our present system. 
 
 It may be argued that under a 
 state of freedom, if one class of pro- 
 ducers overstock the market, that the 
 fall in values would cause laborers to 
 leave the industry which offers small 
 remuneration and enter one which of- 
 
MONEY AND VALUE. IO5 
 
 fers greater rewards. If everyone were 
 master of all trades this mobility of 
 labor, which is assumed by econo- 
 mists, would work to a charm ; but 
 here is the difficulty. How many of 
 the half-starved miners seek to better 
 their condition by changing their 
 trades? If they do, it must be in 
 some line which requires no special 
 training, and ninety-nine chances out 
 of a hundred, such avenues of em- 
 ployment are already filled. 
 
 We will now examine the second 
 method of determining values, cost of 
 production, which is dependent upon 
 the quantity of labor and expenses 
 necessarily attached to the production. 
 By quantity of labor I mean quantity 
 compared with its efficiency. Thus 
 the product of an unskilled laborer 
 
I06 AN EQUITABLE EXCHANGE SYSTEM. 
 
 would not equal the product of a 
 skilled mechanic, either in quantity or 
 quality. Two hours' work of the 
 former might equal but one hour's 
 work of the latter. Now, as a mat- 
 ter of fact, the cost of production is 
 taken into consideration in fixinor the 
 
 o 
 
 price of all manufactured commodi- 
 ties. Both supply and demand also 
 affect values under our present sys- 
 tem. I am aware that modern au- 
 thorities claim that values cannot be 
 determined by cost of production. 
 Macleod insists that cost of produc- 
 tion can only affect value in so far as 
 it affects supply. The criticism of 
 Karl Marx's value theory, by Dr. 
 Bohm-Bawerk, is the most able of any 
 I have read, and yet he admits all that 
 is necessary to establish my claim. 
 
MONEY AND VALUE. IO7 
 
 I assert : 
 
 First, That a system of exchange 
 based upon cost of production is en- 
 tirely practicable, confining it to those 
 goods which may be indefinitely in- 
 creased. 
 
 Second, That because the value of 
 such goods as curiosities, paintings, 
 etc., may only be determined by sup- 
 ply and demand, is no reason why all 
 values must be settled that way. 
 
 Dr. Bohm-Bawerk, in his criticism, 
 inquires : ''Is it even true that in 
 all goods possessing exchange value, 
 there is this common property of be- 
 ing the product of labor? Is virgin 
 soil a product of labor, or a gold 
 mine, or a natural seam of coal ? 
 And yet, as everyone knows, these 
 often have a very high exchange 
 
I08 AN EQUITABLE EXCHANGE SYSTEM. 
 
 value ; and how can an element that 
 does not enter at all into one class 
 of goods possessing exchange value, 
 be put forward as the common uni- 
 versal principle of exchange value." 
 
 In putting forward this argument he 
 evidently thinks he has his opponent 
 '' in chancery." But, may I ask, why 
 has virgin soil, or a gold mine, or a 
 natural seam of coal, value ? Is it 
 not because such things have been 
 made property and become the sub- 
 jects of capitalistic monopoly? The 
 coal mines are beyond price in their 
 value to mankind, but such natural 
 agents are the gratuitous gifts of 
 nature to mankind, they should be 
 owned in common and mined by the 
 state in the interest of all, and the 
 price of coal would then be deter- 
 
MONEY AND VALUE. lOQ 
 
 mined by the average cost of produc- 
 tion. 
 
 The proper function of demand is 
 to give direction to production. That 
 which men have to exchange is their 
 labor. The direction this labor is to 
 take ought to be regulated by men's 
 wants, but these wants must not con- 
 trol the value relation. 
 
 NOTE. 
 
 Upon what does the value of gold depend? 
 Is it primarily the cost of production? or its 
 scarcity? or is the coinage price fixed by gov- 
 ernments the determining factor? If gold is to 
 serve as a standard of value, an absolute, fixed, 
 invariable standard, which will enable us to 
 compare values of commodities at all times, it 
 is of first importance to determine this question. 
 
 If cost of production determines its value, it 
 is evident we could not have selected a com- 
 
no AN EQUITABLE EXCHANGE SYSTEM. 
 
 modity out of the whole category of objects of 
 wealth, in which the cost of production is more 
 variable. Here is a gold nugget which only cost 
 the labor of stooping to appropriate. The Klon- 
 dike miner may secure ^300 a day for his work, 
 while thousands of others may search months 
 and years without any result. How can you get 
 at an average cost of production, when the statis- 
 tics of the returns are positively unattainable ! 
 Only those commodities the production of which 
 can be indefinitely increased, which are free from 
 restrictions, and are not the subjects of monopoly 
 in any shape can have their values determined 
 by cost of production. 
 
 Nature has placed the deposits of gold in un- 
 known quantities in various localities ; these 
 known localities are soon monopolized. When 
 the owner of a mine gets absolute possession, he 
 can secure laborers to work at a fixed price, 
 and the product of their labor he sells entirely 
 regardless of the cost of production. The United 
 States mint purchases all that he can procure at 
 ^20.67 per ounce, whether it costs him ten cents 
 an ounce or ^100 an ounce. If gold were not 
 the subject of monopoly and could be indefinitely 
 
MONEY AND VALUE. Ill 
 
 increased, and the mints would simply stamp 
 the coin as of a certain weight and fineness, 
 its value would conform to the cost of produc- 
 tion. If, for instance, gold could be obtained 
 from seawater at a cost of ^5 an ounce, which 
 has been recently claimed can be done, and pro- 
 viding the method of obtaining it were known to 
 the public, the value would fall, but how would 
 this change in value be manifested ? If the gov- 
 ernment still coined 25.8 grains of gold and 
 called it a dollar, this would make one ounce 
 nominally worth ^20.67. The prices of com- 
 modities would be inflated to four times the 
 present rates. It is evident this would not alter 
 the values of commodities, but their values would 
 be figured on a different ratio. If a hat is worth 
 $4, a pair of shoes $2, and a coat $10, an infla- 
 tion in price which would make hats worth $16, 
 shoes $8, and coats $40, would not give their 
 respective owners any power to get more in ex- 
 change ; they could get more gold but it would 
 take more gold to buy commodities. 
 
 The demand for gold in the arts takes up only 
 a fractional portion of the total product ; the 
 chief demand is for a medium of exchange. 
 
112 AN EQUITABLE EXCHANGE SYSTEM. 
 
 The price of gold as expressed in dollars can 
 never change by reason of varying cost of pro- 
 duction, or through increase in quantity, as long 
 as the government coins a dollar out of 25,8 
 grains of gold. 
 
 A lowering cost of production of gold may 
 indeed be accompanied by falling prices of com- 
 modities. This would be the case if the produc- 
 tion of wealth in the aggregate had increased 
 more rapidly than the increase in the quantity of 
 gold, which, we premise, would accompany 
 lowering cost. Gold is the one commodity in 
 continual and universal demand. This does not 
 spring from the beauty, utility, or any inherent 
 quality of the gold, but owing entirely to the 
 demand for a medium of exchange. 
 
 The adoption of an equitable exchange system 
 would relegate gold to its proper place. The 
 demand would be limited to its use in the arts, 
 and its price determined by the average cost of 
 production. 
 
PLAN IN DETAIL. II3 
 
 PLAN IN DETAIL. 
 
 The question of supreme importance 
 to the producing classes is to secure 
 the value of what they produce. 
 
 It will be admitted that our present 
 competitive system enables some men 
 to acquire enormous fortunes, entirely 
 disproportionate to mere differences in 
 intellectual or physical capacity. An 
 Astor can accumulate millions without 
 the slightest effort on his part. A 
 Rockefeller can, by practically control- 
 ing the petroleum output, accumulate a 
 fortune which represents the savings of 
 a Hfetime of 100,000 men ; and a Gould 
 or a Vanderbilt can likewise acquire 
 
114 AN EQUITABLE EXCHANGE SYSTEM. 
 
 enormous wealth by controlling rail- 
 road transportation. But why particu- 
 larize ? I find no fault with the in- 
 dividuals ; they are doing, on a large 
 scale, what every man endeavors to 
 do, and must do, to succeed under our 
 competitive system — monopolize as 
 much of the trade as possible. No 
 matter whether he be lawyer, doctor, 
 artist or merchant, each one is striving 
 to oret as much as he can. It is the 
 system which is wrong, and I believe 
 that the evils are recognized by far 
 the greater number of people, but they 
 know not how to remedy them. 
 
 The tree which absorbs the moisture, 
 and prevents the light from reaching 
 the ground, has many branches, and 
 philanthropists are busy hacking off 
 limbs, while new ones are constantly 
 
PLAN IN DETAIL. II5 
 
 taking their place. Whether expended 
 in promoting civil service reform, or 
 tariff reform, or bimetalism, or charity, 
 such well-meant effort is doomed to be 
 ineffectual in remedying the trouble : 
 we must remove the tree, root and 
 branches ; and this can be done only 
 by a radical change in our exchange 
 system. 
 
 I am aware of the difficulty of the 
 task. To alter our entire exchange 
 system cannot but be attended with 
 results which will bring trouble to 
 many, but I sincerely believe the good 
 which would follow the adoption of the 
 exchange system I offer, will make the 
 difficulties seem trivial in comparison. 
 A man can, if he possess health and 
 strength, and under ordinary circum- 
 stances, support a family with the bare 
 
Il6 AN EQUITABLE EXCHANGE SYSTEM. 
 
 necessities of life ; but it requires un- 
 remitting toil and the practice of strict 
 economy to do so. What has he to 
 fall back on when sickness overtakes 
 him ? How make provision for old 
 age? 
 
 The claim that the laboring classes 
 were never so well off as now, and the 
 attempt to prove it by pointing to 
 savings-banks' accumulations and gov- 
 ernmental statistics about the advance 
 in wages, etc., may satisfy a certain 
 class of the community, who have pros- 
 pered owing to their superior business 
 qualifications, or to fortunate circum- 
 stances, but it will not convince the 
 man who has been hunting for work 
 for months unsuccessfully, and how 
 many such there are at the present 
 time, every employer of labor knows. 
 
PLAN IN DETAIL. II7 
 
 No wao^e statistics are valid that do 
 not take into consideration the number 
 of workers out of employment, and 
 the number working on short time ; 
 and these facts were not considered 
 in the Aldrich report, 1893, which is 
 so frequently quoted by those who 
 do not wish to recognize the real con- 
 ditions. 
 
 '* Savings bank statistics show accu- 
 mulations, but by whom? The records 
 of the Surroo^ate Court of New York 
 show that two-thirds of the families 
 not only possess no savings bank 
 account, but no registered property of 
 any description." "The investigations 
 of the Massachusetts Labor Bureau, 
 under General Oliver, show that the 
 bulk of deposits belong to a compara- 
 tively small class of well-to-do citizens ; 
 
Il8 AN EQUITABLE EXCHANGE SYSTEM. 
 
 manufacturers, traders, and lawyers, 
 who use these banks instead of banks 
 of deposit ; capitalists, persons living 
 on their incomes, use them to escape 
 taxation and the care necessitated by 
 other investments." (Spahr.) 
 
 Mr. Giffen, the English statistician, 
 makes the claim that during the last 
 half-century : First, Weekly wages have 
 increased about sixty-five per cent. ; 
 Second, That the hours of labor have 
 generally been reduced ; Third, That 
 yearly wages have been increased one 
 hundred per cent. Just how a reduc- 
 tion in the hours of labor should in- 
 crease the yearly wages he does not 
 explain. 
 
 The tenth census for the year 1880 
 states that $245,000,000 were paid by 
 the railroads in interest and dividends, 
 
PLAN IN DETAIL. 1 19 
 
 while wages and salaries were but 
 $221,000,000. 
 
 The inequality in the distribution of 
 wealth is further shown by the fact 
 that one per cent, of the families in 
 America receive, in income from prop- 
 erty alone, as much as fifty per cent, 
 of our famihes receive in both income 
 and wages, and also that one family 
 out of every one hundred owns as 
 much wealth as all the remainder. 
 
 It is not, however, the purpose of 
 this paper to prove conditions by sta- 
 tistics ; the question with which we 
 have to deal is. How are we to rem- 
 edy these recognized evils ? 
 
 First, then, we must abolish our sys- 
 tem of exchange, whereby those who 
 possess capital can secure for them- 
 selves the wealth which is produced 
 
I20 AN EQUITABLE EXCHANGE SYSTEM. 
 
 by others. Instead, then, of exchanges 
 being carried on by merchants, under 
 the profit system, I propose that, — 
 Governmental warehouses shall be es- 
 tablished for the reception of all useful 
 commodities ; producers may bring 
 their products to these warehouses and 
 receive for them certificates of value, 
 which shall be based upon the cost 
 of production. The cost of produc- 
 tion is to be determined exactly as 
 it is done now in all factories, except 
 that such costs will be much easier 
 to reckon, as most of the expenses 
 which are necessarily attached to dis- 
 tribution under the present system, 
 such as salaries of commercial travel- 
 ers and their railroad fares and hotel 
 expenses, advertising, etc., which are 
 such an uncertain element in figur- 
 
PLAN IN DETAIL, 121 
 
 ing costs, will be done away with. 
 
 To further simplify the cost of pro- 
 duction, I would suggest that no77zinal 
 wages should be the same in all trades 
 in all factories ; those workmen receiv- 
 ing the highest nominal wages whose 
 trades require the greatest amount of 
 skill, or where the healthfulness or un- 
 healthfulness, agreeableness or dis- 
 agreeableness of the occupation might 
 justify the nominal differences. 
 
 With a market for their production 
 assured, any body of men could hire 
 capital and engage in production. 
 These men could agree amongst them- 
 selves as to the division of the certifi- 
 cates of value received for their pro- 
 ducts. It will be manifest that those 
 factories which produce the best qual- 
 ity of work, and the greatest quantity 
 
122 AN EQUITABLE EXCHANGE SYSTEM. 
 
 of it, will have the most to divide. 
 Thus, suppose the average production 
 of one hundred men were equal to 
 $200.00 a day. If the operatives of a 
 certain factory, by adopting improved 
 methods, and by exercising care and 
 skill in the manufacture, should turn 
 out goods to the value of $300.00 a 
 day, each employee would receive his 
 share of the increase, proportionate to 
 his nominal wages ; whereas another 
 factory, whose employees did not make 
 use of improved methods, and were 
 careless and lazy, would turn out a 
 product inferior in quality ; conse- 
 quently, while nominally receiving the 
 same wages as in all other similar fac- 
 tories, the value of their product being 
 less, each operator would suffer a loss 
 proportionate to his nominal wages. 
 
PLAN IN DETAIL. I23 
 
 Thus every factory would be directly 
 interested in seeing that every man did 
 his duty. If a man were inclined to 
 loaf or waste his time his fellow-work- 
 ers would object, and he would find 
 his nominal wages reduced. 
 
 Would not such a system encourage 
 the greatest production of wealth, pro- 
 mote industry, and generally be an in- 
 centive for every man to do his best ? 
 It ought to be as easy for a man to 
 sell goods as to buy them. Consider 
 what an enormous waste of energy 
 there is in our present method of sell- 
 ing ; and the inequality resulting from 
 the compulsory sale of goods below 
 their value. 
 
 The governmental warehouses will 
 necessarily receive only those goods 
 whose costs of production are ascer- 
 
124 AN EQUITABLE EXCHANGE SYSTEM. 
 
 tainable, consequently those goods the 
 value of which can only be determined 
 by supply and demand, would be ex- 
 cluded. The question as to whether 
 the system should be applied to agri- 
 cultural products has its difficulties, 
 but I can see no reason why they 
 should be excluded. Nature has so 
 ordained that the products which are 
 the most perishable are generally in 
 the greatest demand. Dealers are not 
 deterred from handling fruits because 
 they are perishable ; the public pays for 
 such losses through the enhanced price 
 of the fruit. By far the greater quan- 
 tity of such products are not only 
 capable of being preserved, but the 
 average cost of production can be 
 ascertained. Corn, cotton, wheat, hay, 
 etc., while both quality and quantity 
 
PLAN IN DETAIL. 125 
 
 are largely influenced by climatic con- 
 ditions, are yet generally profitable at 
 certain prices. The certificates of 
 value will be redeemed in any mer- 
 chandise in the government warehouse, 
 and when redeemed shall be cancelled. 
 
 The next point is to fix the prices 
 at which the governmental warehouses 
 shall sell the products. This, it must 
 be borne in mind, should be the actual 
 cost, but as the cost inclu^des expenses 
 of distribution, losses by fire, by depre- 
 cation and other contingencies, a per- 
 centage must be placed upon the goods 
 to defray such expenses. 
 
 The experience of the Rochdale co- 
 operative stores shows how small the 
 percentage of the cost of distribution 
 may be under proper management, the 
 parent store distributing, annually, over 
 
126 AN EQUITABLE EXCHANGE SYSTEM. 
 
 $2,000,000, at an expense of less than 
 one per cent, yet they have to work 
 under the general disadvantage of the 
 competitive system. 
 
 Loss by fires would be very small, 
 certainly much less than now, as every- 
 body would be directly interested in 
 preventing them, and those of incen- 
 diary origin would be done away with, 
 as there would be no motive. 
 
 Losses by depreciation may occur 
 in various ways, thus : Certain goods 
 might get shop-worn ; others again 
 might cease to be in demand, through 
 the introduction of superior goods, or 
 by producing goods which might be 
 better adapted for the purpose origi- 
 nally intended ; or from goods going 
 out of style, or through breakage, or 
 injury by moths, rust, and in various 
 
PLAN IN DETAIL. 127 
 
 Other ways. Such losses are not a 
 very important factor in computing 
 costs, and may be mostly prevented 
 by ordinary care. 
 
 There would be no percentage 
 added to cover interest charges, nor 
 for rent, and but a very small per- 
 centage would be necessary to cover 
 repairs to property used by the State. 
 If land were owned by the State, any- 
 one could erect a house on any 
 vacant lot and receive certificates of 
 value on its completion. Certain re- 
 strictions there should be as to the 
 character of the buildings, — govern- 
 ment inspection of the construction, 
 sanitary regulations governing plumb- 
 ing, etc., as public interests would 
 dictate. Every owner of a house 
 already erected could secure certifi- 
 
128 AN EQUITABLE EXCHANGE SYSTEM. 
 
 cates of value for it, on passing title 
 to the government authorities, at the 
 appraised valuation. 
 
 Leases of houses deposited with the 
 authorities could be made on short 
 time, the only charge being a sum 
 necessary to keep the property in re- 
 pair. Anyone desiring to purchase 
 such properties would have priority 
 over lessees. 
 
 I think it may be claimed, conserva- 
 tively, that the prices paid by the con- 
 sumer, on an average, exceed the 
 actual cost of production one hundred 
 per cent. The manufacturer makes a 
 profit varying from twenty-five to fifty 
 per cent, gross ; the wholesaler, ten 
 to fifty per cent, gross ; the retailer, 
 twenty-five to fifty per cent, gross. 
 
 Of course, in some lines, the figures 
 
PLAN IN DETAIL. I29 
 
 are much less, but in many others the 
 percentage of profit is much greater. 
 These profits are necessarily large, 
 owing to the cost of doing business 
 under the profit system. The salaries 
 of commercial travelers and their ex- 
 penses, cost of rent, interest, adver- 
 tising, etc., make it incumbent on the 
 dealers to charge this apparently 
 heavy percentage. Almost all such 
 expenses would be abolished under 
 this system, and the prices to the 
 consumer would probably not be over 
 half what they are now. Not only 
 would there be this great gain to all 
 consumers, but the support of the un- 
 productive classes, which is now such 
 a heavy burden on the workers, would 
 be removed. Most of the occupations 
 and professions which are usually 
 
130 AN EQUITABLE EXCHANGE SYSTEM. 
 
 classed as unproductive are the out- 
 growth of the profit system. Abolish 
 the cause of legal difficulties, which 
 originate in trade, and most of the 
 lawyers would have to seek a more 
 useful profession. Bankers, brokers, 
 commercial agencies, collecting agen- 
 cies, insurance companies and their 
 army of clerks, would be unnecessary. 
 What a gain this would be to the 
 producing classes is evident. Every- 
 one employed in such professions is 
 a tax upon production, and the farm- 
 ers and mechanics are supporting 
 them. 
 
 The merchant pays the legal fees, 
 the salary of the commercial traveler 
 and expenses, the expenses of the 
 collecting agencies, and is the chief 
 support of the bankers and clerks. 
 
PLAN IN DETAIL. I3I 
 
 The consumer pays for all in the en- 
 hanced price of the goods he pur- 
 chases. 
 
 Then consider the hundreds of 
 thousands of the unemployed who 
 could, under the system here advo- 
 cated, always find employment. The 
 genus tramp would be exterminated. 
 Those who were able to work and 
 would not could starve ; those who, 
 from sickness or misfortune, were un- 
 able to work, could be provided for 
 by the public. 
 
 I have been asked what would be- 
 come of the widows and orphans de- 
 prived of their ability to live upon in- 
 terest? I answer, What does become 
 of nine-tenths of them at the present 
 time, without interest, and with oppor- 
 tunities to make a living^ restricted 
 
132 AN EQUITABLE EXCHANGE SYSTEM. 
 
 by the competitive system ? Are not 
 the nine-tenths of more importance 
 than the one-tenth? And can anyone 
 fail to see that these widows and or- 
 phans, who constitute the greater 
 number of those deprived of their 
 husbands and parents, would be in- 
 finitely better off under a system 
 where all could find employment, and 
 where equal opportunities were guar- 
 teed to all ? 
 
 Under our present system such un- 
 fortunates are compelled to work un- 
 der very disadvantageous conditions, 
 or are supported by relatives, and the 
 ability of the relatives to afford such 
 relief would not be lessened by hav- 
 ing steady employment at full wages. 
 
 All enterprises which are in their 
 nature monopolistic ought to be 
 
PLAN IN DETAIL. 133 
 
 owned and managed by the State, 
 such as railroads, waterways, tele- 
 phones, telegraphs, water supply, gas 
 supply, etc. Public Interests would 
 not be best promoted by permitting 
 the streets of a city to be used by 
 various telephone, telegraph or water 
 companies, competition being Imprac- 
 ticable. Government ownership Is the 
 only alternative, unless v/e prefer ex- 
 tortion. It Is a reflection on the in- 
 telligence of the American people that 
 they permit private corporations to 
 control transportation. 
 
 The evils of our political system, 
 — corrupt elections, bribery of officials, 
 and the scramble for office, — are the 
 natural outgrowth of giving control of 
 such sources of income to private 
 corporations. These corporations are 
 
134 AN EQUITABLE EXCHANGE SYSTEM. 
 
 conceived in corruption, nourished by- 
 bribery, and their very existence now 
 depends on controlHng- legislation by 
 fair means or foul. 
 
 A corrupt Council, for reasons agree- 
 able to themselves, will give away or 
 lease for an indefinite period valuable 
 franchises, which they know will tend 
 to become more valuable as popula- 
 tion increases ; and yet the law says, 
 that our servants having sold our 
 birthright for a mess of pottage, we 
 must abide by it. The law of con- 
 tract is inviolable. Future genera- 
 tions will refuse to recognize such 
 titles, because corrupt officials cannot 
 dispose of inalienable rights. 
 
 An insurmountable objection to this 
 exchange system in the eyes of some 
 is the danger of bribery in connec- 
 
PLAN IN DETAIL. I35 
 
 tion with the appraising of goods. 
 Safeguards to prevent discrimination 
 that suggest themselves would be to 
 have prices fixed by a board, consist- 
 ing of representatives from various 
 factories, in connection with the gov- 
 ernment experts. Evidence submitted 
 as to the cost of production might be 
 required from each factory. Prices 
 having been once fixed they should 
 be altered only through changes in 
 cost of production. Thus, to encour- 
 age invention, if it should be deemed 
 necessary, patents could be granted 
 the same as at present. When such 
 patents became public property, and 
 the use became general, a readjust- 
 ment of price should take place ; but 
 changes in the quantity of money or 
 certificates of value could not affect 
 
136 AN EQUITABLE EXCHANGE SYSTEM. 
 
 prices as they do under our present 
 system. The money would always 
 have a steady purchasing power, which 
 Professor Andrews states is the ideal 
 sort of money."^ 
 
 Government employees should be 
 paid no more than their services 
 would command in other employ- 
 ments. The reason of the scramble 
 for government offices is due to the 
 fact that the positions are steady and 
 the pay much greater than men can 
 make on an average in other employ- 
 ments. Opportunities to make money 
 corruptly are also the lure for some 
 people. 
 
 A certain class of men object to 
 governmental control. There seems 
 
 *"It is always either assumed or admitted that the ideal 
 sort of money would be money with a unit having a 
 steadfast general purchasmg power." — ("An Honest Dol- 
 lar." — E. B. Andrews.) 
 
PLAN IN DETAIL. 1 37 
 
 to be an idea that government is 
 something separate and apart from 
 the people, and antagonistic to that 
 ideal state of individual freedom which 
 they advocate. I can see no interfer- 
 ence with absolute freedom, and the 
 greatest possible liberty, in the plan 
 I offer. To even mention government 
 to some men is like holding up a red 
 rag before an enraged bull. I believe 
 in perfect freedom of action, so long 
 as such freedom does not interfere 
 with another's rights. I object to one 
 man helping himself to another man's 
 property. 
 
 I believe that governnmetal owner- 
 ship of land and natural monopolies 
 is the only way to secure freedom. 
 Men see the tyranny of government 
 and the abuse of power that has 
 
138 AN EQUITABLE EXCHANGE SYSTEM. 
 
 grown up under a false industrial sys- 
 tem, and naturally go to the other 
 extreme in opposition. 
 
 Under the plan which I have at- 
 tempted to make clear there will be 
 no surrender of individual preference 
 as to one's work, nor will any man be 
 compelled to work if he does not 
 want to ; but there should be general 
 direction given to production by 
 means of a statistical board, which 
 anyone will admit is better than go- 
 ing it blind, as we do now. 
 
 Whether such an exchange system, 
 which I have so crudely outlined, will 
 be the system of the future, or 
 whether it will develop along social- 
 istic lines, remains to be seen. But 
 one thing is clear. The present sys- 
 tem, with the millions toiling for 
 
PLAN IN DETAIL. 1 39 
 
 wages, and a privileged class con- 
 trolling natural opportunities and com- 
 pelling others to pay tribute, is 
 doomed. 
 
140 STATISTICS. 
 
 The United States Census Statistics, 1890. 
 
 From Chas. B. Spahr's "The Present Distribution of Wealth 
 in the United States." 
 
 Distribution of 
 
 wealth by families, five to a 
 
 family. 
 
 OWNING. 
 
 NUMBER. 
 
 AGGREGATE 
 WEALTH. 
 
 AVERAGE 
 WEALTH . 
 
 ,50,000 and over 
 
 125,000 
 
 ^33,000,000,000 
 
 $264,000 
 
 5,000 to 50,000 
 
 1,375,000 
 
 23,000,000,000 
 
 16,000 
 
 500 to 5,000 
 
 5,500,000 
 
 8,2C0,0O0,OOO 
 
 1,500 
 
 Under 500 
 
 5,500,000 
 
 800,000,000 
 565,000,000,000 
 
 150 
 
 
 12,500,000 
 
 55,200 
 
 Seven-eighths of the families hold one-eighth of the nation's 
 wealth. 
 
 One per cent, of the families hold more than the remaining 
 ninety-nine per cent. 
 
 (This aggregate wealth is now, 1898, estimated to be %T2,- 
 000,000,000,) 
 
 Income from Labor and Capital Contrasted. 
 
 FROM LABOR. 
 
 FAMILIES HAVING 
 INCOME OF 
 
 NUMBER OF 
 FAMILIES. 
 
 AVERAGE 
 
 INCOME FROM 
 
 LABOK. 
 
 TOTAL FROM 
 LABOR. 
 
 55,000 and over 
 
 200,000 
 
 53.500 
 
 5700,000,000 
 
 1,200 to 5,000 
 
 1,300,000 
 
 1,200 
 
 1,560,000,000 
 
 Under 1,200 
 
 11,000,000 
 
 380 
 
 4,200,000,000 
 
 12,500,000 
 
 FROM CAPITAL. 
 
 55,000 and over 52.410,000,000 
 
 1,200 to 5,000 1,330,000,000 
 
 Under 1,200 600,000,000 
 
 Total Income from Capital and Labor .... 510,800,000,000 
 
 One per cent, of the families receive from capital alone as 
 much income as half receive from both capital and labor. 
 
statistics. 14] 
 
 Debt of the United States, 1890. 
 
 Estimated by George K. Holmes, Esq., the head of the 
 Bureau of Mortgages. 
 
 Funded Debts of Corporations : 
 
 Railroads $4,631,473,184 
 
 Street Railway Companies 151,872,289 
 
 Telephone Companies 4.992.565 
 
 Telegraph, Water, Gas, and all others 211,661,962 
 
 Total ^5,000.000,000 
 
 Real Estate Mortgages $6,000,000,000 
 
 Crop Liens in the South 350,000,000 
 
 Chattel Mortgages .... 300.000,000 
 
 National Bank Loans . . 1,986,058,320 
 
 Other Bank Loans 1,172,918,415 
 
 Private Debts— Estimated 1,191,023,265 
 
 United States Bonded Indebtedness 891,960,104 
 
 State Bonded Indebtedness 228,997,389 
 
 County 145,048,045 
 
 Municipalities ... 724,463,060 
 
 School Districts 36,701,948 
 
 Grand Total ^18,027,170,546 
 
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