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 PHIUIPS # SOCIAL STRUGGLES 
 
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 SOCIAL STRUGGLES. 
 
 THE 
 
 FUNDAMENTAL FACTS AND PRINCIPLES 
 
 RELATIVE TO 
 
 VALUES, PRICES, MONEY AND INTEREST; NATIONAL 
 BANKS, FRANCHISES, 
 
 THE SILVER QUESTION, 
 
 SOCIALISM, CAPITAL AND LABOR. AND BUSINESS 
 DERANGEMENT. 
 
 BY 
 
 JOHN PHILIP PHILLIPS. 
 
 Whatever cannot bear investigation has no right to exist. 
 
 NE\Y HAVEN, CONN.: 
 
 Press of 
 
 TUTTLE, MOREHOUSE & TAYLOR. 
 
 iSS6. 
 
Entered According to Act of Congress, in the Year 1886, by 
 
 JOHN PHILIP PHILLIPS, 
 In the Office of the Librarian of Congress, at Washington. 
 
 Electrotyped by E. B. SHELDON & CO., 
 393 State St., New Haven, Ct. 
 
DEDICATION. 
 
 TO THE 
 MEN WHOSE STEADFAST VALOR HAS BEEN OUR NATIONAL RELIANCE 
 IN TIMES OF WAR, AND WHOSE PATIENT INDUSTRY HAS EVER 
 BEEN OUR SUPPORT ; TO THOSE WHOSE BUSINESS AND 
 DAILY BREAD ARE VITALLY AFFECTED BY FLUCTUA- 
 TIONS IN PRICES, WAGES and INTEREST; 
 
 TO. THE FARMERS, MECHANICS AND OTHER 
 
 HONEST CREATORS OF WEALTH, THIS 
 
 WORK IS RESPECTFULLY DEDICATED. 
 
PREFACE. 
 
 A WIDELY spread feeling of dissatisfaction with the pres- 
 ent organization of society exists in every civilized nation. 
 In some countries this discontent has assumed the form of 
 secret organizations, one of the objects of which is to de- 
 stroy the lives of kings and other representatives of the 
 present social system. Europe, in time of peace, is covered 
 with vast standing armies, armed with the most deadly 
 weapons ingenuity has created, and trained to use those 
 arms with special reference to the destruction of human life. 
 The ostensible necessity of these armies is to protect one 
 nation from the aggressions of others. But another and a 
 deeper intent lies behind those armed millions. That par- 
 tially veiled purpose is to prevent the masses of the popula- 
 tion from rebelling against their own governments and 
 destroying the existing social fabric. The net result- of 
 what is called the " highest civilization " is the virtual ad- 
 mission that it is so hateful to the. majority living under it, 
 that huge armies of blood-hounds must be kept to compel 
 submission. Many European thinkers believe that conti- 
 nent drifting into a terrible revolution. 
 
 Within a century this country has increased in population 
 about sixteenfold. The increase in wealth, however, has 
 been still greater. But it is a startling fact that every year 
 the inequality between the amount of this vast wealth pos- 
 sessed by each individual grows wider and wider. We for- 
 merly supposed that our laws and institutions produced 
 both political and social equality, and that the class distinc- 
 tions and consequent bitter hatreds and jealousies of Euro- 
 pean society could not here flourish. But to-day, the 
 smothered discontent, which in some countries makes the 
 dominant classes feel as if a volcano were seething beneath 
 
yj PREFACE. 
 
 them, has obtained a firm lodgment in this country. Many 
 of the conditions which exist in Europe are rapidly being 
 developed here. 
 
 Only fifteen years ago it was generally believed that dis- 
 satisfaction with our institutions was a transient feeling en- 
 tertained by comparatively few persons. Resumption of 
 specie payments was supposed an effectual panacea for such 
 social disorder. At the enormous cost of much unemployed 
 labor and industrial disorganization for several years, this 
 remedy has been applied. But instead of being cured 
 thereby, the inequality of wealth has grown greater, and the 
 mutterings of discontent have grown louder and deeper. 
 These mutterings are not yet formulated into a definite 
 creed and purpose, but they have forced a recognition of 
 their growth as a menace to public harmony and welfare in 
 the future. Great numbers of people have one feeling in 
 common. Without assigning a reason therefor, they in- 
 stinctively feel that "something is wrong " in the present 
 condition of affairs. They are not yet angry, but are an- 
 noyed by a vague sense of being the victims of some injus- 
 tice and wrong, the exact source and nature of which per- 
 plexes them. At present this state of mind is chiefly 
 expressed by trades unions and labor organizations of 
 various kinds. To a considerable extent these bodies have 
 imagined that those with whom they came in immediate 
 Contact were the chief cause of their troubles. Not under, 
 standing the facts and principles involved in their situation, 
 they have failed to see that laws and third parties, with 
 whom they were not in direct contact, were the real source 
 of difficulties and wrongs from which employers often suf- 
 fered as much as themselves. Consequently, redress of 
 grievances has been sought in warring against their em- 
 ployers by organized strikes. These have inflicted great 
 losses on society, and generally have left the workmen in 
 worse condition than before. Such misdirected and often 
 pitiful efforts can only be prevented by a wider diffusion of 
 information in regard to the principles which govern prices 
 and wages. 
 
PREFACE. vii 
 
 In a free country, dissent from laws and conditions 
 inevitably assumes, sooner or later, the form of political 
 action. People with common interests naturally have 
 thoughts in common, and whenever these sentiments are 
 shared by a considerable number of persons, and become 
 crystallized into a common desire for a definite change of 
 policy or law, political action will follow. Either a new 
 party will arise, or one of those existing will be dominated 
 by new ideas. Thus far, there has not been sufificient unity 
 of purpose among the dissatisfied multitude to organize and 
 muster a large number of voters. But organization and 
 leaders under some name will appear whenever those now 
 uneasy, but doubtful what they want, become converted by 
 further thought and events into persons with a settled pur- 
 pose. 
 
 A revolt against permanently following the road we are 
 now traveling will certainly occur. It is therefore impor- 
 tant that every one should clearly understand that every 
 evil, every wrong, and every error in our institutions, and 
 every defect in their practical workings, can be cured by a 
 peaceful revolution at the ballot-boxes. Such knowledge 
 will prevent the folly of seeking redress of grievances by 
 violent methods. 
 
 The first element in the successful treatment of a sick 
 man is a careful study of his disease. When what is at 
 fault is known, the effect of different remedies on those 
 wrong conditions must be considered before an appropriate 
 prescription can be made. Both the facts and the princi- 
 ples relative to the case must be weighed ; else the patient 
 is in more danger from his doctor than from the malady. 
 
 In like manner, when anything is at fault with the body 
 politic, unless we first carefully study the matter, we may 
 use remedies which will aggravate the trouble. Both the 
 facts and the related principles must be considered before 
 intelligent political action can be taken. 
 
 Those who desire changes in our social policy are mostly 
 farmers, mechanics, and laborers. Examination shows that 
 this fact is the direct or indirect result of considerable lee- 
 
viii PREFACE. 
 
 islation adverse to the interests of those classes. These 
 persons are entitled to vote, and their numbers are so great 
 that the control of law-making would at once be in their 
 hands if they voted unitedly to protect their own interests. 
 The chief obstacle to such a course has lain in the fact that 
 the majority of the laboring classes have not studied true 
 political economy. Consequently they have lacked clear 
 convictions in regard to the effects of proposed legislation ; 
 and, in this uncertain frame of mind, have been divided and 
 misled by false and hypocritical cries into the support of 
 measures intended for their own injury, and the benefit of 
 persons, small in numbers, but very cunning and unscrupu- 
 lous. 
 
 That the present condition of things will remain undis- 
 turbed is impossible. The laboring classes are slowly but 
 steadily growing more conscious both of their political 
 power and of the existence of defects and wrongs in our in- 
 stitutions and laws. Consequently greater political combi-- 
 nations and efforts to improve their own condition may be 
 expected from those persons in the future. How much- of 
 this political action will be judicious and well calculated to 
 promote the best interests of the whole community, no one 
 can foretell. But with absolute certainty we do know 
 that whoever helps his countrymen to more easily obtain 
 and fully understand a single fact or principle of political 
 economy, thereby contributes his mite toward properly 
 directing the future national thought and action. With the 
 hope of making such a contribution, this book has been 
 written. Its aim is to dissect and illustrate by examples 
 and historical references some of the fundamental principles 
 of political economy, and to state them so fully, and in such 
 a plain and familiar manner, that any person of ordinary 
 intelligence who has never before read a line on the subject 
 can easily understand them. 
 
 That the doctrines herein set forth should conform to the 
 teachings of the majority of writers on such topics has been 
 deemed of no consequence whatever. But it is important 
 that correct principles should be elucidated. Therefore 
 
PREFACE. ix 
 
 great pains and care have been taken to sift out common, 
 but false, assumptions and theories, and to state nothing as 
 truth which cannot be verified. 
 
 It will doubtless seem to some readers that apparently 
 plain things are dwelt on with unnecessary and tiresome 
 detail. Such persons should remember that an understand- 
 ing of political economy can only be obtained by observing 
 the same conduct we follow when learning any other sub- 
 ject or thing. A mechanic's apprentice who has fully 
 learned to properly use half a dozen tools is well advanced 
 in a knowledge of his trade. And in political economy, as 
 in everything else, a knowledge of many complex things 
 depends on first getting a clear comprehension of a few sim- 
 ple things. In arithmetic no progress can be made until 
 the pupil has learned to add, subtract, divide, and multiply. 
 When the alphabet of a subject is thoroughly learned, the 
 hardest work is done. If the reader will patiently consider 
 the full meaning of the few elementary facts and principles 
 herein discussed, and pass none of them carelessly by as 
 unimportant, he will soon discover that the " difificult and 
 abstruse questions of political economy" which are con- 
 stantly talked of, are, in reality, easy and simple questions. 
 
 It must be borne in mind, that whoever wishes to learn 
 something about any subject whatsoever, must not begin his 
 studies with the assumption that he is the incarnation of 
 wisdom and already knows all about it. " Seest thou a 
 man wise in his own conceit? there is more hope of a fool 
 than of him." 
 
 Those who have a special desire to examine the silver 
 question may think too much space is devoted to element- 
 ary principles before reaching and discussing it. But it 
 should be borne in mind that the topic of silver is only a 
 fragment of the subject of money in general, and can only 
 be properly understood in connection therewith. 
 
 And the subject of money can only be clearly compre- 
 hended by those who realize the great practical importance 
 of such knowledge in the every day affairs of business and 
 therefore are willing to slowly read and carefully consider 
 
X PREFACE. 
 
 the facts and principles upon which the use of money 
 rests. 
 
 In an editorial note, the Century Magazine for Septem- 
 ber, 1885, gives expression to the popular wonder that a 
 country with such an industrious population and such 
 vast and varied natural resources as the United States pos- 
 sess, should not have uninterrupted prosperity, and then 
 says : 
 
 " What a strange spectacle this country presents at this very hour ! 
 Money is plenty — fifty or sixty millions on deposit in the banks of New- 
 York City alone ! Food is plenty ; the granaries at the West are full of 
 old wheat, and though the wheat crop of the present year does not 
 promise well, the corn crop is likely to be larger then ever before ; there 
 is no fear of scarcity. Manufactured goods are plenty ; the store-houses 
 of the manufacturers and the shelves of the merchants are crowded with 
 them. Labor is plenty ; five hundred thousand idle men are asking for 
 work. Yet in the midst of this abundance a great industrial and com- 
 mercial depression has overtaken us. At the time of writing this, work- 
 men are selling their labor at the lowest prices, and many are unable to 
 sell it at any price ; merchants and manufacturers find a dull market 
 for their wares ; the railroads report losses instead of gains ; failures 
 multiply. 
 
 " The situation is not only pitiful, it is absurd. What is the explanation 
 of it ? Who is responsible for it .'' " 
 
 True elementary principles furnish a complete answer to 
 the foregoing questions. Either through ignorance, or self- 
 ishness, the fundamental principles of political economy 
 have generally been misapprehended and wrongly stated. 
 Hence, many honest inquirers have been perplexed by prob- 
 lems of comparatively easy solution. This difficulty has 
 not arisen from defective reasoning, but by starting from 
 false standpoints. 
 
 Contentment among all classes of good citizens and steady 
 industry and economy are the prime requisites of a perma- 
 nent national prosperity. Nothing promotes that condition 
 and fosters those virtues more than a public policy of fair 
 dealing with all persons. Nothing is so safe and profitable 
 as simple Justice. In a country governed by the majority 
 of voters, the best safeguard of the rights and inter- 
 
PREFACE. xi 
 
 ests of each indiv^idual is his clear knowledge of the effect 
 of legislation upon them. 
 
 These pages are therefore presented with the earnest wish 
 that they may shed some light on the great problems of the 
 immediate future, viz. : What measures does impartial jus- 
 tice require shall be adopted to protect and preserve the 
 equal rights and proper relations of creditor and debtor, of 
 capital and labor? What political action will best prevent 
 the strong, the cunning, and the rich from insidiously op- 
 pressing and robbing the weak, the simple, and the poor? 
 How shall we displace that fruitful source of evils — a cur- 
 rency whose purchasing power is subject to frequent and 
 great changes — by money convenient to use and of more 
 uniform value than any we have heretofore employed ? 
 
SOCIAL STRUGGLES. 
 
 INTRODUCTORY CHAPTER. 
 
 Natural Laws are not only Invariable but they apply Impartially to all 
 things. — Common error of mistaking the Results of bad Statutory 
 Laws for unavoidable Results of Natural Laws. — What Political 
 Economy is. — A Mistaken Belief. — How Economic Laws should be 
 Considered. — Mankind are Governed by many Emotions and 
 Thoughts. — Common mode of writing Economic works. — Political 
 Economy is an Imperfect Science. — A Confession. — Ignorance is the 
 Mother of Credulity. — Why Mankind make such slow Progress. 
 — Original Thought is not Common. — Mankind prefer Old to 
 New Things. — Evils Perpetuate Themselves. — Need of Elementary 
 Study. — Terrible Fruits of False Premises. 
 
 Nothing is permanently settled nntil correct principles are 
 adopted. Public policy will be fixed iviicn based on absolute 
 triitJi. There may be a lull in the agitation of social topics, 
 but, if so, sooner or later it zvill inevitably re-appear ivitJi in- 
 creased volume and force. Eddies exist in Jiuman thought 
 and human progress, but, 7ievertheless, they form a steady and 
 continuous stream. 
 
 This is not a world of chance, but a world of law. It is 
 not a world of accident, but a world of cause and effect. 
 It is therefore folly to imagine that existing conditions have 
 come upon us in a mysterious, miraculous way. Whenever 
 a result is produced, we should feel certain that its parent, 
 a cause, can be found, if we will but diligently search for it. 
 
 If we lift a stone from the ground and let go of it, the 
 same thing always happens. It does not move upward or 
 sideways ; it always falls directly toward the earth's center. 
 This we call the law of gravitation. By the term " law " 
 
 I 
 
2 SOCIAL STRUGGLES. 
 
 we mean the course and conduct invariably observed and 
 followed by all things placed under the same circumstances. 
 Therefore, when we speak of the *' law " relative to a given 
 thing, we mean the mode of action and the result which al- 
 ways take place and follow the existence of a certain com- 
 bination of facts. 
 
 WHAT POLITICAL ECONOMY IS. 
 
 Political economy may be defined as a statement of the 
 course which human affairs will probably take under given 
 conditions. In other words, it describes how men will think 
 and act under certain circumstances. It is a description of 
 some of the laws which regulate human conduct. The 
 wealth of a squirrel consists of his house and his store of 
 food. These satisfy his wants and make him rich. 
 Whoever should write an accurate description of the con- 
 duct of this interesting little fellow in getting and using 
 his riches, would write the political economy of a squirrel. 
 A description of man's conduct when in quest of riches, 
 when using riches already acquired, and the results flowing 
 from his various modes of trying to accomplish these pur- 
 poses constitute the political economy of man. The wants 
 of man are rarely satisfied. Therefore he is seldom as rich 
 as a squirrel. But he is continually occupied either in try^ 
 ing to get wealth, or in using it. In doing these acts 
 his conduct resembles that of' a squirrel ; that is, he usu- 
 ally follows a certain course of action in order to obtain a 
 certain thing, or produce a certain result. These actions 
 and their results have a tendency to assume uniform and 
 definite shape and character. They are the reflections of 
 human thought from the mirror of varying circumstances and 
 conditions. . Want of discernment may, and often does, pre- 
 vent its full recognition ; but the shadow must always be a 
 correct image of the substance. These are called the laws 
 of political economy. 
 
HOW TO STUDY MANKIND. 
 
 A MISTAKEN BELIEF. 
 
 It is a prevalent belief that the laws of political economy 
 are so abstruse and mysterious that a life-time of prodigious 
 study is required to understand them. Especially is it sup- 
 posed that there is something peculiarly difificult about Fi- 
 nance, that special and supernatural laws preside over 
 money, and that it is impossible for an average man to com- 
 prehend the subject. The common-sense principles which 
 we every day apply to the solution of all other problems are 
 presumed to be inapplicable to political economy. This be- 
 lief has been put in circulation and fostered by those whose 
 selfish interests would be advanced by the impression that 
 only a few persons can understand political economy, and 
 that they constituted those few. We shall hereafter show 
 the gross nature of this imposition. 
 
 HOW ECONOMIC LAWS SHOULD BE CONSIDERED. 
 
 To State how a squirrel always gets and uses his wealth, 
 would be a comparatively easy task. But man has a more 
 complex mental organization ; he has a greater number of 
 wants and a greater variety of means to gratify them. 
 Man has a multitude of desires besides getting and using 
 wealth, and the attempt to gratify these desires makes his 
 conduct in greater or less degree different from what it 
 would be if his wants were as simple as those of a squirrel. 
 The conduct of a man with the mind of a squirrel would al- 
 ways be what some men call " economic " ; that is, it 
 would be governed by a smaller number of laws than it now 
 is. Man's conduct when in pursuit of wealth and the re- 
 sults of such conduct would be uniform. But in fact we 
 cannot predict what the "economic " conduct of a man or 
 a nation will be or what will result therefrom, under certain 
 conditions, without estimating other dominant motives be- 
 sides the desire to acquire wealth. We cannot study the 
 anatomy of a man's muscles without examining his skeleton. 
 We cannot understand the mechanism of his lungs or 
 any other portion of the body without a reference to all 
 other parts. The whole system must be considered. In 
 
4 SOCIAL STRUGGLES. 
 
 like manner when we study the conduct of the human race, 
 we must take into account all the causes which produce 
 and modify it. 
 
 Man is not a mere machine or automaton. He is a living 
 animal moved and directed by a cabinet of counselors 
 more numerous and changeable than ever advised any king 
 or other potentate. They are human passions, human emo- 
 tions and human thoughts. All human affairs are due to 
 some form of human action. All human action is due to 
 the action of the human mind. 
 
 Therefore any student of political economy must ob- 
 serve imperfectly, and argue from false premises, just so far 
 as he ignores |iuman nature. His conclusions must neces- 
 sarily be correspondingly defective and false. 
 
 The great majority of writers on political economy have 
 imagined and assumed an ideal type of human nature and 
 of human conduct flowing from this assumed type. This 
 ideal man is governed purely and entirely by selfishness and 
 avarice, — his whole purpose in life is the acquisition of 
 wealth. Actions in harmony with the supposed feelings of 
 this imaginary man they have styled "economic conduct, " 
 and at the same time have conceded that mankind never act 
 " economically." This is merely a mode of obscuring the 
 subject. We care nothing about the conduct of a being 
 who exists only in the imagination ; but we are deeply inter- 
 ested in the actual conduct of the actual man. 
 
 MANKIND ARE GOVERNED BY MANY EMOTIONS AND 
 THOUGHTS. 
 
 Selfishness is a dominant trait of the majority, but this 
 has a hundred other objects besides wealth. Moreover, 
 every man,' no matter how selfish, has a greater or less 
 streak of generosity in his nature. Every community 
 has a minority of unselfish persons whose precepts and ex- 
 ample exert a vast influence on the rest of society. Patriot- 
 ism, religion, love of home and family, in short, every 
 emotion of the human heart, has more or less influence on 
 the conduct of each individual unit of society. The 
 
THE NEED OF COMMON SENSE. 
 
 5 
 
 social tendencies and movements of a nation are a resultant 
 of the combined and conflicting ideas of each and every 
 individual member of that nation. Consequently, we can- 
 not estimate the result of a given measure without taking 
 into account all the forces with which it will be brought in 
 contact. Every cause which materially tends to influence, 
 modify, or direct human thought and human action in any 
 respect is directly or indirectly a factor in the problems 
 of political economy. Men arrive at different conclusions, 
 largely because they begin to reason with a different bias. 
 
 COMMON MODE OF WRITING ECONOMIC WORKS. 
 
 The value of the majority of works on political economy 
 is impaired by the fact that their authors have not, as they 
 should, made the discovery of truth the sole object of their 
 investigations. They have attempted to explain social 
 tendencies and conduct in such a way as to defend the 
 existing social and political institutions of their country. 
 As most of these writers have been, and are, subjects of 
 monarchical and aristocratic governments, and* believers 
 in them, much of what is called political economy is 
 merely a special plea in favor of those governments and the 
 conditions of society which they foster. 
 
 In the United States, ninth-tenths of those who are 
 styled political economists are mere copyists and imitat- 
 ors of foreign books and their teachings. These persons 
 regard European institutions as models to be admired and 
 not criticised. 
 
 Theories which contain more romance than truth and 
 common sense doubtless amuse and interest some persons ; 
 but they are of no use in studying the various problems of 
 political economy. 
 
 We must ponder human nature as it is. We must grap- 
 ple with the facts as they actually exist. We must severely 
 scrutinize all books written for the purpose of vindicating 
 or supporting an existing form of government or state of 
 society. Above all, we must remember that the truth is 
 never dangerous. We must not shrink from it even though 
 
6 SOCIAL STRUGGLES. 
 
 it seem in conflict with moss-grown and beloved institu- 
 tions. 
 
 The majority of economic writers have made a curious 
 error. They have looked around them and seen disorders 
 which are the results of misgovernment, selfishness, and 
 ignorance ; — evils which exist because the best of us are 
 largely in ignorance of the true principles of civil govern- 
 ment and social science. But under the delusion that our 
 social and political institutions are perfect, or nearly so, 
 they mistake these phenomena for the inevitable results of 
 human association under all possible circumstances. The 
 symptoms of a diseased social condition have been mistaken 
 for those which would appear in perfect political and social 
 health. 
 
 POLITICAL ECONOMY IS AN IMPERFECT SCIENCE. 
 
 The pretense is virtually made that Political Economy 
 has reached a point where it can be called a perfect science. 
 A science is a methodical arrangement of facts and of 
 principles deduced from those facts relating to a particular 
 subject. A science is perfect in proportion to the extent 
 that all the facts and principles relating thereto are fully 
 and accurately known. The sciences of law and medicine 
 have been studied and written upon for thousands of years 
 by the ablest men of every generation. They are con- 
 stantly advancing but are still full of imperfections, and in- 
 stead of claiming that they are perfect, the most eminent 
 lawyers and physicians are foremost in pointing out, and in 
 attempting to remedy, the defects of those sciences. But 
 political economy is not an ancient study. The first syste- 
 matic book on that subject was published by Adam Smith, 
 in 1776. The next most important work was written by 
 David Ricardo, in 181 7. Political economy embraces a 
 wide range of facts and principles. It deals largely with 
 that most complex of all things, human nature, and its 
 manifestations and tendencies under certain conditions. It 
 is not only a comparatively new science, but its study has 
 hitherto engaged the attention of a relatively small num- 
 
FALSE PRETENDERS. y 
 
 ber of competent persons. Its few students differ widely 
 in some of their conclusions, and many of its principles are 
 in controversy. Therefore the air of perfect knowledge as- 
 sumed by a few" Professors" who have thrust themselves 
 before the public as infallible authorities on this subject is 
 ridiculous. * The great majority believe that the subject of 
 national finance is entirely different from other business 
 matters, and governed by obscure and complex laws pecul- 
 iar to itself. This error has been created and fostered 
 chiefly by school-masters and bankers, who find a profit in 
 such a public belief. In a variety of ways every one of 
 those persons is frequently saying in substance : 
 
 *' The masses of the people can never understand the cur- 
 rency question, because its literature is so extensive and pro- 
 found that years of careful study are required for its com- 
 prehension. But only look at me : I am a very learned 
 man. I have studied this matter for many years and under- 
 stand all its deep mysteries. Now, as it is impossible for 
 you to grasp the profound and peculiar principles which 
 underlie the financial question, I will tell you what to be- 
 lieve. If not so instructed, I am afraid you will take some 
 political action which will injure yourselves." 
 
 By a singular coincidence these benevolent pieces of wis- 
 dom invariably direct the people to adopt the line of policy 
 which favors their author's personal interest. Most of 
 those who write financial articles pretend to be possessors 
 of a vast amount of undivulged learning. They do not 
 say : " I am stating the principles of finance as far as I un- 
 derstand them." They continually talk about stating the 
 
 * A considerable proportion of so-called " economists " are clergy- 
 men, \Vho have quit preaching the sublime unselfishness of the Nazarene, 
 and engaged in the business of proclaiming doctrines pleasanter to rich 
 and privileged listeners. To this more congenial task they have mostly 
 brought mental peculiarities which place them in affiliation with the ma- 
 jority of other " economists " ; viz., greater love of dogmas than of truth, 
 and the inveterate habit of assuming statements true, without examina- 
 tion or evidence, and then basing arguments upon them as if the prem- 
 ises of the reasoning had been established. 
 
g SOCIAL STRUGGLES. 
 
 elementary principles of finance and refer to the " conclu- 
 sions arrived at by those who have fully explored the sub- 
 ject." 
 
 The insinuation is constantly made that what is stated is 
 merely a fragment of great learning, and that every asser- 
 tion contained therein is sustained by a mass of knowledge 
 unknown to the public. 
 
 A CONFESSION. 
 
 As a full confession is said to be good for one's soul, I 
 admit once supposing the above-named and kindred state- 
 ments to be true. What was stated seemed so contrary to 
 common sense that I failed to understand how it could be 
 true, but supposed this arose from ignorance of undisclosed/ 
 facts and principles. Impelled by a curiosity to know just 
 what the hidden depths alluded to were, I carefully ex- 
 amined the writings of those called masters of this occult 
 science, and found that an old artifice had been repeated. 
 In all ages of the world, jugglers, priests and necromancers 
 of various kinds have attempted, and generally successfully, 
 to magnify their own importance and accomplish their pur- 
 poses by raising a smoke and affecting a special knowledge 
 of some wonderful mystery. To this old trick I found 
 myself the victim. 
 
 Since that time, whenever I see a man styling himself a 
 " scientific financier " and telling his hearers or readers to 
 defer to his wonderful attainments, I smile at the memory 
 of my own deception and say to myself : This person has 
 put on his paint and feathers and is practicing the tactics of 
 an Indian Medicine Man. Exteriorly he is a " scientist " ; 
 remove his outer garments, dig a little into his pretensions, 
 and a charlaian is exposed to view. Directly or indirectly, 
 he is getting pay for practicing an imposition on the public. 
 The mysteries he pretends to possess a knowledge of do 
 not exist. 
 
THE SIMPLICITY OF NA TURK. 
 
 IGNORANCE IS THE MOTHER OF CREDULITY. 
 
 We are born credulous. We naturally believe whatever 
 is told us until knowledge and experience teach us better. 
 We start in life believing in the truthfulness of all. If we 
 live to mature age, we are convinced that the world is full 
 of liars. Ignorance and credulity are born every day. 
 Knowledge and experience are daily dying. Thus a new 
 crop of victims for imposters continually comes forward. 
 
 Each individual's life is a miniature picture more or less 
 perfect of the passage of the world from ignorance and 
 superstition toward knowledge and free enlightened thought. 
 
 Just in proportion to their ignorance, mankind are filled 
 with the idea that many things possess supernatural qualities, 
 and that unusual events are produced by a miraculous force. 
 As they become enlightened they cease to believe in ghosts, 
 hobgoblins and witchcraft ; they gradually see the folly of 
 supposing that the Creator made his works so imperfectly 
 that he finds it necessary to exercise a fitful and irregular 
 supervision over them; and finally they recognize the sim- 
 plicity of events. Nature grants no charters, and enacts no 
 special or private laws. None of her decrees can be evaded. 
 She is utterly relentless toward all who attempt to defy her 
 mandates, and has no Court of Pardons where special inter- 
 position can be hoped for. Her laws are so general that they 
 apply with rigid and impartial severity to every subject and 
 thing on earth, and so far as we know, to all the planets in 
 the heavens. Strictly speaking, it is impossible to break a 
 natural law. We can easily get broken ourselves in trying 
 it, but the law remains unchanged. 
 
 Until a comparatively recent time astronomers supposed 
 that an elaborate mechanism held the heavenly bodies in 
 place and produced their movements ; but they could never 
 conceive of anything complex enough to explain all the facts, 
 and their theories melted away when a few men thought for 
 themselves, — saw the folly of generation after generation who 
 had blindly trod in each other's footsteps, and showed that 
 
lO SOCIAL STRUGGLES. 
 
 thousands of circling worlds were maintained by the simple, 
 all-pervading law of gravitation. 
 
 The physician of the tenth century saw one or more spe- 
 cial demons in nearly every patient. He imagined that the 
 majority of diseases, especially all malignant ones, were the 
 result of the machinations of witches or other evil minded 
 and strange spirits. Therefore he concluded that equally 
 peculiar and mysterious remedies were needed for each dis- 
 tinct malady. A bold pretense of the possession of occult 
 art was the special thing which commended him to an igno- 
 rant and credulous people. The more profound his ignorance, 
 the greater the confidence reposed in him. 
 
 Medical science has developed by slow and painful steps. 
 Both physicians and patients have fondly clung to methods 
 which now seem almost incredible. But each century has 
 witnessed the reluctant flight, never to return, of some pre- 
 posterous error or some peculiar demon. Especially during 
 the last century has a growing, positive knowledge sup- 
 planted the hidden and strange by the known and familiar. 
 When examining a patient the physician now sees universal 
 laws at work ; instead of a particular devil he now discerns 
 what disordered functions the remedial forces of nature are 
 trying to restore to their normal condition. He no longer 
 attempts to work a special and miraculous cure, but guided 
 by fixed general principles he seeks to assist the natural 
 forces. 
 
 Comparative anatomy and physiology have shown that the 
 Great Architect did not make a special design when he 
 created man. He merely added a few lines to the working 
 drawings whereby the fish, the bird, and the beast were 
 wrought out and given the functions and faculties which 
 maintain their existence. One general plan and idea ap- 
 pears to run through all forms of life from the lowest to the 
 highest. One general system of simple laws governs all their 
 physiological functions, and all their diseases have charac- 
 teristics in common. 
 
 Every partially successful attempt to draw aside the cur- 
 tain which hides nature's secrets has always surprised us in 
 
MAiVA'IND HA TE TO THINK. 1 1 
 
 the same direction ; viz., wonder at finding an unlooked-for 
 simplicity. The discovery that light, heat, motion, and 
 electricity are all different forms and manifestations of the 
 same force warrants us in supposing that the future has 
 greater surprises in store for us, and all of them revelations 
 of the general and simple character of nature's laws. 
 
 Facts and illustrations showing that nature's laws are gen- 
 eral, and that we believe in the special and miraculous in 
 proportion to our ignorance, could be cited and employed 
 indefinitely. 
 
 The foregoing considerations explain why such a multi- 
 tude of persons have been led to believe that money pos- 
 sesses supernatural qualities. Such beliefs vanish whenever 
 a moderate amount of careful study is bestowed on finance. 
 
 THE PLAIN TRUTH. 
 
 The fact is that a man can understand the money ques- 
 tion without being possessed of superior ability, and without 
 devoting years to its study. To many persons the most 
 difficult thing is to get rid of previously acquired supersti- 
 tions and errors. There is nothing obscure or difficult 
 about it and there are no mysterious laws which specially 
 preside over money. The value of money is regulated by 
 precisely the same laws that regulate the value of steel, 
 coal, wheat and every other article bought and sold in the 
 markets. In considering money we should use the same 
 business principles and common sense that we apply when 
 we form a judgment about any other subject or thing. 
 History shows clearly that the numerous errors and whimsi- 
 cal notions into which individuals and nations have fallen in 
 regard to money have been chiefly caused by assuming that 
 money was controlled by such extraordinary laws that plain 
 common sense and judgment were of no use in forming an 
 opinion about it. 
 
 WHY MANKIND MAKE SUCH SLOW PROGRESS. 
 
 There is nothing peculiarly difficult about the study of 
 social questions. But the same lion in the way that has 
 
12 
 
 SOCIAL STRUGGLES. 
 
 always retarded human progress in every direction of 
 thought and effort, stands grimly in the path leading to cor- 
 rect ideas and information about economic subjects. 
 
 This terrible beast is the difficulty we all have, more or 
 less, in changing the beliefs acquired in infancy. Early im- 
 pressions and prejudices are most lasting. Children are 
 naturally credulous. But although credulity is a normal 
 trait of children, it forms in adults a defect of character 
 which in every age has wrought most mischievous and dis- 
 astrous results. 
 
 Each generation is the child of its ancestors and the 
 parent of the next generation. The father teaches the son 
 and the son soon becomes a father and a teacher. Errors 
 are thus handed down from age to age without ever being 
 examined by their believers. Whoever investigates them 
 and exposes their falsity is called a disturber of the public 
 peace. 
 
 A great majority of the community frequently declare 
 themselves " shocked " at what they hear or read. One 
 man is shocked by a proposition to pass a new law or to 
 repeal an old one. Another is shocked at some radical 
 political idea and another is shocked at some new doctrine 
 in regard to the temperance question, or the proper mode 
 of treating criminals. One person is shocked at what gives 
 pleasure to another, and the man who is delighted with one 
 "shocking" sentiment is often shocked himself by some 
 idea not half so radical and startling as the one that pleased 
 him. 
 
 A society of eminently respectable and well-disposed peo- 
 ple may for a long time hear preached some ancient but 
 false religious doctrine whose tendency is to degrade and 
 debase the mind and character of all who believe it. They , 
 are not shocked to hear this pernicious doctrine repeated 
 week after week. But some day they hear a man who be- 
 lieves it his duty to publicly pronounce the old faith a libel 
 on the Deity and a poisonous, stifling cloud on the mind of 
 every person who entertains it. 
 
 Forthwith a hum is heard, like that of a swarm of angry 
 
CONCEIT AND COWARDICE. 
 
 13 
 
 bees. The hearers are fearfully " shocked " and the query 
 is : What shocked them ? 
 
 They were not shocked because a groveling superstition 
 had been believed. The fact that a certain doctrine was 
 spoken ill of was the apparent, but not the real, cause of 
 their disquietude. 
 
 They were shocked simply because their habitual train 
 of thought was disturbed, and because they were forced to 
 suddenly consider a new idea. The average man can be 
 " shocked " at any time by suddenly thrusting a new idea 
 at him, and it makes but little difference to what subject 
 the new idea relates, provided an implicit belief therein ap- 
 pears to him important. 
 
 ORIGINAL THOUGHT IS NOT COMMON. 
 
 Independent thought is so painful to the majority of 
 mankind that comparatively few persons have original 
 thoughts or ideas. They believe what they have been 
 taught when children, and what their associates regard as 
 truth. When an idea is once in their heads they adhere to 
 it with the utmost tenacity, not so much because they love 
 the old idea as because they dislike to consider a new idea, 
 — they hate to think. It is a disagreeable process for them 
 to investigate a subject — to find that their old belief was 
 wrong, and to be forced to accept a new one. It is dilTfi- 
 cult for them to abstractly ask the simple question, whether 
 the old or the new idea be the truth ? They have a shrink- 
 ing fear of such a question. The old idea is associated in 
 their minds with existing laws, institutions and customs, 
 and they feel a sense of safety in having it remain undis- 
 turbed. 
 
 Even if convinced that the new idea is true, they dread 
 the consequences of its diffusion, and have a vague horror 
 of its effect upon themselves or upon society. In fact, 
 more confidence is felt in existing beliefs and institutions 
 which they are convinced are wroiag, than, in an abstract 
 idea which they are satisfied is right. 
 
 No one can read the history of his kind without being 
 
14 
 
 SOCIAL STRUGGLES. 
 
 amazed at the almost incredible stupidity which has char- 
 acterized every age and nation. We wonder why certain 
 acts were done, when a better course would have been so 
 much easier, and all explanations are futile until we remem- 
 ber that by-gone generations had precisely the same pro- 
 clivities and were as cowardly as the men now living ; they 
 trod in the footsteps of their ancestors ; they did not im- 
 agine they could be radically mistaken, that much remained 
 to be learned, and above all, they abhorred the labor of 
 thinking. 
 
 The human race has progressed so slowly because nearly 
 every one has been educated to consider true whatever 
 opinion was held by the great majority, and to reject as 
 false whatever ideas were advanced by a small minority. 
 
 In all social and political problems the aversion of the 
 great majority to new ideas is a potent factor. Without 
 recognizing it we cannot rightly estimate how far the 
 efTect of laws of comparatively recent enactment has been 
 modified by pre-existing prejudices ; neither can an opinion 
 of any value be formed concerning the probable influence 
 which any proposed change in law or custom would exert 
 within a few years' time. 
 
 MANKIND PREFER OLD TO NEW THINGS. 
 
 Whoever im.agines that even the most intelligent com- 
 munity stands ready to immediately accept and profit by a 
 new and more truthful idea, a wiser law, or a better custom, 
 and hazards his personal welfare on such a supposition, 
 will find himself wofully mistaken. 
 
 The inertia of mankind keeps trade in accustomed 
 channels long after better and cheaper goods can be ob- 
 tained from .a new source. Trade-marks become valuable 
 after long use, largely because people have acquired the 
 habit of using goods with a particular brand, and dislike to 
 change. An old college, or school of any kind, will have 
 more pupils than an equally good new one. People em- 
 ploy the old doctor long after a younger and better one has 
 moved into the adjoining house. The old tool is not at 
 
REPRODUCTION OF EVIL. 
 
 15 
 
 once superseded by the improved one. A newly invented 
 machine must have extraordinary merit to insure its speedy 
 adoption. A kind of money with which a community has 
 long been familiar will be received in preference to a more 
 convenient but new form of currency. Old customs and 
 old modes of conducting the various affairs of life are fol- 
 lowed long after the superiority of new ones has been 
 demonstrated thousands of times. 
 
 The benefit w^iich a community or nation would other- 
 wise derive from a wise reform of any kind may be largely 
 nullified for a long period by an inveterate prejudice against 
 it. In considering whether an innovation is advisable at a 
 certain time, it is well to inquire how far it will meet the ap- 
 proval of society. Food must be digested before it nour- 
 ishes an animal ; anci laws and the majority of people gov- 
 erned by them must assimilate before any measure can be 
 fairly and fully tested. 
 
 EVILS PERPETUATE THEMSELVES. 
 
 The poet tells us: 
 
 " The evil that men do, lives after them." 
 
 This is a brief and poetic mode of stating the fact that 
 the evils generated by bad legislation exist long after the 
 repeal of their primary cause. The wounds and social 
 diseases of society heal very slowly, from the fact that the 
 characteristics of a people stunted and degraded by the long 
 continued deprivation of liberty and opportunities of social 
 and intellectual improvement, are transmitted to the next 
 generation. If the ill effects of long carrying a heavy burden 
 disappeared as soon as the grievous weight is removed, a 
 nation steeped in stolid ignorance could at once be trans- 
 formed and elevated by substituting good for evil laws. 
 But under the most favorable practicable conditions it would 
 require a long time to transmute the millions of Russian 
 and Turkish peasants, for example, into such self-re- 
 specting, intelligent and thrifty freemen as the farmers of 
 Central New York. 
 
J 5 SOCIAL STRUGGLES. 
 
 Marks of the grinding despotism to which the French 
 peasantry were subjected prior to the French revolution still 
 exist. The fact that for centuries the laborers of England 
 have borne a cruel injustice accounts for much in their con- 
 dition and character to-day. The discontent of Ireland is 
 not simply the result of existing laws ; back of them lie 
 the results of five hundred years of oppression, with a swarm 
 of bitter memories. The passions aroused by the conflict 
 which occurred over a century ago between England and the 
 United States have not yet subsided ; the embers smolder, 
 but are still warm and could easily be fanned into a fierce 
 blaze. Many supposed that all the angry feelings attendant 
 on the bloody war which raged in this country from 1861 to 
 1865 would speedily disappear after Appomattox. But our 
 dissensions will not be healed until after every actor in that 
 great drama is beneath the sod, and ugly scars will remain 
 long afterward. The American people did not properly ap- 
 preciate that the evils of slavery would remain long after 
 every negro had been declared a freeman. And, at this day, 
 it is not fully realized that the people of the Southern 
 States must needs' for a long time be under the influence of 
 the same forcfes that create and guide public opinion in the 
 Northern States before we can be as united, as a nation, as 
 one of the States is united as a State. All social or politi- 
 cal measures taken without reference to this must largely be 
 failures. 
 
 NEED OF ELEMENTARY STUDY. 
 
 In concluding this chapter, the reader's attention is called 
 to a simple matter of great importance. That is, the gener- 
 ally overlooked fact that it is utterly impossible to ever un- 
 derstand any subject, no matter how plain or simple it may 
 be, without first becoming master of its elementary princi- 
 ples. We must learn the alphabet, else we can never read. 
 We must learn to add, to subtract, to multiply and to divide 
 before we can understand arithmetic. 
 
 Furthermore, we can never acquire a full knowledge of 
 anything unless our ideas about its first principles are cor- 
 
NEED OF CORRECT PREMISES. 
 
 17 
 
 rect. Our premises must be right. If the first step be taken 
 in the wrong direction, no matter how long we walk without 
 turning we shall not reach the place where we wish to go. 
 We must carefully sift the truth from the falsehood. Stu- 
 dents of astronomy never reached the truth so long as they 
 started with the premise that the sun moved round the 
 earth. 
 
 At railroad centres several trains are often seen moving 
 along in the same direction on the same track. Soon one 
 train gradually diverges from its first course, makes a long 
 graceful curve and moves westwardly. Another train keeps 
 on due northerly ; while a third train departs from its first 
 direction by a broad sweep and goes easterly. These differ- 
 ent movements are caused by an instrument called a switch. 
 The deflection caused by it is so slight at first that the ob- 
 server with his eyes fixed upon the train usually fails to 
 note the precise point where the divergence began. If a 
 train is once switched upon the wrong track no amount of 
 speed or length of time will bring it to its destination. It 
 can only be got to the proper place by taking it back to the 
 switch and putting it on the right track. 
 
 What a switch is to a railroad train, elementary principles 
 are to a student of any of the problems of political economy. 
 Unless he start right, unless he have clear and correct fun- 
 damental ideas, no amount of time or study will enable him 
 to understand those topics. Years of study will only add 
 confusion to his mind and lead him farther from the truth. 
 Of necessity, his opinion on any point is utterly worthless. 
 
 The same thing is true of the study of all other subjects. 
 History presents many examples of generation after genera- 
 tion of diligent students and learned men, all pursuing the 
 same study or profession without reaching the truth. In 
 the outset of their studies they assumed that the primary 
 principles taught by their predecessors were true, when in 
 fact they were false. 
 
ig SOCIAL STRUGGLES. 
 
 TERRIBLE FRUITS OF FALSE PREMISES. 
 
 A large portion of history is occupied with the revolting 
 story of bloody religious wars and cruel persecutions on ac- 
 count of religious belief. This appalling amount of wrong 
 and suffering can all be traced to the false premise stated in 
 one sentence, viz., "Free thought on religious topics is a 
 crime." This premise, believed true, made the forcible at- 
 tempts of men to suppress all religious opinions at variance 
 with their own just as logical and inevitable a sequence as 
 their efforts to repress theft were a logical result of a belief 
 that theft was a crime. The faulty premise was the foun- 
 tain from which a multitude of other errors flowed. The 
 great historian, Lecky, has shown us how naturally relig- 
 ious persecutions began when said premise was believed true, 
 and how impossible for them to exist whenever said prem- 
 ise was believed false. 
 
 For century after century medicine was studied from the 
 standpoint of supposing that the arteries were filled with 
 air. Thousands of similar examples could be cited, all show- 
 ing that our ancestors often got on the wrong track, and 
 never reached the desired point until they went back to the 
 switch, sifted out the truth and started from correct prem- 
 ises. Mankind have rarely taken a forward step in the 
 shortest, simplest and easiest manner. False premises have 
 almost invariably led them to take the longest and most dif- 
 ficult route to reach a point which might have been attained 
 by one easy step. 
 
CHAPTER II. 
 
 What is Money? — Its Functions; very Important that all should Under- 
 stand. — Prevalent Ideas about Money. — False Dogmas by the Mill- 
 ion. — How the People came to be Misled. 
 
 By artifice and corruption, measures based on false pritici- 
 ples may be imposed Jipon a misguided people. But success so 
 procured can only be temporaiy. Sooner or later the tmth 
 zvill be discovered, ivrongful legislation ivill be repealed, 
 and its authors and abettors zvill be stigmatised as crafty char- 
 latans, or, at least, as men ignorajit of the subject upon which 
 they presume to enact lazvs. 
 
 This is one of the most important practical questions in 
 political economy, for its answer largely decides the na- 
 tional financial policy. This, many persons suppose, is a 
 matter of little personal concern to them ; but, in fact, the 
 prosperity of every individual is either helped or hindered 
 more or less by it. Persons of small means, and those who 
 work for day wages, generally suffer relatively more from 
 an erroneous policy than those in affluent circumstances. 
 Therefore every primary fact and principle relating to 
 money should be slowly and carefully dissected and under- 
 stood before trying to take a step in advance of this ABC 
 of financial knowledge. 
 
 PREVALENT IDEAS ABOUT MONEY. 
 
 In the first place let us try to get a clear view of the 
 beliefs about money which are generally accepted as true. 
 This will prepare the road, and the reader will then be 
 better ready to take up the subject of money at its root and 
 trace it upward. Perhaps this can be done most easily by 
 reciting the history of some of the efforts which have recent- 
 ly been made in this country to define the term " Money," 
 and by stating some of the results flowing from those 
 efforts. 
 
 19 
 
20 
 
 SOCIAL STRUGGLES. 
 
 From 1865 to 1879 ^^"^^ statement was made and printed 
 millions of times that greenbacks were not money, and that 
 nothing was or could be money but coins made of gold or 
 silve'r. Beginning with Bonamy Price, " scientific finan- 
 ciers " made speeches in all the principal cities, in which 
 they asserted, with the assured air of persons confident of 
 superior wisdom, that trade could not properly be carried 
 on without money ; that it was impossible to make money 
 out of paper, and that therefore the only financial salvation 
 of the country lay in burning the greenbacks and using 
 gold and silver in their stead. 
 
 The question was triumphantly asked : " How can a man 
 pay his debts without money ? " Then the sad fate of a peo- 
 ple unable to pay their debts, because, although rich, they 
 had no money, was depicted and bemoaned, and the audi- 
 ence were pathetically exhorted to rid themselves of pieces 
 of rags and get real money. 
 
 One eloquent "Professor" was taken from Massachu- 
 setts and carried from place to place throughout the West- 
 ern States, in order that he might have a better chance to 
 cry out to the farmers : — 
 
 " For many weary years you have been cheated and plundered. You 
 have sold your produce and have received no money in payment — you 
 have been swindled with worthless rags ; rags with which values cannot 
 be measured, and therefore you do not know how much value you get for 
 your grain, nor how much you pay for what you buy in exchange. It is 
 now time for you to sternly demand the money — the solid coin — before 
 you part with your hard-earned products." 
 
 These so-called high authorities told us — 
 
 " that as the function of money was to measure value, it could not dis- 
 charge its functions unless it possessed intrinsic value. As a bushel 
 measure must have capacity in order to measure volume, and a yard- 
 stick have length in order to measure length, so money must have value 
 in order to be a measure of value. Value must be an inherent quality of 
 money, just as sweetness is an inherent quality of sugar. Therefore 
 nothing is money unless the raw material from which it is made is 
 worth as much as the completed coin. The government stamp on a 
 coin of gold or silver adds nothing to its value— it merely certifies its 
 
MYSTERIOUS EFFECT OF GOLD. 21 
 
 weight and fineness ; i. e., the inscription states the amount of intrinsic 
 value contained in it. 
 
 " Moreover, it is impossible for the stamp of the government on any- 
 thing to add any value to it which it did not possess before. A law de- 
 claring any piece of paper, or even any coin of gold or silver, to be 
 money, and stating its legal-tender value, does not add one particle of 
 real value to it. Legal-tender money, therefore, has no actual value 
 whatever, except the intrinsic value of the materials from which it is 
 made. In case of paper currency, this intrinsic value is just what a 
 paper manufacturer will pay for this spurious money to grind into pulp. 
 Greenbacks, therefore, are only really worth what they will bring by the 
 .pound when sold as old rags. 
 
 " Wealth can only be created by the proper union of labor and capital. 
 Wealth cannot be created by legislation. Paper currency is a mere crea- 
 tion of law and is not wealth. If all the paper currency of the country 
 M'ere burned up in a night, the prosperity of the country would not be 
 affected in the least. No wealth would be destroyed by such a confla- 
 gration beyond the value of some paper rags. 
 
 " Laws can easily be enacted which will transfer wealth from one per- 
 son to another person, or from one class of persons to another class of 
 persons ; but no law ever did, or ever can, create one particle of wealth. 
 If money and wealth could be created by law, then a government would 
 never need to levy taxes— it could readily legislate itself into the posses- 
 sion of both those desirable things whenever they were needed. 
 
 " Paper currency has no utility, except to the extent that it is a conven- 
 ient representative of real money. It should be convertible at par into 
 coin at all times, on demand of its holder. Beyond compelling banks of 
 issue to be constantly ready to redeem their paper currency in coin on 
 presentation, a government has no legitimate right to have anything to 
 do with banking. A government should therefore never issue paper 
 currency." 
 
 I remember hearing one of these wise men lecture on 
 *' Money " and say : — 
 
 " The sight of gold produces a wonderful, mysterious impression on the 
 human mind. When a man has anything for sale the sight of gold at 
 once creates this sensation in his brain — it incites him to immediately 
 place the lowest possible price on his goods in order to get possession of 
 the coveted object, the glittering coin. Consequently the possessor of 
 gold coins has in hand an accurate measure by means of which the real 
 value of whatever he wishes to buy can at once be determined. But this 
 curious effect is not produced by greenbacks, and this is one reason why 
 greenbacks are not a correct measure of value. 
 
 " It is requisite that a pound weight should always weigh the same ; that 
 
22 SOCIAL STRUGGLES. 
 
 a bushel measure should always hold the same quantity ; and that a yard- 
 stick should always have the same length. In like manner, a measure of 
 value should always possess the same value ; otherwise it becomes a 
 means of deception. 
 
 " Gold and silver, unlike other things, have a fixed, unvarying value ; 
 consequently gold and silver are the only things from which a fixed 
 measure of value can be made. Hence we find that all civilized nations, 
 in all ages, have used gold and silver as money. Coins of gold and silver 
 are the money of the world. But it must be borne in mind that these 
 coins are not capital. They are unvarying measures of value which can 
 be exchanged for capital." 
 
 FALSE DOGMAS BY THE MILLION. 
 
 Editorials, speeches and pamphlets, setting forth, in a va- 
 riety of forms, but all containing substantially the foregoing 
 ideas, were printed in great numbers. The " fixed value " 
 of gold and silver was a point dwelt on with special empha- 
 sis, and large numbers of pamphlets were written for the 
 special purpose of setting forth the enormous advantages 
 to be derived from using a " fixed measure of value": to 
 wit, gold and silver coins. That gold and silver could 
 fluctuate in value like other commodities was' deemed a 
 proposition so absurd as not to demand refutation. 
 
 The authors of these statements claimed to represent the 
 most perfect scientific researches, and asserted that all 
 who differed from them were profoundly ignorant, thor- 
 oughly dishonest ; or a mixture of those undesirable qual- 
 ities. 
 
 It is undoubtedly true that by far the greater portion of 
 the financial legislation of the world originated from a belief 
 in the truth of the aforesaid ideas. If they are correct, 
 then the legislation based on them is correct, and we have 
 substantially reached perfection in finance. It also follows 
 that the startling inequality of wealth, the vast amount of 
 pauperism, the great fluctuations in prices, the frequent 
 panics and periods of business depression, accompanied by 
 numerous bankruptcies, are all right too ; they are bitter 
 but wholesome medicines ; they are an unavoidable inci- 
 dent of human affairs which it is folly to attempt to 
 prevent. 
 
A SUDDEN CHANGE IN DOCTRINE. 23 
 
 HOW THE PEOPLE CAME TO BE iNHSLED. 
 
 The vast majority of the American people had never 
 given serious thought to the subject of national finance, and 
 were easily persuaded that it was a very intricate subject, 
 and that the " scientists " had a monopoly of monetary in- 
 formation. Accordingly they proceeded to translate their 
 beliefs into laws and actions. Taught that silver was a 
 " fixed" measure of value, one of their earliest desires was 
 to get rid of the evils and sufferings which they supposed 
 were inflicted by fractional paper currency. Accordingly, 
 at an expense of about fifty millions of dollars in the outset, 
 and at a yearly cost of several millions more, the fractional 
 cui'rency was destroyed and fractional silver coins put in 
 circulation with the confident expectation that a " fixed 
 measure" had been substituted for a " fluctuating spurious 
 money." But the anticipated benefits failed to appear, and 
 many persons observed that trade was not conducted any 
 more easily or accurately than with paper currency. 
 
 Since that time the " learned financiers " have radically 
 changed their teachings. Instead of saying that gold and 
 silver have a " fixed value," they now gravely inform us 
 that gold has a " fixed " value and that " silver has become 
 a metal which fluctuates in value." 
 
 This repudiation of a doctrine which has long been taught 
 as confidently as a mathematical demonstration has puzzled 
 many plain persons. They have said to themselves: "Sil- 
 ver is precisely the same metal and has exactly the same 
 qualities that it had a thousand years ago. The nat- 
 ural laws of to-day are the same natural laws which have 
 always presided over silver. What, then, is meant by the 
 statement that silver has recently acquired qualities which 
 it has never hitherto possessed ? Why does gold stand still 
 while silver moves ? Why are times worse than before the 
 prescriptions of financial doctors were taken ? " 
 
CHAPTER III. 
 
 Why we use Money. — What a Science ig. — How to study Money. — What 
 Capital is. — Distinction between Wealth- and Capital. — No use for 
 Money when no Wealth exists. — A Colony without Wealth. — Need 
 of Tools. — Value of a Thing is Dependent on Circumstances. — The 
 Value of Land. — Need of Capital. — How Commerce began. — 
 Definition of Trade. — How Trade is often Carried on. — What Sim- 
 ple Barter is.— Advantages of Direct Barter. — Mechanism of Ex- 
 changing Things by Use of Money. — Who are Principals in a 
 Trade. — Simple Barter is Still in Use. — How Barter tends to Pro- 
 duce Fair Bargains.— Bartering Labor. — Making " Bees." — Growth 
 of Classes. — What a Snob is. — Barter often the Best Way to Trade. 
 — Profits of Middlemen. — Barter could be Employed more than it 
 is. — Best Test of Wages. — Facilities for Barter should be Increased. 
 — Importance of Citizens being Acquainted. — Wealth of Cities. 
 — Facts in regard to Middlemen. — Parallel Railroads. — Increase of 
 Middlemen. 
 
 False premises always lead to false conclusions. No matter 
 how able and ingenious a person may be, when he makes an ex- 
 tended statement in regard to any subject, Jie zuill inevitably 
 contradict himself, if the premises from luhich he reasons are 
 incoi'rcct. 
 
 We have now, in substance, stated the doctrines of those 
 who call themselves "scientific financiers" and are gener- 
 ally believed worthy such a title. But as all history and ob- 
 servation tell us that a man is not always what he calls him- 
 self, nor what the majority believe him to be, let us care- 
 fylly examine this matter ourselves. 
 
 WHAT A SCIENCE IS. 
 
 A science is not a compound of truth and falsehood and 
 a classification of the principles deduced from such a mixt- 
 ure. No doctrines are truly scientific unless they are the 
 product of sound reasoning from facts verified by careful 
 examination. Therefore, before we can certainly know 
 
 24 
 
WHY MONEY IS DESIRED. 
 
 25 
 
 whether a related series of statements which purport to be 
 "scientific" are actually so, we must first ascertain if the 
 premises be true. We must examine the alleged founda- 
 tion facts and see if they actually exist. If we find that 
 such facts have been correctly stated, we must then consider 
 whether the reasoning from those facts has been properly 
 done. If we find any statement or theory which is the re- 
 sult either of bad reasoning, or at variance with positive 
 facts, we have conclusive proof that such statement or the- 
 ory is partially or wholly false. Moreover, we have reason 
 to suspect that the Vv^hole fabric of the so-called science is 
 built on foundations more or less rotten and defective. 
 
 HOW TO STUDY MONEY. • 
 
 A plow is comparatively a simple tool. But no one can 
 fully understand the meaning of the word "plow " without 
 carefully watching one in operation. He must learn why 
 and how it is used before he thoroughly knows what the 
 tool is and why it is made just as it is. 
 
 The same is true of everything. In order to clearly un- 
 derstand the meaning of the term " money " we must act 
 just as we do when we want to fully understand anything 
 else. We must begin at the bottom of the subject ; we 
 must first learn the uses of money — why we use it and the 
 purpose we accomplish by using it. 
 
 As the chief use of money is to act as the symbol and rep- 
 resentative of wealth and capital, those terms must be un- 
 derstood before the use of money can be comprehended. 
 Many persons suppose that the labors and sacrifices of man- 
 kind have for their object the possession of money. There 
 are a small number of insane persons called misers, who 
 spend years of hard labor and privation for the sole purpose 
 of collecting money and fondly gazing at it. But, with 
 these few exceptions, human industry is not incited by the 
 desire to obtain money. The first and ever dominant mo- 
 tive to labor is the imperative necessity of providing food, 
 shelter, warmth and clothing sufficient to maintain life. 
 After the actual necessities of man's animal life are sup- 
 
26 SOCIAL STRUGGLES. 
 
 plied, his intellectual and moral nature make still further 
 demands. Men labor to supply the wants which they have 
 in common with the lower animals ; they labor to obtain 
 means to gratify their emotions, passions and tastes, and 
 they are continually goaded to industry by an ever widen- 
 ing circle of real or fancied wants. These objects of human 
 endeavor are comprised by the term "wealth." 
 
 The miner for silver and gold has not fully attained his 
 object when those metals are in his possession. He ex- 
 changes them for a homestead, a farm, or such other com- 
 modity or thing as his necessities and fancy may dictate. 
 
 Man's vanity continually prompts him to desire an honor- 
 able and prominent position among his fellows, and in the 
 estimation of the majority such a place is reached by the 
 possession of a greater abundance and better quality of the 
 necessaries and luxuries of life. Wealth is also desired as a 
 means of gratifying social, moral, and religious sentiments. 
 
 When wealth can be obtained without money, men care 
 nothing for money. Beyond the small amount of wealth 
 absolutely necessary to maintain life, men care nothing 
 for wealth whenever their desires can be obtained without 
 wealth. An office which brings little money and much 
 honor is eagerly sought for. Human desires of various 
 kinds generate the force which makes the world a scene of 
 unceasing struggles. Money is eagerly sought as a means 
 of getting wealth, and wealth is desired as a stepping-stone 
 to gratify the myriad cravings of the human mind. 
 
 WHAT CAPITAL IS. 
 
 Capital is whatever mankind use to create and procure the 
 necessaries of life ; it is the tool which labor uses to make 
 wealth. Capital is the product of labor — it is labor put into 
 a more or less permanent form — into something by the use 
 and help of which it is easier to obtain food, clothing, fuel, 
 shelter, and other needs and desires of men. Any tool, ma- 
 chine, agency, or thing which facilitates the creation of 
 wealth, by making labor more effective than it otherwise 
 would be, is capital in the full sense of the term. The 
 
ADVANTAGES OF OWNING CAPITAL. 27 
 
 crooked stick which our ancestors used centuries ago to pre- 
 pare the soil for seed was capital just as truly as the steel 
 plow devised by modern science and skill. 
 
 Suppose a ship's crew were wrecked on an uninhabited isl- 
 and. The waters around them swarm with fish — the woods 
 are alive with birds — but the crew are in danger of starvation 
 because they have no means of killing either fish or fowl. 
 With great difficulty one man makes a rude spear, or hook, 
 wherewith to catch fish. Another makes a bow and arrows 
 to kill birds. By the aid of these imperfect tools starvation 
 is averted. The spear, the hook, and the bow are capital ; 
 labor has created capital, and capital has helped labor to se- 
 cure food. 
 
 Without consciously making an argument, the makers of 
 these tools have demonstrated that capital is the child of la- 
 bor and shown the falsity of the dogma that " Labor can do 
 nothing without the help of capital." In the beginning of 
 society there was no capital. Labor had to create it. 
 
 If the owner of one of these weapons should lend it in 
 consideration of receiving an equitable portion of the game 
 captured therewith, that would be an example of loaning 
 capital at a fair rate of interest. If the weapon-owner 
 took advantage of the hunger of those who had nothing but 
 their naked hands, and loaned the means of catching game 
 for an unreasonable portion of the game, that would be ex- 
 tortion and usury. 
 
 As men progress from a rude state of ignorance and pov- 
 erty toward knowledge and wealth, the forms of capital and 
 the modes of collecting rent and interest become more nu- 
 merous and complex ; but the principle involved remains 
 the same as in the foregoing simple examples. 
 
 DISTIXCTION BETWEEN WEALTH AND CAPITAL. 
 
 In civilized communities, wealth can readily be exchanged 
 for capital, and capital can be exchanged for wealth. In 
 many cases, the same thing is both wealth and capital. A 
 farmer's bin of potatoes is wealth. He can cook and eat 
 them. He can also use them to create more potatoes — he 
 
28 SOCIAL STRUGGLES. 
 
 can plant them, and in that form the potatoes are capital ; 
 they assist the farmer to create wealth. A flock of sheep is 
 both wealth and capital. It is capital when used to produce 
 wool and raise lambs. It is wealth when used for the flesh 
 and skins. 
 
 But many forms of capital are not wealth, simply because 
 they do not and cannot directly supply man's wants — they 
 are a remote link in the chain which carries wealth to man- 
 kind. The tools and machinery by the help of which 
 threshing machines are manufactured are not wealth but 
 simply capital. They help labor create the machine ; the 
 machine helps the farmer to get the grain, and the grain is 
 wealth. 
 
 Forms of wealth which are not a direct or indirect means of 
 helping labor to create other wealth, are not capital. Ele- 
 gantly bound volumes of poetry, fine paintings, elaborately 
 carved musical instruments and kindred things, are wealth 
 because they supply the artificial wants of mankind. But 
 they are not usually tools or means for creating other wealth, 
 and therefore are not capital. 
 
 NO USE FOR MONEY WHEN NO WEALTH EXISTS. 
 
 Having defined wealth and capital we are now ready to 
 consider why we use money. The proper beginning of 
 such a study is to learn under what circumstances money 
 is not used. 
 
 In a state of absolute poverty mankind would have no 
 use for money, simply because they would have neither 
 wealth nor capital, and therefore nothing would exist which 
 they wanted to sell, to buy, or to exchange. Labor would 
 exist, but until it had created some wealth, or some capital, 
 wages paid in money would be of no use to the laborer ; no 
 one would want to sell his labor for money unless thereby 
 his wants could be gratified. 
 
 The possible use of money begins with the acquisition 
 of wealth. The richer a community is the more use it has 
 for money ; it has more to sell and wants to buy more. 
 
WHY MONEY HAS UNDERGONE CHANGES. 29 
 
 The poorer a community is, the less use it has for money; 
 it has less to sell and less ability to buy.* 
 
 In all probability mankind existed a long time before 
 money would have been of any use to them, even if they 
 had possessed what we now deem the best kind of money. 
 After sufficient progress had. been made to render the use 
 of money possible, it was probably a long time afterward 
 before its utility was discovered. 
 
 The earliest kinds of money were like the earliest tools 
 of all kinds, rude and inconvenient. As mankind have 
 painfully and at irregular intervals of time developed intel- 
 ligence on all other subjects, so they have slowly and fit- 
 fully learned to improve their money, and have invented 
 better modes of using it. The history of money is the 
 story of man's progress from poverty, superstition and 
 ignorance toward wealth, liberty and knowledge. To say 
 that our present money is perfect is equivalent to saying 
 that we have reached in all respects the highest state of 
 perfection of which the race is capable. 
 
 Perhaps some things in regard to the uses of wealth, cap- 
 ital and money can be more easily understood by stating an 
 imaginary case wherein money at first would be of no use. 
 
 A COLONY WITHOUT WEALTH. 
 
 Suppose a village of a thousand persons, with a variety 
 of trades and occupations, should have all its inhabitants 
 some day suddenly snatched from home and placed on the 
 back of a comet, — no one having a single thing in posses- 
 sion but the clothes he had on. Suppose they were 
 landed the next day on a planet similar in all respects to 
 our world except that it was uninhabited by mankind. 
 Further, suppose they arrived in the southern portion of 
 the temperate zone, where wild fruit could be obtained 
 in abundance sufficient to sustain life. 
 
 * This is the reason why the money of different countries varies so 
 enormously in volume. A rich country actually needs far more money 
 per capita than a poor country. 
 
jQ SOCIAL STRUGGLES. 
 
 Those persons would be in a condition similar to that ot" 
 primitive man, with, however, one enormous advantage : 
 they would be possessed of knowledge which it has taken 
 our race thousands of years to acquire. 
 
 What would this colony in all probability do? At first, 
 they would be filled with consternation and despair, but 
 perennial Hope would soon partially restore their spirits 
 and they would set out in quest of drink and food. No 
 one would regret the lack of money, simply because noth- 
 ing would be lost by its absence. As none of the neces- 
 saries of life could be bought with money, it would be 
 utterly worthless. 
 
 NEED OF TOOLS. 
 
 A remark about the intrinsic, unvarying and perpetual 
 value of gold and silver would be received with derision. 
 Every individual would be intent on securing the primary 
 needs of life, viz., food, drink, clothing, shelter, warmth, 
 and protection from enemies. 
 
 They would want the simplest forms of wealth, and 
 would go to work to get them. After satisfying thirst 
 and hunger, their next desire would naturally be to provide 
 a shelter from the sun and storm— they would want to 
 build houses. They would not think how much money a 
 house would cost, nor desire money to build it with. The 
 pressing problem would be, How shall we construct some 
 kind of a shelter ? 
 
 At once, the imperative need of tools to work with 
 would possess every mind. The idea in the sentence : 
 " Capital is a tool used b\- labor in creating wealth," would 
 recur to them with an intensity of meaning it never before 
 possessed. , Their thoughts would turn to their former 
 possessions, — but they would not desire many things for 
 which they had toiled when on this earth. They would 
 want working capital more than many other forms of wealth. 
 A sharp steel ax would seem to them of more intrinsic 
 value than a wheelbarrow full of gold eagles. They would 
 rather have a sledge-hammer, a shovel, a pick and a crow- 
 
WHA T CREA TES VAL UE. ^ I 
 
 bar than all the paintings, pianos and ornaments they had 
 ever seen. The distinction between capital, by the use of 
 which labor can readily create wealth, and those forms of 
 wealth which cannot be so used, would be impressed very 
 sharply upon them. 
 
 While slowly and laboriously cutting a stick of wood in 
 two with a sharp stone, one of these colonists would sigh 
 when he thought how easily and rapidly the work could be 
 done with a buck-saw. He would remember that when on 
 earth four buck-saws could be had for one day's labor, and 
 would naturally think how delightful it would be to get one 
 buck-saw for one month's labor. 
 
 It would then be plain to him that the amount of labor 
 which a person is willing to give for a certain thing does 
 not depend on the thing itself but on the person's situation 
 and necessities, and that he will willingly give more or less 
 labor for it as circumstances and conditions change. This 
 conclusion would lead him to ask whether the value of 
 things not bought directly wdth labor was not governed by 
 the same rule as when paid for directly by labor. 
 
 VALUE OF A THING IS DEPENDENT ON CIRCUMSTANCES. 
 
 He would observe that the same things had far different 
 values in his estimation then from what they had when in 
 his old home. As these different ideas of value were 
 attached to precisely the same things, he would see that 
 the values were not inherent and intrinsic in the things 
 themselves. If they were, the same value would always be 
 attached to them ; because an intrinsic quality of a given 
 thing is inseparable from that thing so long as it remains in 
 existence. 
 
 The colonist would next say to himself : " Everything 
 has a different value in my eyes now from what it had 
 when in my former circumstances. Nothing has changed 
 but circumstances and conditions. 
 
 " Therefore nothing w^hatever possesses absolute, intrinsic 
 and inherent value ; the worth of a thing depends entirely 
 upon the circumstances with which the thing is surrounded. 
 
32 
 
 SOCIAL STRUGGLES. 
 
 ■ — upon the relation which it lias to the condition and 
 necessities of mankind. 
 
 " As the value of a thing is entirely due to the conditions 
 by which it is environed, it necessarily follows that every 
 change in those conditions must change the value of that 
 thing just as the reflections of a mirror must change when 
 diff"erent objects are placed before it," These propositions 
 he would talk about with his fellow-colonists and would 
 find no argument necessary for their acceptance, as every- 
 one had already unconsciously imbibed them from the hard 
 facts of daily experience. 
 
 THE VALUE OF LAND. 
 
 Parties would take short journeys in different directions 
 to explore the country. They would discover vast natural 
 meadows of fertile soil, and magnificent forests of good tim- 
 ber. They would think how valuable this soil and tim- 
 ber would be if situated in the vicinity of their former home, 
 and of how little worth they were under the existing cir- 
 cumstances. The value which their life-long education 
 had taught them was one of the most real and solid of 
 all kinds of values — viz., the value of acres of fertile land — 
 they would see, was like all other values, — the result of the 
 conditions under which the land was placed, its relation to 
 man and his need and ability to derive wealth from its use. 
 They would recognize that the term "valuable," when ap- 
 plied to anything, is simply a brief mode of stating the cir- 
 cumstances and conditions under which that thing is placed, 
 and the relation which it bears to mankind in consequence 
 of those conditions. Furthermore, it would be plain that a 
 considerable portion of those conditions are creations of 
 custom and- law. 
 
 NEED OF CAPITAL. 
 
 We have seen that our imaginary colonists, impelled by 
 instinctive love of life and its enjoyments, have gone to 
 work to create wealth and capital, with nothing to aid them 
 but their knowledge and naked hands. Part of their indus- 
 
NECESSITY OE ECONOMY. 
 
 33 
 
 try would necessaril}' be first devoted to gathering means 
 of subsistence from day to day. This labor would leave 
 them no richer at one week's end than another. They 
 would clearly see that the only way to .escape from their 
 destitute condition was by accumulating capital. The im- 
 perative need, not only of supplying daily arising wants but 
 also of practicing economy of time and food, would be 
 sharply forced upon their attention. Thus the first lesson 
 which must be learned by every one who wishes to acquire 
 even the smallest amount of wealth or capital would be 
 taught and illustrated hourly by the constant presence of 
 ugly facts. 
 
 More fully than ever before they would realize how com- 
 paratively inefficient a man's work is when he is without 
 tools, and consequently their earliest savings of time and 
 labor would be expended in procuring various substances 
 wherewith to make rude implements of different kinds. 
 
 HOW COMMERCE BEGAN. 
 
 One man would make a journey to a rocky hill, and after 
 patient search among the fragments of rock would find a 
 sharp-edged stone, suitable for conversion into a stone ax. 
 Straightway he would think that perhaps a better stone 
 could be found, and would continue his efforts until in pos- 
 session of several stones. Doubtful which stone was the 
 best of the lot, with great fatigue he would carry a load of 
 them into camp. From an excursion along the sea-shore 
 another man would return laden with shells suitable for use 
 as drinking-cups. Another would bring in a bundle of 
 sticks of wood which could be used as ax-handles or as 
 clubs to beat off wild beasts. 
 
 These three men would meet and exhibit their treasures 
 to one another. The owner of the sharp stones could not 
 use all of them himself, and would at once wish to exchange 
 one stone for an ax-handle, and another stone for a shell 
 to make into a drinking-cup. The owner of the shells 
 would have more of them than needful, and would prefer 
 
34 
 
 SOCIAL STRUGGLES. 
 
 to have fewer shells and to own instead a sharp stone and a 
 good stick. The owner of the sticks with Httle reflection 
 would conclude it far more desirable to have a smaller num- 
 ber of sticks, and in place of those parted with, have a shell 
 for a cup and a sharp stone to fasten on the end of one of 
 the remaining sticks. 
 
 Thereupon these three persons would exchange goods 
 with one another, and similar exchanges of simple, rude 
 articles would take place between a considerable number of 
 the colonists. Commerce would begin. A few persons are 
 simply a fractional part of the world's population. When 
 we learn how two or three men will naturally trade with 
 each other when placed under certain circumstances and 
 actuated by certain motives, we have a substantially correct 
 miniature picture of what two or three hundred, two or 
 three thousand, or two or three million men will do under 
 similar conditions. Essentially similar motives produce es- 
 sentially similar conduct. The germs of the vast commerce 
 which encircles the globe all exist in the aforesaid simple 
 exchanges. 
 
 In trade of all kinds the first event in the progress of its 
 birth and growth occurs when A learns that something is 
 in the possession of B, the ownership of which the fancies 
 or the necessities of A cause him to think will give greater 
 satisfaction, pleasure or power than a certain amount of his 
 own labor or some commodity which he already possesses. 
 A conference is held between A and B. The relative value 
 of things is agreed on and an exchange is made. 
 
 When the world's commerce is viewed as a whole, it ap- 
 pears such a tangled net-work of trading, buying and selling 
 that no one can understand it, or explain the motives which 
 cause goods to be incessantly shipped hither and thither. 
 But when these apparently complex commercial transac- 
 tions are dissected, they resolve themselves into the simple 
 combination of facts which caused the aforesaid trades be- 
 tween the colonists, and between A and B. 
 
 Each one of the three colonists aforesaid gave a thing 
 which he did not need for a thing which he did need. Or, 
 
UNFAIR BARGAINS. 
 
 35 
 
 more accurately speaking, he gave what he thought he needed 
 least, for what he thought he needed most. 
 
 DEFINITION OF TRADE. 
 
 Trade has been defined as " an exchange of the superfluous 
 for the necessary." This is a correct definition in many in- 
 stances. C gives D something which is superfluous to C, but 
 necessary to D. D gives C something which is superfluous 
 to D, but necessary to C. This is undoubtedly the natural 
 manner in which all exchanges of commodities and labor 
 would be made, if mankind were governed by the Golden 
 Rule. No one would then be obliged to labor for another 
 person unless by so doing he received as much benefit as he 
 conferred. The workman would then give his labor and re- 
 ceive in payment therefor what he needed, but which was 
 relatively superfluous to his employer. When a man traded 
 he would always dispose thereby of something of little or no 
 benefit to himself until exchanged for something else for 
 which its previous owner had less need than for what he 
 took in exchange therefor. 
 
 HOW TRADE IS OFTEN CARRIED ON. 
 
 But in fact injustice and oppression have always prevailed 
 to a large extent throughout the world, and there are no in- 
 dications that their reign will terminate this year. Ex- 
 changes of commodities, and of labor for commodities or 
 money, are not always a mutual benefit. One of the parties 
 to the transaction often gets by far the best of the bargain. 
 Vast numbers of persons have been, and are to-day, com- 
 pelled by various forms of commercial dishonesty, and by un- 
 just legislation backed by ruthless power, to dispense with 
 or forced to sell many things which are not strictly superflu- 
 ous, and thereby subject themselves and families to priva- 
 tion and suffering. Inequitable taxation, exorbitant rent 
 and interest, unfair bargains, inadequate wages, and legis- 
 lative robbery in different forms, compel multitudes to go 
 without some Jiecessaries for the purpose of getting or re- 
 tainincr other thing-s still more needful for their comfort and 
 
36 
 
 SOCIAL STRUGGLES. 
 
 happiness, and perhaps vitally essential to a bare subsistence. 
 Therefore, trade as it is actually carried on should, in a large 
 percentage of cases, be defined as an exchange of things 
 which appear to one of the parties to the bargain of less ne- 
 cessity, for things which appear o{ greater necessity. 
 
 Instead of always selling or exchanging superfluous things, 
 mankind frequently dispose of what they want to keep for 
 the purpose of obtaining something for which their wants 
 are still greater. It would therefore be better to define trade 
 as an exchange of what can be most easily parted with for 
 something more needed. 
 
 WHAT SIMPLE BARTER IS. 
 
 The aforesaid exchanges of the colonists are examples of 
 trade by complete and direct barter. Neither money nor 
 credit has been used, and no merchant, banker, broker, com- 
 mission merchant, shipper or middleman of any kind has 
 acted for or between the different parties. The transaction 
 has been effected with the smallest possible amount of ex- 
 pense, viz., the time of the parties themselves while making 
 the trade. No one has traded with the idea of getting a 
 thing for a low price and keeping it until a future time when 
 more could be had for it. In each case the producer has 
 .given the fruit of his labor directly to the consumer, and has 
 received in return the product of another man's work which 
 is wanted for personal use. The advantages of the trade 
 are confined to the persons who are principals of the ex- 
 change. No fee, commission, or profit has been paid to, or 
 made, by any third party to the transaction. 
 
 ADVANTAGES OF DIRECT BARTER. 
 
 Thousaads of years have passed since our ancestors first 
 made exchanges similar to those aforesaid. Meanwhile 
 human ingenuity has been taxed for the purpose of invent- 
 ing other ways of trading than by direct barter. These en- 
 deavors have been produced by the difficulty which often 
 occurs, of the parties directly meeting each other and bring- 
 ing- their g-oods with them. The result of these efforts to 
 
BENEFITS OF DIRECT TRADE. 37 
 
 overcome inconveniences has been the construction of ad- 
 mirable commercial machinery whereby a man who wishes 
 to exchange his labor, or the product of his labor, with 
 another man for the product of that man's labor, can indi- 
 rectly do so without ever meeting the man with whom he 
 really trades. 
 
 The shortest distance between two points is a straight 
 line drawn from one point to the other. When a meeting 
 is practicable between two men who each possess some- 
 thing which the other wants, it is obvious that the shortest 
 road to an exchange is direct barter; no third article or 
 third man intervenes to make the route a circuitous one — • 
 the line is drawn straight and direct. It follows that 
 wherever and whenever it is practicable for the parties to 
 meet and mutually supply each other's wants, no means of 
 making exchanges has ever been invented which is as good 
 as the primitive method of complete and direct barter. 
 This is one of the comparatively few cases in which per- 
 fection in the manner of doing an act appears to have been 
 reached the first time the act was done. 
 
 When one thing is given directly for another thing, there 
 is less opportunity for errors in judgment and mistakes in 
 estimating relative value than occurs when one thing is 
 given for a third article, and then the third article is given 
 for the desired object. Only two things are compared with 
 one another; the parties are not called upon to appraise a 
 third article. After the relative value of the two things is 
 decided on, only one exchange is made, and this is always 
 simpler and plainer than when two or three exchanges are 
 made. 
 
 MECHANISM OF EXCHANGING THINGS BY USE OF MONEY. 
 
 In illustration of this, let us now carefully note the diiTer- 
 ence between a simple barter, and an exchange in which 
 money is used. 
 
 R has more apples than he wants, and would like to ex- 
 change one barrel of apples for a barrel of potatoes. S has 
 more potatoes than he wants, and would like to exchange 
 
38 
 
 SOCIAL STRUGGLES. 
 
 one barrel of potatoes for a barrel of apples. The simplest 
 way for R and S to have their wants supplied is for R to 
 cart his apples directly to the house of S, to exchange with 
 S for a barrel of potatoes, and then put the potatoes di- 
 rectly in the cart and take them home. 
 
 Instead of trading by the aforesaid barter, if R take the 
 apples to the store of C, a fruit dealer, and sell them for 
 money, the relative value of the apples and a certain amount 
 of money must first be arrived at. In other words, the 
 price of the apples is fixed and then the money is handed to 
 R. One exchange and an appraisal of the relative value of 
 two articles, viz., the apples and the money, has then been 
 made, but R has not yet got what he wants. 
 
 R takes the money received for the apples to the store of 
 T, a dealer in vegetables, and examines a barrel of potatoes. 
 Then the relative value of the money is compared with the 
 value of a barrel of potatoes, and after this appraisal is 
 made, R hands the valuation to T and takes the potatoes. 
 
 Two exchanges and two sets of appraisals have now 
 taken place, but S has not made the exchange which he de- 
 sired to make. In order to do so he carts his potatoes to 
 the store of T, and T and himself estimate the value of a 
 barrel of potatoes compared with a certain amount of 
 money; that is, they decide what the price of the potatoes 
 shall be, and this is the same thing as deciding what the 
 price of the money is. T pays the amount of money de- 
 cided on to S and takes the potatoes. 
 
 S then takes the money received for the potatoes to C 
 and looks at a barrel of apples. S and C then appraise 
 the value of the apples and the value of the money ; that 
 is, the price in money of the apples is decided on. S then 
 hands the determined amount of money to C and takes the 
 barrel of apples home with him. 
 
 WHO ARE PRINCIPALS IN A TRADE. 
 
 After all these exchanges and cartages have been made, 
 R and S have both done in a roundabout way what they 
 might have done by direct barter. In this transaction R 
 
MIDDLEMEN LEVY TOLL. OQ 
 
 and S are the real persons, the principals, who have ex- 
 changed goods with each other. C and T are merely go- 
 betweens. They are middlemen, helping R and S trade for 
 the purpose of making a profit out of both of them. 
 
 If R and S had bartered with each other, neither one of 
 them would have incurred the risk of being a loser at the 
 hands of C and T, by reason of a faulty judgment of values 
 by R or S ; or by the possible superior shrewdness, which 
 may border on dishonesty, of C and T. In a direct barter 
 between R and S, a certain barrel of apples and a certain 
 barrel of potatoes, both of a particular quality, would be di- 
 rectly before each man. In making an appraisal of values 
 tliis barrel of apples would be compared with tJiat barrel of 
 potatoes. Each man would know at once how he was going 
 to come out — what would be the final result of the trade. 
 But when the appraisal of values was made between R and 
 C and T, and between S and T and C, the value of apples 
 and potatoes in general was estimated, instead of a special 
 valuation of a particular barrel of apples or potatoes. At 
 least the general value of those articles had more influence 
 on the minds of the appraisers than it would if the object 
 were merely to compare the value of one designated barrel 
 of apples with that of one designated barrel of potatoes. 
 
 Leaving at present out of view the fact that C and T 
 have both made a profit out of R and S, it is evident that 
 the chances of an equitable bargain were diminished by the 
 exchanges which were made to reach the final end desired. 
 
 In the foregoing illustration there are only two middle- 
 men between the producer and consumer. But in the ordi- 
 nar)' course of commerce, where direct barter is not used, a 
 considerable number of persons often intervene between the 
 real parties to the exchange. The more hands two things 
 given in exchange for each other pass through before each 
 thing reaches its final destination, the greater the probabil- 
 ity becomes that one or both of the original owners of 
 those things will not receive a fair return for what was 
 parted with. 
 
 It is certain that the producer and the consumer of a cer- 
 
40 
 
 SOCIAL STRUGGLES. 
 
 tain thing must, either directly or indirectly, pay the com- 
 missions charged by the third parties as toll for having that 
 thing pass through their possession. 
 
 SIMPLE BARTER IS STILL IN USE, 
 
 By reason of the foregoing advantages attending it, di- 
 rect barter to a considerable extent has survived the inven- 
 tion of money, and the many devices for making exchanges 
 with representatives of money. This is so not only in 
 localities where money is scarce and exchanges few and 
 simple in character, but direct barter is still carried on in 
 the great centers of wealth and population. In London 
 and Paris newspapers are now printed which make a spe- 
 cialty of helping persons make direct trades with one another. 
 A portion of their advertising space is devoted to notices 
 similar to those given below which were taken from a re- 
 cent London paper. 
 
 EXCHANGES. 
 
 " Well mounted slides of pigeon dispatch, used during the siege 
 of Paris, in exchange for two slides of interest, also well mounted. 
 — L. Hawkins, Hillside, Hastings. 
 
 " Wanted, standard works on natural history, in exchange for fossils 
 and algae. A good copy of Goldsmith's 'Animated Nature,' colored 
 plates, 2 vols., well bound, for four dozen good micro, slides. — 165 Well 
 street, Birmingham. 
 
 "A valuable collection of British mosses (120 specimens), with notes, 
 from herbarium of late W. Valentine, offered for Cooke's ' Hand-book 
 of Fungi.' — G. E. Massee, 8 West Grove Terrace, Scarborough." 
 
 It appears not improbable that the public press will here- 
 after be used far more than it has been for bringing to- 
 gether persons who can mutually supply each other's 
 wants by direct barter. We could thus restore the op- 
 portunities for trading face to face which were enjoyed by 
 our ancestors when hamlets, farms and forests existed where 
 larsfe cities now stand. 
 
LESS DAMGER OF BEING MISLED. ^^ 
 
 HOW BARTER TENDS TO PRODUCE FAIR BARGAINS. 
 
 Let us now consider a specimen case, which may show 
 the tendency of direct barter to prevent those who wish to 
 make an exchange from being confused and misled by side 
 and irrelevant facts and issues and being cheated in con- 
 sequence. 
 
 Suppose M wants to exchange his colt for a fine cow, 
 and N wishes to exchange his cow for a colt. If M is 
 pleased with N's cow and N likes M's colt, nothing can be 
 simpler than for M and N to bring their animals to a place 
 of meeting and there compare the relative merits and value 
 of the cow and the colt. The range of debate is thereby 
 made as small as possible. Whether live stock at that 
 time is high priced or low priced, — whether the Winter is 
 likely to be severe or the Summer very. dry, — whether feed 
 will be plenty or scarce and high, and a number of other 
 considerations, are all shut out as foreign to the question be- 
 fore M and N, viz.. What is the relative value of these two 
 animals ? 
 
 The manner in which barter often benefits both parties 
 and prevents troublesome disputes may perhaps be still 
 further shown by an example of direct barter of labor for 
 labor. 
 
 F and H are farmers and each one has three stalwart sons 
 living at home with their father. Their farms lie near to- 
 gether but are quite different in quality. F's farm has a 
 subsoil of sand and gravel, but the farm of H has a subsoil 
 of heavy clay. As a result of this difference, the farm of 
 F produces early crops while the crops on H's farm are of 
 slower growth and are later in ripening. When F's corn is 
 ready to hoe, the corn of H is just coming up. 
 
 F then says to H : "I have a large field of corn which 
 needs hoeing at once. You come and help me hoe my corn 
 and when yours is ready I will help you hoe yours." H 
 agrees to this, and early the next morning a little army of 
 men has invaded F's cornfield, — F and H and their six 
 sons are at work, cheered alike by one another's company 
 
42 
 
 SOCIAL STRUGGLES. 
 
 and by the rapidity with which the weeds are cut down. 
 " Many hands make light work." 
 
 In a few days F's large cornfield is free from weeds and 
 presents a beautiful sight to a farmer's eye. In a short 
 time the corn of H needs hoeing, and then F and his sons 
 join H in hoeing his corn until H has received as many 
 days' labor as he has given F. 
 
 Neither F nor H has used either money or commodities 
 in making this exchange. Both have traded a day's work 
 when they could most easily spare it for a day's work when 
 they needed it most. The value of each day's labor has 
 thus been increased. The wages of a day's labor have been 
 a day's labor. There has been no possible chance for any 
 disputes about the number of hours which a man should 
 work in a day, the rate of wages, nor about any other of 
 the disputed questions concerning the proper relations of 
 capital and labor. The exchange has furnished steady 
 employment, and enabled both parties to accumulate a 
 certain number of days' work to be used when wanted. It 
 has also promoted good feeling and pleasant relations 
 between neighbors, which is a matter of considerable 
 importance. 
 
 BARTERING LABOR. 
 
 The foregoing example of directly paying for labor with 
 similar labor literally describes the custom of " changing 
 work " which prevails more or less throughout the agricult- 
 ural portions of the country. It is generally practiced 
 more in the new, than in the old settled sections. Fifty 
 years ago, in the neighborhood where my boyhood was 
 passed, it was a universal custom, which existed by reason of 
 the scarcity of money, the difficulty of obtaining laborers in 
 sufficient numbers when an urgent need of their services for 
 a short time arose, and the feeling of equality and kindli- 
 ness which prevailed between the farmers. 
 
 I remember seeing a case of the application of this mode 
 of barter which illustrates its simplicity and efficiency. In 
 December, C agreed to deliver sixty cords of wood, for a 
 
A SUCCESSFUL WOOD BEE. 
 
 43 
 
 certain price per cord, at a designated place before the first 
 day of the next April. It was important to the buyer that 
 the wood should be delivered at the specified time. A 
 series of mishaps occurred to C, the result of which was that 
 about the middle of March the wood had been chopped, 
 drawn from the woods and piled along the highway, but 
 none of it had been drawn to market. Just before that 
 time snow had fallen. The sleighing was good, but liable 
 any day to be spoiled by a thaw. If this happened the 
 roads would be left in such a bad condition that it would be 
 impracticable to draw the wood during the remainder of the 
 month. C would therefore be unable, with his own team, 
 to deliver the wood as agreed. Even if the buyer should 
 permit him to deliver it in April, after the road had settled 
 and become good, he would then be unable to spend the 
 time requisite to draw the wood, because the Spring plow- 
 ing and sowing would have to be attended to at once. 
 
 C could not hire the neighboring farmers with money for 
 two reasons, each one of which alone was sufficient. He 
 had no money which could be spared for that purpose. If 
 he had possessed the money and offered to hire them with 
 it, nearly every one of his neighbors who owned teams 
 would have been very much offended and refused to hire 
 out on such an occasion, as something utterly beneath their 
 dignity. 
 
 C resorted to direct barter of labor for labor. He sent a 
 boy Vv'ith a horse and cutter to all the neighbors for some 
 distance around, inviting them to " a wood bee," the next 
 afternoon. Shortly after noon the next day double teams 
 attached to wood sleighs arrived at C's house from all di- 
 rections. Some of the neighbors who had no teams came 
 with willing hands to help load and unload the sleighs. 
 
 Sleigh after sleigh was driven to the wood pile, quickly 
 loaded with wood, and started for the market-place amid 
 merry talk and laughter. At the place of delivery a similar 
 scene occurred, as one sleigh after another delivered its 
 cargo and started back for another load. When the sun set, 
 the entire pile of wood had been moved about a mile down 
 
44 
 
 SOCIAL STRUGGLES. 
 
 a series of steep hills and neatly piled at the place agreed 
 on. The neighbors then went home to fodder their cattle 
 and attend to other nightly chores, all pleased with the 
 success of the " wood bee." It so happened that a thaw 
 spoiled the roads the next day. 
 
 This was a case of direct barter of labor for labor without 
 any agreement either verbal or written between the parties 
 to it. There was simply the tacit understanding that C 
 should conform to established custom, and be willing at 
 any time to help any other one of the neighbors in a similar 
 manner whenever help was required. 
 
 MAKING " BEES." 
 
 It was customary to make " a bee" whenever an unusual 
 number of hands for a few hours were required for some 
 heavy work, as raising the frame of a building, for instance ; 
 or, whenever a farmer had a very heavy piece of work of 
 any kind which he wished speedily done and hated to begin 
 alone. Man's social nature made it seem easier to work in a 
 large company of acquaintances where the work was speed- 
 ily dispatched, as if it were merely a huge joke, than to 
 drudge along alone. At these gatherings all the interesting 
 news and topics of the region were talked over, and some of 
 the old farmers would grow eloquent in descanting on the 
 merits of a favorite team of horses, or the strength and en- 
 durance of a lusty son. Labor was not the only thing 
 which was bartered ; jokes and stories were also freely ex- 
 changed. The capacity of telling a good story always in- 
 sured its owner an invitation to all the bees in the neigh- 
 borhood. Not to invite a neighbor to a bee was considered 
 an affront, — an intimation that his society Avas undesirable. 
 Frequently the afternoon's work was followed by a bounti- 
 ful supper, and a merry-making at the house of the maker of 
 the bee. In this the wives, daughters, sisters, and sweet- 
 hearts of the workers participated, and it was often long 
 after midnight before the bee broke tip. Thus besides being a 
 mode of bartering labor, " bees " were to the farmers what 
 
ARISTOCRATIC FOOLISHNESS. 
 
 45 
 
 " parties " of different kinds are to the unfortunates who live 
 in cities. 
 
 GROWTH OF CLASSES. 
 
 That the custom of "changing work " and of making 
 "bees" has fallen considerably into disuse during the 
 last forty years is to be lamented. It shows that the social 
 relations between men of small means and those in more 
 opulent circumstances are not as cordial and friendly as 
 they were ; — that the people are separating into classes 
 who do not fully fraternize wqth each other, and that the 
 spirit of the community, in consequence, is less democratic 
 than it was. It denotes also the growth of a desire to imi- 
 tate men who are so mean and ignorant as to use wealth and 
 position solely for the gratification of vanity and other self- 
 ish purposes, and to imagine that such conduct confers 
 nobility. 
 
 WHAT A SNOB IS. 
 
 Persons guilty of snobbery, /. c\, of mean imitation of 
 mean conduct, are generally so more because of their lack 
 of information and good sense than from inherent baseness 
 of heart. They have aspirations for superior things, but do 
 not know enough to see the distinction between what is 
 essentially admirable and what is superficial, ignoble and de- 
 grading. These pretentious persons practically ignore some 
 of the cardinal. Christian virtues. Let us hope that this 
 prevalent ignorance of to-day will melt away before the 
 broader knowledge and better spirit of to-morrow. 
 
 BARTER OFTEN THE BEST WAY TO TRADE. 
 
 The simplicity of direct barter and its tendency to pre- 
 vent unequal amounts of value from being exchanged 
 equally for one another are not its only mierits. Whenever 
 circumstances make it practicable, it is the most economical 
 method of making exchanges ; but, as will hereafter be 
 shown, under certain conditions, indirect barter, and pur- 
 chase and sale with money, are cheaper than direct barter. 
 
46 
 
 SOCIAL STRUGGLES. 
 
 Every intelligent mechanic knows that the power of an 
 engine, or machine of any kind, is greatest where the force 
 is created, or arises ; and that every transmission of that 
 power through belts, cogs, shafting, cams, or pulleys dimin- 
 ishes it. Part of the power is lost in turning the machinery 
 which transfers it from one place to another, or from one 
 kind of motion to another. No matter how perfect the 
 mechanism, nor how well oiled it may be, more or less waste 
 of power by friction is unavoidable. The more complex 
 the machinery, and the farther apart its different portions 
 are, the greater the expense must necessarily be of realiz- 
 ing a given amount of net power from the engine. There- 
 fore all the various appliances for distributing the power of 
 an engine are necessary evils and should be made as few 
 and simple as possible. 
 
 What cogs, belting, shafting and pulleys are to engines, 
 merchants, brokers, bankers and middlemen of all kinds 
 are to men who wish to exchange things with one 
 another. Belting and shafting transfer power ; middlemen 
 transfer property. As we shall see hereafter, middlemen 
 are often a necessary means whereby exchanges are made, 
 but nevertheless they increase the friction and expense 
 attendant upon transfers of property from one man to an- 
 other ; that is, they make the expense greater than it would 
 be if it were practicable to use direct barter. Other things 
 being equal, producers receive a less value in return for 
 what they create, and consumers give a greater value for 
 what they buy, just in proportion to the number of middle- 
 men who intervene between them. This is unavoidably so 
 from the fact that the necessary expenses, as well as the 
 profits of the middlemen, must be borne by those who 
 originally sell and those who finally buy. 
 
 PROFITS OF MIDDLEMEN. 
 
 Merchants and agents of different kinds do not always 
 transact business for strictly benevolent purposes. 
 
 This may be illustrated by reference to a state of facts 
 now existing. 
 
A COSTLY TRADE FOR THE PRINCIPALS. 
 
 47 
 
 A shoemaker living in Massachusetts wishes to exchange 
 a pair of boots for some corn to feed his fowls. A farmer 
 living in Iowa wishes to exchange some corn for a pair of 
 boots. These two men, lacking facilities for direct barter, 
 trade with each other through the intervention of a num- 
 ber of middlemen. The shoemaker takes his boots to a 
 merchant and sells them for two dollars and forty cents. 
 He then takes this money and. with it buys four bushels of 
 corn. The shoemaker has then exchanged one pair of boots 
 for four bushels of corn. The boots are then sent through 
 different persons to a merchant in Iowa. The Iowa farmer' 
 sells twenty bushels of corn for four dollars, and takes 
 the money and buys the identical boots which the Massa- 
 chusetts shoemaker sold. The farmer has then exchanged 
 twenty bushels of corn for a pair of boots. 
 
 The exchange is now completed. The shoemaker has 
 got four bushels of corn and the farmer has got the boots. 
 Now what has become of the rest of the corn — ^the sixteen 
 bushels which the farmer gave more than the shoemaker re- 
 ceived ? The answer is obvious ; the middlemen have got it. 
 They have charged the farmer and the shoemaker sixteen 
 bushels of corn for carrying a pair of boots from Massachu- 
 setts to Iowa and bringing back four bushels of corn. 
 
 In the foregoing illustration, for the purpose of making 
 a moderate statement, the retail price of corn in Massachu- 
 setts is placed at three times the wholesale price of corn in 
 Iowa. It would, however, be much nearer the average 
 market rates to state the Massachusetts retail price at four 
 times the Iowa wholesale price. This, of course, would 
 make the example a more striking one. 
 
 The aforesaid recital of what, in substance, is constantly 
 occurring in a countless number of cases, shows how large a 
 tribute persons at a considerable distance from each other 
 often pay to middlemen. The actual expense of carrying 
 corn from Iowa to Massachusetts is considerable, but it 
 seems as if the transfer ought to be made in some way so 
 that the consumer would not pay three or four times as much 
 as the farmer receives. Let us now look at a case in which 
 
48 SOCIAL STRUGGLES. 
 
 the distance between the real parties to the exchange is 
 small. 
 
 A farmer living near a city wishes to exchange some 
 butter for a coat. At the same time a tailor living in the 
 city wishes to exchange a coat for a tub of butter. The 
 farmer drives into the city with some tubs of butter, and 
 sells them to a wholesale dealer in butter for twenty-five 
 cents a pound. He takes the money to a dealer in clothing 
 and buys a coat for which he pays twelve dollars. He has 
 then exchanged forty-eight pounds of butter for a coat. 
 This coat was made by the said tailor who sold it for ten 
 dollars, and a couple of days afterward he took this money 
 to a retail butter dealer and bought a tub containing thirty- 
 three pounds of the same butter which the farmer sold. 
 The tailor had then exchanged his coat for fifteen pounds 
 less butter than the farmer gave for the same coat. 
 
 If the farmer and the tailor could have made a direct 
 barter with each other, they would, between them, have 
 saved the butter which the middemen have taken as toll 
 for having the goods pass through their hands. In a di- 
 rect trade, the tailor would probably have got about forty 
 pounds of butter for his coat. 
 
 When a boy; I knew a man who owned a large farm and 
 had a fixed policy of disposing of as much of his products 
 as possible by direct barter. He was constantly making 
 direct exchanges with the blacksmith, the grocer, the 
 tailor, the doctor, and with every one else with whom a 
 direct barter could be made. The neighbors laughed at 
 this and called it what mankind are prone to call conduct 
 which they do not understand, "eccentric." He was fre- 
 quently asked : " Why do you barter like a savage when 
 you can so easily sell your crops for money ? " 
 
 But the farmer kept still and steadily persevered in his 
 " eccentricity." The result was that this settled habit of 
 paying his bills largely by direct barter, in course of time 
 made him the most prosperous farmer in the vicinity. 
 
 None of his acquaintances saw the fact that by direct 
 barter he continually sold his products for a higher price 
 
TRUE WAY TO MEASURE WAGES. .g 
 
 than the neighbors did. He made the exchanges which he 
 desired to make with a smaller amount of products than he 
 would have been obliged to give if middlemen had stood 
 between him and those he dealt with. He had no diffi- 
 culty in bartering again with a man who had made one 
 trade of that kind, because his customers always fared as 
 well and often better than they would if their exchanges 
 had been made in the ordinary way with money. It would 
 be better for the whole community to have more such 
 eccentric farmers. 
 
 BARTER COULD BE EMPLOYED MORE THAN IT IS. 
 
 Direct barter of one kind of labor for another kind of 
 labor and direct barter of labor for commodities, especially 
 in periods of business depression, could be profitably re- 
 sorted to far more than they are. It is an error, both prev- 
 alent and pernicious, for workmen to suppose that their 
 wages are necessarily very low when they do not receive 
 pay in money. Idle men not infrequently say : " There 
 is plenty of work if you work for nothing but trade. We 
 do not want to work for nothing-." 
 
 BEST TEST OF WAGES. 
 
 The fact is that a man may receive fair, or even high 
 wages, without receiving any money whatever. The true 
 test of the fairness of a man's wages is the amount of the 
 necessaries of life which he gets for a day's labor. It is 
 immaterial to the laborer whether he gets the things he 
 needs directly for his wages, or whether he gets money 
 and then takes the money and buys the goods. The es- 
 sential thing is that the fair value of the labor should be 
 balanced by necessaries. Whether this takes place or not 
 does not depend on the mode of payment, but on the 
 amount of value which is transferred to the workman when 
 his wages are paid. Very frequently, in hard times, thousands 
 of idle men throughout the country could be put to work 
 at once if they would take their wages directly in the prod- 
 ucts of the mine, the farm, the mill, and the factory. 
 4 
 
CO SOCIAL STRUGGLES. 
 
 This course would have a powerful influence in hastening 
 the return of better times. 
 
 Suppose a carriage factory in Connecticut, in consequence 
 of inability to sell carriages, has discharged its workmen. 
 At the same time a rice planter in South Carolina writes : 
 " I wish to buy a carriage of you, but cannot sell my rice 
 at a fair price." Why could not the planter barter his rice 
 for a carriage, and the carriage-maker pay his workmen 
 in rice ? Occasionally, woolen factories in New England 
 are closed for want of sale for their cloth, and the workmen 
 meanwhile are idle, and anxious to know how their bread 
 will be obtained if work cannot soon be had. At the same 
 time in many sections of the West, farmers who own over> 
 flowing granaries of wheat are sorely in need of woolens. 
 
 Why could not a club of farmers send one or more car 
 loads of wheat, direct from the nearest railroad station to 
 the factory, and receive in return bales of woolen cloth to 
 be divided equitably among the contributors of the wheat? 
 The manager of the factory could have the wheat ground 
 into flour, and paid as wages to the factory operatives. 
 
 Similar things have been done for centuries, and it would 
 be far better to do them now than to have society suffer 
 such great losses as the idleness of large numbers of per- 
 sons necessarily entails. Greater information about political 
 economy would often enable farmers, employers and work- 
 men to devise and successfully carry out plans for bridging 
 a chasm of business stagnation by direct barter. A high 
 sense of honor among all classes of citizens would also be an 
 important factor in facilitating barter in the manner afore- 
 said. 
 
 FACILITIES FOR BARTER SHOULD BE INCREASED. 
 
 Government should take measures to facilitate direct bar- 
 ter, because thereby individual, and consequently national 
 prosperity would be fostered. 
 
 The obstacle to direct barter between persons living re- 
 mote from each other is chiefly lack of information. For 
 example, a manufacturer of cotton cloth in Massachusetts 
 
NEED OF GREATER INDUSTRIAL INFORMATION. t^\ 
 
 may want to barter cloth directly with a Mississippi cotton 
 planter. The first question is : To whom shall I address 
 my proposition ? Not having knowledge of a single plant- 
 er's address, the manufacturer abandons the project as 
 impracticable. 
 
 Discussion and practical experience have resulted in the 
 general conviction that it is sound public policy for a gov- 
 ernment to take charge of the distribution and dissemination 
 among the people of all kinds of information. To this end 
 the Post Office in all its departments is established and 
 maintained. For the same purpose, every ten years, at 
 great expense, a census is taken and published. At public 
 expense we print the speeches of Congressmen, and send 
 them with various governmental reports all over the 
 country. 
 
 In some countries the Government controls the telegraph 
 lines. All these measures have essentially one purpose ; 
 /. e., to educate the people and make it easier for every man 
 to communicate his thoughts and desires to persons remote 
 from himself. In this work. Government should take an- 
 other step. Every State should have a Bureau of Industrial 
 Information, which, on application by letter, would furnish 
 the inquirer with the address of all persons or firms engaged 
 in any specified business or industry in that State, together 
 with such other information as might be required to enable 
 the wants of the different parties to be fully known to each 
 other. One man would then be able to directly state what 
 he wished to get and what he wished to sell, or trade, in or- 
 der to get it. The creation of such a bureau would enable 
 a resident of Maine to exchange his goods directly with a cit- 
 izen of Texas without paying large commissions of different 
 kinds to those who make a profit by the temporary posses- 
 sion of property. It would simplify our commercial machin- 
 ery, by removing the need of the present great number of 
 men who stand between the producer and consumer. 
 
^2 SOCIAL STRUGGLES. 
 
 IMPORTANCE OF CITIZENS BEING ACQUAINTED. 
 
 Whatever facilitates commercial intercourse between citi- 
 zens of different States, and their knowledge of each other's 
 condition, tends to make us a more homogeneous nation. 
 Any measure which makes it easier for a man to learn about 
 the peculiarities of soil, climate, industries, and ideas of a 
 locality to which he may have some thoughts of removing, 
 promotes social relations between all parts of the country. 
 Increased knowledge of mutual wants opens new markets 
 for labor, goods and skill. It stimulates education of all 
 kinds. It makes every citizen feel more fraternal toward 
 all others. 
 
 Under our present social system a majority of the large 
 fortunes which individuals are constantly acquiring are not 
 obtained by those engaged in the creation of wealth. As a 
 general rule money is more easily made by acting as a mid- 
 dleman than in any other capacity. It is the traders of vari- 
 ous kinds, and not the producers, who get the cream of in- 
 dustrial efforts. The traders in money usually get the larg, 
 est share of profits. 
 
 WEALTH OF CITIES. 
 
 Wealth accumulates in large cities largely because the 
 various products of industry pass through those cities on 
 their way from the producers to the consumers, and pay toll 
 during their passage. Hence the w^ealthiest cities of the 
 world are those through which the greatest amount of prop- 
 erty continually passes. In all ages, the wealthiest na- 
 tions have been those who acted as middlemen, and handled 
 in various ways the property created by other nations. Any 
 measure which would enable persons engaged in different 
 industrial pursuits to more easily supply each other's wants 
 by trading without paying tribute to middlemen, would 
 lighten the burdens of the laboring population. The cost 
 of exchanging the productions of different portions of the 
 country is lessened by a reduction of the numbers of those 
 
WHEN MIDDLEMEN ARE USEFUL. 
 
 53 
 
 who must be paid for the labor involved in making such 
 exchanges. 
 
 FACTS IN REGARD TO MIDDLEMEN. 
 
 Much has been said and written in eulogy of the great 
 benefits conferred on the community by bankers, merchants, 
 and other middlemen. But an analysis of the matter 
 shows that they are of service in so far as they perform the 
 labor of making exchanges cheaper than the producers 
 could do it by directly trading with each other. Beyond 
 that point they are burdens on society, parasites living and 
 often growing rich on the labor of producers. Every un- 
 necessary middleman is so much labor and energy wasted ; 
 the middleman himself may flourish, but society is poorer to 
 the extent of the labor that he might otherwise perform 
 in a more useful capacity. Therefore the best interests of 
 every community, State, and nation, require the adoption of 
 measures, the tendency of which will be to transfer these su- 
 perfluous agents into some employment, useful, not simply 
 to themselves, but also to the whole people. 
 
 Other conditions being equal, the actual expense to a 
 railroad, a merchant, or an agent of any kind, of transfer- 
 ring a hundred thousand things from one person to another, 
 is not twice as great as the cost of transferring fifty thousand 
 things. The net profits of a middleman may be untouched, 
 or even be increased, at the same time that his charges for 
 performing a certain service are diminished, provided the 
 gross amount of his business be sufificiently increased. Con- 
 sequently, society can secure the lowest possible expense of 
 making exchanges by limiting railroads, merchants and 
 agents of all kinds, to the number absolutely needed to per- 
 form the requisite service, 
 
 PARALLEL RAILROADS. 
 
 The aforesaid principles have recently been illustrated in 
 a striking manner by the construction of parallel railroads 
 not necessary to perform the carriage required. In every 
 case, such roads have not ultimately cheapened the cost of 
 
54 SOCIAL STRUGGLES. 
 
 transportation, but have been a loss to the community. 
 When an existing railroad charges exorbitant rates, and has 
 full capacity to perform all the public service required along 
 its line, a parallel railroad should not be allowed to be built. 
 The Legislature should at once take the existing road by the 
 throat, and say : " We will make you carry passengers and 
 freight at equitable rates, and you shall not be allowed to 
 say what is equitable. We will establish a fair tribunal 
 to decide that question, and will compel you to abide by its 
 decision. You shall no longer be the sole judge of your 
 own case. The public have rights as well as yourselves." 
 
 INCREASE OF MIDDLEMEN. 
 
 It is a common delusion to suppose that an increase in 
 the number of middlemen, and of those engaged in pursuits 
 auxiliary to industrial production, necessarily results in a 
 competition which lessens the cost to the community of a 
 particular service. For example, let us suppose a city which 
 actually needs the services of twenty physicians and ten law- 
 yers. Within its bounds twenty additional doctors and ten 
 additional lawyers have recently settled. Would medical 
 and legal fees thereby be diminished ? On the contrary, that 
 city would thereafter have to support two men where one 
 was supported before. Many physicians and lawyers are 
 opposed to the trades unions of bricklayers and carpenters, 
 but they are continually supporting trades unions which 
 they call "Medical Societies" and "Bar Associations." 
 These trades unions fix the scale of prices at which medi- 
 cal and legal services shall be rendered. The result is, that 
 there is actually little competition in prices of wages. The 
 competition is for employment. Having less employment 
 than if there were a smaller number to perform the service, 
 there is a greater necessity and temptation to charge the 
 highest possible fees. 
 
 What has been said of physicians and lawyers applies to 
 many other classes of persons. When society is properly 
 organized, measures will be adopted, the tendency of which 
 will be to prevent an unnecessary number of middlemen. 
 Hereafter this subject will be further discussed. 
 
CHAPTER IV. 
 
 Indirect Barter. — Trade is Seldom made Purely for Amusement. — Origin 
 of Commission ^Merchants. — Origin of Merchants. — A Merchant's 
 Profits are for Information. — Fairs. — When Indirect Barter begins. — 
 Foreign Commerce is Barter. — rEffect of Destruction of Gold and 
 Silver. 
 
 Transfers of property are not made for the mere purpose 
 of transfer ; but for the attainment of a definite purpose pre- 
 existing in the minds of all parties thereto. 
 
 Perhaps it has been shown with sufficient fuUness that 
 direct barter is the simplest method of trading, and the one 
 wdiich mankind naturally first used. Let us now consider 
 the next step in the development of commerce, and to 
 make its description more easily understood, return to the 
 fortunes of our imaginary colonists. When we left them they 
 were very poor, and had just begun to create wealth and 
 capital, and to directly exchange things with one another. 
 But they are steadily working and practicing economy, and 
 in consequence, wealth and capital slowly but surely in- 
 crease. Neither time nor labor is spent on wealth which is 
 not a means of creating other wealth. 
 
 Thus, directed by imperative necessity, labor as far as 
 possible is employed in creating the means whereby wealth 
 can more easily be produced. After a time, as a consequence 
 of such a course, capital in the form of rude tools begins to 
 be abundant, and although these implements are of an in- 
 ferior quality, they are nevertheless a great help to the 
 naked hands. Labor becomes more efficient and produc- 
 tive. Food, shelter and clothing are more readily obtained, 
 and life becomes easier and its tenure more secure. The 
 colonists increase in numbers. They are now provided 
 with weapons to defend themselves against wild beasts, and 
 there is no longer the same necessity which first existed for 
 
 55 
 
56 
 
 SOCIAL STRUGGLES. 
 
 all congregating within narrow limits for mutual help and 
 protection. The country is explored for good locations, 
 and emigrants from the first camping-ground settle the best 
 sites on the neighboring lands, over a steadily widening 
 area. 
 
 As their numbers increase and the distance from one 
 man's house to another's, and from one part of the settle- 
 ment to another growls greater, meeting each other and 
 trading entirely by direct barter becomes more difficult. 
 This is so chiefly because a personal knowledge of each 
 man's wants, and his capacity to supply other persons' 
 wants, becomes less universal. Everybody ceases to know 
 everybody. Consequently, every man ceases to know all 
 those who want to trade, what things they wish to dispose 
 of, and just what things they wish to get in exchange. 
 
 ORIGIN OF COMMISSION MERCHANTS. 
 
 In proportion as this condition of things grows, the need 
 of information in regard to each other's desires and abilities 
 to make exchanges also grows. The colonists need an 
 Industrial Intelligence Office where facts in regard to each 
 other's wants can readily be obtained. The events which 
 lead to the opening of the first office of this kind are always 
 essentially the same ; i. c, circumstances make it either 
 convenient or necessary for a third party to intervene be- 
 tween the two persons who exchange goods with each 
 other. 
 
 A has the skin of a wolf which he wishes to exchange for 
 some fish-hooks. B has more fish-hooks than he wants, 
 but does not wish to trade for a skin, — he wants to ex- 
 change them for an ax. C has a surplus stone ax, but he 
 does not want any fish-hooks, — he wishes to exchange the 
 ax for a wolf skin. 
 
 D is a shoemaker who lives in a cabin near the junction 
 of several much traveled paths. While D is sitting in 
 front of his hut at work, A comes along with his wolf skin, 
 and after accosting D, says : " I want to trade this skin for 
 its value in fish-hooks, but do not know who has any to 
 
PROFIT OF COMMERCIAL KNOWLEDGE. 
 
 57 
 
 spare. You live here where you see a great many more 
 people than I do, and can therefore more easily find out 
 who wants to exchange hooks for this skin. I will leave the 
 skin here ; you make the exchange, and I will pay you for 
 the trouble." D takes the skin and hangs it up in his 
 cabin. 
 
 Soon afterward B comes along with a bunch of fish- 
 hooks, and after making remarks similar to those made by 
 A, he desires D to help him make a trade for an ax. 
 Then C walks up to D, and like A and B, he requests D's 
 assistance in making an exchange of his ax for a wolf skin. 
 Thereupon D trades A's skin for C's ax, and receives a 
 small stone hammer from C for his trouble. 
 
 When next D sees B, he gives him the ax received from 
 C, takes his fish-hooks in exchange, and receives one fine 
 hook for his trouble. 
 
 Finally, A returns, and upon inquiring about the fish- 
 hooks is told that they have been obtained in exchange 
 for his wolf skin. A takes the hooks and gives D one of 
 them for his trouble. 
 
 The desired exchanges have now all been made. Indi- 
 rect barter has begun. D has made a profit by trading the 
 property of other persons, and has thus become a middle- 
 man. In fact, D has received pay for keeping an intelli- 
 gence office ; his duties were to get the precise items of in- 
 formation which were wanted by A, B and C. 
 
 D now perceives that a profit can be made by acquiring 
 industrial information, and having a central location, he 
 puts out a sign : " I help people trade by finding out who 
 wants to procure what they have got, and who can furnish 
 in exchange what they want." This sign is afterward short- 
 ened, without changing its meaning, so that it reads : 
 "General Commission Merchant." 
 
 ORIGIN OF MERCHANTS. 
 
 After a time D acquires some wealth, and knowing what 
 things are commonly wanted and what the people are 
 willing to give in exchange for them, he puts his wealth in 
 
58 
 
 SOCIAL STRUGGLES. 
 
 the form of a supply of what is usually needed. When a 
 customer appears who wishes to exchange something in his 
 possession for another thing, D has ordinarily that other 
 thing on hand, and can make the exchange without the de- 
 lay which we have seen occurred in making trades for A, B, 
 and C. Besides avoiding the delay, there is another ad- 
 . vantage to the customers, viz., they can see the things 
 which they want, examine their quality, and learn at once 
 how the trade is coming out. 
 
 It is no longer a question oi finding s. man who has both 
 the desire and ability to exchange certain required things, 
 as at first. D has both this knowledge and the required 
 goods in his own possession. D then puts out a different 
 sign : " I help people trade by keeping on hand the things 
 they want to get, by 'always knowing who wants what they- 
 wish to trade off, and on what terms such an exchange can 
 be .made." 
 
 Without changing its meaning, this sign is finally abbre- 
 viated so that it reads, " General Merchant." 
 
 D now keeps in his cabin substantially the same medley of 
 things which most of us have seen in what is called " a coun- 
 try store.'* Direct barter between the colonists still goes on, 
 but for several reasons a considerable number of persons come 
 to trade with D. They do not know who else can supply 
 their wants, and at the same time be willing to take pay in 
 what they at that moment wish to part with. Even if they 
 did know who was both willing and able to make with them 
 the exchange desired, it might cost more in time, labor and 
 other expense to go where that person lives than it would 
 to pay D his profit. 
 
 A merchant's profits are for information. 
 
 In the foregoing sketch the causes, motives and circum- 
 stances which have made D at first a commission merchant, 
 and afterward a merchant, are, in substance, the identical 
 causes and conditions which first started, and have kept in 
 motion, a large portion of the world's commerce. When 
 trade is analyzed it appears that salesrooms, stores and shops 
 
FAIRS CONVEY COMMERCIAL INFORMATION. 
 
 59 
 
 are essentially intelligence offices. The most sud'cessful 
 keeper of one of these offices is the man who practically has 
 the most industrial information to sell the public. The mer- 
 chant should know what articles his customers want and 
 what things they wish to give in exchange for them. He 
 should also know who are able and willing to supply the 
 goods desired by his customers, and what these persons are 
 willing to take in exchange for what they furnish. It is also 
 important that the relative value of all the goods he deals in, 
 and the cost of their transportation and other expenses of 
 placing them in the hands of consumers, should be known to 
 the merchant. 
 
 When we go to what is ordinarily called an " Intelligence 
 Office," we expect to receive special information and to pay 
 a fee therefor. We do not usually recognize the fact that 
 the charges which a merchant makes for his goods, over and 
 above their total cost to him, are, in fact, fees forgiving prac- 
 tical information to the buyers of those goods. It some- 
 times happens that the merchant exchanges his goods at a 
 loss instead of a profit ; he is then suffering from his own 
 lack of knowledge in regard to present or prospective values 
 when he made the exchange and got the goods which must 
 be sold at a loss. 
 
 FAIRS. 
 
 In every age, all peoples and nations have been accustomed 
 to gathering together in considerable numbers, at onetime 
 and place, for the purpose of getting the information which 
 we have seen is so necessary to those who wish to barter one 
 thing for another. 
 
 L may have something which he wishes to dispose of in 
 exchange for a thing which M owns. M may wish to part 
 with that thing in exchange for the precise article which L 
 wishes to trade off. But so long as L and M do not know 
 these facts, nor how to effect a meeting, an exchange be- 
 tween them is impossible. Hence commercial and indus- 
 trial knowledge is the necessary forerunner- of an exchange. 
 
6o SOCIAL STRUGGLES. 
 
 The s2»Tie principle always holds good, no matter whether 
 it be between two individuals or between two nations. 
 
 Until the invention of newspapers, fairs and market-places 
 were the principal sources of acquiring a knowledge of each 
 other's wants. The great fairs of Europe, which for cent- 
 uries were such important events to nations, were chiefly 
 gatherings of persons who wished to barter directly or indi- 
 rectly with each other. Some money was used at these fairs, 
 but comparatively little ; the exchanges were chiefly made 
 in substance, like those aforesaid between A, B and C. To- 
 day the merchant can take up his newspaper and study the 
 markets in all quarters of the globe. But market-places 
 still remain, and, although far less important than formerly, 
 fairs of various kinds for the purpose of disseminating indus- 
 trial and commercial information are still frequently held. 
 A World's Fair is the latest mode of doing substantially just 
 what our colonist shoemaker did in the manner aforesaid. 
 
 WHEN INDIRECT BARTER BEGINS. 
 
 Whenever A and B wish to exchange things with each 
 other and for any reason are unable to do so without the in- 
 tervention and aid of a third person, indirect barter begins. 
 Shippers, merchants, salesmen and other kinds of middle- 
 men are part of the machinery whereby the wants of A and 
 Bare supplied. The merchants of this country do not have 
 facilities for carrying on a direct trade with South America, 
 and the merchants of that continent have no means of di- 
 rectly trading with us. England has means for carrying on 
 a direct trade with South America, and therefore she acts to 
 a large extent the part of a middleman between parties who 
 would be benefited by directly trading with each other. 
 
 We have now seen that indirect barter differs from direct 
 barter only by the fact that it is not conducted by the pro- 
 ducers and consumers, but by third parties who charge a fee 
 or profit for so doing. We have also seen that this mode of 
 trade begins at an early stage of the growth of society. Like 
 direct barter, it is not peculiar to an uncivilized state and is 
 
FOREIGX XATfONS BARTER GOODS. ^i 
 
 still employed to a great extent between citizens of the same 
 country. 
 
 It maintains its hold on commerce for the same reason 
 that direct barter does. Whenever it is cheaper or more 
 convenient for men to exchange one thing for another with- 
 out the use of money than with money, barter occurs. The 
 presence of a third party does not affect the principle which 
 makes barter probable. 
 
 FOREIGN COMMERCE IS BARTER. 
 
 An illustration of indirect barter on a large scale is con- 
 stantly before us in the trade of this country with foreign 
 nations. This vast commerce is carried on entirely by bar- 
 ter. Money is not used, for the simple reason that inter- 
 national money has yet to be made. Gold and silver are 
 used to a small extent to settle balances of accounts. But 
 those metals are used simply as commodities, just as copper, 
 tin and quicksilver are. A pile of bricks is not a brick 
 house, and the material from which money is made is not 
 money. We have several times suspended specie payments, 
 but this event did not interrupt foreign commerce for a 
 single day, — it went on, as before, by barter. 
 
 The international commerce of the world is carried on by 
 an indirect barter and not with money. Merchants send 
 ships to distant ports laden with various kinds of valuable 
 commodities. The ability of the master of such a ship to 
 exchange his cargo for valuables on which a profit can be 
 made in the home port, does not depend on his having gold 
 or silver to buy them with. No matter what the cargo is, 
 provided the foreigners regard its possession more desirable 
 than goods which they already have, an exchange is 
 readily effected. A ship may be loaded with flour, sugar, 
 coffee, or hardware ; and it may also carry some gold or 
 silver. But when those metals are exchanged, the trans- 
 action is carried on just as if a keg of nails, a bale of cloth, 
 or any other valuable thing was being compared with the 
 value of some other thing and an exchange is made on the 
 basis of the appraisal agreed on. 
 
62 SOCIAL STRUGGLES. 
 
 EFFECT OF DESTRUCTION OF GOLD AND SILVER. 
 
 The reason of barter between nations, and the use of gold 
 and silver in carrying it on, may be illustrated by supposing 
 the immediate loss of all the gold and silver in the world. 
 Would trade be arrested by such an event ? Not for a day. 
 Different nations would still have different productions, and 
 therefore an exchange of different goods would be required 
 to supply their wants. 
 
 For example, Cuba would continue to raise sugar and 
 would also want flour, carriages, hardware and other things 
 just as she now does. Nations who do not raise sugar, and 
 produce the things which Cuba needs, would have the same 
 desire to trade with her they now have. An exchange of 
 commodities would therefore be made just as at present. 
 The only difference would be in the mode of making change, 
 or settling balances when things of unequal value were 
 traded. At present, gold and silver are used to a small 
 extent for that purpose. If those metals did not exist, some 
 other commodity would be so used, and greater pains prob- 
 ably taken to trade equal amounts of value so as to avoid 
 the necessity of " change." The use of those metals even 
 as commodities is therefore not a necessity of commerce, 
 but often a convenience. 
 
 In the foregoing sketches of direct and indirect barter, 
 reference to the use of money has been avoided as far as 
 possible, in order to give the reader a clear idea of the 
 mechanism of exchanges in which money is not employed. 
 
 We have seen that the ultimate object of human industry 
 and effort is to supply wants and gratify desires, — that ex- 
 changes are made directly or indirectly for those purposes, 
 and that the methods of making exchanges, and the means 
 employed in conducting them, are all subordinate to this 
 desired end. Having considered exchanges by barter with- 
 out money, let us now dissect exchanges in which money is 
 used and find out why we use it. 
 
« 
 CHAPTER V. 
 
 Money. — Trade through a Third Person. — Trade through a Third 
 Thing. — Ancient Kinds of Money. — The peculiar Use of Money. — 
 Mechanism of Trading through the Medium of a Third Thing. — 
 What Commerce is and how it Developed. — Difference between Bar- 
 ter and Exchange with Money. — Definition of the word " Money." 
 — A Common but False Idea.— Some Debts can only be Paid with 
 Coin. — The same Thing may have several Definitions. — Why Barter 
 is often Impracticable. — Origin of the Use of Money. — Legal Tender 
 Laws. — Effect of- a Change in Value of the Legal Tender. — Legal 
 Tender Laws Increase Value. — Development of Money. — A Poor 
 , Old Thing is Preferred to a Good New Thing. — What we can Rea- 
 sonably Expect. — Bankers and Money. — An Irresistible Movement. 
 
 A full knozvledge of tJic functions of money is possible only 
 to those who clearly understand hozv trade is conducted ivitJi- 
 out its use. 
 
 We have found that direct barter was the first mode em- 
 ployed by mankind to trade with each other. It has further 
 appeared that circumstances often render it inconvenient or 
 impracticable for mankind to trade with each other by direct 
 barter. 
 
 We have also found that the second natural step in the 
 progress of commerce is indirect barter: i. e., to make ex- 
 changes through the medium of a third person. This brings 
 us to the third commercial stage, which is the making of 
 exchanges through the medium of a third thing. 
 
 These three ways of trading may be stated thus : 
 
 Simple Barter : Two persons trade one thing for another, directly. 
 ^ y ^ -n f . S Two persons trade one thing for another, through 
 ■ ) the medium of a third person. 
 f Two persons trade one thing for another, through the 
 Money or pur- J medium of a third thing ; and, generally at the same 
 chase and sale : j time, also trade through the medium of a third per- 
 [ son as well as a third thing. 
 
 63 
 
64 
 
 SOCIAL STRUGGLES. 
 
 TRADE THROUGH A THIRD PERSON. 
 
 To make the difference between these various ways of 
 making exchanges as simple as possible, we will use an illus- 
 tration. 
 
 F has a house and lot which he wishes to exchange for a 
 ten-acre field owned by G. If F go in person to G and 
 exchanges his house for G's field, that is direct barter. 
 
 If G refuse to trade directly with F, and then F employs 
 a real estate broker, who, by various arguments, persuades 
 G to exchange his field for F's house, that is indirect bar- 
 ter, — an exchange through the medium of a third person : 
 to wit, the real estate broker. 
 
 TRADE THROUGH A THIRD THING. 
 
 Let us next suppose that F learns that G will not ex- 
 change his field for anything but its value in cows and oxen. 
 Thereupon F exchanges his house for some cows and oxen, 
 drives them to G's house and exchanges them for his field. 
 This is a purchase and sale by the use of money. The 
 cows and oxen are money, the third thing through which 
 the trade was made. 
 
 The reader will observe that this exchange of cattle for 
 G's field differs in one important respect from a case in 
 which a neighboring farmer should have more cattle and 
 less land than he wanted, and therefore should exchange 
 some cattle for a field. That would be barter. But F 
 exchanged his house for the cattle with the express pur- 
 pose of temporarily obtaining a medium whereby his house 
 could be changed into a field. G accepted the medium, 
 and therefore the cattle were money. In effect, F melted 
 his house down and ran it first into the mold of oxen and 
 cows ; then he melted the cattle and ran them into the 
 mold of a field. 
 
 ANCIENT KINDS bY MONEY. 
 
 As COWS, oxen and other domestic animals have been used 
 as money for thousands of years, F has not been an inno- 
 
TRADE THROUGH A THIRD THING. 65 
 
 vator in doing as he has. The wealth of a person was for- 
 merly computed and stated in this kind of money. The 
 Bible does not inform us how many thousand pounds, or 
 dollars, Job was worth, but it says : 
 
 " His substance also was seven thousand sheep, and three thousand 
 camels, and five hundred yoke of oxen, and five hundred she-asses, and 
 a very great household ; so that this man was the greatest of all the men 
 of the East." 
 
 In England^ for a long time, cattle were the medium of 
 exchange ; and the laws provided severe penalties against 
 those who mutilated cattle, — not simply because private 
 property was thereby injured, but because of the additional 
 crime of injuring the public money. These enactments 
 were similar to those now on our statute books against 
 clipping coins. It is only about two hundred years since 
 cattle were a legal-tender money in this country. 
 
 THE PECULIAR USE OF MONEY. 
 
 Money has several different uses. It is used for exchang- 
 ing, comparing, computing, dividing, storing, and transport- 
 ing values. But the peculiar and essential function and 
 use of money is to help mankind make exchanges and com- 
 pare the value of one thing with that of another. How 
 money can take the place of a third person : how an ex- 
 change of two things can be made by converting one or 
 both of them into a third article, and then exchanging this 
 third article for the desired object ; and how money is used 
 as a help and guide in comparing values, must be clearly 
 understood before any definite conception of the various 
 currency problems is possible. At the risk of being tedi- 
 ous, I will therefore use further illustrations as an aid to 
 the reader in thinking these matters slowly over. 
 
 MECHANISxM OF TRADING THROUGH THE MEDIUM OF A 
 THIRD THING. 
 
 A farmer wishing to get a pair of shoes, goes to the work- 
 room of a shoemaker, and seeing a pair to his liking, asks 
 their owner if he does not wish to make an exchange and 
 5 
 
66 SOCIAL STRUGGLES. 
 
 take some farm products for his shoes. A conversation 
 ensues, in which it transpires that the shoemaker wants 
 three sheep skins to give the tanner for some leather. 
 Therefore the shoemaker offers to trade his shoes for sheep- 
 skins. The farmer has no sheep skins. He then goes 
 home, and knowing that his neighbor S has sheep skins to 
 spare, he goes to his house and tells him that a certain shoe- 
 maker has a pair of shoes which can only be got by a man 
 having three sheep skins to give in exchange. The farmer 
 then inquires if S will not take the skins to the shoemaker 
 and get the shoes, and concludes by saying that after that is 
 done he will trade with S for the shoes. S replies to the 
 farmer by saying that as the shoemaker wants to see a 
 third thing, instead of a third person, it is unnecessary for 
 S to take the skins to the shoemaker. Whereupon the 
 farmer barters a pig for the sheep skins, takes them to the 
 shoemaker and trades them for the shoes. After getting 
 the skins, the shoemaker exchanges them with a tanner for 
 some leather. 
 
 The farmer has now exchanged a pig for a pair of shoes ; 
 that is, the shoes are the final result of his trading off the 
 pig. The skins were the third thing which served as a 
 medium of exchange. The skins were money. They were 
 the temporary form into which the farmer changed his pig, 
 and the shoemaker changed his shoes. When this form 
 was finally changed, the farmer had his shoes and the shoe- 
 maker had his leather. 
 
 The reader will observe how the money helped the differ- 
 ent parties to this trade to compare values. When the far- 
 mer gave his pig for skins, he knew that they would buy the 
 shoes ; therefore the exchange was merely a mode of com- 
 paring the pig with the shoes. It was, in substance, the 
 same as if the pig had been put in one side of the scales, and 
 the skins, labeled : " These are equivalent to a pair of shoes," 
 put in the other side. In like manner the shoemaker, when 
 he gave the shoes for the skins, virtually gave the shoes for 
 the leather, thus comparing the shoes with the leather and 
 adjudging them to be of equal value. 
 
DEVELOPMENT OF COMMERCE. 6y 
 
 It should Steadily be remembered that all comparisons of 
 value are an exercise of the judgment. By using money, in 
 many cases, it becomes easier to compare the value of one 
 thing with another, because we thus simplify the matter, and 
 steady our judgments by diminishing the number of things 
 to be borne in mind at one time. Thus in the last foregoing 
 case, when the farmer bartered his pig for the skins, they 
 really shortened the distance between the pig and the shoes, 
 because the farmer knew that the effect was the same as 
 if he were comparing his pig directly with the shoes. . 
 
 Here, too, by using skins as money, no new thing has been 
 done, as the skins of animals from time immemorial have 
 been used as money. In some localities skins are still cur- 
 rent money. 
 
 The reader will here observe that we are not now consid- 
 ering what is the best kind of money, but are merely speak- 
 ing of the uses of money, using the term " money " in a 
 general sense. No one can intelligently talk about the 
 "best kind" of plows until he knows just what a plow is, 
 what object is accomplished by it, how it is used and why 
 it is used. In like manner, before the relative merits of dif- 
 ferent kinds of money can be considered, zvJiat money is 
 used for, and Jiozv and ivJiy we use it must be understood. 
 
 WHAT COMMERCE IS AND HOW IT DEVELOPED. 
 
 The trade of the world appears a very complex matter. 
 But in reality it is all nothing but a multiplication of three 
 things. First, a trade directly between A and B. Second, 
 a trade between A and B through the medium of a third 
 party, C. Third, a trade between A and B through the 
 medium of a third thing, called money. 
 
 The art of commerce, like the great majority of other arts, 
 has developed very slowly through a long period of time. 
 Many things which now appear very simple were only 
 learned by the united efforts of a multitude of minds acting 
 for century after century. The primitive idea of using 
 something as a medium of trade, appears to have been to 
 compare a third thing with one of two objects sought to be 
 
68 SOCIAL STRUGGLES. 
 
 exchanged, and if this third thing were judged to be of the 
 same value as one of the things to be traded for something 
 else, then to use this third thing as money, with little refer- 
 ence to any other consideration than its presumed equality 
 of value with a certain other thing. The fact that this 
 money was bulky, or undesirable in other respects, was sub- 
 ordinated to the central idea of obtaining an equality of 
 value. After a long time, by successive and painful steps, 
 mankind discovered that it was both desirable and practica- 
 ble to have money that was divisible, compact, portable and 
 imperishable. This led to the use of iron, copper, tin, 
 silver and gold as money. Lastly, it has been learned that 
 representatives of value can be used in making exchanges 
 just as effectively, and far more cheaply, than the ancient 
 kinds of money. To us who are accustomed to using rep- 
 resentatives of value, and to seeing large amounts of proper- 
 ty transferred from one man to another by the transfer of a 
 few small pieces of paper called checks or drafts, it is some- 
 what difficult to think of the payment of a dozen oxen, or a 
 thousand bushels of corn, as a money transaction. We are 
 apt to think of it as barter. 
 
 DIFFERENCE BETWEEN BARTER AND EXCHANGE WITH 
 
 MONEY. 
 
 The character of an act does not depend on the kind of 
 instruments used in performing it. Murder may be com- 
 mitted either with a gun or a bread-knife. The character of 
 an act depends on the circumstances under which it is com- 
 mitted, — on the thoughts which directed a certain course of 
 conduct. 
 
 In like manner the principles involved in a trade do not 
 depend on zvJiat is exchanged. Whether a certain transfer 
 of property is a barter or a money transaction, depends on 
 the manner in which the thing or things which effect it is 
 used. Therefore the essence of a bargain in which a sack of 
 salt, a dozen beaver skins, a wheelbarrow full of copper dol- 
 lars, oi a yoke of oxen is used as an aid in comparing values, 
 and as a medium of exchange, is precisely the same as the 
 
 I 
 
MUTUAL CONSENT MAKES A THING MONEY. 
 
 69 
 
 essence of a trade in which gold or silver coins, or legal-ten- 
 der paper notes are used as a medium of exchange. 
 
 For example : a roof is the cover to a building. It may 
 be nearly flat or very steep ; it may be composed of wood, 
 metal, or other substances; but no matter what its form or 
 material, if it perform the essential function of covering a 
 building, it is a roof. It is not the material nor shape, but 
 the purpose and intent which it carries out which deter- 
 mines its definition. A thing is bartered when it is ex- 
 changed without being used as a third thing. 
 
 DEFINITION OF THE WORD " MONEY." 
 
 If the foregoing have been carefully read and thought 
 over, the definition of the word "money " is already in the 
 reader's mind. 
 
 Whatever two persons agree shall be transferred from 
 one to the other as a medium of exchange, and as an aid in 
 comparing and computing values, is money in the full 
 sense of the term, as between those two persons. 
 
 Whatever an entire community agree shall be transferred 
 from one person to another as an aid in comparing and 
 computing values, and as a medium of exchange, is money 
 in the full sense of the term, in that community. 
 
 Whatever a nation consents to transfer from one person 
 to another as an aid in comparing and computing values 
 and as a medium of exchange, is ^noney in the full sense of 
 the term, in that nation. 
 
 The aforesaid definitions explain how a thing can be 
 money in one part of a countr)% and not be money in 
 another portion of the same country. This was exempli- 
 fied on a large scale in the United States during, and for 
 several years after, the civil war. Greenbacks were then 
 money in the Northern States, but in California they were 
 generally merely a commodity, simply because the citizens 
 of that State did not agree to receive and use them as 
 money. During the war, by agreement of the people. Con- 
 federate notes were money in the territory held by the 
 Confederate armies. But in the Northern States the peo- 
 
jQ SOCIAL STRUGGLES. 
 
 pie did not agree to use those notes, and therefore they 
 were not money in the North. 
 
 The distinctions in the aforesaid definitions also show 
 why things which pass freely as money in one nation, cease 
 to be money as soon as they pass the frontiers. Mankind 
 have not yet emerged from barbarism and ignorance suffi- 
 ciently to render possible the creation of money which 
 shall pass current and unchallenged in any quarter or sec- 
 tion of the globe. But it seems as if there ought to be in- 
 telligence and morality enough in a few of the leading na- 
 tions to enable their governments to create an interna- 
 tional money, as between the citizens of those nations. 
 
 A COMMON BUT FALSE IDEA. 
 
 Let us here interrupt our discussion of the uses of money 
 long enough to consider a statement which is commonly 
 supposed to be highly " scientific." This idea is that, 
 " nothing is money but gold and silver coins." 
 
 As Lincoln used to say, this reminds me of a story. A 
 man went to a lawyer, and after stating his case inquired : 
 " Can a man sue me for doing thus and so ? " The reply 
 was: " Certainly not." The lawyer was then asked: "But 
 if he should sue me, could he recover judgment?" The 
 answer was : " No, he could not — he would have no right 
 to sue you, and therefore could not get judgment." The 
 inquiry was then made : " But, if he should sue me and 
 get judgment, could execution be issued and the judgment 
 collected?" To this the answer was : " Oh, no ! Such a 
 judgment would have no validity, and could not be col- 
 lected." Whereupon the client burst out: "What non- 
 sense! You tell me it cannot be done, but I tell you it has 
 been done. I have been sued, judgment against me has 
 been given, and, worst of all, the sheriff has collected it." 
 
 In like manner, a plain man can say to the self-styled 
 scientist : " A great number of things besides gold and silver 
 have been money for thousands of years, and enormous 
 amounts of property have been bought and sold with them 
 to the satisfaction of all parties. Why, then, say that it 
 
COMMON SENSE IS USEFUL. yi 
 
 is impossible to do what we all know has been done so 
 often and for so long a time ? " 
 
 Much mental confusion has arisen in consequence of not 
 distinguishing the difference between money and the ma- 
 terial from which it is manufactured, and of which it con- 
 sists. This comes from the prevalent mistake of not test- 
 ing money by the same rules we apply to everything else. 
 All other things we name by what they actually are and 
 not by what they happen to be made of. 
 
 For example : we usually apply the term " house " to a 
 shelter and home for human beings. A home and shelter 
 for human beings is therefore a house, no matter what its 
 size, nor of what material it is composed. It may be made 
 of a great variety of materials, but it has the same name, 
 and in essence is the same thing, when built of rough logs 
 as when made of the finest hewn marble. Houses are fre- 
 quently built of wood, but a pile of wood is not therefore 
 a house. In these respects, what is true of houses is true 
 of money. Money is frequently made of gold and silver, 
 but a lump of gold or silver is not therefore money. Those 
 who say that nothing is money unless made of those metals 
 might, with the same propriety, say that nothing was a 
 house unless built of hewn stone. Money can be made of 
 a great variety of materials, just as houses can. The test 
 as to what constitutes a house is the object and purpose 
 effected by a building, viz., furnishing a home and shelter 
 for human beings. The test as to what constitutes money 
 is the special object and purpose which a certain thing gen- 
 erally effects, viz., the transfer of property and the payment 
 of debts by being passed from hand to hand without in- 
 dorsement or other formality as a medium of exchange, and 
 a help in comparing the value of one thing with that of 
 another. 
 
 If paper money be not money, then the United States 
 carried on a vast war for four years, and transacted an 
 enormous domestic commerce for sixteen years, almost en- 
 tirely without money. England also carried on business 
 
72 
 
 SOCIAL STRUGGLES. 
 
 from 1797 for about twenty years almost entirely without 
 money. 
 
 The false notion that nothing but gold and silver coins 
 are money naturally leads its believers into the error of 
 supposing that valuable things of various kinds cannot 
 really be bought, sold and paid for, without using those 
 coins. Furthermore, such persons tell us that debts can- 
 not be paid without gold and silver coins. But the simple 
 fact is that mankind bought and sold valuable property of 
 various kinds for centuries before coins were invented. In 
 recent times, countless millions of debts have been paid to 
 the satisfaction of all parties without using gold or silver in 
 any form. Furthermore, payment of debts without the 
 use of any money is constantly taking place. The large 
 debts continually being paid by the merchants and bankers 
 of one country to the merchants and bankers of foreign 
 countries are canceled without using money at all. Pay- 
 ment is made with various commodities. Of these com- 
 modities the raw material from which much money is made 
 — viz., gold and silver bullion — forms comparatively a very 
 small portion. 
 
 SOME DEBTS CAN ONLY BE PAID WITH COIN. 
 
 The error of supposing that debts cannot be paid unless 
 gold or silver coins are given and received, has probably 
 arisen from not noting the distinction between an ordinary 
 debt and a specific contract. When a man specifically 
 agrees to deliver as payment of a debt a thousand bushels 
 of wheat, a thousand silver dollars, or any other definite 
 and specified thing or things, he can properly discharge 
 that obligation only by paying the exact thing, or things, 
 ■ named in the contract. But the vast majority of debts are 
 not specific contracts. This is illustrated by the different 
 kinds of United States bonds. The major part of those 
 bonds are payable "in coin of the standard value of the 
 United States on the 14th day of July, 1870." This is a 
 specific contract, because certain things are defined which 
 can, and must, be given in payment; to wit, a silver dollar, 
 
HO W DEB TS ARE PA YABLE. 73 
 
 nine-tenths fine, weighing 41 2>^ grains, or a gold dollar, 
 nine-tenths fine, weighing 25 8-10 grains. The United 
 States have the right to choose whether they will pay in one 
 or the other of the said coins. But beyond the choice be- 
 tween a silver or a gold dollar, they have rightfully no 
 choice. Unless the creditor agree to receive it, they can- 
 not pay in legal-tender paper of any kind whatsoever with- 
 out breaking their contract. Hence all bonds issued by 
 virtue of said act should be paid as agreed, — in coin of the 
 standard value of the date referred to. 
 
 But a portion of our Government bonds are payable in 
 *' lawful money." These are called the " currency bonds." 
 Payment of these can be made in whatever is legal-tender 
 money when they fall due. Therefore the currency bonds 
 are not specific contracts, because there is no definite speci- 
 fication beyond the requirement that the money paid shall 
 have a legal-tender quality. 
 
 All obligations in which the agreement is that a certain 
 number of dollars shall be paid at a given time, without 
 any specification in regard to what those dollars shall con- 
 sist of, are payable in whatever dollars are legal tender 
 when the debt falls due. This is so, simply because both 
 parties to the contract have therein agreed to give and 
 receive such dollars as money ; and, whatever a debtor and 
 creditor agree to use as money, is thereby converted into 
 money, as between those two persons. 
 
 THE SAME THING MAY HAVE SEVERAL DEFINITIONS. 
 
 Many definitions depend, not on the qualities of the 
 thing itself, but on the manner in which that thing is used. 
 Thus, a stick three feet long, and an inch in diameter, is a 
 staff if used as a support, a club if used for striking a blow, 
 and a yard-stick if used for measuring length. No matter 
 what definition may ordinarily be attached to a thing, 
 whenever it is used as a medium of exchange and as a help 
 in comparing and computing values, it is then properly de- 
 fined as MONEY. 
 
 Hoping that the definition of money has been made sufifi- 
 
74 
 
 SOCIAL STRUGGLES. 
 
 ciently explicit, we will now resume consideration of its 
 uses. 
 
 WHY BARTER IS OFTEN IMPRACTICABLE. 
 
 Theoretically, there are no obstacles to carrying on all 
 trade entirely by barter. For every man who wants to give 
 a certain thing in exchange, there is always a person who 
 wants to receive that certain thing in exchange. Why then 
 not promote the meeting of those two persons, in order 
 that they may barter and save the cost of money ? There 
 are several answers to this question. One of them is the 
 practical difficulty which frequently occurs of effecting a 
 meeting between two persons whose commercial desires are 
 exactly opposite ; viz., A wants precisely the thing which 
 B wishes to dispose of; and B desires just what A wants 
 to give in exchange. For example : a farmer needs a tooth 
 drawn, and wishes to give in exchange for the desired ser- 
 vice a bushel of turnips. In this case the farmer's desire is 
 to receive a definite service, and \.o give a bushel of turnips. 
 If he should find a man competent and willing to give the 
 required service and receive the turnips in exchange, then 
 the trade could be completed without the use of money. 
 But while there is no doubt of the existence of a person 
 skilled in drawing teeth who wishes turnips for his pay, the 
 farmer might have to suffer toothache for some time, if he 
 waited until such a man were found. 
 
 Money is used because a man who will work for money is 
 more easily found than one who vvill take pay in turnips. 
 
 At first sight a combination of precisely opposite wants 
 in two persons appears easy to find. But in fact it is often 
 impracticable. When the kinds of labor and the number 
 of articles of commerce were very few and simple, it was an 
 eas}^ matter for a man to find his commercial opposite. 
 But the steady growth of a great diversity of employments, 
 and the creation of a multitude of different things, have 
 produced such numerous and complex desires, and real and 
 fancied wants, that it is yearly becoming more and more 
 difficult to supply those desires and wants by barter. 
 
HOJV MONEY HELPS EXCHANGES. 
 
 75 
 
 Money is therefore used as a means whereby one man's de- 
 sire to give in exchange is converted into an ability to 
 give in exchange just what the man wants with whom a 
 trade is desired. How money is employed to transform a 
 desire to /r^c/r without the abiUty into a combined desire to 
 trade and an ability to do 5^, let us show by an example. 
 
 Suppose the last-mentioned farmer had gone to several 
 dentists and found them all unwilling to take turnips in 
 pay for drawing his tooth. Finally, he goes to a dentist 
 who also refuses to work for turnips, but incidentally says 
 that he would take some fresh £ggs in payment for his ser- 
 vices. Whereupon the farmer goes to a market-place and 
 sells his turnips for some fresh eggs. He then takes the 
 eggs to the dentist and completes the bargain. 
 
 In this case, the principle involved is precisely the same 
 as if the farmer had exchanged his turnips for a silver coin 
 instead of eggs. The eggs were money. They acted as a 
 medium of exchange by making a coincidence between the 
 thoughts of the farmer and the desires of the dentist , that 
 is, the eggs made the farmer and the dentist think alike. 
 After the farmer got the eggs he had the ability to give 
 just what the dentist wished to receive. 
 
 As eggs have been used to a considerable extent as 
 money, nothing new is presented in the foregoing example. 
 The reader will here carefully observe that the obstacle to 
 a trade between the farmer and the dentist was removed 
 by making the commercial wants of one man precisely the 
 opposite of those of the other. Their wants then resem- 
 bled a mortise and a tenon, — one fitted the other. This 
 was effected by the farmer exchanging turnips for eggs. 
 Turnips are a useful commodity, wanted by a considerable 
 number of persons, but they are not nearly as generally de- 
 sired as fresh eggs are. The completion of the bargain be- 
 tween the farmer and the dentist was therefore brought 
 about by one of the parties to the transaction first changing 
 his ownership of a thing which is wanted by comparatively 
 few persons, into the ownership of a thing more generally 
 wanted. 
 
76 
 
 SOCIAL STRUGGLES. 
 
 ORIGIN OF THE USE OF MONEY. 
 
 As we have reason to suppose that the natural laws now 
 in force have always operated on the human race, the fore- 
 going train of events shed light on the origin and continued 
 use of money. Sometime in the misty past, our ancestors 
 discovered that some articles were more universally wanted 
 than others. They next observed that a man who pos- 
 sessed an article which was generally wanted could more 
 easily make exchanges and supply his wants than a man 
 who owned a thing which was not generally wanted. It 
 was then found that a man owning a thing desired by a 
 comparatively small number of persons, by directly or indi- 
 rectly trading with one of that small number of persons 
 could exchange that thing for something wanted by a large 
 number of persons. It was next noticed that the attention 
 of mankind was gradually becoming directed to the advan- 
 tage of owning things which were generally wanted, and 
 that this fact made such things more sought after, and con- 
 sequently more valuable. Finally, long continued experi- 
 ence taught the whole community that certain desirable 
 things could always safely be taken in exchange for what 
 was disposed of, simply because those desirable things 
 could readily be used for making another exchange. 
 
 Those desirable things were thus converted into money 
 by being generally used as a medium of exchange. Before 
 the discovery that ships could sail from Europe to the In- 
 dias by passing around the Cape of Good Hope, pepper was 
 brought from India to Europe over land on beasts of bur- 
 den. As pepper was difficult to obtain, and much used, 
 it was considered a very desirable thing to own, and was 
 therefore generally wanted. It had the advantage of be- 
 ing portable, comparatively imperishable and easily di- 
 vided info parcels of different size and value. Conse- 
 quently, pepper was used to a considerable extent as 
 money for a long time. 
 
 Mankind undoubtedly existed a long time before the 
 metals were used for any purpose whatever. After the art 
 
 I 
 
DEBTS AND LEGAL TENDER. 
 
 77 
 
 of working metals was learned, their service for both utility 
 and ornament created a demand for them until finally they 
 became generally wanted. After the fact that they were 
 generally deemed desirable was fully established, only one 
 more step was needed to convert them into money. Iron, 
 copper, tin, silver and gold have thus all passed through the 
 various stages of discovery ; a test of value for ornament, or 
 use ; a growth of demand until generally wanted ; and 
 finally, a conversion into money. 
 
 LEGAL-TENDER LAWS. 
 
 Whenever a thing, by habitual use, is adopted by a peo- 
 ple as money, one more step takes place as that people ad- 
 vances in civilization. That is, the enactment of a law 
 making the use of a thing which was previously voluntarily 
 used by most persons, compulsory to all in some cases. 
 Such is a legal-tender law. It defines what shall be money 
 and compels all persons who owe value to pay it in a certain 
 thing, which the creditor is also compelled to receive. 
 
 A legal-tender law does not directly compel a man to sell his 
 goods for what is declared a legal tender. It merely compels 
 him, after having so sold them, to receive the specified legal 
 tender in full payment of his claim. But this fact sometimes 
 has a powerful influence in determining whether an owner of 
 certain goods will sell them or not. If he decide to sell 
 them, the practical operation of the legal-tender law is to 
 influence the price which will be asked for the goods. 
 
 Making a thing a legal tender changes its status relative 
 to other things in one important respect, — a quality is 
 thereby conferred on it not possessed by other things; viz., 
 a debt-paying power at a specified price. Any valuable thing 
 can be used in payment of a debt, provided the creditor 
 will accept it at a satisfactory price to the debtor. But a 
 legal tender, for the purpose of paying debts, has a fixed 
 price at which it must be paid by the debtor and received 
 by the creditor. Thus, at present in this country the legal 
 price of 25 8-10 grs. of standard gold is one dollar, and the 
 legal price of 4i2]4, grs. of standard silver is one dollar. In 
 
78 
 
 SOCIAL STRUGGLES. 
 
 1870, the raw materials from which these two kinds of 
 dollars are made were about equal in value. The gold 
 dollar has a far greater value now than it then had ; but, 
 for debt-paying, it is still only one dollar. The silver dollar 
 has not advanced in value as much as the gold dollar ; but 
 it too has a greater value than It had in 1870. But the 
 fact that the silver dollar is worth more to-day than either 
 the silver or the gold dollar was in 1870 does not make it 
 any more efficient in paying debts, — it is still only one 
 dollar. For all other purposes than paying old debts both 
 the gold and the silver dollar are far more valuable now 
 than fifteen years ago. 
 
 EFFECT OF A CHANGE IN VALUE OF THE LEGAL TENDER. 
 
 The evidence of this is the fact that more property of all 
 kinds can be bought with them now than then. Conse- 
 quently more property must be given nozv to get possession 
 of them, and therefore their rise in value makes it harder 
 for the debtor, and increases the wealth of the creditor. 
 When paid, the creditor gets the same number of dollars 
 originally agreed on, but each one of them is worth more 
 than formerly, and the debtor is bound by the legal-tender 
 law to pay, not simply the amount of value received when 
 the debt was created, but the NUMBER of dollars called for 
 in the legal-tender money. 
 
 The aforesaid considerations show why affixing a legal- 
 tender quality to a thing gives it one positive and fixed use 
 and value not before possessed. When the legal-tender 
 quality is spread over a great number and amount of things 
 — as when wheat, corn and cattle are made legal tender — the 
 value of each one of those things is not appreciably raised 
 thereby. But when the debt-paying power is limited to 
 articles small in number and amount, as in case of making 
 gold and silver sole legal tenders, it then has a great influ- 
 ence in raising their value. The value of those metals com- 
 pared with all the other property in the world is very 
 small. Furthermore, their total value is very small com- 
 pared with the total amount of debt existing in the world. 
 
INCREASED DEMAND INCREASES VALUE. yg 
 
 Making a law which compels the payment of all debts in 
 gold and silver, therefore, enormously increases the use, the 
 demand for, and the consequent value of, those metals. 
 
 In the first place, a great demand for them arises for 
 coinage purposes. Secondly, the use of a metal for mak- 
 ing legal-tender money affects its value for other purposes 
 besides the scarcity occasioned by its coinage. An un- 
 coined metal, which when coined is a legal tender, has at 
 all times a royal prerogative over other metals and other 
 kinds of property. It is the debt-paying metal, the repre- 
 sentative of wealth and the symbol of pecuniary resources. 
 When used in the arts, or for ornament, it is not simply a 
 valuable metal — it betokens that the owner is rich enough 
 to melt a part of his money, and use it where cheaper mate- 
 rial is commonly employed. 
 
 Remove the legal-tender quality from a metal to which 
 it was once attached, and not only is its use for coinage de- 
 stroyed, but, in other respects, its value is impaired. Its 
 prestige is gone ; it is no longer a royal metal with powers 
 beyond others ; and as a result of this, when used in the 
 arts it does not supply the requirements of those who wish 
 to make a luxurious display of their wealth. Silver plate is 
 not as highly esteemed as when silver was a full legal 
 tender. Thus we see that the value of gold and silver, to a 
 considerable extent, is created by selecting them as the ma- 
 terials from which to make legal-tender money. 
 
 We have now considered how money facilitates exchanges, 
 by first helping one man to get just what the man with 
 whom he wishes to trade wants to receive. The examples 
 recently given may seem very simple, but the student must 
 remember that these very plain things are the key to what 
 are usually called " obscure questions." Let us carefully 
 clear away the underbrush so that we can more easily chop 
 the large trees. A clear grasp of simple elementary princi- 
 ples makes a person master of the " difficulties " of finance. 
 
8o SOCIAL STRUGGLES. 
 
 DEVELOPMENT OF MONEY. 
 
 Perhaps the use of money can be better understood by 
 considering the order in which different kinds of money 
 have been invented and adopted by mankind ; and, after 
 being used a long time, have slowly become obsolete in a 
 succession the reverse of that by which they were first em- 
 ployed. 
 
 We have seen that various articles have come into use as 
 money because experience taught mankind that they were 
 generally wanted ; and that this demand arose from an ac- 
 quired belief that such articles were uncommonly desirable 
 and valuable. Furthermore, we have seen that the primi- 
 tive idea of a medium of exchange was something valuable 
 and generally wanted, with little reference to other desir- 
 able qualities which should be possessed by money. The 
 value of grain, oxen, bales of wool, slaves and other incon- 
 venient kinds of money was not estimated simply by 
 their utility as a medium of exchange, but by their 
 usefulness for other purposes. After a long time, the idea 
 dawned upon our forefathers that money should possess 
 other desirable qualities in addition to those aforesaid. 
 This led to the use of copper, iron, tin, silver and gold, in 
 form of dust, or rough pieces for money. After the metals 
 had thus been used as money for a long time, another 
 idea occurred to our astute fathers, viz., the idea of melt- 
 ing the metals into pieces of convenient size for counting 
 and handling. These were used a long time, and then an- 
 other idea appeared, viz., that of stamping or marking the 
 pieces so that their relative value could more readily be 
 estimated. Still another lapse of time was necessary be- 
 fore metals were converted into rude coins with an image 
 and superscription thereon. After another long period, the 
 mechanic arts were developed sufificiently to render possible 
 the creation of the beautiful coins of the present day. 
 
 After the metals had been converted into coins bearing 
 the stamp of the sovereign power, mankind discovered that 
 pieces of paper, as representatives of coin, could be used as 
 
GROWTH OF MONEY. gl 
 
 money more conveniently than the coins themselves. Be- 
 sides a multitude of lesser details, the present form of 
 bank-notes has passed through three distinct periods of 
 growth. The first idea appears to have been to deposit 
 valuables in a bank for safe keeping, and to have their 
 value ascertained and registered in a book kept at the 
 bank. The owner of these valuables then had a bank credit 
 which he used as money by transferring it, with consider- 
 able formality, to another person. Next, a certificate was 
 given to the depositor, payable only to him or his carefully 
 authenticated heirs, successors or assigns. Then one step 
 more was taken by issuing certificates, payable to bearer 
 without indorsement or other formality. 
 
 Finally, after all the foregoing stages of the development 
 of money had been wrought out, despite the clinging of our 
 race to traditional ideas, habits and prejudices, appears the 
 crowning triumph of common sense applied to finance, — 
 legal-tender paper money, difficult to counterfeit and lim- 
 ited in amount. 
 
 The teachings of history in regard to the growth of finan- 
 cial ideas are conclusively verified by the fact that in differ- 
 ent quarters of the globe all the aforesaid stages of devel- 
 opment exist to-day. Every portion of the financial prog- 
 ress through which we have passed is now substantially 
 typified by the commercial thoughts and habits of some 
 nation or tribe. 
 
 Even within the limits of the United States, nearly all 
 the aforesaid stages of the development of a uniform tend- 
 ency to make exchanges in the easiest way, and a growth of 
 knowledge that convenient money is just as good as incon- 
 venient money, are exemplified by money now in use. We 
 have the greenback as the most desirable kind of money. 
 Next lower in the scale stands the national bank-note as the 
 type of representative paper money. The era of beautiful 
 coins of metal is shown by our gold, silver and nickel coins. 
 The era of cumbrous, inconvenient coins is symbolized by 
 the few old-fashioned copper cents which still remain in cir- 
 culation. The use of bars of bullion as money recalls 
 6 
 
$2 SOCIAL STRUGGLES. 
 
 another age. The employment of gold dust and nuggets of 
 gold as money reminds us of a still more primitive epoch of 
 human history. Finally, the earliest kinds of money are lit- 
 erally exhibited by those Indians who still use skins, ponies 
 and kindred things as money. 
 
 Usually, the monetary ideas of a community or nation 
 are a correct index of their intellectual growth and culture 
 in all other respects. This is significantly shown by the 
 conduct of the emigrants who land at Castle Garden. 
 Just in proportion to their ignorance, those persons eagerly 
 desire heavy and inconvenient metallic money in prefer- 
 ence to national bank-notes or greenbacks. 
 
 An improved form of money is adopted by a nation only 
 when a considerable portion of its people become suffi- 
 ciently intelligent to appreciate it. Money must be 
 adapted to the mental stature of those who use it ; hence 
 no sudden change from an inferior to a superior kind of 
 money is ordinarily possible, because the growth of mone- 
 tary ideas is simply a reflection of the progress of public in- 
 telligence in all other respects. A long forward stride was 
 taken by this country when greenbacks and national bank- 
 notes superseded State bank-notes. But in reality, this 
 was not an exception to the aforesaid general law. For a 
 long time the American people had suffered great losses 
 and inconvenience from State banks, and thus had grad- 
 ually been prepared to welcome a uniform national cur- 
 rency. Notwithstanding this, national paper money was 
 strenuously resisted by capitalists, and its speedy introduc- 
 tion was only accomplished by the pressure and exigencies 
 of a terrific civil war. 
 
 A POOR OLD THING IS PREFERRED TO A GOOD 
 NEW THING. 
 
 The proclivity of mankind to prefer an old inferior article 
 to a new superior one, and the wonderful vitality of a 
 human habit which has once been fully established, are 
 illustrated in nothing more strikingly than in their conduct 
 in regard to money. In all ages and countries, every im- 
 
LOVE OF FAMILIAR FACES. 
 
 83 
 
 provement in money has been obstinately resisted by the 
 great majority. The old kind of money was better under- 
 stood, and therefore was preferred to the new. When a 
 new form of money was invented, it merely added at first 
 another name to the list of moneys in use ; the old kinds 
 of money were not superseded, but continued in use side by 
 side with the new money. From the time when the first 
 improvement in money was made, down to the present, 
 the same process has been going on. Several kinds of 
 money have been simultaneously in use; the best kind of 
 money very slowly gaining ground, and the inferior kinds of 
 money slowly passing out of use. What was at first a 
 monetary innovation, looked on with distrust, in course of 
 time became an old kind of money endeared to the people 
 by long familiarity. The choice of the people then lay, not 
 between a new and an old kind of money, but between two 
 old kinds of money, — the elder of the two inferior to the 
 other. Then a new form of money appeared, destined to 
 pass through the same gradual process of adoption as its 
 predecessors. Meanwhile, the primitive kind of money had 
 slowly fallen into disuse by reason of an increased employ- 
 ment of the second kind of money. In like manner, the 
 second kind of money slowly faded out of use because the 
 third kind of money was gradually taking the first place in 
 the estimation of mankind.* 
 
 Step after step the aforesaid processes have gone on, cent- 
 
 * The foregoing sketch of the history of money is not, and is not in- 
 tended to be, chronologically correct. It simply shows the successive 
 steps by which monetary knowledge has developed, when viewed from 
 its lowest stage to its highest, without any reference to what took place 
 in the intervening periods of time. Financial, like all other kinds of 
 knowledge, has followed a line of alternate progress and recession. The 
 fact that the value of a unit of money, as money, depends on the number 
 of those units in circulation and not on the materials of which it is made, 
 was known and acted on thousands of years ago by the foremost nations 
 of the world. But this fundamental principle has repeatedly been lost 
 sight of, and the result has followed which inevitably flows from the adop- 
 tion of false premises ; viz., a confused and erroneous mode of reasoning 
 and action. 
 
84 SOCIAL STRUGGLES. 
 
 ury after century, until the financial ideas of the world have 
 reached their present form. How very slowly and imper- 
 ceptibly we have traveled is shown by the fact that all the 
 gradations of money, from the primitive up to the highest 
 form, are in use to-day. Moreover, the highest form of 
 money now in use is much smaller in amount than that of 
 other and inferior kinds of money. 
 
 The past reflects inversely the image of the dawning fut- 
 ure. Nothing can check the further development of finan- 
 cial methods, and an extension of the knowledge which 
 will enable us to make a better kind of money than any we 
 have thus far had, but a check to the progress of human 
 intelligence. 
 
 WHAT WE CAN REASONABLY EXPECT. 
 
 In all probability, future progress will resemble that of 
 the past, and be so slow as to be perceptible only by com- 
 paring one long period of time with another. The people 
 of this country will be likely to advance more rapidly than 
 those of any other. We are now quite rapidly changing 
 our national habits of thought in regard to money. The 
 use of paper certificates instead of gold and silver coins is 
 increasing, and the people are learning that a twenty-dollar 
 silver certificate is far more convenient than a twenty-dollar 
 gold coin. Public opinion is slowly but inevitably gravitat- 
 ing toward favoring the abolition of national bank-notes 
 and their replacement by an improved kind of greenbacks. 
 
 During the ten years just past the financial branch of the 
 United States Government has been largely controlled by 
 men who, from ignorance, from a desire to aggrandize a 
 small class, or from both those reasons, have been steadily 
 trying to reverse our natural progress toward the best and 
 most convenient money. Persistent efforts have been, and 
 are still being made, to compel the use of gold and silver, 
 by a people the majority of whom, if allowed to follow 
 their own instincts and convenience, would not use either 
 one of those metals. Fractional paper money has been 
 withdrawn, silver certificates limited, and the number of one 
 
 I 
 
 £ 
 
FACTS REGARDING BAN'KERS 85 
 
 and two-dollar bills curtailed, for the purpose of preventing 
 the people from using the kind of money they prefer. 
 
 BANKERS AND MONEY, 
 
 It is frequently said, " Bankers know most about money 
 because they do nothing but handle it." But a little reflec- 
 tion shows that a man may "handle " certain things all his 
 life and still be entirely ignorant of the scientific principles 
 relating to them. Thus a man may handle stones all his life 
 and not know anything about geology. A life service as a 
 butcher does not imply a knowledge of comparative anat- 
 omy. A dealer in chemicals does not consequently under- 
 stand the science of chemistry. Handling iron, copper, lead, 
 and other metals does not teach a knowledge of the science 
 of metallurgy. Many other illustrations similar to the fore- 
 going could be adduced, all showing that those whose daily 
 occupation is to " handle " a particular thing are almost in- 
 variably ignorant of the primary facts and principles relat- 
 ing thereto. Bankers are not an exception to this general 
 rule. 
 
 AN IRRESISTIBLE MOVEMENT. 
 
 The American people have not advanced far enough in 
 intelligence to dispense with gold and silver as a necessary 
 portion of their monetary system. But the majority have 
 arrived at a stage of progress which precludes them from 
 desiring to directly use either of those metals as money. 
 They believe gold and silver should be locked up in vaults 
 as " a basis for the issue of paper money." But carrying 
 around any kind of metal in pockets,- as money, is every 
 year regarded more and more as an inconvenient relic of 
 barbarism. The natural development of the use of paper 
 money has been temporarily thwarted. But all movements 
 are irresistible whose impelling force is the steady unfold- 
 ing of human intelligence. 
 
 Improvement in the machinery of commerce, like all 
 other manifestations of human progress, resembles the com- 
 ing of warm weather. When February is past, the temper- 
 
35 SOCIAL STRUGGLES. 
 
 ature does not rise steadily day by day, but moves upward 
 in an irregular and intermittent course. Even when April 
 has arrived, a reaction often occurs, of weather so severe 
 that we should imagine midwinter was returning, if ex- 
 perience had not taught us otherwise. As the past prog- 
 ress of mankind has moved along a zigzag and irregular 
 line, we have every reason to presume that future achieve- 
 ments will follow a similar course. Periods of apparent 
 stagnation, and even of actual reaction toward barbarism, 
 will inevitably occur. But despite all discouragements, the 
 tendency is steadily . toward wiser and better methods, in 
 financial as well as in all other fields of thought and action. 
 
CHAPTER VI. 
 
 Origin of Prices. — Primitive Mode of Stating Prices. — Need of Com- 
 paring all Things with a Few Things. — Money of Account. — A 
 Price is always a Mode of Comparing one Thing with Another. — 
 A Money Price is always a Numerical Comparison. — Antiquity 
 of Numerical Comparison. —Fractional Money. — Primitive Mode 
 of Making Change. — Division of Values one Function of Money. — 
 Money of Account, resumed. — How Value is Expressed. — What 
 happens when Specie Payments are Suspended. — Money of Account 
 would Survive the Destruction of all Other Money. — False Pre- 
 dictions. — Weight of Coins is seldom Considered. — Rise and Fall 
 of Prices. 
 
 Statement of a price is a mode of exchanging thoughts. 
 Thought is exchanged first and tilings afterward. 
 
 We have sketched the manner in which certain things 
 originally came to be used as money. We have also traced 
 the order in which improvements have been made in the 
 things used as money, and in doing this, have found that 
 several things have always, at the same time, been used as 
 money. The next step in studying this subject is to ascer- 
 tain how it has been made possible for mankind, in the 
 midst of such a diversity of money, to learn each other's 
 ideas of the value of a given thing, and to state the ratio in 
 which one thing should be exchanged for another. 
 
 The first step in every bargain is to estimate and compare 
 the value of one thing with that of another ; and although 
 this may be begun by one or both parties independently, it 
 is always completed by directly or indirectly talking with each 
 other; i. e., the parties to a trade exchange thoughts before 
 they exchange things. Therefore, a necessary preliminary 
 of all bargains is an ability of those who desire to make 
 them to communicate clearly their thoughts to one another. 
 At present, we possess a means of easily conveying our ideas 
 of value to those with whom we desire to trade, and we are 
 
 87 
 
88 SOCIAL STRUGGLES. 
 
 now considering what that means is, and how we acquired 
 it. 
 
 To make the answer to the above questions easier, let us 
 conceive a market-place frequented by a community with 
 the most primitive ideas of commerce. We first observe a 
 number of persons possessed of different things which they 
 wish to exchange, and find among these persons a variety of 
 opinions in regard to the proper mode of stating the value 
 of a thing. 
 
 One man would say his goods were Avorth so much grain. 
 Another would name the value of his wares in meat ; and 
 another would name a certain number of sheep skins as the 
 worth of his goods. Naming the value of goods in a vari- 
 ety of ways would make it difficult for the different persons 
 in the market to exchange thoughts and compare ideas. 
 
 In other words, a number of persons wish to trade with 
 each other but they have not yet invented a commercial 
 language by means of which one man's opinion of the value 
 of his goods can be so stated that all other men in the 
 market-place will readily understand him. We are now 
 trying to learn how a universal mode of stating values was 
 arrived at, and how all persons came to understand it. 
 
 PRIMITIVE MODE OF STATING PRICES. 
 
 Let us first see what a man would naturally do who 
 was without a knowledge of the commercial processes 
 which are so familiar to us that we use them unconsciously. 
 Obviously, he would name the value of a thing which he 
 wished to dispose of, by the thing or things which he 
 wished to get in exchange for it. If a man possessed of a 
 horse that he thought was worth as much as two cows, and 
 which he wanted to exchange for two cows, were asked the 
 value of his horse he would naturally say, "Two cows." A 
 man with 'seven calves which he wished to exchange for a 
 cow would naturally name a cow as the worth of his calves. 
 A man with fifty bushels of wheat which he wished to ex- 
 change for seventy-five bushels of barley would be likely to 
 state the value of his wheat at seventy-five bushels of 
 
HOJV PRICES BEGAN. 
 
 89 
 
 barley. Similar statements of value would be made by 
 persons possessed of other things, alid the result would be a 
 confused medley of language in regard to values, and 
 considerable trouble in making exchanges, e\'en in a mar- 
 ket-placi where a comparatively limited variety of things 
 was offered in exchange. Where only three or four differ- 
 ent things were for sale or exchange, a mutual understand- 
 ing could easily be reached. But the difficulty of making 
 appraisals of value and making exchanges would increase 
 with each additional thing offered for exchange. 
 
 This difficulty would arise from the defective manner in 
 which the indispensable prerequisite of every bargain — viz., 
 an interchange of thoughts — was conducted. The language 
 of two persons may be alike in other respects and unlike in 
 regard to commercial matters. Two persons cannot readily 
 exchange ideas with each other unless they both apply a 
 similar meaning to the same words or phrases. Further- 
 more, statements which require reflection and computations 
 to interpret them do not convey commercial information 
 with sufficient rapidity, clearness and precision to meet the 
 wants of the multitude who wish to exchange things with 
 each other. Consequently, to a large extent, the different 
 persons in the aforesaid case who wished to trade would 
 not be able to make themselves perfectly understood by 
 each other, and, as a necessary result, the relative value of 
 different things — the ratio in which one thing should be 
 given for another — would be arrived at with great difficulty. 
 
 NEED OF COMPARING ALL THINGS WITH A FEW THINGS. 
 
 Even a person possessed of our present facilit)- of esti- 
 mating values, and computing and changing the value of 
 one thing into that of another, would be somewhat puzzled 
 if, on taking a walk through a business street, he should ask 
 the price of a stove and be told, " Ten sheep skins." He 
 would be still more perplexed if he asked the price per 
 yard of certain cloth and were told, " A dozen eggs ; " or, 
 if he asked the price of a hat and were informed that it 
 was very cheap at the price , viz., " A four-weeks-old pig." 
 
go SOCIAL STRUGGLES. 
 
 His knowledge of commercial arithmetic would be still fur- 
 ther drawn on if he asked a laborer in search of employ- 
 ment how much wages he asked per day, and should be told, 
 " A bushel of corn ; " or, if he asked the price of a dressed 
 sheep, and was informed that it was worth " two bushels of 
 wheat." 
 
 The foregoing example may seem queer, but we must 
 remember that it illustrates, in substance, precisely the dififi- 
 culties which our ancestors once had to contend with. The 
 reader will note that the perplexity of the aforesaid inquirer 
 of prices arose chiefly from the fact that no two persons 
 who offered goods for sale compared them with the same 
 thing, and consequently the buyer failed to readily under- 
 stand the comparative amount of value which was meant 
 by the various statements of price. 
 
 When a person puts a price on a thing, he thereby states 
 that in his opinion the value of that thing is equal to the 
 thing named as the price. If a man mark two dollars as 
 the price of a hat, that is equal to saying : This hat is 
 worth as much as two dollars ; or. This hat is the price of 
 two dollars. 
 
 If all the aforesaid persons who were asked the value of 
 their goods had stated the price in corn, or any other one of 
 the various things used as money, the man who wished to pur- 
 chase could readily learn the value of the one thing with 
 which all other things were compared. He could then exer- 
 cise his own judgment by comparing this one tiling with 
 the various things on which a price was fixed, and thus 
 determine whether those things were equal in value to 
 the price. Therefore the root of the difficulty we are de- 
 scribing lies in the fact that the man with things to sell uses 
 language in naming prices which is not fully understood 
 by the man who contemplates buying. 
 
 When "this occurs,, although the language of these two 
 men may be alike in other respects, they will fail to fully 
 understand each other, for a similar reason that a man who 
 talks French will not be able to fully state his ideas to a 
 man who can understand nothing but English. 
 
STATING AND COMPUTING PRICES. 
 
 MONEY OF ACCOUNT. 
 
 91 
 
 In the early history of our race the number of things 
 offered for exchange, at first, was very small and must have 
 increased very slowly. Therefore the necessity of solving 
 the problem of naming a price so that it would be easily 
 understood came upon our fathers by a slow process. 
 When it came, an invention was made which has been so 
 long and so commonly in use that the great majority use it 
 without thinking it once had a beginning. Our ancestors 
 invented a commercial language, — a uniform mode of stating 
 ideas of the worth of a thing, by the use of which two men 
 can converse concerning the relative value of different 
 things, and be at once understood by each other. This in- 
 vention consists of certain words or terms to which the per- 
 sons forming a community or nation agree to give a uniform 
 meaning, and to use them exclusively when stating their 
 ideas concerning the valife of things. These terms, there- 
 fore, constitute the uniform language adopted by a com- 
 munity or nation in which values are estimated, prices 
 stated, accounts kept, and all financial conversation carried 
 on. This is the money of account, — the peculiar terms 
 used by a people in stating prices, and conducting all other 
 commercial transactions. Each nation has adopted a finan- 
 cial language more or less peculiar to itself which has been 
 called the " money of account," because it is the mode in 
 which computations are made and accounts kept in that 
 nation. 
 
 We use dollars and cents as our money of account; we 
 state all prices in dollars and cents, and compute and keep 
 all accounts in the same way. Great Britain uses pounds, 
 shillings and pence just as we use dollars and cents ; Ger- 
 many computes values in marks ; France keeps accounts in 
 francs ; and every other nation has it§ peculiar money of 
 account. Although each different nation has always used 
 words different from those used by other nations, as a com- 
 mon mode peculiar to itself of stating prices and keeping 
 accounts, this important fact should be noted, viz. : TJie sub- 
 
92 
 
 SOCIAL STRUGGLES. 
 
 stance of all moneys of aceoiDit, in every age and nation, is a 
 practical mode of expressing the same fundamental idea. 
 
 In order to understand this idea more clearly, let us dis- 
 sect it into its component parts. The first portion of it 
 consists of the undeniable fact that it is absolutely impossi- 
 ble to really define or state the worth of a thing otherwise 
 than by comparing it with some other thing. 
 
 The second portion of this idea consists of the kindred 
 fact that although a variety of methods may be employed 
 whereby the value of some things may be compared with 
 the value of some other things — as, for instance, one thing 
 may be said to be as fine, or as rich, or as large as another — 
 yet there is only one universal method of comparison by 
 which the value of one thing can be compared with the 
 value of all other things, viz., the numerical mode of com- 
 parison. That is to say, the worth of all things can be com- 
 pared with the worth of all other things, by saying that a 
 given thing is worth one-quarter, or some other fraction 
 of the value of another thing ; or, by saying that a given 
 thing is worth ten times (or some other number of times) 
 as much as another thing. 
 
 The third portion of the aforesaid idea is that since a 
 comparison of some kind is the only way in which the worth 
 of a thing can be estimated or stated, it is desirable that the 
 method of making comparisons should be the one which 
 admits of universal application, viz., the numerical method- 
 Furthermore, it is essential that all persons who make nu- 
 merical comparisons of value should use the same numeral 
 or unit as a standpoint from which to start in comparing 
 one thing with another. 
 
 The fourth portion of the said idea is that, as it is im- 
 possible to estimate the worth of anything absolutely, the 
 unit of value, or numeral, from which and by which all 
 comparisons of value are made must be an assumed and 
 arbitrary one ; that is, it may be symbolized, but, in the 
 outset, it can have no real existence, because there is nothing 
 except the imagination from which to construct it. 
 
 Therefore all civilized nations have assumed that the 
 
A PRICE IS A comparison: 
 
 93 
 
 numeral " ONE " was the proper arbitrary standard of value 
 from which to start in making comparisons of value. This 
 imaginary standpoint has been given a concrete form by 
 calling it one pound, one rouble, one mark, one franc, one 
 dollar, and a variety of other names. But in all cases, its 
 essential characteristic is one and the same thing, because 
 all the different names aforesaid are simply different ways of 
 naming the national monetary numeral, or unit of value. 
 
 A PRICE IS ALWAYS A MODE OF COMPARING ONE THING 
 WITH ANOTHER. 
 
 The above four fragments, when combined, are the basis 
 of the greatest monetary invention ever devised by man- 
 kind. Let us now see if the foregoing statements can be 
 further elucidated by an illustration. L has ten sheep, all 
 alike, which he wishes to sell. M comes along and asks L 
 how much a sheep is worth. If L should reply that " a 
 sheep was worth a sheep " he would convey no idea except 
 to raise a doubt of his own sanity or wisdom. M might then 
 say : " I knew before I spoke to you that at the same time 
 and place one thing is always worth a precisely similar thing ; 
 therefore one sheep, at the same time and place, is always 
 worth a precisely similar sheep. Please drop nonsense and 
 tell me ivkat one sheep is worth in such language that I 
 will be able to understand you." 
 
 A moment's reflection shows that the only possible way 
 for L to state his idea of the worth of one of his sheep is to 
 compare it with something else besides one of its fellow 
 sheep. Furthermore, it is apparent that the easiest and 
 most intelligible way of comparing its worth with the 
 worth of something else is to do so by using numbers. 
 Thus L may say : " This sheep is worth ten geese." That 
 would be equivalent to saying that this sheep was worth 
 ten times as much as one goose. L might say : " This 
 sheep is worth fifteen bushels of oats." That would be 
 equivalent to saying that the sheep was worth fifteen times 
 as much as one bushel of oats. Suppose M should ask L 
 if he would sell all his sheep for a cow. If L said yes, that 
 
94 
 
 SOCIAL STRUGGLES. 
 
 would be -simply another way of stating his opinion that 
 one of his sheep was worth one-tenth as much as a cow. 
 
 Two facts appear at once from the foregoing considera- 
 tions. First, no matter what intelligible method or words L 
 may adopt or use to give his idea of the worth of his sheep, 
 they all necessarily involve a comparison of the sheep with 
 something else, and a statement of the ratio i-n which he 
 thinks a sheep should be given in exchange for something 
 else. 
 
 Second, it is evident that L and M, in carrying on their 
 bargaining, will more readily understand each other if they 
 steadily use the same object in making all their comparisons 
 of value. Furthermore, it is clear that by exclusively using 
 the object designated by the common consent of the whole 
 community as the best one thing with which to compare all 
 other things, they can exchange ideas still more easily. 
 
 A MONEY PRICE IS ALWAYS A NUMERICAL COMPARISON. 
 
 The aforesaid two facts substantially embody what ob- 
 servation and experience have taught mankind is the best 
 manner of making statements of value. In this country L 
 would use the term " one dollar," as the money of account 
 and the unit from which to start in making all comparisons 
 of value. He would say : " A sheep is worth so masy dol- 
 lars and such a fraction of one dollar." In England L 
 would employ the term " one pound," as the unit from 
 which and by which to make all comparisons of value. In 
 Germany, L would use as the money of account and unit of 
 value, " one mark " ; and all his conversation would steadily 
 refer to "one mark" and to fractions of one mark. No 
 matter what country he may be in, nor what terms he use, 
 L would constantly make all statements of value by a 
 numerical comparison of the thing on which a price was 
 thus put with an adjective which would mean "one." The 
 name succeeding this adjective would depend simply on 
 the custom of the locality, and not on any difference in the 
 principle involved. 
 
HOW SA FACES NAME PRICES. 
 
 ANTIQUITY OF NUMERICAL COMPARISON. 
 
 95 
 
 Having found that all civilized peoples of the world com- 
 pute values by a numerical method, it would be interesting 
 to know just when they first began to do so. There are 
 several tribes now living which use the numerical method of 
 reckoning values who are so low in the scale of intelligence 
 that they have no written history. They compare the value 
 of all things with a skin, a canoe, or a weapon of some kind, 
 or with some other thing with which they make exchanges 
 and are familiar. It is only a short time since the Indians 
 of this country used a beaver skin as the unit of value and 
 the money of account. These facts give us reason to pre- 
 sume that the numerical method of reckoning value is older 
 than human history. 
 
 The fact that some nations use units of value which are 
 widely different from those of other nations is an unimport- 
 ant detail. The intent, object and result of doing certain 
 acts are usually more important than the manner in which 
 those acts are done. The Portuguese unit of value is so 
 small that no necessity arises for dividing it. The principle 
 involved is the same, whether the unit with which all values 
 are to be compared is equal to the worth of one month's 
 labor or one hour's labor ; or whether its representative 
 weighs one pound or a fraction of an ounce. Furthermore, it 
 makes no real difference how the number of these units is 
 ascertained, — whether by counting or weighing them. A 
 uniform agreement by a people to reckon the value of all 
 things by comparing them in a numerical ratio with one 
 thing is the substance of the matter now under examination. 
 
 FRACTIONAL MONEY. 
 
 We have heretofore found, at an early period in the be- 
 ginning of commerce, the adoption of an arbitrary or con- 
 ventional unit of value, which is multiplied and (unless the 
 unit is very small) divided into fractions as circumstances 
 may require. Let us now examine the special function and 
 use of these fractions of the unit of value. 
 
^6 ' SOCIAL STRUGGLES. 
 
 When men first began to barter with each other they 
 frequently met with a practical difficulty which we have 
 thus far omitted to consider. That difficulty is the equita- 
 ble exchange of things possessed of unequal values and 
 which it is not practicable to divide. 
 
 A has a buffalo skin which he wishes to exchange with 
 B for some rice. In this case a fair trade could easily be 
 made, because the rice, without injuring it, can be divided 
 into such an amount as equals the worth of the skin. But 
 suppose A wishes to exchange a buffalo skin for an ax and 
 the ax is deemed worth two-thirds the value of the skin. 
 The first thought would be to cut off one-third of the skin 
 and give the two-thirds for the ax. It takes but little 
 reflection to" show that such a course would spoil the buf- 
 falo skin. 
 
 Let us suppose another example. D has a cow which he 
 w'ishes to exchange with E for a colt. After D and E have 
 talked about the matter and compared the values of the 
 two animals they conclude that the colt is worth one-quar- 
 ter more than the cow. What is then to be done ? For E 
 to take the cow, and after slicing off one-quarter of the colt 
 give D the remainder, is certainly impracticable. The ne- 
 cessity has arisen of doing what we now call " making 
 change " or " giving boot." This necessity arises, when two 
 things exchanged are of such unequal value that something 
 must be given in addition to the least valuable one, in 
 order to do justice to the person who parts with the most 
 valuable one. 
 
 In early times, a problem similar to that above presented 
 would have been solved by D giving E a couple of sheep, a 
 yearling heifer, or some similar thing in addition to the 
 cow to make the bargain even. This mode of making 
 change was undoubtedly in use for a long time. In fact, it 
 has been used to a considerable extent in this country 
 within the memory of persons now living. During the first 
 portion of the late civil war, when silver coins had disap- 
 peared from circulation and the fractional paper currency 
 had not yet been issued, we were on the verge of a general 
 
MAKING SMALL PAYMENTS. 
 
 97 
 
 \ 
 
 return to the primitive method of making change. Postage 
 stamps, car tickets, dinner tickets, stage tickets, and a variety 
 of similar things were rapidly coming into use as fractional 
 money. 
 
 When New Orleans was taken possession of by the 
 troops under command of General Butler, the soldiers, 
 when shopping, frequently used as change, at the request 
 of the shopkeepers, the large hard crackers which formed 
 their bread ration. In various cities throughout the 
 Northern States a considerable number of individuals, cor- 
 porations and railroad companies started mints of their own, 
 and began to make small brass and pewter coins of differ- 
 ent kinds with a variety of inscriptions thereon. These 
 were put into circulation as fractional money and continued 
 in use until the United States Government passed a law 
 prescribing severe penalties against any person who made 
 or used them as money. 
 
 PRIMITIVE MODE OF MAKING CHANGE. 
 
 The use of pigs, chickens, eggs, calves, and similar arti- 
 cles for making change and other small payments is at- 
 tended with great inconvenience and expense. M. Wolow- 
 ski has told us that several years ago Mademoiselle Zelie, 
 a noted singer, made a professional tour in various coun- 
 tries and, in the course of her travels, gave a concert in the 
 Society Islands. The bargain with the manager of the 
 entertainment gave her one-third of the receipts for her 
 services. When her share was counted, it was found to 
 consist of twenty-three turkeys, three pigs, forty-four chick- 
 ens, five thousand cocoa-nuts, and a quantity of bananas, 
 oranges and lemons. A portion of this " small change " 
 was consumed by Mademoiselle and her servants, and 
 meantime the remaining pigs and poultry were fed with the 
 fruit. 
 
 This incident illustrates both the inconvenience of primi- 
 tive money and the importance of having a kind of money 
 which will enable those who possess it to divide values into 
 small and regular fractions of an assumed unit, and to 
 7 
 
98 
 
 SOCIAL STRUGGLES. 
 
 reckon such a division. Much inconvenience must often 
 result if, when things are exchanged of unequal value, arti- 
 cles of different and unequal size, quality and value are 
 used for making change and paying small balances. This 
 is not simply because the articles used for paying balances 
 in such cases have different values, but because these val- 
 ues would be so irregular as not to have a constant relation 
 and easily understood ratio of value to each other. 
 
 For example, K might desire to exchange two sheep with 
 L for a heifer. Upon appraisal of value, suppose K and L 
 decided that the heifer was worth the sheep and the value 
 of half a sheep. In such case, after giving L the sheep K 
 would still owe a balance to L of half the value of a sheep. 
 The question would arise how to pay it. K might have a 
 pig to give for his debt, but the pig might be considered 
 worth more than half a sheep. Or, he might desire to give 
 a turkey for change but upon reflection find that it was not 
 worth quite enough. 
 
 All the above and kindred difficulties are removed by the 
 adoption of a unit pf value, and by dividing this unit into 
 small and regular fractions. It is obvious that a system 
 which admits of the division of value into fractions of a 
 definite and uniform size, can also be used to gather these 
 fractions of value and put them together again into wholes. 
 This is shown by the way we use our unit of value. It is 
 very easy to multiply the figure " one " by any number. 
 Therefore an estimate of the value of anything, no matter 
 what it is, nor how great its value, can readily be stated at 
 so many units. 
 
 If an appraisal of a thing place its value at less than one 
 unit, or at a given number of units and a portion of another 
 unit, we then divide the unit into one hundred equal parts 
 and say : This thing is worth so many units and such a 
 hundredth part of a unit ; or we say, Such a thing is worth 
 so many hundredths of a unit. 
 
 The foregoing is what we really do and what we actually 
 mean. But other terms are usually employed, and we say : 
 " This thing is worth so many dollars and so many cents." 
 
 I 
 
DIVISION OF PRICES AND VALUES. 
 
 99 
 
 This method of comparnig all values with the unit " one," 
 and of dividing this " one " into one hundred equal parts, 
 enables us to state all kinds of prices, make both large and 
 small payments, and pay small fractional balances accu- 
 rately, without inconvenience. It also gives those who 
 chance to receive more fractions of a dollar than they want, 
 the ability to readily convert them into whole dollars when- 
 ever they desire. 
 
 In substance, those who employ the monetary systems of 
 other civilized nations use their units of value as we do our 
 dollars. For instance, the Englishman breaks up the na- 
 tional unit, the pound, first into twenty equal parts, which 
 he calls shillings. If required, he next breaks up each of 
 these fractions into twelve parts, which he calls pence ; and 
 if further division be necessary he breaks each of these frac- 
 tions into four parts, called farthings. When this is done, 
 he has divided the unit into nine hundred and sixty pieces, 
 and as these pieces have a regular and uniform relation to 
 each other, there is little difficulty in putting them all 
 together again into one pound. 
 
 Although the English and American money of account, 
 the pound and the dollar, rest on essentially the same prin- 
 ciple, our money has one practical superiority, viz., there is 
 less arithmetic about it. We compute all values and break 
 up our unit into fractions by the decimal system, the 
 easiest mode of computation ever devised by man. 
 
 DIVISION OF VALUES ONE FUNCTION OF MONEY. 
 
 The division of values into fractions for the purpose of 
 making small' payments and paying small balances is one 
 of the chief uses and functions of money. In fact, more 
 money is actually used for those purposes than for making 
 large payments and paying large balances. The larger 
 payments are mostly made by what we do not call money 
 at all, viz., checks and drafts. Moreover, the larger pay- 
 ments are made less frequently, and only by the wealthier 
 classes ; whereas the small payments are constantly made 
 by the w^iole population. 
 
jOO SOCIAL STRUGGLES. 
 
 Ability to readily divide values into fractions of a com- 
 monly recognized whole unit furnishes a means whereby 
 the prices of all things, no matter how small or how large 
 their amount, can be readily stated and understood. By 
 dividing the unit into a considerable number of regular 
 fractions, the slight daily fluctuations and changes which 
 prices constantly undergo can be easily registered. 
 
 Division of the unit into pieces of a uniform proportion 
 to each other enables the owner of one thing to transform 
 it into units of money, and then divide and exchange it for 
 such number and variety of other things as its value and 
 his wishes may determine. It also furnishes an aid for 
 comparing the value of one thing of little value Math 
 another thing of little value, and of estimating the ratio in 
 which they should be exchanged for each other. Further- 
 more, it renders it possible to translate all kinds of values 
 and prices from one kind of money, and reckon them in 
 another kind of money ; to multiply the value of one thing 
 which is expressed in fractions by the numbers of that 
 thing, and thus find their aggregate value ; and to add, 
 subtract and compute the fractional values transferred in 
 a great number of exchanges, and ascertain the final result. 
 
 MONEY OF ACCOUNT, RESUMED. 
 
 Having considered how the assumed unit of value of 
 different nations is divided for convenience into fragments, 
 the value of each one of which has a uniform proportion to 
 the value of the whole unit, we can now resume our study 
 of money of account. 
 
 All civilized nations have, in substance, at least three 
 kinds of money : First. The imaginary money, the money 
 of account, in the language of which all accounts are 
 kept and recorded, and by the help of which all values 
 are estimated and compared with one another. Second. 
 The current money, the money actually in use and cir- 
 culation. This may, and often does consist of several dif- 
 ferent kinds of money, and those varieties of money may 
 be more or less intermina"led in all commercial transac- 
 
 \ 
 
HOW WE STATE IDEAS OF VALUE. jqi 
 
 tions. Third. The national standard of coinage ; or, the 
 national legal-tender money. This may consist of one 
 kind of money ; or, it may consist of several kinds of legal- 
 tender money. 
 
 The national money of account necessarily consists of 
 one kind of money, to the unit and fractions of which the 
 same terms are always applied. But the second and third 
 kinds, aforesaid, may embrace a great variety of different 
 moneys. All of the said three kinds of money may be sepa- 
 rate and distinct ; — they may be substantially incorporated 
 in one and the same thing ; or, they may be all three es- 
 sentially blended in two different kinds of money. 
 
 Let us now dissect and illustrate the foregoing state- 
 ments. To those who have not thought about it, nothing 
 seems much more absurd than the idea of an imaginary 
 money of account and an imaginary unit of value. 
 
 HOW VALUE IS EXPRESSED. 
 
 Upon reflection, we observe that in comparing and stat- 
 ing values we cannot do as when defining colors, for in such 
 case we have an absolute standard before us ; viz., the 
 colors of the rainbow, the colors of light. We can say this 
 is red, this is yellow, and so on, simply because we possess 
 an unchangeable standard of color. But value, as we shall 
 hereafter demonstrate, is a mental perception of the worth 
 of a thing. Therefore it is impossible to say of a thing, 
 this is absolute value. We might as well attempt to pre- 
 cisely define and put in concrete and material form all 
 other mental conceptions and emotions, and after our labors 
 were completed say : This is hate, this is love, this is fear, 
 and so on. We can symbolize and typify a human thought 
 or emotion by making a material form which we imagine is 
 a correct representation of it. For example, beauty is a 
 mental perception of harmonious proportions and colors. 
 We can make ^ thing which in a partial sense materializes 
 this thought. Such a thing we call beautiful, — but it is 
 not beauty, in the abstract, because that is as intangible as 
 any other thought. A "beautiful " thing is merely a sym- 
 
102 SOCIAL STRUGGLES. 
 
 bol of an idea. Men's ideas of beauty differ. Therefore, 
 what to one man is a symbol of beauty, to another man is 
 the reverse of beautiful. 
 
 Thus we see two facts : First. Value cannot be put in 
 material form except as a symbol of an idea. Second. As 
 it is necessary in comparing values to start somehow or 
 somewhere, we are driven to assuming and imagining an ar- 
 bitrary unit of value from which to date and make all our 
 comparisons. 
 
 The correctness of the foregoing statements is shown by 
 the fact that the unit of value, the starting-point of the 
 money of account of several nations, has been employed to 
 compare and reckon values a countless number of times 
 without even attempting to give it a material symbol. 
 Thus the British pound sterling has been a money of ac- 
 count for many centuries, but the first "pound " was put in 
 symbolic form when the sovereign was coined in 1816. 
 The rouble was the Russian money of account for a long 
 time before the reign of Peter the Great, when a piece of 
 money called "a rouble " was first coined. 
 
 The unit of the money of account of Portugal is called a 
 " rei." But no coin called a rei has ever been made. The 
 rei is an imaginary money of account, which, unlike most 
 other moneys of account, has never had a symbolic represent- 
 ative. The unit of value and money of account of Spain 
 for a long time wasthe " maravedis." But no such coin as 
 the "maravedis" ever existed, — it was a purely imaginary 
 money without any concrete representative. In this coun- 
 try we frequently employ the thousandth part of a dollar in 
 reckoning and stating values. But no one ever saw a mill, 
 — it is simply an imaginary piece of money. We can men 
 tally create the hundredth part of a mill just as readily as 
 we can iroagine the tenth part of a cent. 
 
 Other examples of a purely imaginary money of account 
 might be cited, but those above given are sufficient to illus- 
 trate the principle we are examining. 
 
HOW IVE TRADE WITHOUT COINS. jq^ 
 
 WHAT HAPPENS WHEN SPECIE PAYMENTS ARE SUS- 
 PENDED. 
 
 It almost invariably happens, whenever a nation is suffer- 
 ing from a very severe and exhausting war, that what is 
 called " a suspension of specie payments" occurs. That 
 is : the money which forms the national standard of coin- 
 age, the coins which most persons suppose do not represent 
 anything, but are of themselves units of absolute *' intrinsic 
 value," cease to circulate. People in the market-places can 
 no longer sell goods and receive what is commonly called 
 " intrinsic value" in exchange therefor. 
 
 Under such circumstances, if the prevailing ideas about 
 money were correct, the people would at once be deprived 
 of all their money, — their means of " measuring values " 
 and reckoning accounts would be gone, and commerce 
 would cease, except the limited amount which could be car- 
 ried on by what the nation would be forced to return to, — 
 primitive barter. And, as heretofore seen, in proportion as 
 population grows numerous and commerce complex, ex- 
 changes by means of barter grow more and more inconven- 
 ient and difficult. 
 
 But, we know from experience that the disuse of stand- 
 ard coins does not interrupt commerce for an hour. Trade 
 goes steadily on, — people continue to buy and sell, and all 
 values are compared and reckoned in the same terms as 
 when the coins were in use. This undeniable fact is read- 
 ily explained when it is remembered that before " suspen- 
 sion " commerce was essentially carried on by the imaginary 
 money of account ; and after suspension it was carried on 
 in the same way. No material change has occurred, no new 
 conditions have forced business to adjust itself to them, 
 and consequently no commercial stagnation or convulsion 
 has arisen. 
 
 The only difference in the mode of carrying on trade be- 
 fore suspension and after, is the change in the things used 
 to represent value. Before suspension, to a limited extent, 
 coins were used which were symbols of the imaginary 
 
I04 
 
 SOCIAL STRUGGLES. 
 
 money of account. Where coins were used before suspen- 
 sion, paper money is used after suspension as a symbol of 
 symbolic coins. The real thing in the people's minds, the 
 imaginary money of account and the unit of value, remains 
 substantially unchanged. 
 
 MONEY OF ACCOUNT WOULD SURVIVE THE DESTRUC- 
 TION OF ALL OTHER MONEY. 
 
 Let US consider how we would compute values if, instead 
 of being deprived of metallic money, as we are when specie 
 payments are suspended, we were also at the same time 
 stripped of paper money and had no power to make either 
 it or a substitute therefor. Undoubtedly, we should be 
 subjected to great inconvenience by being compelled to re- 
 turn to barter. But we would have one enormous advan- 
 tage over primitive man : we would still have left the imag- 
 inary dollar, — the money of account, and with it we would 
 continue to compute values and reckon accounts. Barter 
 would be carried on by constant allusion to dollars which 
 had no symbolic representative, just as we now speak of 
 mills which are not represented by a concrete form except 
 as we imagine a dollar divided into a thousand pieces. 
 
 A people deprived of all material symbols of value 
 would thereby lose to a considerable extent that power of 
 easy commercial association which is one great distinction 
 between civilized and barbarous nations. But the imagi- 
 nary money of account, under such circumstances, would 
 largely obviate the necessity which otherwise would exist 
 of an entire return to primitive modes of exchanging prop- 
 erty. 
 
 For the same reason that business is not paralyzed by a 
 suspension of specie payments, the addition to, or sub- 
 traction from, the currency of one kind of standard money 
 has in itself no tendency to derange commerce. Before 
 February 12, 1873, the United States had always two 
 kinds of standard coins, both of which were a full legal ten- 
 der : viz., the gold dollar and the silver dollar. February 25, 
 1862, a third kind of money was created which was a full 
 
SEVERAL KINDS OF MONEY. Iqc 
 
 legal tender for all purposes except payment of custom du- 
 ties and interest on the public debt ; viz., the greenback. 
 We thus had three kinds of legal tender immediately after 
 February 25, 1862. A fourth kind of money was made by 
 the National Bank Act, June 3, 1864. This money is a 
 legal tender for all debts due the Government except cus- 
 tom duties. 
 
 By the demonetization of the standard silver dollar, the 
 number of legal tenders, except for sums not over five dol- 
 lars, was reduced to tzvo, not counting the national bank- 
 notes, the trade-dollar, and the fractional money. 
 
 The act of February 28, 1878, restored the legal-tender 
 quality of the silver dollar, and increased the number of legal- 
 tender moneys to three. But the aforesaid changes in the 
 iiuuiber of legal tenders were almost unnoticed, simply be- 
 cause people were not accustomed to make exchanges for 
 gold dollars, silver dollars, or paper dollars, but for the 
 imaginary dollar which forms the money of account. 
 
 FALSE PREDICTIONS. 
 
 After the passage of said act of 1878 several "econo- 
 mists" predicted with great positiveness and vehemence 
 that the business of the country would be in chaos in a few 
 months thereafter as an inevitable result of the introduction 
 of a new standard coin. These " learned " school-masters 
 seemed to really believe business could not be properly 
 carried on with more than one legal-tender money. But 
 their confident predictions have shared the fate of other 
 statements made without reference to actual facts. 
 
 As will, in the proper place, be more fully shown, the only 
 important result of the remonetization of silver has been 
 that prices have not fallen as low as they otherwise would 
 have done, thus producing the reverse of the tendency 
 which was produced by stopping the coinage of silver. 
 
 When we hereafter come to study the causes which raise 
 and depress prices, we shall find that the number of differ- 
 ent legal-tender moneys in circulation has no effect what- 
 ever on prices, except as it may increase or diminish the 
 
Io6 SOCIAL STRUGGLES. 
 
 gross amount of legal-tender money. But the total sum of 
 legal-tender money in a country is not necessarily changed 
 by an alteration in the number of the kinds of legal 
 tender. 
 
 THE WEIGHT OF COINS IS SELDOM CONSIDERED. 
 
 Most of the writers who are kind enough to give us in- 
 struction in finance state that coins are used as money, and 
 pass current, only because people know that they contain 
 a fixed amount of pure gold and silver, a;id consequently 
 know that they have a " fixed value." However, as a mat- 
 ter of fact easily demonstrated, the vast majority of persons 
 have nothing in mind but the money of account. They read- 
 ily comprehend prices stated in the money of account be- 
 cause the value attached to its unit has become impressed 
 on their minds. But any marked deviation from this familiar 
 mode of estimating, comparing, and stating prices, confuses 
 them. If a dealer in clothing should put in his show 
 window a coat marked, " 348 30- 1 000 grains of pure gold ; " 
 or should mark a pair of trousers, " Cheap at 2,970 grains 
 of pure silver ; " how many persons at first sight would be 
 able to say whether they thought the prices fair? Cer- 
 tainly, not one person in a hundred. 
 
 But if he marked the coat "$15," and the trousers 
 " $8," every one would understand him. This would be 
 so in this country because the dollar is here the money of 
 account, and each person has an idea of its meaning ; where- 
 as his mind has not been accustomed to associate an idea of 
 a certain value in connection with one or two thousand, or 
 any other number of grains of gold or silver. 
 
 If a shop-keeper in Russia should mark his goods in " dol- 
 lars " he would thereby convey but little idea to his cus- 
 tomers of the prices asked, because the dollar is not the 
 Russian money of account. 
 
 Prior to the Revolutionary War, pounds, shillings and 
 pence were the money of account in this country. One of 
 the earliest measures of the United States Government was 
 to establish the decimal system of currency, and substitute 
 
INEQUALITIES OF PRICES. I07 
 
 the dollar for the pound, as the unit of value. But the es- 
 tabhshed habit of estimating values, and reckoning accounts 
 in pounds, shillings and pence faded away very slowly. 
 Many merchants retained the old method to the day of 
 their death, and noticeable traces of the custom of reckon- 
 ing values in shillings remained sixty years after the coinage 
 of dollars. 
 
 If the English Government were to legally abolish 
 pounds, shillings and pence, and commence coining dollars 
 and fractions of dollars, instead of sovereigns and fractions 
 of sovereigns, the people of England, with few exceptions, 
 would go steadily on in the old rut and continue to esti- 
 mate, compare and state all values by the pound. The 
 habit of using the pound as the unit of value is so firmly 
 fixed in the national mind that a century would probably 
 pass before dollars would be used as readily as pounds 
 now are. This would be so because the current coins of a 
 country are simply the symbols of something deeper and 
 more potent behind them, viz., the imaginary unit of value, 
 the established money of account. 
 
 RISE AND FALL OF PRICES. 
 
 During the recent civil war, especially during the first two 
 years of that struggle, those who entertained the common 
 belief that gold had a fixed value, and that therefore the 
 price of paper money stated in gold was a correct measure 
 of the value of things, were very much puzzled by the fact 
 that the price of real estate and many other things remained 
 comparatively but little affected, while rapid and enormous 
 fluctuations of value were registered by the barometer of 
 the Gold Exchange room. This arose from two causes, 
 one of which will hereafter be stated.. The other cause is 
 the fact that the great mass of the people compute and 
 state all values by the money of account, and when, by long 
 habit, they have acquired a certain idea of the worth of 
 the unit of value, viz., the imaginary dollar, they adhere to 
 it after the current money, or the legal-tender standard 
 money, or both of them, have undergone a change in value. 
 
jo8 SOCIAL STRUGGLES. 
 
 The value of the money of account may remain but little 
 changed for a considerable time, while current money and 
 the legal-tender money have either increased or decreased 
 materially in value. 
 
 At the beginning of the war, the first change in prices 
 was observed in imported goods. The next change occurred 
 in those articles in active demand for export ;' next, personal 
 property most frequently bought and sold rose in price ; 
 then all kinds of personal property and labor were quoted 
 higher ; and, lastly, the price of real estate was affected. 
 Like personal property, the real estate deemed most desir- 
 able, and that most frequently bought and sold, rose first in 
 price. 
 
 If a shallow dish containing a pint of water be exposed to 
 either cold or sunshine for one hour, its temperature will be 
 materially changed. If a barrel of water be similarly exposed 
 much less change will occur, and the effect will diminish in 
 the ratio that the amount of water is increased. Finally, 
 w^e find that a large deep lake or ocean is affected sensibly 
 only by a long continued exposure to a considerable de- 
 gree of heat or cold. 
 
 Changes often take place in the value of current money, 
 legal-tender money, and the money of account as the result 
 of causes hereafter to be discussed. 
 
 If we liken the money of account to a large body of water, 
 the current money to a smaller, and the legal-tender money 
 to the smallest body of water, we find that these causes 
 operate on the three different kinds of money in a manner 
 analogous to the action of heat and cold on different sized 
 bodies of water, and produce similar results. A slight tem- 
 porary cause may affect the legal-tender money, or the cur- 
 rent money, without producing an appreciable effect on the 
 money of account. But if this cause be very powerful, or 
 long continued, the money of account becomes changed in 
 consequence of a change in the purchasing power of its unit. 
 Results occur in the same order, no matter whether the 
 change consists in an increase or a decrease in the worth of 
 the imaginary unit of the money of account. They are first 
 
ORDER IN WHICH PRICES CHANGE. 
 
 109 
 
 shown in the prices of those things which may be compared 
 to a dish of water, — those things which are most mercurial 
 and subject to the greatest commercial activity ; and finally 
 they appear in the prices of that great mass of wealth which 
 is comparatively seldom bought and sold. Real estate is 
 the last in rising and the last in falling in value. Real es- 
 tate most in demand, and most frequently bought and sold, 
 rises in value before the real estate which is seldom trans- 
 ferred. 
 
 The aforesaid considerations explain why it is that some 
 things are often falling in price at the same time that the 
 price of others is stationary, or even rising. They are also 
 of great practical importance to business men upon whom 
 rests the necessity of making bargains to be executed at a 
 future time, as they may help to forecast the prices of 
 given things at such future date. 
 
CHAPTER VII. 
 
 Effect of Legislation on Value.— What Legislation is. — Power of Legis- 
 lation is Limited. — The Laws of Trade. — An Absurd Question. — 
 Inconsistency of those who Deny that Legislation can Create Value, 
 — Historical Example of the Creation of Value by Legislation. — Evi- 
 dences that a Thing is Valuable. —Value of a Man's Services. — Leg- 
 islation may change the Value of a Person's Services. — Historical 
 Legislation which affected Values. — Effect of Aforesaid Law. — What 
 made the Aforesaid Law Possible. — A Plea in Defense of the 
 Money-Lenders. — Effect of Other Legislation on Paper Money. — 
 Bankers' Schemes. — National Bank Act. — Subterfuges. — Why Na- 
 tional Bank-Notes have not been Destroyed. — Attacks on the Green- 
 backs. — The Five-twenty Bonds. — Difficulty of Satisfying Avarice. — 
 A Hypocritical "Pretense. — Proclivity of Mankind to Hypocrisy. — 
 Means Employed to perpetrate a Crime. — Why Horatio Seymour 
 was Defeated. — National Credit. — What Experience Teaches. — 
 Effect of Act of March l8, 1869. — Other Acts of Repudiation and 
 Di.sgrace. — What made the Aforesaid Wrongs Possible. — Fruits of 
 Crime and Folly. — Views of so-called Statesmen. — Simple Facts 
 Overthrow false Theories. 
 
 Igiwj-ancc of tJic nature of value is tlie parent of the suppo- 
 sition that legislation has no effect upon it. 
 
 Perhaps there is no doctrine which writers on political 
 economy more unanimously agree to assume as a funda- 
 mental truth than the statements that " value cannot be 
 created by legislation," and that " legislation is powerless 
 to create, to increase, or to diminish value." From this 
 doctrine an important practical result naturally and neces- 
 sarily flows; viz., the idea that the value of money can 
 neither be created, increased, or diminished by legislation. 
 
 The examination heretofore given this subject has forced 
 us to the conclusion that value is human judgment of the 
 comparative worth, utility, or desirability of a thing, or of 
 its ownership and possession ; and that this judgment is 
 formed and depends on the relation of that thing to man- 
 no 
 
LEGISLA TION IS A KIND OF LABOR. i j i 
 
 kind and to other things. In other words, value is created, 
 increased and diminished by circumstances and conditions. 
 Therefore whether legislation can create value or not de- 
 pends entirely on the answer to other questions; viz.. Can 
 legislation create conditions, facts and circumstances ? Can 
 legislation change the relation of a thing to mankind, and 
 the relation of one thing to other things? Can legislation 
 cause a diminished or an increased use of a thing, and 
 thereby diminish or increase the demand for it ? 
 
 WHAT LEGISLATION IS. 
 
 Before we can answer the aforesaid questions we must in- 
 quire what legislation is. In doing this our attention is first 
 attracted by the fact that legislation is not manual labor. 
 But this is not a decisive test, from the fact that a consider- 
 able portion of what the world regards as its most valuable 
 things are chiefly the result of mental labor. 
 
 Legislation is the mental labor of a considerable number 
 of men. In performing this labor, legislators have the ben- 
 efit of the history of the practical results of the mental 
 labors of generation after generation of other legislators. 
 So that in theory, and largely in fact, legislation is the re- 
 sult of an accumulation of the labors of bygone legislators, 
 combined with the labors of living law-makers. 
 
 Legislation not only represents the labors of a great num- 
 ber of legislators who have lived at different times, but it 
 also represents the thoughts and experience of all mankind 
 in regard to laws which have been enacted, and subjected to 
 practical tests. 
 
 What is legislation an attempt to do? It is simply an 
 effort to organize the forces of society in such a manner that 
 certain modes and forms of thought and action will be en- 
 couraged, and other forms of thought and action \\'ill be dis- 
 couraged. Legislators, with more or less practical success, 
 endeavor to organize the social forces against things which 
 they regard as of evil tendency. Legislation, therefore, is 
 an organization of society for the purpose of creating cer- 
 tain conditions which legislators deem desirable and salu- 
 
112 SOCIAL STRUGGLES. 
 
 tary, and this organization can only be effected by the con- 
 sent and co-operation of the ruling class in society. The 
 rule and domination of this class may arise either from 
 their superior numbers, from their superior intelligence and 
 power, or from both causes combined. But legislation 
 always implies some degree of control over the forces of 
 society, else the Legislature would not exist. 
 
 We are forced to admit that the labor of a single indi- 
 vidual can create conditions, and thereby create value. It is 
 also apparent that a few men may combine together, may 
 organize a company, and by this means create a condition 
 which will create value. 
 
 Suppose a hundred industrious and thrifty families form 
 an association, and buy ten thousand acres of wild land. 
 This land is fertile, well supplied with water and timber, 
 and has on it coal which can be mined with a moderate 
 amount of labor; but, in consequence of a lack of popula- 
 tion in its neighborhood, the value of the land is estimated 
 at only two dollars per acre. As soon, however, as this col- 
 ony of emigrants have perfected their title, the land is en- 
 hanced in value. A .still greater rise in its value occurs as 
 soon as the hundred families have arrived on the spot and 
 staked out their respective portions of the land. This 
 is simply because the land is thereby placed under different 
 conditions from what it was before. 
 
 If the organization of a sviall portion of a nation can cre- 
 ate conditions and value, it is certain that the organization 
 of the ivhole nation for a definite purpose can also create 
 conditions and value. Legislation is a mode of organizing 
 the people who are subject to the laws enacted. By the 
 labors of a legislature the thoughts and conduct of a whole 
 nation are placed under new conditions. As an inevitable 
 consequence, the national efforts produce different results 
 from what they would if those new conditions had not been 
 created by law. Legislation, therefore, either for good or 
 for evil, is the most potent of all social forces. This is nec- 
 essarily so, because legislation is the expression of the senti- 
 ments of the dominant class of society. Legislation is one 
 
HUMAN CAPABILITIES ARE LIMITED. 
 
 113 
 
 of the great educators of the people ; it organizes and com- 
 bines a considerable number of human tendencies and de- 
 sires, and thereby converts them into auxiliaries of statute 
 law. 
 
 POWER OF LEGISLATION IS LIMITED. 
 
 It is undeniably true that legislation is not omnipotent. 
 Like all other human agencies its powers are limited, but 
 this does not show that it has no power at all. No one 
 claims that legislation can either subvert or create a natural 
 law. Legislation exerts influence, not by opposing natural 
 laws, but by creating new conditions under which latent 
 forces come into play, and by which natural laws operate in 
 different ways, because they are giving direction to differ- 
 ent forces. When a farmer plows a field, he does not 
 subvert existing, nor create new natural laws. He simply 
 changes the conditions under which the sun, rain, air and 
 kindred forces will have an effect on the earth. He 
 changes the relation of things ; he changes the conditions 
 under which natural laws shall work. Legislation influences 
 society just as a farnic}' does his fields : it creates nciv condi- 
 tions under which social laivs and forces luork ont different 
 results. 
 
 THE LAWS OF TRADE. 
 
 We are frequently told that " legislation has nothing 
 whatever to do with finance ; " that all such thingrs are 
 governed by the " laws of trade." Many credit this state- 
 ment, and anarchists give credence to the kindred assertion 
 that " legislation has little or no influence on anything," 
 except for evil ; that the best way would be to " abolish all 
 laws and let everything take its natural course." Recently, 
 an event occurred in the streets of this city which demon- 
 strated in a striking manner the folly of such doctrines. A 
 street parade of colored men took place. Before them 
 marched a platoon of white policemen, and in the proces- 
 sion were four bands of music, three of which were entirelv 
 composed of white men. Such a thing would have been 
 
jj. SOCIAL STRUGGLES. 
 
 impossible thirty years ago. The poHcemen would then 
 have refused to march, and the musicians would have re- 
 fused to play in company with " niggers." We should 
 then have heard the old story that it was " contrary to nat- 
 ural law for blacks and whites to associate except in the re- 
 lation of slaves and masters." But law has converted these 
 once despised black men into citizens, with the right to 
 vote and hold office. The possibility of the aforesaid event 
 has been largely wrought by changes in legislation, which 
 have produced changes in public sentiment. What are 
 called the " laws of trade " are merely the phenomena ex- 
 hibited by human society under existing conditions, and 
 one of the most potent of these conditions is the legislation 
 then, and for some time previously, in force. Change the 
 legislation and the so- e ailed " lazvs of trade " also change to a 
 greater or less extent. 
 
 AN ABSURD QUESTION. 
 
 Many of those who hold that legislation has no influence 
 on values appear to imagine all opposition to their favorite 
 dogma crushed by asking one question : " If value and 
 money can be created by legislation, why not create an un- 
 limited amount of them in that way and no longer levy 
 taxes for the support of the Government ? " 
 
 This absurd question would deserve no serious answer 
 were it not for the fact that many persons in high positions 
 think it a conclusive argument. The solitary judge of the 
 United States Supreme Court who differed from the rest 
 of his associates on the question of the constitutional power 
 of Congress to issue legal-tender paper money in time of 
 peace, seems to have based his opinion on the idea that 
 the aforesaid inquiry conclusively settled the matter. 
 
 This question reminds us of the story of a man who did 
 his cooking by an open fire-place. When told that half his 
 fuel could be saved by using a cook-stove, he replied that 
 such a statement must be false ; because, if half the fuel 
 could be saved with one stove, two stoves would enable him 
 to save it all and cook without any fuel whatever. 
 
FOOLISH QUESTIONS. I j 5 
 
 A number of kindred questions could be asked, each one 
 as absurcf as tlie one aioresafd. For example, we might in- 
 quire : If a good farmer can raise twenty bushels of grain 
 on an acre where only five bushels once grew, why cannot 
 a still better farmer raise eighty bushels of grain on the 
 same land ? If labor create value, why not create an un- 
 limited amount of value by labor, and cease our continual 
 struggle to supply our wants? If elegant houses can be 
 created by labor, what is the use of living in poor, homely 
 houses ; why not build fine houses enough to supply the 
 whole community with them ? 
 
 HUMAN CAPACITY IS LIMITED. 
 
 All necessity for asking the foregoing questions and a 
 thousand similar ones is obviated by the exercise of a little 
 reflection and common sense. Value is created by labor, 
 but this undoubted fact does not warrant us in presuming 
 that there are no limits to the power of labor to create value. 
 Human capacities in every direction are hedged in with lim- 
 itations. Bounds are appointed that we cannot pass. The 
 production of land, and kindred results in various other de- 
 partments of industry, can be increased, but we soon reach 
 the extent to which this increase can be carried. All agree 
 that the various necessaries of life and forms of wealth can 
 be created by labor, but after toiling for thousands of years 
 mankind are now but a short remove from starvation, and 
 millions of persons are constantly in a state of poverty. 
 
 Our control over natural forces is steadily growing, and 
 we can now produce conditions which create wealth more 
 easily than ever before. But man's power to create value 
 is still so limited that if all the wealth in the world were 
 equally divided, each man would have much less than what 
 is generally thought requisite for a competence. 
 
 Legislation can create conditions and thus create value; 
 but this power, like all other human capabilities, is confined 
 within strict and narrow limits. Legislation can place 
 pieces of paper under certain conditions and thus create 
 money ; but it by no means follows that therefore legislation 
 
Il6 SOCIAL STRUGGLES. 
 
 can create an unlimited amount of money. Because a miner, 
 under some circumstances, may be able to dig one ounce of 
 gold in three days, it by no means follows that three hun- 
 dred men could dig one hundred ounces every day, and in- 
 definitely continue to do so.* 
 
 On the other hand, because the capacity of a single labor- 
 er, and the powers of a number of laborers sitting as a legis- 
 lature, to create conditions and thus create value are limited 
 by narrow and impassable boundaries, it does not therefore 
 follow that this capacity has no existence. We might as 
 well argue that because a man's powers in all other respects 
 are limited that therefore he does not actually possess any 
 powers whatever. For instance, we know that a man can- 
 not walk fifteen miles in an hour; but this does not prove 
 tliat he may not walk two or three miles in an hour. 
 
 INCONSISTENCY OF THOSE WHO DENY THAT LEGISLATION 
 CAN CREATE VALUE. 
 
 There is one curious fact in regard to the doctrine that 
 legislation cannot create value. Many persons assume that, 
 nothing depends on legislation, but that " natural laws " are 
 the sole causes which produce results. But suppose it is 
 said : " Since laws have no influence, let us repeal all exist- 
 ing laws, and among other things let us withdraw legal sup- 
 port to the value of gold, and legal power to collect debt," 
 
 Immediately a violent objection is made to the destruc- 
 tion of what a moment before was pronounced of no influ- 
 ence. But if law have no effect, why should persons who so 
 believe object to the repeal of laws ? 
 
 This inconsistency is chiefly due to two causes: First. 
 Profound ignorance of the nature of value and the causes 
 which produce it. Second. Personal contentment and sat- 
 isfaction with the results which long-existing laws have 
 helped to produce. The few men who own most of the land 
 in England are quite satisfied with the laws which uphold 
 
 * If that were the case, and the product of gold mines could be increased 
 by human labor and ingenuity proportionately to all other products, gold 
 would maintain a more uniform value than it now does. 
 
 I 
 
THE FRACTIONAL PAPER MONEY. 
 
 117 
 
 their title to it. All over the world, the great majority of 
 those whom the present order of things has placed in opu- 
 lent circumstances are averse to change. " So long as we 
 are comfortably situated why hazard the result of a change ? " 
 Those in favor of the " let alone " doctrine are chiefly those 
 who now possess more than their equitable share of the 
 world's wealth. They do not wish any inquiry made into 
 the rightfulness of the means whereby their possessions 
 were acquired, for fear that such an examination might re- 
 sult in laws which would diminish their wealth. Hence, in 
 every country and age a majority of the wealthy classes 
 have always instinctively resisted every movement, the di- 
 rect or indirect object of which was to impartially ascertain 
 and make public the justice of existing laws. 
 
 HISTORICAL EXAMPLE OF THE CREATION OF VALUE BY 
 LEGISLATION. 
 
 The power of a legislature to create value, and the limita- 
 tion of that power, are both exemplified by the act passed 
 by Congress, March 3, 1863. Prior to that time, silver coins 
 had disappeared from circulation, and a want of fractional 
 money existed. That act authorized the issue of fifty mill- 
 ions of paper money, in form of fractions of a dollar, and 
 allowed the holders of those fractions to return them to the 
 Treasury and receive dollars therefor whenever they chose 
 to do so. 
 
 Said act placed pieces of paper, which previously were 
 worth only a few cents per pound, under conditions which 
 enabled them to supply a want, viz., the need of fractional 
 money. The result was that a large value was conferred 
 on those pieces of paper. The extent to which this value 
 could be conferred was shown by the extent to which a de- 
 mand for such fractional money existed. Although fifty 
 million dollars were legalized, that amount was never issued ; 
 the demand proved to be for about forty-five millions, by 
 the fact that all issues above that sum were promptly re- 
 turned to the Treasury as not needed. 
 
 If the fractional paper money had not been convertible 
 
Il8 SOCIAL STRUGGLES. 
 
 into greenbacks, it would have fallen below the value of 
 greenbacks whenever more than the amount actually needed 
 by the people was issued. As water never rises higher than 
 the dam which retains it, the value of the fractional money 
 kept constantly on a level with the value of the greenback. 
 As it was, whenever there was a surplus of fractional paper 
 money, the excess ran over the dam and was changed into 
 whole dollars. 
 
 Under the delusion that this fractional paper money had 
 no value beyond its worth for paper rags, the Government 
 largely increased the interest-bearing public debt for the 
 purpose of buying silver bullion. The fractional paper 
 money was destroyed, and replaced by silver coins, which it 
 was imagined would perform functions that the fractional 
 paper money had failed to execute. The country was per- 
 suaded by so-called " financiers " that if the people only 
 had silver coins they would have a " measure of value," and 
 then it would be easy to go out shopping and always get 
 the exact amount of value that was parted with. 
 
 But experience has demonstrated that the silver coins are 
 no more valuable to the community than the fractional paper 
 money was. This is so, simply because the coins fill the 
 same office that was previously filled by the paper money. 
 The coins are exchangeable for greenbacks, and the paper 
 fractions were also exchangeable for greenbacks. As a thing 
 is worth what it can be equally exchanged for, it follows 
 that the worth of a greenback determines the value of the 
 thing given for a greenback. The silver coins are now worth 
 as much as gold for the same reason that the greenback is. 
 If the fractional paper money had not been destroyed, it 
 would also have been worth the same as gold. 
 
 Since experience has shown that the denunciations of the 
 fractional paper money were not founded in reason, but on 
 crude theories and ignorant prejudice, the Government could 
 do no more popular act than to issue twenty-five millions 
 of paper dollars in form of one-half and one-quarter dollar 
 notes. 
 
HOW WE A'lVOW A THING IS VALUABLE. 
 
 EVIDENCES THAT A THING IS VALUABLE. 
 
 119 
 
 It Ivas been said that " the fractional paper money had an 
 exchangeable value, but no real intrinsic value." This state- 
 ment illustrates the popular confusion in regard to the nature 
 of value and how it is created and constituted. 
 
 Whatever is exchangeable equally for things which all 
 concede have a " real value " is itself possessed of a " real 
 value ; " else why should persons give valuable things in ex- 
 change for it ? Whatever supplies a want and performs a 
 duty or function is just as valuable, for that purpose, as it 
 would be if made of different and more costly materials. A 
 brass baggage check is just as valuable, as a baggage check, 
 as it would be if made of silver. It is true that the silver 
 check would be more valuable than the brass check for melt- 
 ing and using for some other purpose. But this fact does not 
 affect its value as a baggage check. Fractional paper money 
 was valuable because it supplied the need of a medium of 
 exchange. As it performed a valuable service, it had pre- 
 cisely the same value for that purpose as the silver coins 
 which now perform the same service. 
 
 Fractional paper money is far more convenient to use than 
 silver coins. The objection to it on the ground that dirty 
 bills were sometimes in circulation could be obviated by mak- 
 ing all the principal post-of^ces agencies for exchanging 
 new for worn bills. 
 
 All difficulty of seeing clearly why the fractional paper 
 money was just as valuable as silver coins disappears when- 
 ever the nature of value is properly considered. 
 
 Tivo different materials have the same value so long as they 
 are under the sajne conditions, supply the same zuant, and per- 
 form the same duty. 
 
 Mahogany is a valuable timber for conversion into furni- 
 ture ; but if used for piles driven into the mud to rest build- 
 ings on it is no more valuable than yellow pine. A rose- 
 wood scavenger cart would be no more valuable than a cart 
 made of less valuable timber. The value of a plow depends 
 on its ease of draft and the thoroughness with which it per- 
 
I20 
 
 SOCIAL STRUGGLES. 
 
 forms its work. Its value as a plow would not be increased 
 by trimnning it with gold or silver. The value of a thing for 
 a particular purpose does not depend solely on its value for 
 other purposes. Thus gold is far more valuable than steel 
 for filling decayed teeth ; but for the spring of a chronome- 
 ter watch, steel is more valuable than gold. Copper is worth 
 more per pound than iron and steel, but many valuable iron 
 and steel tools would be worthless for their special purpose 
 if made of copper. 
 
 The value of a tool of any kind does not depend on its 
 materials, size, form, color or any other quality but one ; viz., 
 fitness to perform the work to be done with it. When a tool 
 meets the conditions required it supplies a want, and its 
 value for that purpose depends solely on the completeness 
 with which the existing conditions are filled by its use. 
 
 VALUE OF A man's SERVICES. 
 
 What is true of things is also true of persons. A man's 
 value to society depends on his fitness for the peculiar 
 duties he performs, and not on the fact that it would be 
 possible for him to perform more important and valuable 
 labor. Neither Bismarck nor Gladstone would be of any 
 more value to their respective countries than ordinary coal 
 heavers, if they did nothing but shovel coal. No matter 
 what office a man has latent capacity to honorably occupy, 
 his value to society is measured by the duties he actually 
 performs. When his abilities are discovered, and his po- 
 sition correspondingly changed, then his importance to his 
 fellows and the value of his services are proportionately in- 
 creased. This recognition of a particular person's value to 
 the community for some special purpose or duty may not 
 occur until a late period of his life, and in a vast number of 
 cases it never occurs. Such events are a loss to society — 
 the relation between the individual and others is not the cor- 
 rect one. The proper conditions never occur, and a large 
 amount of valuable ability is wasted. Meanwhile some infe- 
 rior and incompetent person is placed in a situation where his 
 services are comparatively useless because of inability to 
 
EFFECT OF LA TV ON PERSONAL SEE VICES. \ 2 I 
 
 properly discharge his duties. Such spectacles are continu- 
 ally before us, and show that the value of personal services, 
 like the value of other things, is determined by the circum- 
 stances and conditions under which those services are placed, 
 Circumstances may enhance the value of a man's services or 
 they may diminish or destroy their value. 
 
 LEGISLATION MAY CHANGE THE VALUE OF A PERSON'S 
 
 SERVICES. 
 
 Legislation enhances the value of men's services to society 
 when procedures are framed into statutes which tend to fill 
 offices and positions with those best adapted for them. An 
 example of this is seen in the laws of nations, which are 
 made with special reference to filling special places with 
 men of special ability for those places. 
 
 When a system of laws is enacted which tends to place in- 
 competent men in office, the value of a considerable num- 
 ber of persons' services is diminished to society. There is 
 then more probability that those in public service will not 
 each be placed under the most favorable conditions to de- 
 velop his full value to the community. More men will be 
 in either too high or too low places than under better laws. 
 
 Legislation may also indirectly enhance the value of the 
 services to society of certain persons by putting in opera- 
 tion means for their education. The Military Academy at 
 West Point is an illustration of this. Boys are trained to 
 perform special duties. This knowledge confers a special 
 value on their services to the nation when they become men. 
 Without the sanction and support of law, West Point would 
 never have existed. 
 
 HISTORICAL LEGISLATION WHICH AFFECTED VALUES. 
 
 Since July 17, 1861, the United States Government has 
 made several financial experiments on a large scale which 
 illustrate the effect of legislation on the value of mone}-. 
 By acts of July 17 and August 5, 1861, and February 12, 
 1862, Congress authorized the issue of sixty millions of Treas- 
 ury notes. As first issued these notes were not a legal ten- 
 
122 SOCIAL STRUGGLES. 
 
 der, except for Government dues. But as they could be 
 used in making all payments to the Government, they went 
 into general circulation, by common consent, as a medium of 
 exchange. By act of March 17, 1862, these notes were 
 made a legal tender for all purposes except payment of in- 
 terest on the national debt. 
 
 This sixty millions of dollars were received by the Govern- 
 ment for all purposes at par with coin. The result was that 
 while other kinds of paper money were quoted below the 
 par of coin, these notes, throughout the entire period of 
 their existence, remained at the same value as coin. This 
 arose from the fact that the pieces of comparatively worth- 
 less paper which composed them were placed under condi- 
 tions similar to the conditions surrounding coin. Their 
 amount was limited, and they were legal tender for nearly 
 all purposes. 
 
 Having thus seen the results which certain conditions 
 produced on one kind of paper money, let us consider the 
 history of an issue of paper money which was legally placed 
 under conditions widely different from the sixty millions 
 aforesaid. 
 
 Toward the close of December, 1861, specie payments 
 were suspended. Bank-notes, nominally convertible into 
 coin, on demand, shared the fate which invariably occurs 
 whenever national distress causes a serious attempt to ex- 
 change such notes for coin. The " honest money " did as 
 history tells us it has always done under similar circum- 
 stances ; it failed. In the beginning of 1862, after a long 
 debate. Congress came to the conclusion that national bank- 
 ruptcy was impending, and that it would be impossible to 
 carry on the war under the existing system of finance. On 
 February 25, 1862, the famous Legal Tender Act was 
 passed. That act authorized the issue of one hundred and 
 fifty millions of the paper money, since known as green- 
 backs, and also authorized the issue of five hundred millions 
 of the, so-called, five-twenty Government bonds. 
 
 As the legal-tender act first passed the House of Repre- 
 sentatives, the greenbacks were a full legal tender for all 
 
THE CREATION OF GREENBACKS. 
 
 123 
 
 purposes whatsoever. This action profoundly aroused and 
 alarmed the majority of the great money-lenders. A large 
 lobby, composed of representatives of many rich individuals 
 and corporations, then appeared before the finance com- 
 mittee of the Senate, and threatened that most of the capi- 
 talists and leading financial institutions of the country 
 would refuse to aid the Government with money to carry on 
 the war ;— would refuse to buy the Government bonds, un- 
 less the greenbacks were shorn of the legal capacity of pay- 
 ing the interest on the bonds. Payment of the interest of 
 the public debt in coin entailed some provision whereby 
 the Government could obtain coin for that purpose. After 
 some consideration, the lobby decided to insist that the 
 custom, duties should be specially mortgaged for the pur- 
 pose of obtaining the requisite coin to pay the interest on 
 the national debt. Thus the demands of the lobby con- 
 cluded by requiring that the greenbacks should be placed 
 under adverse and discredited conditions in two important 
 respects, instead of the one first suggested. One false step 
 necessitated another. 
 
 A conference committee was appointed by the Senate 
 and the House. The majority of the members of that 
 committee were alarmed by the arguments and threats of 
 the bankers and capitalists. Most of them had no clear 
 and definite conception of financial principles, and shared 
 the common delusion that the financial wishes and demands 
 of bankers were presumptively both expedient and just. 
 Therefore this committee voted to recommend that the 
 interest on the bonds should be paid in coin, and they also 
 agreed that the Government should refuse to receive its 
 own notes at the Custom House. Thaddeus Stevens, the 
 Republican leader of the House, was a member of that 
 committee and foresaw t'he evil which would inevitably be 
 inflicted on the nation by such legislation. As a means of 
 calling attention to its want of equity, he made an effort 
 to have the soldiers fare the same as the bondholders, so 
 far as a payment of the soldier's wages in coin would equal- 
 ize the war burdens borne by those who fought and those 
 
124 
 
 SOCIAL STRUGGLES. 
 
 who remained safely at home and loaned money at high 
 rates of interest. 
 
 But the lobby dictated that the soldier should be paid in 
 paper money which was dishonored by its maker, and pro- 
 claimed as not good enough to pay the interest due the 
 bondholders. 
 
 On the national statute books it was virtually written : 
 " The rights of men who peril and give their health and 
 lives in defense of the country are secondary to the rights 
 of those who lend the Government money. Capital is more 
 sacred than human life. The Nation has a right to con- 
 script and compel men who are not rich enough to hire sub- 
 stitutes, to suffer the privations, disease and death of the 
 camp, the march and the battle field ; but there is no right, 
 by any means whatsoever, to compel a man to lend money 
 for the support of the laws which protect his property. 
 Pensions for injuries received in the field can be justly paid 
 with money which is not fit to pay interest with." 
 
 Every greenback daily tells the story of this outrage on 
 humanity. On its back is inscribed : " This note is a legal 
 tender at its face value for all d&his, public and private, ex- 
 cept duties on customs and interest on the public debt!' 
 
 This policy discredited the greenback — deprived it of two 
 functions which it ought to have filled, and by increasing 
 the demand for coin increased the value of coin, and thus 
 put it in the power of foreign capitalists to obtain possession 
 of our bonds for less value than they otherwise would have 
 been obliged to pay for them. The action aforesaid of the 
 lobby placed a sickle in the hands of bankers and foreigners, 
 who reaped a rich harvest by dealing in United States 
 bonds. 
 
 The mistake and the wrong of this measure was not 
 merely in refusing to pay the soldiers in coin. All persons 
 should have good money. The evil lay in issuing money 
 crippled with conditions which diminished its uses, and con 
 sequently diminished its value. 
 
 It has been said that the depreciation of the greenbacks 
 was due solely to the issue of so large an amount of them. 
 
WHAT DEPRECIATED THE GREENBACKS. 
 
 125 
 
 The first greenback was issued March 10, 1862. Before 
 that time coin had risen to 104^ per cent. This shows 
 that the greenbacks were depreciated before a single one of 
 them was printed. Had the greenback been made a full 
 legal tender, there is no reason to suppose that the premium 
 on coin, even in the darkest days of the war, would have 
 exceeded ten per cent. As it was, this premium went so 
 high that coin was quoted at one time at 285. On that 
 same day, the first issue of notes which were a legal tender at 
 the Custom House were quoted at par with coin. 
 
 EFFECT OF THE AFORESAID LAW. 
 
 This depreciation of the greenback encouraged those en- 
 gaged in rebellion against the Government ; increased the 
 chances of a foreign intervention, which would have de- 
 stroyed the national unity ; and thus not only prolonged 
 the war but largely added to the cost of every day of its 
 continuance. It is now apparent that the great difference 
 in value between the greenback and the first issue of treas- 
 ury notes was due to the different legal relations and condi- 
 tions borne by those different kinds of paper money. 
 
 WHAT MADE THE AFORESAID LAW POSSIBLE. 
 
 The mistake of not receiving the greenbacks for custom 
 duties chiefly arose from the prevalent and curious error of 
 supposing gold exempt from the influence of natural laws. 
 Every one knows that an increased demand for real estate 
 raises its price, and that a diminished demand produces a 
 fall in its value. But we acted on the theory that the price 
 of gold is not affected by the causes which change the 
 prices of all other things. By making coin the sole legal 
 tender at the Custom House, we increased the demand for 
 it ; this raised its price just as an increased demand for silk 
 would raise the price of silk. Refusal to receive the green- 
 backs diminished the demand for them ; just as a diminished 
 use for fine horses would lessen the demand for fine horses. 
 
126 SOCIAL STRUGGLES. 
 
 A PLEA IN DEFENSE OF THE MONEY LENDERS. 
 
 OiTe extenuating plea, however, should be entered in de- 
 fense of the aforesaid traitorous and selfish conduct of the 
 lobby of capitalists. Its members, taught by false works on 
 political economy, were to a considerable extent under the 
 delusion that gold and silver possess a mysterious intrinsic 
 value which cannot be affected by legislation. Therefore 
 they did not see that legislation which increased the demand 
 for coin would inevitably increase the value of coin. Fur- 
 thermore, they believed that legislation could not create 
 value, and therefore they failed to see that the national need 
 of a medium of exchange could be supplied by placing 
 pieces of paper under certain conditions : viz., making them 
 a full legal tender and limiting their amount. They sup- 
 posed that the sole value of paper money under all circum- 
 stances arose from the existing degree of probability that 
 at some future time it would be received by the Govern- 
 ment, and coin given in exchange therefor. They fancied 
 that nothing was, or could be, money but coins of gold or 
 silver. Ignorant of the fact that the value of all things is 
 solely the product and result of conditions, they naturally 
 failed to recognize that the value of the greenback would be 
 adversely affected if that kind of money were placed under 
 adverse conditions by the national Legislature. 
 
 Tremendous evils flowed from incorporating these errors 
 into statute law. This exemplifies the necessity of exam- 
 ining fundamental doctrines before believing them. We 
 should be sure our foundation is solid before we begin to 
 build upon it. 
 
 EFFECT OF OTHER LECxISLATION ON PAPER MONEY. 
 
 We have heretofore found that the adverse conditions 
 under which Congress placed the greenback at the time of 
 its birth were created to satisfy the demands of the bankers. 
 Those persons for a long time had enjoyed the legal privi- 
 lege of issuing their own notes and putting them in circu- 
 lation as money at great inconvenience, expense and loss 
 
LIVING BY THE LABOR OF OTHERS. 1 27 
 
 to the public, and at considerable profit to themselves. 
 They instinctively recognized the proposition to issue na- 
 tional paper money as an entering wedge which, if not de- 
 feated or neutralized, would eventually destroy their an- 
 cient legal right to levy tribute on the people. This trib- 
 ute was laid and collected in the form of interest on the 
 paper money issued, and in the profits made by buying such 
 paper money at large discounts at places remote from where 
 it was nominally convertible into coin. 
 
 BANKERS' SCHEMES. 
 
 All human experience teaches that persons who have 
 once lived on the toil of others are usually very reluctant 
 to abandon such an easy means of support. Over twenty- 
 four years have elapsed since the Legal Tender Act was 
 framed. From that day to the present time the bankers 
 have been continually plotting and contriving some way or 
 means to prevent the issue of national legal-tender paper 
 money. This opposition to the greenback is carried on 
 under the pretense that it is contrary to " financial science " 
 for a government to issue paper money. The actual rea- 
 son is not only a desire of the bankers to issue their own 
 notes as money, and receive interest thereon, but also the 
 fact that by destroying the greenback the field for the use 
 of bank-notes would be so much enlarged thereby. More- 
 over, if all the paper money of the country were issued by 
 the bankers, those persons would have more power and 
 control over the business interests of the nation. Hence, 
 persistent efforts have been made to place in the hands of 
 a few men the power to increase or diminish the circulat- 
 ing medium of the country in such manner as would best 
 promote the selfish interests of those few. 
 
 These schemes have been numerous, but in substance 
 have been merely various ways of attaining a common pur- 
 pose. To directl}^ suppress the greenback ; to curtail the 
 amount of them in circulation, and to surround them with 
 adverse conditions and thus diminish their usefulness and 
 thereby discredit them in public estimation, have all been 
 
128 SOCIAL STRUGGLES. 
 
 component parts of one plan. Let us in outline follow 
 the history of the greenback, and see how far these attacks 
 of its enemies have been successful. 
 
 The principal efforts made at first to prevent the passage 
 of the Legal Tender Act were made by arguments intended 
 to show that it would disrupt the nation and array all capi- 
 talists against the Government. It was argued that Con- 
 gress had no constitutional power to enact such a law, and 
 that even if such power existed, making paper money a 
 legal tender was contrary to " natural laws " and would 
 therefore be a useless and inoperative incumbrance on the 
 statute books. These and kindred arguments had but 
 little effect. 
 
 Failing to directly prevent the issue of legal-tender paper 
 money its opponents then tried to indirectly prevent it by 
 a limitation of its legal-tender qualities. As heretofore 
 shown, this attempt succeeded. Greenbacks were deprived 
 of the legal power to be used in. payment of custom duties 
 and interest on the Government bonds. 
 
 Human aversion to new things is shown by the fact that 
 before the greenbacks appeared a large number of persons 
 wondered if they really could be used as money. The 
 New York bankers were hostile to them. But they passed 
 freely into circulation, and their superiority over the exist- 
 ing State bank-notes was soon recognized. It was observed 
 that the danger of their being counterfeited was much less ; 
 and that, unlike the old kind of paper money, they could 
 be taken from State to State and passed without question. 
 
 NATIONAL BANK ACT. 
 
 The bankers saw that the people approved of the green- 
 backs and preferred them to the issues of State banks. 
 They also saw that the circulation of the greenbacks had 
 struck a' fatal blow at paper money issued under State au- 
 thority. 
 
 They concluded that the most feasible way to retain 
 their profitable privilege was to obtain the right to issue 
 paper money under national, instead of State authority. 
 
SUCCESS OF BAxYA'ERS' SCHEMES. 
 
 129 
 
 Conferences were held, and the final result was that on the 
 3d of June, 1864, the National Bank Act was passed. 
 
 That act will doubtless appear to future generations as an 
 amazing exhibition of effrontery on the part of those who 
 asked for its passage, and of folly in those who enacted it. 
 It is a long document but its essence is brief. The Govern- 
 ment said to the bankers : " Organize as national bankers 
 under this act ; for every thousand dollars which you lend 
 me at six per cent, per annum, I will lend you nine hun- 
 dred dollars at one per cent, per annum." 
 
 Instead of issuing paper money directly to the people 
 with little expense in form of greenbacks, without interest, 
 it created an expensive machinery for indirectly issuing 
 paper money through the hands of bankers. The bankers 
 took the money borrowed of the Government at one per 
 cent, per annum and loaned it to the people at high rates 
 of interest. The issue of national bank-notes inflated the 
 currency and thus diminished the value of every greenback 
 in circulation. It should be borne in mind that every na- 
 tional bank-note inflated the currency as much as so many 
 greenbacks would have done, and that a greater total of 
 paper money was issued toward the close of the war than 
 would have been had it not been swollen by the national 
 bank issues. 
 
 In effect, the National Bank Act was a partially success- 
 ful attack on the greenback. By its passage the bankers 
 attained three objects : First. They curtailed the amount 
 of the greenbacks and thus left a wider field for the use of 
 national bank-notes. Second. They came into posses- 
 sion of the value created by the law which authorized the 
 national bank-notes. This value is broader, and therefore 
 greater, than it is possible for State authority to confer on 
 paper money. Third. They practically retained their legal 
 opportunity to levy a tax on the people without giving any 
 adequate return therefor. Every dollar of interest which 
 has been paid on national bank-notes is so much money 
 stolen from the people under forms of law, from the simple 
 9 
 
130 
 
 SOCIAL STRUGGLES. 
 
 fact that for every bank-note ivith interest, a greenback 
 without interest might have been substituted. 
 
 SUBTERFUGES. 
 
 Recently the progress made in the reduction of the nom- 
 inal amount of the national debt, and the great fall in the 
 nominal rates of interest paid by the Government, have 
 greatly diminished the profits of the national banks and 
 caused a diminution in their circulation. With the extinction 
 of the national debt they see an extinction of their opportu- 
 nity to issue paper money. Accordingly, each bankers" 
 convention brings to light some new subterfuge where- 
 by its members hope to continue to get money without 
 giving an equivalent therefor. 
 
 As an instructive means of illustrating the effect of 
 legislation on value, we have briefly sketched the history of 
 the greenback down to the passage of the National Bank 
 Act. We found that said act created, for the benefit of 
 bankers, value which justly belonged to the whole people. 
 The national bankers, by lending the people in form of 
 national bank-notes the value created by the people's law- 
 makers, have received a large amount of interest. This in- 
 terest has been paid by the people on value created by their 
 own laws, and properly belonging to themselves. 
 
 WHY NATIONAL BANK-NOTES HAVE NOT BEEN DESTROYED. 
 
 Why has not the intelligence of the American people, en- 
 larged by the discussion which has occurred since 1864, abol- 
 ished the national bank-notes and replaced them with 
 greenbacks ? 
 
 Three causes have combined to prevent such a desirable 
 thing as the extinction of all kinds of paper money but that 
 directly issued by the nation : 
 
 First. 'Bad in principle as the National Bank Act is, in 
 fact it is a far less evil than the old system of State banks. 
 This is simply because the paper money of national banks 
 is placed under better and more uniform conditions than 
 the paper money of the State banks was. Instead of look- 
 
BORROWING MONEY AT ONE PER CENT. PER ANNUM. 131 
 
 ing forward to see how feasible a still further improvement 
 of their currency is, the people have been looking backward 
 and rejoicing over the evils from which they have escaped. 
 
 Second. The public press of the large cities has been 
 chiefly printed in the interest of the national banks, and 
 has not fairly presented the facts to their readers. 
 
 The amount of tax paid by the national bankers has 
 been constantly recited as an all-sufficient reason why spe- 
 cial privileges should be granted to that class of persons. 
 But, on the same principle, the farmers of the country 
 could gather statistics showing the amount of tax which 
 they pay, and thereupon claim privileges not enjoyed by 
 other citizens. 
 
 Third. Congress and the national administration, from 
 the close of the war to the present day, with a few excep- 
 tional acts, have steadily exerted their influence in favor of 
 the national bankers and others of the wealthier classes of 
 society. 
 
 ATTACKS ON THE GREENBACKS. 
 
 As heretofore stated, the opponents of the greenback 
 sought to prevent the enactment of the legal-tender act by 
 urging the unconstitutionality of such a law. Soon after its 
 passage, measures were taken to bring the law before the 
 United States Supreme Court, in the hope that said tri- 
 bunal would declare Congress to have no right in time of 
 war to make paper money a legal tender. But a series of 
 decisions which affirmed the right of Congress in time of 
 war to issue legal-tender paper money destroyed the fond 
 anticipations of those who denied the existence of such 
 a power, and, at the same time, claimed that no value 
 whatever could thereby be created if it were exercised. 
 
 Finally, it was set forth with great positiveness that 
 a though it might be constitutional in time of war to issue 
 paper money and make it a legal tender, yet it was 
 clearly unconstitutional to issue paper money as a legal 
 tender in time of peace. The slowness with which events 
 occur in this world is shown by the fact that over twenty 
 
J 22 SOCIAL STRUGGLES. 
 
 years elapsed after the passage of the Legal Tender Act 
 before its legaHty was finally passed on by the Supreme 
 Court. A full bench, with only one dissenting voice, 
 afifirmed the constitutional right of Congress at any 
 time to issue paper money and make it a legal tender. 
 
 The judge who dissented from the views of his associates 
 apparently based his opinion on the hypothesis that leg- 
 islation cannot create value, because, if that were so, an 
 unlimited amount of value could be created by law. 
 
 This learned judge should also have told us thkt it 
 was impossible for a man to swim, — because if he could 
 swim there was nothing to prevent him from swimming 
 across the Atlantic Ocean. He should have considered 
 that if legislation cannot create value the greenbacks have 
 always been worthless, and therefore no decision of the 
 Suprerne Court could lessen their value. 
 
 The aforesaid decisions of the Supreme Court by re- 
 moving all doubt of their legality have placed the green- 
 backs on a more assured foundation, and thereby fortified 
 their value. Soon after the last named decision was made, 
 Senator Bayard, the present Secretary of State, proposed to 
 amend the constitution so as to prevent the issue of legal- 
 tender paper money. But this proposal, except by the 
 friends of the banking interest, was received with derision 
 as a device to mold the supreme law of the land in the 
 interest of the bankers. 
 
 THE FIVE-TWENTY BONDS. 
 
 As heretofore seen, the lobby who went to Washington 
 in 1862 to effect a change in the Legal Tender Act con- 
 fined themselves to procuring two limitations, which every 
 one can now see on the back of each greenback. " This 
 note is a legal tender at its face value for all debts, public 
 and private, except duties on customs and interest on 
 tJie public debt."' Nothing is included in the " except " but 
 custom duties and interest on the public debt. The 
 principal was clearly payable in greenbacks. John Sher- 
 man said so, and he denounced any man who should 
 
WHAT WAS THOUGHT I]V 1862. 
 
 133 
 
 ask to be paid otherwise as a " Shylock." Similar views 
 were expressed by Benjamin Wade, Oliver P. Morton, 
 Thaddeus Stevens, and other leaders of the Republican 
 party who participated in the creation of the Legal Tender 
 Act. 
 
 The bonds issued under authority of this act were six 
 per cent, bonds, and were known as " five-twenties." 
 
 In March, 1864, Congress supposed that money could 
 be borrowed at five per cent, if bonds were issued more 
 satisfactory to the capitalists than the five-twenty six per 
 cent, bonds. Accordingly, the "ten-forty" bonds were 
 issued. These bonds bore five per cent, interest in coin, 
 and, in compensation for the reduction of interest, the prin- 
 cipal was expressly made payable in coin. At the passage 
 of that act, coin was at a premium of 160 and was soon quoted 
 at over 200. The difference of interest between the five and 
 the six per cent, bonds was therefore about two per cent. 
 in greenbacks, and for this reason a comparatively small 
 amount of these bonds was issued. The great bulk of 
 the debt became composed of the so-called five-twenty 
 six per cent, bonds, with interest payable in coin and the 
 principal payable in greenbacks. 
 
 On the first day of May, 1865, although the war had 
 terminated, and the future tranquillity and prosperity of 
 the nation were assured, coin was quoted at 145. The 
 greenbacks, crippled by legal disability to pay custom 
 duties and interest on the public debt, were at a discount. 
 
 The holders of the six per cent, bonds and of the seven- 
 thirty bonds, which were convertible into five-twenties at 
 maturity, saw that they had made a thrifty bargain with 
 the Government. They w^ere entitled to six per cent, in- 
 terest in coin, which was equivalent to about eight per cent, 
 in greenbacks ; and their bonds were exempt from State or 
 municipal taxation. 
 
 DIFFICULTY OF SATISFYING AVARICE. 
 
 But the pleasure .of the leading holders of bonds was 
 sadly marred by the reflection that although they had 
 
134 
 
 SOCIAL STRUGGLES. 
 
 made a good bargain for themselves, a still better bargain 
 might possibly have been made, in the time of the nation's 
 peril and distress, if they had wrongly thought far enough 
 and had assurance enough to have availed themselves of 
 the opportunity to make a harder bargain with the Govern- 
 ment, At the time of the framing of the law creating the 
 six per cent, bonds, they were satisfied with its provisions. 
 But of all the passions, avarice is most rarely satisfied. 
 Other passions may often be allayed by gratification, but 
 avarice usually grows more unsatiable in proportion as it is 
 supplied with food. 
 
 A HYPOCRITICAL PRETENSE. 
 
 After conferring with each other, and considering the 
 best means of placing the country under still greater tribute 
 to them, the bondholders concluded to pretend and insist 
 that the bargain which they now regretted not making had 
 actually been made. In consideration of receiving six per 
 cent, interest in coin, and of having the custom duties 
 mortgaged to secure such interest, they had agreed that the 
 principal of the bonds should be paid in greenbacks. But 
 this agreement they now repudiated, and, instead thereof, 
 demanded that the written and well understood bargain 
 should be so changed as to make the bonds payable in coin. 
 
 PROCLIVITY OF MANKIND TO HYPOCRISY. 
 
 Naturalists and anatomists have devoted much labor to 
 pointing out the peculiarities of physical structure, and men- 
 tal endowments and traits which distinguish man from other 
 animals. But an additional volume could be written in illus- 
 tration of the fact that among all the multitudes of animals 
 on earth man is pre-eminently the hypocritical animal. 
 Man is the only animal that commits a considerable portion 
 of the acts of his life under false pretenses. 
 
 Nations are simply aggregations of human individuals. 
 National acts are therefore human acts done on such a 
 large scale that the mental traits of the different individuals 
 are blended in a picture of the average man, whose conduct 
 
FALSE AND DELUSIVE CRIES. 
 
 135 
 
 is often more easily studied than the acts of one isolated 
 man woidd be. The history of all national crimes tells a 
 painfully monotonous story; i. c, as far as it is possible for 
 him to do so, man always commits a crime in the name of 
 some virtue. England has recently added to the thousands 
 of illustrations of this fact. She went into Africa to rob 
 tlie natives, and committed many murders in attempting it. 
 But this wretched crime was not done under its true name, 
 but under pretext of " maintaining order and extending 
 Christianity and civilization." 
 
 England has recently taken formal possession of an im- 
 mense tract of land in Southern Africa. But this robbery 
 has been committed under pretext of a desire " to benefit the 
 native tribes." France once had a war in which the com- 
 mon people had the same interest that a flock of sheep has 
 in the wrangles of two rival packs of wolves. This war, by 
 a refinement of hypocrisy, was styled " the war for the 
 public good." 
 
 A multitude of examples similar to the foregoing might 
 be cited, all tending to show that the various forms of 
 wrongs constantly being committed are almost invariably 
 given the name of some virtue by their authors. 
 
 The scheme by which the holders of United States bonds, 
 payable in greenbacks, procured legislation making them 
 payable in coin reminds us of the, long passed war for 
 " the public good." It was carried out under pretense of 
 " strengthening the public credit " and in the name of " hon- 
 esty." If the real nature of this scheme had been generally 
 known it would have been defeated ; as it was, the people 
 sanctioned it under the delusion that it was what it pre- 
 tended to be, — a measure of justice. 
 
 On the first day of August, 1865, the United States debt 
 reached its highest point, and amounted to $2,845,907,626. 
 In round numbers, by a liberal construction of their con- 
 tracts in favor of the bondholders, about one-sixth of this 
 vast sum was payable in coin ; the other five-sixths were 
 payable in greenbacks, both legally and morally. Coin 
 was then at a premium of forty-four per cent. 
 
136 SOCIAL STRUGGLES. 
 
 MEANS EMPLOYED TO PERPETRATE A CRIME, 
 
 Soon after the close of the war, the bondholders and 
 their representatives began to flood the country with state- 
 ments and arguments intended to induce the American peo- 
 ple to pay the bonds in a manner different from what had 
 been agreed upon. These pleas were numerous, but their 
 substance can be briefly stated. 
 
 " Honesty is a great virtue. Without money the Government could 
 not have carried on the war and the Union would have been divided. 
 Disunion would have been a terrible blow to the prosperity of the country. 
 The national creditors should be honored for lending money to carry on 
 the war, — their services were so great that the nation can well afford to 
 pay them, not simply according to the letter of the contract, but as 
 their merits entitle them. Let us be honest. The national debt is a 
 sacred obligation. If the bonds should be paid according to the letter 
 of the contract the public credit would be ruined ; in case of a future 
 war no one would lend the Government money, and therefore the nation 
 would be ruined. Let us be honest and pay the bonds in coin. Every 
 bond is as sacred as a soldier's grave. Honesty is the best policy." 
 
 The above sentiments were amplified into thousands of 
 articles and editorials, and millions of copies were distributed 
 throughout the country. Every one who ventured to say 
 that the rights of public creditors were neither more 
 nor less " sacred " thaji the rights of tax-payers was de- 
 nounced as " dishonest." After the discussion had pro- 
 gressed for some time it was claimed that the Government 
 had actually agreed to pay the bonds in coin. 
 
 The country was flooded with pretended statistics show- 
 ing that " the majority of the bonds were owned by poor 
 men." Toward the close of the debate several of the, so- 
 called, religious papers proclaimed with great positiveness 
 the notorious lie that the bonds had been paid for in coin, 
 and therefore should in equity be discharged in coin. In 
 a country with an extended privilege of suffrage, great 
 questions inevitably assume, sooner or later, a political 
 aspect. The first national convention which was held 
 after the close of the war for the purpose of adopting party 
 
SUCCESS OF FRAUD. 1 37 
 
 principles and nominating presidential candidates, took up 
 the question of the proper mode of paying the bonds pay- 
 able in greenbacks by the contract when the bonds were 
 issued. 
 
 The prospects of the success of the Republican party were 
 much the brightest, and the majority of the bondholders 
 belonged to that party. Hence, the Republican party was 
 chosen as the best instrument to carry out the scheme afore- 
 said. The platform of the Republican party declared : — 
 
 " That national honor requires the payment of the public indebtedness 
 in the uttermost good faith to all creditors, at home and abroad, not only 
 according to the letter, but the spirit of the laws under which it was con- 
 tracted." 
 
 The convention denounced all forms of repudiation as " a 
 national crime," and nominated Ulysses S. Grant for Presi- 
 dent. This occurred May 21, 1868. 
 
 The Democratic National Convention assembled July 4, 
 1868, and declared that : — 
 
 " When the obligations of the Government do not expressly state upon 
 their face, or the law under which they were issued does not provide, that 
 they shall be paid in coin, they ought, in right and justice, to be paid in 
 the lawful money of the United States." 
 
 Horatio Seymour was nominated for President. 
 
 WHY HORATIO SEYMOUR WAS DEFEATED. 
 
 Hundreds of millions of capital were at once arrayed 
 against the Democratic candidate, and the majority of vot- 
 ers did not understand the real issue. Besides the support 
 of the bondholders, the Republican party had the prestige, 
 of having successfully carried on the war that restored the 
 Union. Many persons believed that Horatio Seymour had 
 befriended the national enemies. The result of the election 
 was the casting of the majority of electoral votes for Ulysses 
 S. Grant. Although war issues had been the dominant feat- 
 ure of the election campaign, and the financial question had 
 not been understood, the result was interpreted as a popu- 
 lar decision in favor of paying the bonds in coin. History 
 
138 
 
 SOCIAL STRUGGLES. 
 
 again repeated itself. A false pretense deceived the people, 
 just as they have been misled from time immemorial. 
 
 On the 1 8th of March, 1869, the bonds, which all impar- 
 tial persons had no doubt were payable in greenbacks, were 
 made payable in coin by an act entitled, " An act to 
 strengthen the public credit." Coin was then quoted at 131. 
 Two months afterwards it was 142, The preamble to this 
 hypocritical law betrays the consciousness of its authors that 
 a falsehood was being stated. It begins : 
 
 " In order to remove any doubt as to the purpose of the Government to 
 discharge all just obligations to the public creditors, and to settle conflict- 
 ing questions and interpretations of the laws by virtue of which such ob- 
 ligations have been contracted." 
 
 NATIONAL CREDIT. 
 
 The credit of a nation depends not only on the ability of 
 its citizens to pay the taxes requisite to discharge all na- 
 tional obligations, but on their zvil/ingness to do so. If the 
 tax-payers, by unjust laws, are called on to pay more than 
 they really owe, they are robbed to the extent they pay 
 more than the contract called for. The inevitable tendency 
 of such unjust laws is to create a public contempt for all 
 laws. The aforesaid act should therefore have been named : 
 " An act to rob the tax-payers and thereby weaken the foun- 
 dation of public credit." For it is certain that a repetition 
 of similar acts would eventually result in a public discovery 
 of their real nature, and a repudiation of all national debts. 
 But laws which deal impartial justice to both tax-payer and 
 public creditor can safely be repeated an indefinite number 
 of times. 
 
 WHAT EXPERIENCE TEACHES. 
 
 A very considerable number of bond owners who advocated 
 the aforesaid change of contract were probably unconscious 
 of a desire to cheat the people. But, as all experience 
 shows that the most upright judge should not be trusted to 
 try a case in which he has a pecuniary interest, it is contrary 
 to public policy, and a dangerous precedent, to allow a small 
 
RESUL TS OF RASCALITY. I -,q 
 
 number of persons, whose interests are adverse to those of 
 the masses, to change an estabHshed mode of interpreting 
 contracts. 
 
 EFFECT OF ACT OF MARCH 1 8, 1 869. 
 
 Let us next consider the effect which the above described 
 legislation had on values. By preventing the use of the 
 greenbacks in payment of the five-twenty bonds, according 
 to the original agreement, it diminished the uses to which 
 the greenbacks could be put, and thereby, by placing them 
 under still further adverse conditions, struck an additional 
 blow at their value. 
 
 In fact, the said act was thus a partial repudiation of the 
 greenbacks. If they had been used according to the orig- 
 inal intent, the demand for greenbacks would have been in- 
 creased, and the demand for coin diminished. The inevita- 
 ble result would have been a relative fall in the value of 
 coin, and a corresponding rise in the value of the greenbacks. 
 
 The act of March 18, 1869, did what its authors ex- 
 pected and desired: it increased the value of the bonds 
 which previously were payable in greenbacks. This was a 
 specimen illustration of a form of legislation which unfort- 
 unately is not of rare occurrence. No new value whatever 
 was created by the said act ; it merely added value to one 
 kind of property, and subtracted value from all other kinds 
 of property. In fact, by deranging the relation of things, 
 as w'ill hereafter be more fully shown, it actually diminished 
 the total amount of value in the country. It also indirectly 
 placed an additional tax on the earnings of ev^ery laborer in 
 the country. It was simply a huge theft committed by 
 changing existing obligations into heavier burdens under 
 pretense of helping the people by "strengthening" their 
 credit. 
 
 WHEN LEGISLATION CREATES VALUE. 
 
 Legislation actually creates value only when, by supplying 
 new conditions, some industrial or commercial deficiency or 
 want is filled ; or, Avhen some latent wealth-creating force is 
 
I40 
 
 SOCIAL STRUGGLES, 
 
 thereby evoked or organized. A distinction should be care- 
 fully made between the/rw legislative acts which actually 
 create value, and the many laws which merely transfer the 
 value rightfully owned by one class of persons to another 
 class, without giving adequate compensation therefor. 
 Whenever legislators neglect to guard the rights of all classes 
 of persons with equal fidelity they fail of their duty. By 
 enacting laws which increase the value of one man's prop- 
 erty at the expense of another man, they legalize robbery 
 and repudiate their obligations to recognize the equality of 
 all men in the eyes of the law. 
 
 OTHIiR ACTS OF REPUDIATION AND DISGRACE. 
 
 We have seen that the act of March i8, 1869, was a par- 
 tial repudiation by Congress of the contract under which the 
 greenbacks were issued to the people. But this was not the 
 only act committed by men who in political convention de- 
 nounced all forms of repudiation as " a national crime." 
 The Legal Tender Act which created the greenbacks said : — 
 
 " And any holders of said United States notes depositing any sum not 
 less than fifty dollars, or some multiple of fifty dollars, with the Treas- 
 urer of the United States, or either of the assistant treasurers, shall re- 
 ceive in exchange therefor duplicate certificates of deposit, one of which 
 may be transmitted to the Secretary of the Treasury, who shall thereup- 
 on issue to the holder an equal amount of bonds of the United States, 
 coupon or registered, as may by said holder be desired, bearing interest 
 at the rate of six per centum per annum, payable semi-annually, and 
 redeemable at the pleasure of the United States after five years, and 
 payable twenty years from the date thereof." 
 
 By the foregoing clause, the United States clearly agreed 
 with the holders of certain notes therein described, to allow 
 them to fund them at their pleasure into five-twenty six per 
 cent, bonds. On the 3d of March, 1863, Congress, suppos- 
 ing that a five per cent, bond, with the principal payable in 
 coin, would be more advantageous to the Government, and 
 be considered more desirable by the people than a six per 
 cent, bond with the principal payable in greenbacks, passed 
 an act which authorized the issue of five per cent, bonds 
 with both interest and principal payable in coin. This act 
 
ACTS OF repudiation: 
 
 141 
 
 referred to the acts which authorized the greenbacks, and 
 said : 
 
 " And the holders of United States notes, issued under and by virtue of 
 said acts, shall present the same for the purpose of exchanging the same 
 for bonds, as therein provided, on or before the first of July, 1863, and 
 thereafter the right so to exchange the same shall cease and determine." 
 
 This repeal of the right to convert greenbacks into five- 
 twenty bonds was done for the purpose of inducing people 
 to convert greenbacks into the five per cent, bonds. But it 
 was a partial repudiation of the right to convert greenbacks 
 into six per cent, bonds — a right that was then inscribed on 
 the back of every greenback. It placed the greenbacks un- 
 der different conditions from those under which they were 
 issued. 
 
 The exigencies of the war, however, compelled the Gov- 
 ernment to practically resume the sale of five-twenty six per 
 cent, bonds at par in greenbacks until the close of the war. 
 But the temporary suspension of such sales had an unfavor- 
 able effect on the national finances. In fact, this was one of 
 the most serious mistakes in the conduct of the war. Water 
 never rises higher than the dam which retains it. Had the 
 convertible feature of the greenbacks remained undisturbed, 
 and had proper efforts been made, all the money needed by 
 the Government could have been obtained without the suc- 
 cessive issues of legal tenders, which were afterward deemed 
 necessary. Whenever more greenbacks were in circulation 
 than necessary, they would have been converted into bonds. 
 
 The right to convert greenbacks into five-twenty bonds 
 soon after the close of the war would have made the green- 
 backs worth as much as coin. At the time when the 
 bonds became worth their face in coin, the greenbacks 
 would have had the same value if the original contract had 
 been kept. 
 
 The Legal Tender Act of February 25, 1862, contained this 
 clause : 
 
 " And such United States notes shall be received the same as coin, at 
 their par value, in payment for any loans that may be hereafter sold or 
 negotiated by the Secretary of the Treasury." 
 
142 
 
 SOCIAL STRUGGLES. 
 
 The aforesaid clause made a contract which Congress re- 
 pudiated on the 14th of July, 1870. An act was then 
 passed authorizing the issue of five per cent., four and a 
 half per cent, and four per cent, bonds. This act provided 
 that in payment for the bonds authorized by it the out- 
 standing five-twenty bonds should be received at their face 
 value, but, instead of receiving greenbacks at their face 
 value, according to the original agreement, it said : 
 
 " The Secretary of the Treasury is hereby authorized to sell and dis- 
 pose of any of the bonds issued under this act at not less than their par 
 value in coin." 
 
 The act of July 14, 1870, was thus another repudiation 
 of the contract under which the greenbacks were issued. 
 It placed the greenbacks under still further adverse condi- 
 tions, and thereby struck another blow at their value. If 
 the greenbacks had been receivable for the bonds, the de. 
 mand for greenbacks would have been increased and the 
 demand for coin diminished. The inevitable result would 
 have been a relative fall in the value of coin, and a corre- 
 sponding rise in the value of greenbacks. 
 
 WHAT MADE THE AFORESAID WRONGS POSSIBLE. 
 
 Two things made this further repudiation of national 
 promises possible. 
 
 First. The majority of the " statesmen " who composed 
 Congress had not the faintest knowledge of the nature of 
 value or of the causes which create it. Second. Such a 
 straightforward way of doing business as the reception of 
 the greenbacks for bonds, and their consequent increase in 
 value, would not have suited the purpose of the compara- 
 tively few persons who controlled the financial policy of 
 the nation. That purpose was to reduce the wages of 
 labor, the prices of the products of labor, and the value of 
 all kinds of property except money and bonds, mortgages 
 and other evidences of claims for the payment of money. 
 
 On the 15th of July, 1875, in furtherance of said purpose, 
 the so-called Resumption Act was passed. Instead of 
 chauCTinCT the adverse conditions under which the green- 
 
COSTLINESS OF IGNORANCE. 1 43 
 
 backs had been placed by the successive acts aforesaid, as 
 should have been done, by at once placing them in all re- 
 spects on a legal equality with coin, their legal disabilities 
 were continued. Ignorant of the simple fact that all values 
 depend solely upon conditions, Congress saw no other way 
 to place greenbacks and coin on an equality of value but 
 to buy and hoard coin for use after January i, 1879, ^'^ ^^- 
 demption of the greenbacks. 
 
 FRUITS OF CRIME AND FOLLY. 
 
 The result of this act was to increase the demand for 
 coin, and consequently to increase its value. This was at 
 once made apparent by the fall in the prices of labor and all 
 kinds of property, except money and well-secured claims for 
 its payment. An element of uncertainty was thus intro- 
 duced in the financial and business situation. People were 
 apprehensive of the future, and hoarded their money. The 
 currency was thus contracted and the volume of business 
 correspondingly reduced. Large numbers of laborers were 
 thrown out of employment, and the production of wealth 
 throughout the country was thereby greatly diminished. 
 Numerous bankruptcies occurred, and an army of tramps 
 sprang into existence and began to menace the security of 
 property. On February 28, 1878, alarmed at the growing 
 and threatening consequences of their criminal folly. Con- 
 gress passed an act for the coinage of silver. This act, al- 
 though seriously defective, produced one good effect imme- 
 diately. It showed business men that the contraction of 
 the currency to a gold basis was temporarily and partially 
 arrested, and that less immediate danger from that source 
 existed. 
 
 After the ist of January, 1879, ^^^^ greenbacks, although 
 not legally on an equality with com, were practically so 
 placed. The result was that the anticipated enormous de- 
 mand for coin did not occur, simply because the conditions 
 surrounding the greenback, being practically the same as 
 those surrounding coin, few persons cared to exchange 
 them for coin. Distrust of the future was removed and 
 
144 
 
 SOCIAL STRUGGLES. 
 
 business began to revive. After suffering unnecessary and 
 enormous losses through the derangement of business and 
 idleness of machinery and labor, we finally reached the 
 point we might have attained soon after the close of the 
 war if our legislators had comprehended the fundamental 
 principles which govern the creation of value, and had 
 made laws, not for the aggrandizement of a class, but for 
 the welfare of the whole people. 
 
 . We have now seen that successive laws have been enacted 
 without proper reference to their effect on values. It is, 
 however, a mistake to say that these laws were enacted in 
 the interest of " capital." They were in fact formed in the 
 interest of a particular kind of capital ; viz., money, and 
 documents calling for its payment. These ill-advised meas- 
 ures, by deranging business and throwing vast numbers of 
 workmen out of employment, subjected the nation to great 
 hardships and enormous losses, which might have been 
 mostly averted by judicious laws. 
 
 VIEWS OF A SO-CALLED STATESMAN. 
 
 In reply to the aforesaid criticism one of the United 
 States senators has been applauded for saying that : — 
 
 " When a labor is to be performed, or a burden borne, it makes but 
 little difference how it is done ; the great thing is to do it." 
 
 Just as ignorant people imagine the skill of a physician 
 is measured by the nauseous nature of his prescriptions and 
 their unpleasant effects, many " statesmen " suppose that 
 the sufferings attendant on bad financial measures are nec- 
 essary and inevitable. Furthermore, they assume that 
 a great amount of industrial and business derangement 
 betokens the wisdom of the laws which produce it. 
 
 SIMPLE FACTS OVERTHROW FALSE THEORIES. 
 
 Two roads may finally lead a traveler to the same place. 
 But, one of these roads may be straight and easy, while 
 the other is crooked and very difficult and dangerous. 
 A little reflection ought to convince any one that the 
 manner in which a particular thing is done often deter- 
 
NEED OF GREA TER INTELLIGENCE. 
 
 145 
 
 mines whether it is an easy or an onerous task. A journey 
 from New York to Chicago with eighty pounds of baggage 
 is not a difficult thing when made in a raih'oad car; but if 
 it had to be performed on foot with the baggage carried 
 on the back it would be quite an undertaking. A man 
 can put a hundred-pound keg of nails on a wheelbarrow 
 and wheel it over a good road a mile t\'ith compara- 
 tive ease ; but to put it on his shoulder and carry it a 
 mile would be quite a different thing. A farmer can easily 
 get rid of the rats in his wheat stack by setting fire to it ; 
 but such a course would add to the numerous cases in 
 which the remedy is worse than the disease. Numberless 
 examples might be given to show that it is not always the 
 result accomplished which makes a hardship, but the manner 
 in which that result has been reached. 
 
 Instead of assuming that social and industrial derange- 
 ment is inevitable, and resigning ourselves like fatalists, 
 we should remember that such an event is always the 
 result of some form of ignorance, and set to work to 
 find out what it is and how to apply a remedy. It is easy 
 to deceive ourselves with the pleasant belief that our knowl- 
 edge is perfect and that our misfortunes have not arisen 
 from our own folly. 
 
CHAPTER VIII. 
 
 Value; a Clear Understanding of its Nature Indispensable. — How to 
 Study Value. — Location apparently affects Value. — Creation of Value 
 by Transportation. — Effect of Time in Creating Value.— "Difference 
 between Value and Weight and Measure. — Change of Place not the 
 Real Cause of Changes in Value. — Men change Values by Time, 
 Place and Mode of Sale. — A Merchant's Success. — The Essence of 
 Value. — Intrinsic Value. — Changes in Value in Consequence of 
 Changes in Circumstances.— The Result which Creates Value. — Un- 
 usual Values. — Value of Water. — Changes of Value are always 
 wrought by the same Law. — How Value is Diminished. — How Value 
 is Increased. — What gives Stability to Values. — Common Idea of the 
 Cause of Value. — Why Land has Risen in Value. — Why Personal 
 Property changes in Value. — Effect of Law on the Value of Gold and 
 Silver. — Things do not possess Two Values. — Exchangeable Value. 
 — Final Analysis of the Nature of Value.— Different Amounts ot 
 Value Created by the Same Amount of Labor. — Why Labor does not 
 Always Create Wealth. — How We state Value. — Distinction between 
 Value and Inherent Qualities. — Value not an Intrinsic Quality. — Leg- 
 islation has no Effect on Intrinsic Qualities. — -A Prolific Error. — - 
 What is Necessary to the Existence of Value. — Value is always Re- 
 lation. — Only one Way to learn the Nature of Value. 
 
 Value is not a quality ; it is a result of ciremnstances. 
 WJien a person with a certain zvant is placed in possession of a 
 tiling ivhose intrinsic qualities meet, gratify and fill said 
 zvajit, value is created. The degree, the aiiiount, of value thus 
 evoked depends on the intensity and importance of the want 
 and the difficulty of otherivise supplying it. 
 
 The difificulty which obstructs progress in studying polit- 
 ical economy is similar to that met in the study of all other 
 subjects. .It is more or less impossible to fully understand 
 one branch of any subject until all other portions of that 
 subject have been mastered so that the relation of one thing 
 to another can be surveyed at a glance. As only one thing 
 can be learned at a time, we have no alternative but to first 
 study the different parts of a subject separately, and then 
 
 146 
 
NEED OF KNOWIiYG WHAT VALUE IS. 
 
 147 
 
 turn back and pass the whole ground over again with the 
 help of the light afforded by the preliminary process of 
 studying one portion after another. Thus it is impossible 
 to comprehend any social problems fully without a clear 
 understanding of what is described by the term " value." 
 But " value " can only be fully understood by a person 
 familiar with the motives which lead men to exchange 
 things with each other, and the mode in which these ex- 
 changes are made. 
 
 That the nature and attributes of value be correctly un- 
 derstood is of the utmost importance, because every portion 
 of the topics we are considering has a direct relation to 
 value. A work on political economy might truly be enti- 
 tled : " A description of the laws which regulate the crea- 
 tion and distribution of value." The definition of value 
 therefore describes fundamental facts and principles. The 
 greater portion of all financial theories and systems must 
 consequently hinge on the manner in which it is understood 
 that value can be created or destroyed, and on what the es- 
 sence of value itself is believed to be. 
 
 HOW TO STUDY VALUE. 
 
 Heretofore we have partially considered the nature of 
 value. Let us now carefully dissect the meaning of the 
 word " value," and see if we can definitely and fully ascer- 
 tain precisely what value is, and what it is made of. 
 
 The word " valuable " is an adjective which is placed be- 
 fore names to denote that a designated thing possesses util- 
 ity, worth, usefulness, or the power to gratify and satisfy 
 fancied and actual necessities and desires. Thus we say: a 
 valuable farm, a valuable cow, a valuable coat, a valuable 
 house ; thereby meaning to convey the idea that the named 
 things possess qualities which render their ownership desir- 
 able, — that they are forms and kinds of wealth. The term 
 valuable literally means something which contains, brings 
 or represents value. We now wish to find out just what the 
 thing itself is which valuable goods and valuable property 
 contain or possess. We cannot discover it by sight, nor by 
 
148 
 
 SOCIAL STRUGGLES. 
 
 any other one of the senses ; neither can we learn anything 
 about value by breaking a valuable thing in pieces, or by 
 subjecting it to any chemical test. But the failure of such 
 tests to reveal the nature of value does not prove that it has 
 no existence, because we know that the nature of many 
 other things cannot be so determined, but must be ascer- 
 tained by comparative reasoning. Therefore we are forced 
 to study this invisible thing by reasoning from facts which 
 we know have a relation to it. 
 
 LOCATION APPARENTLY AFFECTS VALUE. 
 
 In beginning this investigation, the first thing which at- 
 tracts our attention is the fact that the same thing has a dif- 
 ferent value in different places. In some things the differ- 
 ence in their value caused by locality is comparatively 
 small, — in other things very great. 
 
 Between these two extremes there is every gradation ; 
 but, in everything whatever, we invariably find that the 
 same thing in one country has some degree of difference in 
 value from what it has in another. These differences are 
 most noticeable in proportion to the distance of one place 
 from another, and the contrast between the surroundings, 
 wealth, habits, occupations and industrial and mental devel- 
 opment of the inhabitants of those places. Thus we find 
 that the same things which have little value in South Amer- 
 ica, Asia and Africa are considered much more valuable in 
 London, Paris, or New York. On the other hand, we find 
 that many things become much more valuable if taken from 
 the world's great centers of wealth and transported to other 
 climes and nations. Furthermore, we observe great differ- 
 ences in the value of the same things in the same country ; 
 some things being frequently worth several times as much 
 in one place as in another. Even where places are within 
 fifty miles of each other, we often find that a thing has one 
 value at one place, and another, and a very different value, 
 at another place. 
 
 Furthermore, we observe that a considerable number of 
 
CHANGE OF PLACE— CHANGE OF VALUE. j^g 
 
 things are of no value in one location, and of considerable 
 value when removed to another spot. 
 
 A ship's crew, ice-bound in the Arctic seas and certain of 
 being obliged to remain there for several months, would not, 
 if they could, sell their stock of coal for one thousand dol- 
 lars a ton. Near the ship may lie a mountain of ice which 
 is of no value whatever to them. But change the conditions 
 and relative position in which both coal and ice are sit- 
 uated, — place them both in New Orleans. The crew would 
 then be willing to sell their coal for a comparatively small 
 price', while the ice would become very valuable. 
 
 CREATION OF VALUE BY TRANSPORTATION. 
 
 Having become convinced that changes in the location, 
 surroundings and conditions under which things are placed 
 alter their values more or less, we naturally ask : If the 
 value of a thing can be enhanced by changing its location 
 and surroundings, does not such a change actually create 
 value? If coal which is worth only one dollar a ton at the 
 mines be taken to a place where it is worth five dollars a ton, 
 have not four-fifths of the value of that coal been created 
 by placing it under different conditions? Reflection on 
 the above and kindred questions compels us to answer 
 them in the afifirmative. 
 
 But our curiosity is excited, and we are impelled to ask:' 
 If value can be created by changing the location and cir- 
 cumstances in which things are placed, why do not men 
 who desire gain engage in the business of moving goods 
 from place to place in such manner that a material change 
 will be wrought in the conditions which environ them and 
 thus enhance the value of those goods? The more we re- 
 flect upon this question, the more feasible such a scheme 
 appears ; when, lo ! it dawns upon us that the aforesaid 
 mode of creating value and getting gain is exactly what a 
 very considerable part of the human race have always been 
 industriously engaged in. 
 
 At first, men learned that more value could be had for the 
 few simple things they had for exchange by carrying them 
 
I50 
 
 SOCIAL STRUGGLES. 
 
 on their backs over rude foot-paths to another tribe who 
 were not as well supplied with those things as themselves. 
 In course of time mankind had a greater number and va- 
 riety of things for sale and exchange, — they tamed animals 
 and made paths suitable for beasts of burden to travel over, 
 and then the business of making things more valuable by 
 moving them from one place to another became more 
 extended and important. Progress went slowly on. 
 Wheeled vehicles were invented, and then the need of bet- 
 ter roads over which to draw loads of goods from one place, 
 where cheap, to another place, where more valuable, be- 
 came more obvious and imperative ; roads were made better 
 and in greater numbers ; hills were cut down, morasses 
 filled, streams bridged, and ail the cultivated lands and 
 cities placed in easy communication by earth roads. 
 
 But this did not satisfy the desires of shippers of goods. 
 Within a century, a new instrumentality has been invented 
 whereby the value of things can be enhanced by cheaply 
 and rapidly transporting them any distance required. The 
 railroad and the steam locomotive now connect all the 
 commercial and industrial centers in this country, and in 
 each nation of Europe, by tens of thousands of miles of 
 road ; and even in Asia and South America an immense 
 length of railroad is in operation. 
 
 The postal service, the telegraph, huge warehouses equip- 
 ped with hoisting machines, steam-engines, ponderous 
 trucks drawn by powerful horses, and a variety of other 
 potent aids to the work of creating value by the transporta- 
 tion of goods are in constant use. 
 
 We also find that the carriage of goods by water has 
 passed through the same stages of growth as land trans- 
 portation. Instead of timidly creeping along the shores in 
 little boats as our ancestors did, we now place the goods 
 which are cheap in one continent on board a huge ship and 
 steer straight across the ocean to another continent, where 
 we know the same things have a greater value. We have 
 dug canals, built docks, lined the ocean shores with light- 
 
MAN HAS ALWA YS BEEN A TRANSPORTER. 
 
 151 
 
 houses, and dotted every sea with sails and with the trailing 
 smoke of steamers. 
 
 From the time when a few skins or other simple commod- 
 ities were carried in rude canoes, or on the backs of men 
 or beasts, from one place to another, for the purpose of in- 
 creasing their value, down to the present, when an enor- 
 mous net-work of organized commerce is spread over the 
 world, we find in every period a universal and practical be- 
 lief that under certain conditions the value of things 
 can be raised by transporting them from one market to 
 another. 
 
 A large portion of history, the story of man's efforts to 
 satisfy his wants and gratify his desires, is merely a record 
 of inventions and attempts made for the purpose of creating 
 or discovering some means or route whereby the location 
 and surroundings of goods could be more easily changed, 
 and the creation of value and the acquisition of gain more 
 readily and certainly accomplished. 
 
 Only a short time has elapsed since, at great cost, the 
 Suez Canal was completed, for the sole purpose of making a 
 means whereby the location of goods in Asia and Europe 
 could be more easily changed. At enormous expense a 
 canal is now being built across the Isthmus of Panama. 
 This, like great numbers of other works, is simply a step 
 whereby the creation or increase ot value by moving goods 
 from place to place can be effected with less difficulty. 
 
 In some cases we find a change in the locality of a thing 
 affects its value comparatively little ; in other instances, 
 the entire value is dependent on its being transported from 
 where nature placed it to another spot. Ice is of no value 
 while lying in northern waters, and of considerable value 
 when carried to southern cities. Immense quantities of 
 the finest building sand lies on beaches where it is not 
 worth one cent a ton. But if this worthless sand be placed 
 under different conditions by being carried to an inland 
 city where sand is scarce it becomes quite valuable. Coal, 
 iron, building-stone and many other things are almost with- 
 out value when lying in their natural beds, but become of 
 
152 
 
 SOCIAL STRUGGLES. 
 
 great value when their relations to mankind are changed 
 by transportation to a place where a greater number of 
 persons desire to own and use them. The emigration of 
 laborers and mechanics from one place to another is due, to 
 a considerable extent, to the fact that labor, like every- 
 thing else which is bought and sold, has different values in 
 different countries ; and, even in different portions of the 
 same countries, labor sells for different prices. 
 
 EFFECT OF TIME IN CREATING VALUE. 
 
 We have now seen that place seems to be an essential ele- 
 ment of value. Upon further reflection we find that iime 
 is another factor which apparently often largely determines 
 the value of a given thing. Merchants buy commodities at 
 one time and keep them until another time, when they ex- 
 pect their value will be greater. Dealers in real estate buy 
 land at one time with the idea of keeping it until another 
 time. Speculators in stocks and alt kinds of other things 
 are continually basing their calculations on the changes 
 which time will make in the value of whatever they are 
 dealing in. 
 
 The market reports of the prices of grain are a familiar 
 illustration of this. Wheat, for instance, is quoted at one 
 price if to be delivered in May , and at a different rate if to 
 be delivered in October of the same year. The price of 
 labor varies in the same place at different seasons of the 
 year. This is especially noticeable in farming regions. 
 Laborers get much higher prices in harvest time, for the 
 same amount of exertion, than at other portions of the year. 
 The enhanced wages are due to the time at which the ser- 
 vices are rendered. 
 
 DIFFERENCE BETWEEN VALUE AND WEIGHT AND 
 MEASURE. 
 
 The foregoing considerations show .us that value is 
 entirely different from weight and measure. An elephant's 
 tusk, which is four feet long and weighs twenty pounds, will 
 be just as long and just as heavy no matter to what part of 
 
CHANGE OF PLACE CAJV DESTROY VALUE. i r •, 
 
 the world we carry it. But its value will depend on the cir- 
 cumstances in which it is placed. Neither time nor place 
 affect the weight and measure of a thing ; those qualities 
 cannot be changed without essentially changing the thing 
 itself. But the value of a thing can be raised to several 
 times its original price, and afterward reduced to nothing, 
 without changing its material qualities in the slightest de- 
 gree. 
 
 S has a thousand loads of paving-stones piled up in a 
 city, where they are worth two thousand dollars. They 
 were brought there from a stony farm, where they were 
 worthless. If S send these stones to a place where no one 
 wants them, their value is gone ; but they will weigh and 
 measure just as much as ever. 
 
 CHANGE OF PLACE NOT THE REAL CAUSE OF CHANGES 
 IN VALUE. ■ 
 
 The last example illustrates another important fact ; viz., 
 while place is usually the apparent reason why a thing 
 which is shipped from one point to another is raised or 
 lowered in value it is never the real reason. If it were, a 
 movement of things from one place to another would al- 
 ways alter their value. But such is not the fact. Coal 
 might be taken from the mines of one country and brought 
 thousands of miles to the coal mines of another country, 
 without having its value altered by such a change. 
 
 What is true of place is also true of time : it is often the 
 apparent, but never the real reason for a change in the 
 value of a thing. A thing may have the same value on 
 dates separated by months or years. 
 
 The actual reasons which change values are alterations in 
 the conditions under which a thing is placed, — changes in 
 the relation which it bears to mankind and to surrounding 
 things, facts and circumstances. Time and place are merely 
 instrumentalities which are often used to produce those 
 changed conditions, and place a certain thing under circum- 
 stances, or in a location where it will be in greater demand. 
 
154 SOCIAL STRUGGLES. 
 
 and therefore have a greater value because its relative im- 
 portance will be increased. 
 
 MEN CHANGE VALUES BY TIME, PLACE AND MODE 
 OF SALE. 
 
 The dealer in stocks says to himself : " At this time, stocks 
 are low because money is difficult to obtain, and the major- 
 ity of persons are frightened. I will buy now and hold my 
 stocks until the business outlook has altered — until money 
 is plentier and the community full of hope. I will buy 
 in a market clouded by general distrust ; I will sell under 
 different circumstances. Time will bring these changes 
 about." The dealer in land acts from reasoning akin to that 
 of the stock dealer, and thus concludes : 
 
 " The land which forms Manhattan Island is substantially the same 
 land that it was two hundred and fifty years ago when it had very little 
 value, but the surroundings of this island have so changed as make 
 it, at the present time, of great value. A change in the population and 
 wealth of a city changes the value of the land within it. Here is a tract 
 of land w^hich is hqiv within one mile of the center of a city of twenty 
 thousand inhabitants ; within ten years it will be within one mile of the 
 center of a city of forty thousand. The change which the circumstances 
 surrounding this land will undergo must produce an effect on its value in 
 moderate degree, similar to the effect which the growth of New York 
 has had on New York land. By buying now, I will be paying iox present 
 conditions. By keeping it ten years, I can then sell it under other con- 
 ditions which will create a far larger value." 
 
 The dealer in coffee says : " Coffee is worth so much in 
 New York and' so much in Rio Janeiro. A handsome prof- 
 it can be made by purchasing coffee in Rio Janeiro and 
 carrying it to a different market, to a place where there is 
 less coffee and more persons who want it." 
 
 Trains of reasoning similar to those aforesaid are em- 
 ployed by all dealers who intelligently conduct their busi- 
 ness. The transportation of goods from place to place, 
 like the buying of things at one time for the purpose of 
 selling them at another, are merely agencies through which 
 certain results are expected to follow. All dealers endeavor 
 to make a profit by purchasing certain things in a market 
 
WHAT A TRADER'S SUCCESS DEPENDS ON. 
 
 155 
 
 where the conditions tend to produce a low price, and then, 
 by the aid of time, distance, or a mode of sale different from 
 that by which the purchase was made, bring these same 
 things to a different market, to a market where the condi- 
 tions will be likely to give them a greater value. 
 
 At first sight, it appears as if the great majority of shop- 
 keepers got their profits without enhancing the value of the 
 goods dealt in by making changes in the conditions sur- 
 rounding those goods. But a little examination shows that 
 these merchants, in essence, pursue the same course that a 
 merchant does who buys in England and sells in Mexico. 
 They buy in the wholesale, and sell in the retail market. 
 Goods sold at wholesale are sold under materially different 
 conditions from goods sold at retail. Hence, goods bought 
 of a wholesale dealer, and then divided into small parcels 
 and sold at retail, have their conditions, and consequently 
 their value, considerably changed. That is, the value of 
 each pound, yard, or quart of goods sold at retail is 
 greater to its purchaser than it would be if he were obliged 
 to buy a large amount of the same thing. This is so be- 
 cause the portion bought supplies the customer's wants, — 
 it is adapted to his condition and circumstances, and there- 
 fore has a greater relative value to him than a large amount 
 of the same thing would have. 
 
 All mercantile and commercial transactions are con- 
 ducted on the principle of changing, in some form or 
 way, the conditions and circumstances of the property 
 dealt in. These changes are created, or are expected to 
 occur, by and from a great variety of means and methods. 
 But the principle underlying them is always the same. 
 
 A merchant's success. 
 
 Leaving out of view the fortuitous events which are 
 usually called " luck," the success of these endeavors de- 
 pends on the accuracy and breadth of the merchant's 
 knowledge, the soundness of his judgment, his pecuniary 
 resources, the amount of trust reposed in him by owners 
 of property, his alertness in seizing opportunities, and his 
 
156 
 
 SOCIAL STRUGGLES. 
 
 skill in conducting the practical details of the enterprises 
 he may engage in, and advantageously changing the con- 
 ditions surrounding his goods. 
 
 THE ESSENCE OF VALUE. 
 
 We nave now learned that all mankind, practically if not 
 theoretically, agree that the value of things is largely depend- 
 ent on the conditions under which they are placed. Further- 
 more, we have found that value can be created, increased, 
 diminished, or destroyed without making the slightest mate- 
 rial alteration in the thing which contains or possesses it, 
 simply by changing the relation of a thing to mankind, and 
 the attendant facts and circumstances. But we have not 
 yet found what is meant by the word "value," nor what it 
 essentially consists of. As neither physical nor chemical 
 examination will reveal anything, we are forced to continue 
 to analyze it by reasoning from known facts. We must 
 follow the same method we use when considering the nature 
 of " justice," or any other thing which cannot be weighed, 
 measured, and handled. 
 
 Having learned that altered circumstances create changes 
 in the amount of value which a given thing possesses, 
 the next natural step is to inquire whether value ever 
 exists absolutely, without any dependence whatever on 
 circumstances. If it be possible for anything or things to 
 contain or possess absolute value, then that or those things 
 will always be prized highly, sought for and considered 
 desirable and valuable by one man, or by a hundred men, 
 no matter what the situation, condition and circumstances 
 of that man or those men may be. 
 
 INTRINSIC VALUE. 
 
 The question consequently arises : Are there any things 
 which are valuable to a man at all times and under all 
 circumstances? If so, then those things are not dependent 
 on any circumstances, facts or conditions whatsoever in 
 order to be valuable, but they actually contain and possess 
 absolute, intrinsic and unchangeable value. Furthermore, 
 
WHAT INTRINSIC VALUE WOULD BE. 
 
 157 
 
 the possessor of those things, under all circumstances 
 and conditions whatsoever, is better off than if he did not 
 possess them. 
 
 But, if no such things can be found, then it necessarily 
 follows that value is dependent entirely on, and is the 
 creature of circumstances and conditions. 
 
 In commencing to search for a thing which contains 
 intrinsic value we naturally turn first to those things which 
 are usually considered most valuable ; viz., gold, silver 
 and diamonds. At the outset we find a universal testi- 
 mony that the ownership of those things is usually deemed 
 so desirable that mankind often voluntarily undergo great 
 labors and privations to obtain it. But our search is not 
 for something which generally and under ordinary con- 
 ditions has value, but for something which invariably has 
 value. The question whether gold, silver and diamonds 
 possess intrinsic value can therefore only be solved by an 
 answer to a kindred question : Can a man be placed under 
 circumstances in which those things are of no value to 
 him whatever? Does not their ownership always bring the 
 benefits derived from the favorable conditions described 
 and conveyed by the term " wealth " ? 
 
 CHANGES IN VALUE IN CONSEQUENCE OF CHANGES IN 
 CIRCUMSTANCES. 
 
 The slightest reflection shows that a great variety of 
 conditions are possible, and often exist, which render 
 those things of no value whatever to a man, simply be- 
 cause under such circumstances he cannot derive any 
 benefit or advantage from owning them. Suppose a man 
 has in possession a large amount of silver, gold and 
 diamopds, and at the same time is suffering from, and in 
 danger of perishing of thirst, of starvation, of cold, or of 
 wounds or disease. Further suppose, as not infrequently 
 happens, that his surroundings and condition are such 
 that he is utterly unable to exchange his goods for the 
 things which will supply his necessities or relieve his 
 sufferings. Is it not evident that those things would 
 
158 
 
 SOCIAL STRUGGLES. 
 
 then be of no value whatever to their owner? Remote 
 from aid, men occasionally perish of thirst, cold and star- 
 vation, which the possession of millions at the time would 
 not have averted. All around us rich men are constantly 
 falling- into conditions in which what was their wealth loses 
 all value to them. They are in a condition similar to 
 that of a man perishing of thirst in the desert, sitting on 
 a pile of gold and diamonds, with no possibility of succor. 
 They are dying of disease, and all the things in the world 
 usually called " valuable " are of no value to them, from 
 the simple fact that their ownership does not supply 
 imperative wants and desires. 
 
 Some persons may say that the aforesaid examples are ex- 
 treme cases, and therefore do not truly represent the facts. 
 But it must be remembered that the existence of a law is 
 not disproved, or affected in the slightest degree, by 
 showing that the results of its workings are often un- 
 noticed. The fall of a feather attracts little attention ; 
 the fall of a thousand tons a great distance creates a 
 vivid impression on the beholder. But both these events 
 are due to precisely the same cause, — the law of gravita- 
 tion. Natural laws are universal and perpetual. They do 
 not apply to one class of cases, and, at the same time, have 
 no operation or effect in precisely similar circumstances. 
 The law which governs value does not differ in the least 
 from the laws which relate to all other subjects and things : 
 it is universal and perpetual ; it regulates all gradations of 
 value, from the lowest to the highest, and it operates just as 
 inevitably and effectually in ordinary cases, which do not 
 attract general attention, as it does where striking results 
 are produced. 
 
 If we are compelled to admit that gold, silver and dia- 
 monds have no intrinsic value — that is, no value independent 
 of certain conditions which are requisite to confer value 
 upon them — we still find it hard to believe that the value of 
 all things is due to outside influences instead of to something 
 inside of them. In other words, we have difficulty in be- 
 
VALUE IS CREATED BY CIRCUMSTANCES. 
 
 159 
 
 lieving that a universal law decrees that all value is extrinsic 
 and not intrinsic. 
 
 Consequently we ask : Have not bread, meat and kindred 
 ne'cessities intrinsic value to a man ? Are they not always 
 useful and therefore valuable without the slightest regard 
 to circumstances ? Is not wheat, for instance, a synonym 
 for value because it actually contains valuable nourishment? 
 
 After carefully pondering on the above crucial test ques- 
 tions we are compelled to answer in the negative, from the 
 simple fact that a man maybe in a condition in which those 
 things are of no use to him. A thing is of absolute value to 
 a man only when the attendant circumstances are such as'to 
 create a coincidence between the wants of the man and the 
 peculiar qualities of the thing. To a man suffering from ex- 
 cessive heat, a cool place and abundance of cool drinks are 
 of value ; but if a person is shivering with cold his ideas of 
 value are warm clothing, shelter from the cold wind, fuel 
 and warm drink and food. Large sums are continually be- 
 ing paid to musicians, but a person with a dislocated arm 
 would not be in the mood to attach any value to an opera 
 ticket : he would think a surgeon's services of more value 
 than the melody of the finest musicians in the world. 
 
 A coat would not be of as much value to a barefooted 
 man, well clad in other respects, as a pair of shoes. Un- 
 commonly warm clothing is of great value to a person in the 
 Arctic regions. Except during a few days in the year, cloth- 
 ing suitable for the Polar region is of no value to a man living 
 in the temperate zone ; and, to an inhabitant of the tropics, 
 such clothing is worthless, unless possibly he can ship it to 
 a cold country. Thus we see that the value of clothing de- 
 pends on its meeting and supplying the wants of its owner ; 
 and the amount of this value depends largely on the extent 
 and completeness with which an imperative need is supplied. 
 
 THE RESULT WHICH CREATES VALUE. 
 
 Illustrations similar to the above might be given indefi- 
 nitely, all tending to show that value is created only by the 
 meeting- of a ivant with a means of supplying it. The value 
 
l6o SOCIAL STRUGGLES. 
 
 of a thing is consequently determined by the degree in which 
 it supplies a want. Therefore, of necessity, nothing can 
 have inherent, intrinsic value ; the value of a thing is only 
 called into existence by a combination of conditions and 
 circumstances which enables and causes that thing to supply 
 a want. 
 
 UNUSUAL VALUES. 
 
 Ordinary conditions produce an ordinary amount of value 
 in a giveh- thing. Extraordinary conditions may change the 
 usual value of a thing to an extraordinary state, and this 
 change may be either an entire creation, an increase, a 
 diminution, or a total destruction of its value. These ex- 
 traordinary values seem wonderful to us, but an examin- 
 ation of the matter shows that no new laws or mysteri- 
 ous forces have produced them. They are created by 
 precisely the same laws which give an ordinary value to a 
 thing under ordinary circumstances. A gentle breeze is 
 caused by the same laws which create tornadoes ; — the dif- 
 ference between them arises from different combinations of 
 facts under which those laws set the air in motion. When 
 the result of a law's operation attracts our attention vividly, 
 we usually forget that those marked effects are simply an 
 exhibition of forces constantly at Avork under different cir- 
 cumstances and then almost unnoticed. We are not much 
 impressed by stroking a cat in the dark and watching the 
 electric sparks from her fur ; but the same electrical law is 
 then in force as when the heavens are shaken with thunder 
 and lightning. 
 
 VALUE OF WATER. 
 
 The foregoing statements may be exemplified by reference 
 to the value of water pure enough for drinking and other 
 domestic purposes. Under ordinary circumstances, water 
 has but little value, — a small sum of money, or a small 
 amount of labor, will procure all that is requisite for the 
 constant supply of a family. But events often occur which 
 render a small amount of water of great value ; the price of a 
 
WHEN WATER IS VALUABLE. l6l 
 
 gallon of water under some circumstances, if it could 
 thereby be bought, would equal the entire wealth of the 
 purchaser. From this extreme, there is every gradation of 
 the value of water down to the point where vast rivers of it 
 flow along where no one even imagines that water may have 
 value. 
 
 In a valley high among Avild hills lies a small deep lake 
 fed by living springs and streams. For centuries it has 
 lain there without any inhabitant of its vicinity dreaming 
 that its ten thousand acres of area were worth as much 
 as ten acres of fertile land. But within a few years a city 
 has arisen, forty miles away, with no water supply in its 
 neighborhood- adequate to its present and prospective 
 needs. A few far-sighted persons comprehend that a con- 
 dition of facts exists which sooner or later must inevitably 
 confer a great value on the waters of that lake. They 
 quietly buy the lake, with a large amount of surrounding 
 wild land, and then give all the residents of that city infor- 
 mation that an abundance of good water, at a moderate 
 cost, can be had from it. A water company is formed, — ■ 
 the water is made to supply the citizens with an abundance 
 of good water at a low charge, and a large amount of value 
 is thereby created. A want and a supply have met. The 
 water which a short time before was considered of no value 
 is now deemed, by careful capitalists, a desirable kind of 
 property, because they see no probability of any circum- 
 stances ever arising which will lessen the demand for it and 
 the income from its sale. No change whatever has taken 
 place in the amount or quality of the water. The change 
 of value is entirely due to the fact that the relation of the 
 water to mankind has been changed, — a new and entirely 
 different condition has been created — a new^ use has been 
 given to the water. 
 
 CHANGES OF VALUE ARE ALWAYS WROUGHT BY THE 
 
 SAME LAW. 
 
 There is nothing exceptional in the foregoing case ; the 
 change of value was wrought by an unvarying universal 
 II 
 
|62 SOCIAL STRUGGLES. 
 
 law which operates precisely the same in all cases without 
 the slightest reference to the amount of attention its 
 results may attract. The principles involved in the creation 
 of a million dollars' worth of value are precisely the same as 
 those which convert a worthless load of sand into one dol- 
 lar's worth of building material. A certain change of cir- 
 cumstances and facts must occur, and the judgment of man- 
 kind on the result of that change constitutes what is meant 
 by the word " value." 
 
 As surrounding conditions and the relation of things to 
 mankind change, the judgments and estimates formed and 
 made of their value must also change. This explains the 
 changes which are constantly taking place in the value of 
 various things. The conditions and circumstances sur- 
 rounding them change, and more or less changes in value 
 occur, in proportion to the altered conditions. 
 
 HOW VALUE IS DIMINISHED. 
 
 A machine for a given purpose may be valuable because 
 it exists under conditions in which it supplies a want far 
 better than any other machine. But the invention of a 
 better one may wholly destroy its value, simply because 
 the new machine radically changes the conditions under 
 which the old machine was valuable. In this way, old 
 tools and machinery of various kinds are constantly being 
 made comparatively worthless by the invention of better 
 ones. A vast amount of value in the world now exists in 
 the form of steam-engines. But it is not " intrinsic " value. 
 The discovery of a new mode of generating force — more 
 efficient and economical than steam, would change the 
 present conditions under which steam-engines are valuable 
 and render them almost worthless. In like manner, the 
 value of all other kinds of property may be more or less 
 diminished by inventions and events that would change the 
 conditions which now give them value. If the value of this 
 property were intrinsic, no changes of circumstances would 
 or could affect it. 
 
INCREASED NEED, INCREASES VALUE. 163 
 
 HOW VALUE IS INCREASED. 
 
 On the other hand, just as circumstances may diminish 
 or destroy the value of a thing, events may increase its 
 value. Whenever the amount of a certain thing in the 
 world, or at a certain place, is limited, and it is either very 
 difficult or impossible to create more of it, then such a 
 thing is largely enhanced in value by conditions which 
 increase the demand for it. For example : the land on 
 Manhattan Island is limited in amount ; the growth of the 
 United States has made it the commercial center of a great 
 nation ; an increased demand for it and an enhanced value 
 are the results of these changed conditions. 
 
 Gold is so limited by nature that it is difficult to increase 
 its amount. The demonetization of silver by several na- 
 tions has increased the demand for gold. The conditions 
 under which gold formerly had value have thus been so 
 changed as to largely increase its value. If the conditions 
 which make a great demand for land in New York City 
 should so change as to lessen that demand, the value of 
 said land would be diminished. If the conditions under 
 which gold is now placed should be so altered as to lessen 
 the demand for gold, its value would thereby be dimin- 
 ished.* 
 
 * The reader will here please carefully observe the wide distinction 
 between things which can readily be increased in amount proportionately 
 to an increased use of, and consequent increased demand for them, and 
 things surrounded by natural limitations which render it practically im- 
 possible for their amount to be augmented nearly simultaneously with an 
 augmented demand for them. 
 
 For example, if the use of bricks throughout the nation should steadily 
 increase so that five years hence the demand for bricks were twice as 
 great as at present, the price of bricks would not materially rise. This 
 would be so, because the materials from which they are made are practi- 
 cally unlimited, and by the application of capital and labor the supply of 
 bricks could and would be so increased that their value would not mate- 
 rially change. 
 
 But an increased demand for a thing which, like gold, cannot be read- 
 ily augmented in amount by an increased application of labor to its pro- 
 duction, must result in an enhanced value of that thing. 
 
164 SOCIAL STRUGGLES. 
 
 WHAT GIVES STABILITY TO VALUES. 
 
 Another matter of vast practical importance also follows 
 as an inevitable deduction from the aforesaid principles, 
 viz.: Stability of tJie value of money and of all othc7' tJiings 
 is dependent on the stability of the conditions zahich ereate 
 their value. The majority of persons imagine there is some- 
 thing supernatural in the changes which occur in the value 
 of money. But in fact there is no mystery about it, — it is 
 dependent on altered conditions which produce altered 
 judgments and opinions, and these changes of condition 
 arise in the same way, and from the same causes, which 
 change the conditions of other things ; that is, the princi- 
 ples, the laws which create those changes, are identical. 
 
 A merchant who wishes to estimate the value of a thing 
 at a future specified time will arrive at correct results, just 
 in proportion to the accuracy with which he foresees the 
 circumstances under which that thing will then be placed. 
 The failure of many merchants is due to their want of vigi- 
 lance in studying the effect of various industrial and politi- 
 cal movements, and consequently not adapting their pur- 
 chases and sales to the probable conditions of the future. 
 Unlooked for events often occur, and change conditions so 
 suddenly as to set at naught the most careful estimates of 
 the future value of certain goods. The man whose goods 
 such events increase in value is then said to be " in luck." 
 But, on the average, " luck " falls to the man who conducts 
 his business with the most intelligence, and most carefully 
 studies and forecasts the probable conditions which will en- 
 viron the goods he deals in. 
 
 COMMON IDEA OF THE CAUSE OF VALUE. 
 
 A few -years ago, the Secretary of the United States 
 Treasury caused the following statement to be printed : 
 
 " The value of the precious metals depends, as in the case of all other 
 commodities, on certain inherent qualities and the cost of production." 
 
 This statement was doubtless the result of consulting the 
 
COST AND VALUE NOT AL WA YS ALIKE. 165 
 
 works of the most " learned economists," and was pub- 
 lished for the instruction of the public. The reader will 
 observe one idea in this statement, viz., that value is always 
 the product of two facts. First, the inherent qualities of 
 the thing itself; — that is, its intrinsic qualities. Second, 
 the cost of producing the valued thing. As this is the gen- 
 erally accepted belief in regard to the causes which give 
 value to everything, let us see if it be true. 
 
 WHY LAND HAS RISEN IN VALUE. 
 
 We will first apply this idea of " value " to that which 
 forms a large portion of the assessed valuation of every 
 portion of our country; viz., real estate. This valuable 
 thing has changed enormously in value during the past 
 century, as every intelligent person knows. What has 
 caused these great changes in the value of real estate? It 
 is not due to the cost of its production, because it was cre- 
 ated without human agency. Neither can it be due to its 
 inherent, intrinsic qualities, because those are the same now 
 that they were when the land where New York City stands 
 was not worth a thousand dollars. Thus we see that said 
 statement utterly fails to explain the changes which take 
 place in the value of real estate. 
 
 WHY PERSONAL PROPERTY CHANGES IN VALUE. 
 
 Let US next apply it to personal property. If the value 
 of wheat depended on its inherent qualities it would 
 always have the same value, because its inherent qualities 
 are always essentially the same. We see, then, that the 
 great changes which occur in the value of wheat happen 
 without any change in the wheat itself. But does the dif- 
 ference in the cost of producing wheat account for the 
 changes in its value ? When we examine this question, we 
 find that wheat is sometimes worth 25, 50, or even 100 per 
 cent, more than it is at other times, zvJicn the cost of its pro- 
 duction is substantially iDicJiangcd. What is true of M'heat is 
 true of all other farm products. Hops, for example, have 
 always the same intrinsic qualities, and the cost of their 
 
1 66 SOCIAL STRUGGLES. 
 
 production varies but little. But hops are sometimes worth 
 ten times as much as at other times. 
 
 Let us next turn to manufactured goods. When their 
 quality is the same, does the value of such goods depend on 
 the cost of producing them? If it did, then the value of 
 manufactured goods would simply be a reflection of the 
 cost of making them. But that this is not so is proved by 
 the fact that manufacturers sometimes get far more than 
 the cost of manufacture, and make large fortunes as the re- 
 sult. At other times, goods are sold for less than the cost 
 of making them, and ruin comes to the manufacturer. 
 
 The value which a man gets in payment for his labor 
 does not depend solely on the essential qualities of that 
 labor. If it did, the value of a workman's services would 
 change but little That is but one of several conditions 
 which determine his wages. Neither does the price of a 
 man's labor depend on the cost of his living, as it may be 
 much more, or much less. 
 
 The value of all things depends considerably on law and 
 fashion. I have known good unused carriage bodies which 
 cost $75 a piece to manufacture, and the shape of which had 
 become unfashionable, sold for half a dollar a piece. Every 
 one can recall similar cases wherein great fluctuations in 
 value were due solely to changes in public opinion as to 
 what was good taste. 
 
 EFFECT OF LAW ON THE VALUE OF GOLD AND SILVER. 
 
 It is a common belief that law has no influence on the 
 value of gold and silver. But in reality nothing owes its 
 value more to law than those metals. The recent apparent 
 fall in the value of silver is not due to any change in its 
 inherent qualities, nor to any alteration in the cost of pro- 
 ducing it.. The demand for it has been lessened by its 
 demonetization in several countries. At the same time 
 the demand for gold has been proportionately increased, 
 and its value correspondingly enhanced. Suppose the 
 demonetization of silver were carried still further by other 
 nations discarding it and using gold in place. The inevi- 
 
VALUE IS THE RESULT OF ALL CONDITIONS. 
 
 T67 
 
 table result would be a still greater demand for gold, and 
 a less demand for silver. The value of gold would then 
 rise still higher. 
 
 On the other hand, suppose gold should be generally 
 demonetized and no longer be employed for any purpose 
 but use in the arts. The result would be a diminished de- 
 mand for gold, — it would no longer be, as now, the royal 
 metal, and its relative place in commerce would be different 
 from what it is at present. Its inherent properties would 
 be unchanged ; the cost of its production would not be 
 altered, but its value would be greatly diminished. It would 
 be placed under different circumstances ; under conditions 
 which would lessen its relative importance. 
 
 Further examples and illustrations of the fact that the 
 aforesaid statement of the Secretary of the Treasury is 
 misleading will readily occur to whoever will scrutinize it 
 properly. The plain facts in regard to the value of a thing 
 are, that its inherent qualities and the cost of its produc- 
 tion have more or less influence in determining it. But 
 the peculiar qualities of a thing, and the cost of making 
 another thing like it, are only two facts, in the midst of a 
 multitude of other facts, conditions and circumstances, 
 which also affect its value. These two facts aforesaid may 
 therefore be, and usually are, the dominant conditions, or 
 they may have little or no influence on the value of a thing 
 at a given time and place. 
 
 THINGS DO NOT POSSESS TWO VALUES. 
 
 Many persons suppose that things possess two values : 
 an intrinsic value and an exchangeable value. Much paper 
 has been spoiled in attempting to show that two kinds of 
 value exist. These writers call the utility of a thing its 
 intrinsic, inherent value. 
 
 If a given thing possess intrinsic, inherent value, it nec- 
 essarily follows that the amount of intrinsic value in pos- 
 session of a man will be multiplied by the dumber of those 
 things which he owns. But this is not the fact. A thing 
 possesses utility to a man to the extent that it supplies his 
 
1 68 SOCIAL STRUGGLES. 
 
 wants, and no farther. Suppose a person needing a pecul- 
 iar kind of shoes should order a pair, and by some mistake 
 a thousand pairs were made. The first pair would be the 
 most valuable ; the second pair less valuable, because their 
 value would depend on the contingency of their owner 
 living long enough to want them. The third pair would 
 be still less valuable, and this diminution of value would 
 continue until a point was reached where the shoes be- 
 came worthless. 
 
 A team of two horses is valuable to a man who has 
 use for them. But it does not therefore follow that four 
 horses would have double the value of one pair. On 
 the contrary, part of them might be a useless burden and 
 expense. 
 
 Suppose a farmer needing a thousand gallons of water 
 daily for the use of his family and live stock should dig in 
 his hillside for a spring. After excavating for some dis- 
 tance, suppose a spring was found which poured over a hun- 
 dred thousand gallons daily. The water which the farmer 
 needed would be of utility to him, but the excess would be 
 of no value and might be an injury to his farm. If the cir- 
 cumstances and surroundings of the farmer were such that 
 he could sell, or in some way use all of the water, the 
 whole of it would be valuable ; but this would simply be 
 confirmatory evidence that all values are created by con- 
 ditions. 
 
 The principle which renders an addition to the amount 
 or numbers of a certain thing, beyond what is needed by a 
 person at a given time and place, of less and less utility ap- 
 plies to all things under all circumstances. This could not 
 be so if utility and value were intrinsic qualities. 
 
 EXCHANGEABLE VALUE. 
 
 Let us now see if there be really any such thing as " ex- 
 changeable value " attached to any substance whatever. 
 If there be, it follows that the thing which actually pos- 
 sesses exchangeable value can always be exchanged for 
 another valuable thing. But this is not the fact. A thing 
 
WHAT MAKES A THIXG EXCHAxYGEABLE. 
 
 169 
 
 may be exchangeable at one time and place for a great va- 
 riety of other valuable things ; but under different circum- 
 stances the owner of this same thing may not be able to 
 exchange it for a small portion of food, drink, or any other 
 object of desire. Thus we see that exchangeable value is 
 not an inherent quality of a thing. Whether a given thing 
 can be exchanged, at a given time and place, for one or 
 more valuable things, depends entirely on the circumstances 
 and attendant facts. 
 
 The inherent qualities of a thing do not necessarily de- 
 termine whether it can be exchanged or not ; they simply 
 are one out of a great number of other facts and circum- 
 stances which decide that question. A combination of 
 certain facts must exist in order to enable a man to ex- 
 change one thing for another, no matter how desirable the 
 ownership of that thing is usually considered. Life-pre- 
 servers can ordinarily be bought with a little money ; but 
 on a sinking ship it would be impossible to buy one with 
 any amount of money. 
 
 That a given thing is often worth more to one man than 
 to another is a fact of daily observation. This is so be- 
 cause the value of a thing to a man depends on the use he 
 can make of it, and this depends on his situation and cir- 
 cumstances. Value varies greatly in amount ; but its 
 changes in amount do not change its character and essen- 
 tial qualities. There is no more propriety in saying that 
 two kinds of value exist than there would be in saying 
 there were ten kinds of value. 
 
 Dividing value into two kinds is as absurd as it would be 
 to say: " There are two kinds of weight : one is the weight 
 that a man can lift and walk off with, the other is a 
 weight that he cannot lift." The above and kindred errors 
 have arisen from setting out to discuss value without exam- 
 ining the fundamental facts and principles which underlie 
 the subject. 
 
 The considerations heretofore stated shovv us that the 
 importance of a certain thing, at a given time and place, 
 depends entirely on its having such a relation to other 
 
170 
 
 SOCIAL STRUGGLES. 
 
 things and facts that it suppHes an actual or fancied human 
 npcessity or desire. Furthermore, it appears that the word 
 "value" is simply an abbreviated form of stating the re- 
 sult of an exercise of human judgment as to the extent to 
 which a necessity or desire can be supplied by a certain 
 thing, at a given time and place, and the relative importance 
 of such a supply in comparison with other things. Value is 
 therefore a human opinion as to the relative worth of a 
 thing, and what this opinion shall be depends entirely on 
 the circumstances and conditions under which that opinion 
 is formed. 
 
 Human judgment is liable to error, and it frequently 
 fails to accurately compare the worth of one thing with 
 that of another. Mankind often attach an undue value to 
 some things and at the same time prize other things less 
 highly than they should. At least, so it appears when cent- 
 uries of history record their verdict. But however much 
 we may regret that it is often a serious problem to know 
 what constitutes TRUTH, and therefore difficult to under- 
 stand the TRUE value of a thing, we have no other means 
 of determining it, — no other standard of value, except 
 human judgment of the relative benefit, desirability and 
 importance of possessing one thing, under the existing cir- 
 cumstances, compared with some other thing or things, at 
 the same time and place. As the human mind is a 
 complex instrument, affected by a multitude of influences, 
 it necessarily follows that its conclusions on the value of a 
 thing depend on the circumstances under which such 
 judgment is rendered. 
 
 FINAL ANALYSIS OF THE NATURE OF VALUE. 
 
 Thus, in the last possible analysis of value, we find it a 
 thought, a judgment, a perception of the relation of things 
 to one another and to mankind. Value, therefore, is imma- 
 terial, like all other thoughts and judgments. We can give 
 it a symbolic representation, but the thing itself is as in- 
 tangible as beauty. No one will deny the existence of such 
 a thing as beaut)-, but no one ever saw it. This is so be- 
 
THE CREATION OF FALUE. 
 
 171 
 
 cause beauty Is a thought, — it is a mental perception of 
 color and proportion ; we can make its symbols, but the 
 thing itself cannot be made, because it is not material. If 
 beauty and value were material things we could make them 
 out of some substance, and then say : TJiis is beauty and tJiis 
 is value. As the facts are, the farthest we can go is to say : 
 This is beautiful and this is valuable, — that is, these are our 
 ideas of the qualities which representations of beauty and 
 value should possess, and how they should appear. 
 
 DIFFERENT AMOUNTS OF VALUE CREATED BY THE SAME 
 AMOUNT OF LABOR. 
 
 Having found that value is purely a creation of circum- 
 stances and conditions, let us now consider some prac- 
 tical applications of the foregoing principles. The ma- 
 jority of persons imagine that value is the creation of labor, 
 and that labor always creates value. 
 
 The fact is that value is always created by labor, but 
 labor does not always create value. A small amount of 
 labor sometimes creates a large amount of value. The fort- 
 unate borer for an oil-well may create more value by one 
 week's labor than ten men would ordinarily create in a life- 
 time of toil. 
 
 On the other hand, a large amount of labor may, and 
 often does, produce but little value, or it may be expended 
 without creating a particle of value. Furthermore, not 
 only may labor fail to create any value but it may actually 
 destroy value which has been previously created. 
 
 When labor changes circumstances, facts and conditions 
 so that a want and supply are made to fit each other just 
 as one blade fits another and forms a pair of scissors, value 
 is created. But the amount of labor expended in bringing 
 about this condition and the amount of value thereby 
 created vary enormously ; thus showing that the value 
 created is not solely dependent on the labor expended. 
 
 Suppose A and B should each buy an acre of land, of 
 equal fertility, and set to work to convert their respective 
 lands into gardens. In doing so each man performs an 
 
172 
 
 SOCIAL STRUGGLES. 
 
 equal amount of labor, but the product of A'sland is treble 
 the value of that of B. This arises from the fact that A 
 knows under what conditions different plants thrive best. 
 He knows how to prepare the soil, when to plant, and the 
 different kinds of manure and cultivation required by differ- 
 ent vegetables. In short, he understands how to apply his 
 labor so as to place each plant under the most favorable 
 conditions for growth. But B works without full informa- 
 tion of the needs of his plants. Consequently, B, with 
 the same amount of exertion, fails to create the conditions 
 that A did, and a smaller amount of value therefore re- 
 sults from his toil. 
 
 When wheat is taken to a market open to the competi- 
 tion of the owners of wheat throughout the world, its value 
 is the same, whether raised by hand labor on a naturally 
 poor soil, or raised by machinery on a fertile soil with little 
 labor. A similar fact is true of the value of all other things. 
 If a miner dig ten thousand dollars' worth of gold in a 
 day, that gold brings the same price per ounce as the gold 
 does for which another miner spent a month in digging an 
 ounce. Buyers of goods pay for results : they pay for the 
 creation of facts and conditions without estimating the 
 amount of labor which was expended in order to produce 
 those results. The price of one thing is not affected by 
 the fact that it may have cost either more or less labor to 
 produce it than was expended in producing a precisely 
 similar thing. 
 
 Thus we see that labor is necessary to create value, and 
 that therefore, if all other things were equal, the amount of 
 labor required to create a thing would be a correct index 
 of its value. 
 
 WHY LABOR DOES NOT ALWAYS CREATE WEALTH. 
 
 But other things are seldom equal, and therefore there is 
 a law which determines the amount of value which shall be 
 created by a giwQn amount of labor. The real force which 
 evokes value where it did not exist, and which increases the 
 value of things already created, is a suitable change in the 
 
WHAT CREATES VALUE. 
 
 173 
 
 relation of facts and things to mankind. If labor produce 
 this suitable change, labor creates value. But if labor be 
 not directed with sufficient intelligence, if the desired re- 
 sult does not flow from it, the labor is wasted. // is the 
 proper amditiois ivhicJi create value : labor is merely an in- 
 strument which, when rightly managed, forms circumstances 
 and facts under the influence of which value is created or 
 enhanced. 
 
 More or less labor is always required either to create a 
 valuable thing or to enhance the value of something already 
 created. But the amount of value resulting from a given 
 amount of labor depends on the circumstances under which 
 it is performed, and the intelligence with which it is guided. 
 
 To a very large extent, the foregoing simple fact is. not 
 recognized. All over the world an enormous amount of 
 labor is constantly being performed which creates no value 
 whatever, simply because it is unskillfully performed or un- 
 wisely directed. It frequently happens that a large amount 
 of labor is expended on some enterprise without reference 
 to the conditions which the completion of that enterprise 
 will produce. A common example of this is the construc- 
 tion of useless canals, railroads, streets and buildings. 
 These and other ill-judged schemes are continually started 
 and carried on by States, cities, companies and individuals. 
 A considerable number of these ruinous works are under- 
 taken solely because other works of the same kind, but per- 
 formed under different conditions, are successful. 
 
 Comparatively recently, a large number of the people of 
 Connecticut spent a considerable amount of money under 
 the delusion that value could be created by building a little 
 canal from New Haven, northerly to the Berkshire Moun- 
 tains ! A large amount of value was created by the Erie 
 Canal, but it was not produced simply by the expenditure 
 of a certain amount of labor, nor merely by making a canal. 
 Value was produced by creating a new condition ; viz., the 
 union of the Hudson River with the chain of great Western 
 lakes, thereby establishing a cheap mode of changing the 
 condition of goods by carrying them from places where 
 
174 SOCIAL STRUGGLES. 
 
 they had one value to places where they had another and 
 a greater value. 
 
 Many persons suppose because one work, — called a canal, 
 or railroad, a mine, or a factory, — creates value, that there- 
 fore any other enterprise of the same name and kind will 
 prove remunerative. Absurd as this mistake may seem, it 
 is frequently made, and vast amounts of labor are annually 
 squandered in consequence. A multitude of these unfortu- 
 nate schemes would never get beyond the budding stage if 
 their originators would calmly sit down and inquire : " After 
 this work is performed, will the same facts and conditions 
 which environ similar works in successful operation sur- 
 round this enterprise ? " 
 
 The practical lesson from the foregoing is, that value, 
 and therefore wealth, is most rapidly created, legitimately, 
 by the persons who best kiioiv lioiv to create conditions which 
 will supply the various wants and desires of mankind. 
 
 HOW WE STATE VALUE. 
 
 Having considered the essential nature of value, let us 
 next see how we define our ideas of its varying amounts, 
 — how we state the different degrees in which value may be 
 attached to a thing. 
 
 The majority imagine that values are measured by money 
 and that therefore money must have intrinsic value, just as 
 a peck measure must have a certain bulk in order to meas- 
 ure bulk. A little consideration will show that we do not 
 measure values with money, in the sense that we measure 
 distance with a yard-stick or tape-line. Values are meas- 
 ured by the judgment. We can give a child a quart measure 
 and send him out to buy a quart of milk, because the meas- 
 ure determines the amount of a given article ; but no one 
 w^ould think of trusting a child to "measure" value ^Wh. 
 money. If money measured value, we could give a child a 
 handful of gold coins and entrust him to buy a horse. If 
 gold coins measured value accurately, as we are told they 
 do, then possession of these coins would enable one man to 
 estimate values as wisely as another, just as one man can 
 
HOW VALUE IS ESTIMATED. 
 
 175 
 
 take a ten-foot pole and measure a hundred feet almost as 
 well as another. 
 
 V and W each have ten gold eagles and go out shopping. 
 They visit a number of different stores and each one ex- 
 pends her money for a variety of articles of wearing ap- 
 parel. After returning home, the goods purchased are 
 compared with each other and it is found that V has ob- 
 tained a better quality of goods, has received far more 
 value for her money, than W. When they started out shop- 
 ping, the things commonly called the "measure of value " 
 which each one took along with her, were alike. But one 
 woman carried along with her more judgment and intelli- 
 gence in regard to what she proposed to buy than the other. 
 
 Values are our judgments of the relative worth to us, 
 under our circinnstanccs, of one thing as compared with an- 
 other. There is no other way of stating our ideas of the 
 value of a certain thing, at a given time and place, except 
 by comparing it with some other thing. There are gener- 
 ally one or more things which circumstances make us want 
 more than we do other things. Therefore we state value 
 by saying how much of tJiis we will give for so much of 
 that. Our conduct is essentially the same, whether we are 
 giving our views of value by comparing one commodity 
 with another commodity, or whether we are comparing 
 money with a commodity. 
 
 A man's idea of the value of a certain thing to himself 
 does not depend simply upon his actual circumstances. 
 His judgment and opinion of his needs determine the 
 amount of value which he will put upon a certain thing. 
 Furthermore, a man's idea of the value of one thing always 
 depends on the way in which he compares it with anotJier 
 thing. Or in other words, a man's idea of the value of one 
 thing depends on his ideas of the value of the thing with 
 which he compares it. Consequently a correct judgment in 
 regard to values is only possible to those who have intelli- 
 gence concerning the thing to be appraised. Hence, as a 
 matter of daily occurrence, when we wish to " measure " the 
 value of a particular thing we do not approach or test it 
 
176 SOCIAL STRUGGLES. 
 
 with money. If we are not intelligent in regard to it our- 
 selves, we employ some one who has that special knowledge 
 to aid us. We employ a jeweler to tell how much a pre- 
 cious stone is worth. We get a man who knows the good 
 points of a horse to select or appraise a horse. We employ 
 a man familiar with real estate and buildings to tell us the 
 value of a house, and we consult one skilled in knowledge 
 of ships if we wish a vessel appraised. In short, when we 
 wish to " measure " the value of a thing, we employ in- 
 telligence and judgment in regard to that thing. V^o. com- 
 pare it with other things and we use money and money- 
 terma to facilitate a statement of this comparison. 
 
 Purchases and sales are made after consideration ; the 
 price depends upon the intelligence, judgment, and necessi- 
 ties of the buyer and seller — it is not " measured " by the 
 money used in the transaction. We express ourselves in 
 terms of money merely as a convenient mode of stating our 
 ideas and judgment of the value of a given thing, so that 
 others can understand us. The unit of value, the dollar, 
 for instance, is used to compare the value of one thing with 
 another. The whole community speak of things as being 
 worth so many dollars, and thus they arrive at a common 
 understanding of value by using a common means of com- 
 parison. If one man said a thing were worth so many bush- 
 els of wheat, another man said it were worth so many days' 
 labor, and another man said it were worth so many pounds 
 of cheese, etc., etc., great difficulty of making exchanges 
 would exist. But, by all parties using the same comparison, 
 exchanges are facilitated and our judgments of values are 
 steadied. 
 
 Suppose two farmers wish to trade stock. Both have in 
 mind, consciously or unconsciously, an idea of the value at- 
 tached to the unit of value, the dollar. One says : " Those 
 pigs of rnine are worth about five dollars apiece ; that heifer 
 of yours is worth about four times as much as one of my 
 pigs. I will give you my three pigs and five dollars for your 
 heifer." Money is thus used, not to measure vdXwQ, but as a 
 help to compare, count and state values. We "measure" 
 
NO SUCH A THING AS INTRINSIC VALUE. 
 
 177 
 
 value with our brains; we record and statr value by using 
 the names of units of money. 
 
 W. M. Evarts, our former Secretary of State, has made 
 an elaborate argument intended to show that values are meas- 
 ured by money just as we measure distance with a rod, or 
 weight with pound weights ; and that therefore money must 
 have " intrinsic " value in order to measure value. The 
 learned gentleman did not tell us how the value of money 
 was determined in order to obtain a " measure " to start 
 with. An inquiry of this kind would have led him to the 
 conclusion that the value of money is determined by the 
 judgment, and that the value of all things computed in 
 money must therefore rest on the same foundation as the 
 value of money itself. 
 
 When a farmer takes a hundred bushels of wheat to mar- 
 ket and exchanges it for money, a double comparison takes 
 place. The wheat is com.pared with money, and the money 
 is compared with wheat. The dealer in grain buys the 
 wheat and the farmer buys the money. The wheat " meas- 
 ures " the value of the money just as truly as the money 
 " measures " the value of the wheat. 
 
 DISTINCTION BETWEEN VALUE AND INHERENT QUALITIES. 
 
 A considerable portion of the financial legislation of this 
 country, for the past fifteen years, has been enacted on the 
 theory that gold and silver possess " intrinsic value," and 
 that such value is necessary to " measure " other values 
 with. 
 
 A man was arrested for beating his wife. Defense was : 
 " I treat women with the utmost kindness. I have no 
 wife." 
 
 In fact, there is no such thing as intrinsic value. We do 
 not " measure " value with money in the sense that we 
 could if such a thing as intrinsic value actually existed. 
 When silver coins "first took the place of fractional paper 
 money, many persons were surprised to find that their pur- 
 chases and sales went on as before the circulation of an 
 alleged " measure of value." 
 12 
 
■I^S SOCIAL STRUGGLES. 
 
 The idea that gold, silver, copper and other things pos- 
 sess " intrinsic value ' has arisen from not recognizing the 
 distinction between the intrinsic, inherent, physical qual- 
 ities of a thing and the value of that thing. Thus, anthra- 
 cite coal has certain intrinsic qualities. It is black, com- 
 posed chiefly of carbon, is combustible, and has certain 
 other intrinsic, physical qualities. Neither time, location, 
 nor any other circumstance, has any effect on these intrin- 
 sic qualities. If every nation in the world should enact 
 that anthracite coal should thereafter be white, it would 
 not have the slightest effect on its color. The inher- 
 ent, intrinsic qualities of coal are precisely the same at the 
 mines as when carried to the market where it has the great- 
 est value. 
 
 VALUE NOT AN INTRINSIC QUALITY. 
 
 The mistake lies in assuming that value is an " intrinsic " 
 quality. If its value were an inherent quality, coal would 
 have the same value under all circumstances ; just as its 
 color and other intrinsic qualities are invariable. But we all 
 know that the value of coal depends on the conditions un- 
 der which it is placed. Legislation could not, in the slight- 
 est degree, affect a single one of the intrinsic qualities of 
 anthracite coal. But legislation could be enacted which 
 would materially affect its value. For instance, if a heavy 
 tax were laid on all the bituminous coal mines, and rigidly 
 collected, it would increase the cost of bituminous coal and 
 thus indirectly raise the value of anthracite coal. Legisla- 
 tion might be enacted which would practically rob the 
 owners of bituminous coal mines of a considerable portion 
 of their value and transfer this value, thus wrongfully taken, 
 to the owners of anthracite mines. Such a measure would 
 be facilitgited by the fact that anthracite coal deposits are 
 limited to a comparatively small area. 
 
 Gold has certain inherent, physical qualities which can- 
 not be altered except by destruction of that metal. It has 
 a beautiful orange color, is very malleable, has a high spe- 
 cific gravity, and does not rust. These are the intrinsic 
 
DISTINCTION BETWEEN VALUE AND QUALITIES. ijg 
 
 qualities of gold, and they are fixed and invariable under 
 all conditions and circumstances. If the stock of gold in 
 human possession were reduced to one hundredth part of 
 the present stock, each ounce of that gold would have pre- 
 cisely the same intrinsic qualities which are now possessed 
 by each ounce of gold. On the other hand, if a mountain 
 of pure gold were discovered, so easy of access that it could 
 be mined as cheaply as coal now is, that fact would not 
 affect the intrinsic qualities of gold in the slightest degree. 
 Each ounce of the gold taken from such a mine would have 
 the identical, intrinsic qualities which are now possessed by 
 gold. 
 
 If all the nations of the world were to enact that gold 
 should hereafter be the sole legal tender; and also prohibit 
 the use of paper money entirely, in every form whatsoever, 
 the intrinsic qualities of gold would remain unchanged. It 
 would still be a bright yellow color, be malleable, very 
 'heavy, and unaffected by exposure to the air. 
 
 LEGISLATION HAS NO EFFECT ON INTRINSIC QUALITIES. 
 
 Legislation which might decrease the demand for gold 
 would have no effect on its intrinsic qualities. The univer- 
 sal demonetization of gold would not affect its weight, its 
 color, nor any other one of its intrinsic qualities in the 
 least. 
 
 The aforesaid facts in regard to gold are equally true in 
 regard to silver, copper, tin and all other metals. Each 
 metal possesses intrinsic qualities peculiar to itself which 
 cannot in the least be affected by legislation, scarcity, 
 plenty, time, or any other condition or circumstance what- 
 soever. A multitude of persons suppose the "intrinsic" 
 qualities of silver have changed since 1872. But, in fact, 
 we have no evidence that any change in the intrinsic quali- 
 ties of silver has occurred since the creation of the world. 
 Its intrinsic qualities are invariable, and therefore unchange- 
 able by legislation. 
 
l8o SOCIAL STRUGGLES. 
 
 A PROLIFIC ERROR. 
 
 The parent of an enormous amount of unwise legislation 
 is the fundamental error of assuming that value is an 
 " intrinsic quality " of gold and silver. Persons talk about 
 silver having " lost a portion of its intrinsic value." The 
 plain fact is that silver never had any intrinsic value. It 
 always possessed certain intrinsic physical characteristics 
 and qualities, but \\.'s,valuc has always depended on precisely 
 the same circumstances and conditions which have given 
 value to gold, iron, lead, copper, and all other metals and 
 things ; viz., its supply relative to the demand for it ; its 
 relative importance compared with other things. When 
 people say, "Legislation has no effect on value," they have 
 always previously assumed that value was an intrinsic qual- 
 ity. They confound ^. physical quality with a result. 
 
 WHAT IS NECESSARY TO THE EXISTENCE OF VALUE. . 
 
 Nothing is "valuable" unless three facts unite. First. 
 A thing must possess certain intrinsic, physical qualities 
 which adapt it to supplying a human want. Second. A 
 person must have a want which the intrinsic, inherent quali- 
 ties of a certain thing would supply. Third. The person 
 having the want must be supplied with the thing whose 
 intrinsic qualities satisfy that want. Then the thing pos- 
 sessing those qualities has a value. The amount and 
 degree of such value depends entirely on the circumstances 
 under which the want is supplied ; on the urgency and 
 intensity of the want ; on the difficulty of supplying it in 
 any other way ; and on the fullness with which the desired 
 thing satisfies the need. 
 
 To illustrate how value arises from the union of certain 
 conditions, let us suppose a man suffering from cold and in 
 want of protection from the air. A woolen blanket pos- 
 sesses the intrinsic qualities which would supply this man's 
 wants. When the blanket is placed in possession of the 
 man, a value is created, — a want has been supplied with a 
 substance possessing the requisite intrinsic qualities to sup- 
 
 1 
 
I 
 
 BOW VALUES ARE CHANGED. l3l 
 
 ply that want. The degree of the value of said blanket 
 to the shivering man depends on the surrounding circum- 
 stances. It might be so that the man would regard 
 possession of the blanket as a matter of life or death to 
 him ; or, it might be so that his wants could otherwise 
 be easily supplied and thus give the blanket the value 
 ordinarily possessed by it. 
 
 VALUE IS ALWAYS RELATIVE. 
 
 When a man talks of the '' value " of a thing, it is only 
 another way of saying : " This thing, to me, under the 
 present circumstances, is worth more than that thing, or 
 those things." Value is an idea of the relative importance 
 to a man, under his existing circumstances, of one thing as 
 compared with another thing. Thus a wounded soldier 
 lying on the battle field would think a twenty-dollar gold 
 coin of much less importance than a drink of water. This 
 is simply because the value of the coin is not " intrinsic," 
 but the creation of circumstances. Ordinary conditions 
 give it its ordinary value. Extraordinary conditions either 
 raise or lower its value to an extraordinary degree. Leg- 
 islation can affect the value of coins to the extent that it 
 can increase or diminish their relative importance as com- 
 pared with other things. Whenever the relative importance 
 of a thing which possesses intrinsic qualities adapted to the 
 supply of human necessities and desires is increased, the 
 advantage of owning such a thing and its value are thereby 
 increased. Any event which makes it more difficult to ob- 
 tain possession of a thing the ownership of which is desira- 
 ble, increases what we call the "value" of that thing. 
 The relative importance, and consequently the value, of 
 one thing as compared with all other things may be changed 
 by various events. 
 
 First. It may become smaller in actual amount, scarcer, 
 and more difficult to obtain in consequence. Thus a 
 short crop of wheat throughout the world makes that grain 
 more valuable. Its importance in comparison with other 
 things is increased. 
 
1 82 SOCIAL STRUGGLES. 
 
 Second. It may become larger in actual amount, 
 plentier, and more easily obtained. An unusually large crop 
 of wheat throughout the world diminishes the relative im- 
 portance of a bushel of wheat, as compared with the im- 
 portance of other things, and thus diminishes its value. 
 
 Third. The amount, the supply of a certain thing may 
 be unchanged, and, at the same time, its relative impor- 
 tance and consequently its value may be either increased 
 or diminished by other events which either increase or 
 diminish the demand for such a thing. This fact was 
 noted by Adam Smith, and has ever since been recognized 
 by every respectable writer on political economy. When- 
 ever two things are used for the same purpose and one of 
 those things becomes plentier, or less difficult to obtain, the 
 value of the other thing is thereby diminished. And, on 
 the other hand, whenever one of those things becomes 
 scarcer, or, for any reason, more dii^cult to obtain, the 
 value of the other thing is increased. 
 
 Beef and mutton are used for a similar purpose. When 
 beeves are very plenty and cheap, the tendency is for people 
 to buy beef instead of mutton. This reduces the price of 
 mutton. W'hen beef is very scarce and dear, mutton is in 
 greater demand and consequently more valuable. An in- 
 crease or a diminution in the supply of mutton has a sim- 
 ilar effect on the demand for beef. 
 
 When mules and oxen are plenty and cheap, there is 
 less demand for draught-horses. The importance of a 
 draught-horse is thus relatively diminished and his value 
 lessened. When mules and oxen are scarce and high, 
 the relative importance of a draught-horse is thereby 
 increased and his value consequently raised. 
 
 When bituminous coal is made plentier and cheaper the 
 inevitable -effect is to lessen the use and demand for anthra- 
 cite coal. If bituminous coal should become scarcer, or, for 
 any reason, less desirable or more difficult to obtain, the value 
 of anthracite coal would be enhanced. 
 
 Hundreds of illustrations similar to the foregoing could 
 be cited if necessary. The curious thing is that the appli- 
 
EACH MAN SHOULD THINK FOR HIMSELF. 
 
 183 
 
 cation of the aforesaid established and familiar principle 
 has been so largely overlooked in regard to the relative 
 value of gold and silver. Prior to the demonetization of sil- 
 ver, gold and silver were both legal tenders, and used for the 
 same purpose. The disuse of silver as a legal tender imme- 
 diately increased the relative importance of gold ; it became 
 relatively scarcer and more difificult to obtain, and its value 
 was therefore, inevitably increased. Many persons have 
 supposed the gold dollar unchanged in value because its 
 weight is unchanged, and because the number of gold 
 dollars has not been materially diminished. Such persons 
 forget that all things are relative, and that the number of 
 gold dollars, relative to the demand for tJiein, has been 
 largely diminished. 
 
 ONLY ONE WAY TO LEARN THE NATURE OF VALUE, 
 
 Very little substantial progress can be made toward un- 
 derstanding finance and kindred topics without first clearly 
 learning the essential nature of value. There is only one 
 way to acquire this indispensable knowledge. The student 
 must carefully think the subject over for himself from 
 beginning to end. If he be too lazy to do this, he will 
 never comprehend what value is, and, necessarily, will never 
 have a correct idea about either it or any related subject. 
 
 This consideration of value can and should be made by 
 using the simplest and most familiar things as objects of 
 study. Thus a person who lives near a brick-yard can find 
 therein a practical illustration of every fact and principle 
 heretofore discussed, concerning value. He will first ob- 
 serve a bank of undug clay. This he will notice ha's certain 
 intrinsic qualities which make it suitable material for mak- 
 ing bricks. He will next find that the value of clay in the 
 bank is very small. That even this small amount of value 
 is not " intrinsic " can readily be seen by asking: Are there 
 not many locations wherein such a clay bank would have 
 no appreciable value whatsoever? 
 
 The observer will next note that four thousand pounds of 
 unworked clay are worth only a few cents, and four thou- 
 
1 84 
 
 SOCIAL STRUGGLES. 
 
 sand pounds of good bricks are worth ten dollars. This 
 change of value, he will find, has arisen because changes 
 have been made in the clay by making it into things which 
 will supply a human want. 
 
 He may next see two piles of brick, upon each of which 
 the same amount of labor has been expended. One pile is 
 worth ten dollars per thousand, while the other is worth 
 only five dollars per thousand. Upon inquiry, he will find 
 this is so because one kiln was spoiled by unskillful burning ; 
 the requisite amount of labor was used but it did not pro- 
 duce the required conditions. 
 
 If told that the best bricks have an " intrinsic" value of 
 ten dollars per thousand, the student can test the accuracy 
 of that statement by asking: Could these bricks not be 
 taken to a place where they would have no appreciable 
 value ? Their size, shape, weight and other intrinsic quali- 
 ties would not be altered by such a removal, but their value 
 would be destroyed by an unfavorable change of the con- 
 ditions surrounding them. 
 
 In the simple manner aforesaid, the fact that value is EX- 
 TRINSIC and not INTRINSIC can be demonstrated by study- 
 ing the facts relative to any familiar object to which the idea 
 of value is ordinarily attached.''^ 
 
 * FALSE THEORIES IN REGARD TO LAND. 
 
 It is commonly supposed that the value of land in cities is entirely due 
 to the amount of labor which has been expended upon it. If this sup- 
 position were correct, it would necessarily follow that land within muni- 
 cipal bounds, once made valuable by an expenditure of labor thereon, 
 would maintain such value no matter what changes in other conditions 
 might occur. 
 
 Let us test this belief by a hypothesis which would place New York City 
 under conditions similar to those which frequently in the past have iso- 
 lated great cities from the channels of commerce and reduced them to 
 insignificance. Invention, discovery, wars, and political transformations 
 have often changed the course of the commerce which nurtured a city. 
 Instead of those causes, suppose an earthquake should change the rela- 
 tion which Manhattan Island now occupies to the United States. Sup- 
 pose the Hudson River should pass through the Highlands at West 
 Point, and a channel be opened so that its water emptied into a harbor, 
 
CONDITIONS DETERMINE LAND VALUES. 
 
 185 
 
 far surpassing the present harbor of New York, in the middle of the 
 coast of New Jersey. Suppose the same convulsion should place a 
 mountain range in the lower Hudson valley and should destroy the East 
 River and the present New York harbor. 
 
 What effect would said supposed changes inevitably have upon the 
 value of the land now so enormously valuable? Immediately after the 
 earthquake, commerce would begin in the new harbor. New York City- 
 would begin to move to a spot whose conditions better fitted it to be the 
 commercial center of a great nation. The vast amount of labor hereto- 
 fore expended on the land constituting Manhattan Island would not suf- 
 fice to arrest its depreciation for a single day. Not another new building 
 would be erected in New York. Land now valuable would be placed 
 under circumstances which would render it comparatively worthless. 
 What is now deemed the most desirable kind of property, land on the 
 business streets of New York, would then be unsalable at almost any 
 price. 
 
 The aforesaid events would occur because the sum total of conditions 
 which now give value to the land of New York City would cease to exist. 
 The condition of labor expenditure on the land would remain, but that 
 would not avail to prevent a tremendous change of land values. It 
 would then fully appear that the amount of labor expended on municipal 
 land is neither the sole, nor the dominant thing, which gives and sustains 
 its value. Such land rises and falls in value just in the proportion that it 
 fills and supplies a commercial, industrial, and social want, not merely of 
 the residents of the particular city in which it lies, but of the nation ; and, 
 in case of cities largely engaged in foreign commerce, the population of 
 the entire globe. In verification of this, we have only to consider the his- 
 tory of the land where large and wealthy cities once stood, whose ruin 
 was wrought by events that placed other locations under conditions which 
 gave them greater fitness for the supply of human desires. Labor be- 
 stowed upon municipal land is simply one of many conditions upon which 
 its value depends. Whether it shall raise the value of the land upon 
 which it is expended, or not, depends on the ultimate result of such labor, 
 viz., whether it places the land under conditions which will make it sup- 
 ply human wants better than other lands with which it is in competition. 
 Unlike things which, in response to an increased demand therefor, can be 
 indefinitely multiplied by labor, the amount of land within a given area 
 cannot be increased. Hence, an enlarged demand for land in a certain 
 location must result in an additional value being conferred on said land, 
 simply because the want supplied by it has been intensified. The condi- 
 tions surrounding the land have been so changed as to enable it to supply 
 a greater need than previously. 
 
 The theory that the value of land is governed by a peculiar and special 
 law may therefore be dismissed as untenable. But the well established 
 
1 86 ■ SOCIAL STRUGGLES. 
 
 fact, that the ownership by a few individuals of very large amounts of 
 land is a pernicious monopoly, remains for consideration, after erroneous 
 theories relative thereto are abandoned. The remedy for such monopo- 
 lies is indicated in another chapter, viz.: Sufficient taxation to make the 
 public burdens of the owners of such land as great as the benefits they 
 derive from its monopoly. 
 
 Whenever and wherever one man owns an amount of land sufficiently 
 great to make such ownership an injury to the community and State, the 
 portion of land in excess of what is necessary for the supply of his per- 
 sonal needs should be taxed heavily enough to induce him to dispose of 
 it at a fair price, to those in need of homesteads. At present, on the av- 
 erage, the owner of one city lot, with a home thereon, pays a higher pro- 
 portional tax than the capitalist who owns one thousand vacant lots. 
 And the owner of a farm of one hundred acres is taxed relatively higher 
 than the man who monopolizes twenty thousand acres. The present sys- 
 tem is inequitable,— it is not fair play. 
 
 But it should be remembered that taxation is a tremendous power, and 
 when directed by rash ignorance, an engine certain to produce great 
 wrong and disaster. That its lands should all be managed and improved 
 with the greatest possible economy, care, and intelligence, is a matter 
 of the highest importance to a nation. Therefore all changes of na- 
 tional policy in regard to land taxation should be made slowly and cau- 
 tiously, after full investigation. While seeking to abate the evils of land 
 monopoly, care should be taken to avoid the opposite extreme, viz. : A 
 policy the tendency of which vi'ould be to cause the abandonment and 
 neglect of all but the most fertile and desirable lands, and make the 
 ownership and improvement of land so unprofitable as to induce the 
 vast majority to study how small an amount of land they shall cultivate 
 and beautify. Baleful results would certainly flow from the adoption of 
 measures whose tendency would be to make men more nomadic and les- 
 sen their affection for their homes. 
 
 As only one thing can be discussed and settled at a time, it would be 
 unfortunate to have public attention concentrated on the minor question 
 of land monopoly until the subject of paramount importance, the currency 
 question, is first disposed of. 
 
CHAPTER IX. 
 
 The Silver Question : It Compreliends Many Things. — Historical Sketch 
 of the Silver Dollar. — Acts of 1834 and 1837. — Relative Value of 
 Silver and Gold Dollars. — Option of Payment by either Gold or 
 Silver. — Tendency of Commerce. — Established Right of both Credit- 
 ors and Debtors. — Silver Coinage. — Effect of Demonetizing Silver. — 
 Contagiousness of Vice. — False Doctrines framed into' Law. — Fun- 
 damental Facts about Gold and Silver. — Attempt to Demonetize Gold. 
 — Present Consumption of Gold in the Arts. — Origin of the War on 
 Silver. — An Old Subterfuge. — Effect of Legislation on the Value of a 
 Dollar. — Value of all things Dependent on the same Law. — An Ex- 
 ample of Legislative Theft. — A Talk with a Clergyman. — One Pur- 
 pose under Various Pretenses. — A Doctrine Dangerous to Creditors. 
 — Ought the Silver Dollar to be made Heavier .'' — Danger of Rob- 
 bing Debtors. — Debt not Disreputable. — The True Doctrine. — 
 Nothing is more Detestable than Hypocrisy. — The Cry for Honesty. 
 — Groundless Charges against Silver. — Why Silver does not Circulate. 
 — Superiority of Paper Money. — The Essential Allegation in regard 
 to Gold. — Has Gold a Fixed Value } — The Bullion Report. — Facts 
 which Overthrow the Common Theory in Regard to Gold. — Origin 
 of a Belief in the Fixed Value of Gold. — By Comparison with Things 
 other than Itself, is the only Way in which We can Ascertain and 
 State any of the Qualities of any Object or Thing. — All Ideas are 
 Relative. — Need of Comparing One Thing with Something besides 
 Itself. — Value of Gold should be Tested as all other Things are.— 
 Logical Results of Comparing Gold only with Gold. — Result of un- 
 limited Coinage of Silver. — Correct Mode of Stating the Value of 
 Gold and Silver. — What a Price is. — Money changes in Price like 
 other Things. — How to Test the Price of Money. — The Price of Gold. 
 — Correct Test of the Rate of Interest. — Public Debts and Taxes. — 
 An Example of Benevolence. — The True Explanation. — What has 
 changed the Value of Gold. — America bearing down the Prices of 
 American Goods. — Effect of Lowering Prices in England. — The 
 Delusion that Gold Prices would not Fall. — Effect of Making a 
 Metal Legal Tender. — Has Silver Depreciated in Value .' — How to 
 Test the Value of Silver. — .An Official Table of Relative Prices. — 
 Another Comparison of Prices. — Ought an Equality be Maintained 
 between the Value of Gold and Silver Dollars ? — Statements of the 
 
 187 
 
J 88 SOCIAL STRUGGLES. 
 
 New York Tributie. — Money should maintain a Relative Uniformity 
 in Amount. — Stability of Prices is the Practical Result of a Stable 
 Currency. — The 125-Cent Dollar. — Labor a Test of Value. — Silver 
 has Risen in Value. — Why Silver has not Fallen in Value. — Silver has 
 always Fluctuated in Value. — Why England has a Gold Currency. — 
 Should We make Times harder in Europe ? — Are Payments in 
 Silver Honest .'' — Written Contracts more Reliable than Vague Un- 
 derstandings. — A Man cannot lose what He never Owned. — Differ- 
 ences in Relative Value of Gold and Silver. — A Suggestion for Con- 
 sideration.— Result of Entire Demonetization of Silver. — The Idea 
 of Coercing England.^ — Ought Prices to t)e Depressed by Legisla- 
 tion .'' — The best kind of Money.— Stable Money best for the Masses. 
 —A Stable Currency best for Debtors. — Why different Classes have 
 Different Ideas. — A Notorious Fact. 
 
 The present monetary anei social situation of affairs zvill not 
 lose interest after coming events have replaced it with differ- 
 ent conditions. As an illustration of the inevitable tendency 
 of certain legislation to produce certain results, it will have a 
 permanent historical value for guidance in the formation of 
 public policy throughout all futiLre time. 
 
 We have now studied elementary principles far enough 
 to begin a consideration of the silver question. 
 
 A large number of persons have learned that a silver dol- 
 lar is heavier than a gold dollar, and that the materials from 
 which it is made are worth at present less than the mate- 
 rials from which a gold dollar is made. These two superfi- 
 cial and universally conceded facts are sufficient to make 
 them imagine themselves fully capable of writing and talk- 
 ing about the silver question with an air of profound wis- 
 dom. But, like all those who talk on any other subject 
 without first giving it a careful examination, their state- 
 ments and arguments af^e merely exhibitions of conceit 
 and ignorance. 
 
 HISTORICAL SKETCH OF THE SILVER DOLLAR. 
 
 The first United States law in regard to coining money 
 was made April 2, 1792. That act prescribed that the 
 gold dollar should contain 24 75-100 grains of pure gold, 
 and the silver dollar 371^ grains of pure silver. From 
 the first settlement of the country, the Spanish milled dollar 
 had been the principal kind of metallic money in use 
 
ORIGIN OF THE SIL VER DOLIAR. 
 
 189 
 
 throughout the Colonies, and said act was framed with ref- 
 erence to maintaining the existing coin with no change ex- 
 cept the inscription thereon. " There shall be from time to 
 time, struck and coined at the said mint, dollars or units, 
 each to be of the value of a Spanish milled dollar, as the same 
 is now current, and to contain 37 ij^ grains of fine silver." 
 The phrase, "As the same is now current," referred to the 
 average weight of a number of silver dollars taken from the 
 circulation by direction of the Secretary of the Treasury, 
 Alexander Hamilton, and assayed to determine the average 
 amount of pure silver contained therein. 
 
 Although the act of 1792 made gold a legal tender, silver 
 continued to be the chief metallic money of this country. 
 
 The aforesaid act fixed the relative value at one of gold 
 to fifteen of silver. The leading European nations after- 
 wards fixed the legal relative value of gold and silver at one 
 of gold to fifteen and a half of silver. The result was that 
 gold became legally worth more in Europe than in this 
 country, and silver was legally worth less in Europe than 
 here. In Europe an ounce of gold would buy fifteen and a 
 half ounces of silver, but in this country it would buy only 
 fifteen ounces. The gold eagle was worth a little more than 
 ten silver dollars, and as both creditors and debtors had 
 the option to make payments in either kind of money, the 
 slightly cheaper money was employed. Then, as now, the 
 great bulk of commerce was carried on without using either 
 silver or gold dollars, but when metallic dollars were used 
 the silver dollar was usually selected. 
 
 On June 28, 1834, with a view of bringing both gold and 
 silver into concurrent circulation, Congress passed a coinage 
 law which left the Aveight of the silver dollar unchanged, 
 but diminished the weight of the gold dollar to 23 20-100 
 grains of pure gold. 
 
 On January 18, 1837, Congress passed a coinage law which 
 diminished the amount of alloy in the silver dollar, but left 
 the amount of pure silver unchanged. The weight of the sil- 
 ver dollar was thus changed from 416 grains to 412^^ grains. 
 The same law changed the fineness of the eagle from one 
 
190 
 
 SOCIAL STRUGGLES. 
 
 part of alloy to eleven parts of fine gold, to its present fine- 
 ness — one part of alloy to nine parts of gold. This change 
 was from one-twelfth to one-tenth alloy. At the same time 
 the amount of pure gold in the dollar was increased 2-100 
 of one grain. 
 
 ACTS OF 1834 AND 1 837. 
 
 The net result of the said acts of 1834 and 1837 was this: 
 The amount of alloy was changed. The amount of pure 
 silver in the silver dollar was left at the original amount, 
 371^ grains. The amount of pure gold in a gold dollar 
 was changed from 24 75-100 grains of pure gold to 23 22-100 
 grains. 
 
 Said acts reduced the weight of a gold dollar more than it 
 should to have the legal value of gold in this country con- 
 form to the legal value of gold in European nations ; to 
 wit, one part of gold to 15)^ of silver. 
 
 Instead of conforming to the European ratio, as should 
 have been done. Congress changed the weights of the coins 
 so that one pound of gold coins was equal in value to nearly 
 16 pounds of silver ; or 15 988-1000 pounds, to speak accu- 
 rately. This change increased the price of gold at the 
 United States mints (that is, less gold was required to coin a 
 dollar) to the extent of 6 589-1000 per cent. The value of 
 a gold dollar coined by virtue of those acts was thus reduced 
 to that extent. The effect of legislation on value once 
 more became apparent soon after this change in the relative 
 value of gold and silver at the mints in this country. 
 
 American legislation decreed that about sixteen pounds 
 of silver were required to buy one pound of gold. But the 
 mints of Europe called one pound of gold worth only 151^ 
 pounds of silver. A merchant could buy a pound of gold in 
 Europe by giving 15)^ pounds of silver for it ; he could then 
 bring that pound of gold to this country and sell it for nearly 
 16 pounds of silver. After paying expenses of purchase, 
 shipment and sale, a profit could be made by buying silver 
 in this country for gold, taking the silver to Europe and sell- 
 ins: it there for gold. 
 
OPTION OF PA YMENT. 
 
 191 
 
 RELATIVE VALUE OF SILVER AND GOLD DOLLARS. 
 
 From the passage of the act of 1834 until the demonetiza- 
 tion of silver in 1873, the silver dollar was worth a little 
 more than the gold dollar. The following table, furnished 
 by the director of the mint, shows the relative value of the 
 silver and the gold dollar from 1834 to 1873. 
 
 < 
 
 ^a^^ 
 
 X! 
 
 =:5a.< 
 
 < 
 
 TO _ < 
 
 !U 
 
 £;.2.c 
 
 p 
 
 ■E.2.E' 
 
 p 
 
 £.2.^ 
 
 n 
 
 5 STf 
 
 ."■ 
 
 i »=''' 
 
 "t 
 
 S F" 
 
 
 I 
 
 
 "to 
 
 
 
 -> 
 
 
 = 2.^' 
 
 
 5-°sr 
 
 
 
 5'°,^ 
 
 
 Gfq 41. wi 
 
 
 crq*. <£. 
 
 
 
 OfQ-t^ i£. 
 
 
 2.S r 
 
 
 £.S < 
 
 
 
 2.S 5* 
 
 
 
 
 p.»f s 
 
 
 
 
 
 Cents. 
 
 Cents. 
 
 
 Cents. 
 
 1834 
 
 101.62 
 
 1848 
 
 100.88 
 
 1862 
 
 104.16 
 
 1835 
 
 101.20 
 
 1849 
 
 101.30 
 
 1863 
 
 104.06 
 
 1836 
 
 101.72 
 
 1850 
 
 101.83 
 
 1864 
 
 104.06 
 
 1837 
 
 100.98 
 
 I.S51 
 
 103.42 
 
 1865 
 
 103.52 
 
 1838 
 
 100.88 
 
 1852 
 
 102.57 
 
 1866 
 
 103.63 
 
 1839 
 
 102.36 
 
 1853 
 
 104.26 
 
 1867 
 
 102.67 
 
 1840 
 
 102.36 
 
 1854 
 
 104.26 
 
 1868 
 
 102.57 
 
 I 84 1 
 
 101.88 
 
 1855 
 
 103-95 
 
 1869 
 
 102.47 
 
 1842 
 
 100.77 
 
 1856 
 
 103-95 
 
 1870 
 
 102.67 
 
 1843 
 
 100.34 
 
 1857 
 
 104.69 
 
 1871 
 
 102.57 
 
 1844 
 
 100.88 
 
 1858 
 
 103-95 
 
 1872 
 
 102.25 
 
 1845 
 
 100.46 
 
 1859 
 
 105.22 
 
 i 1873 
 
 100.46 
 
 1846 
 
 100.56 
 
 i860 
 
 104.58 
 
 
 
 1847 
 
 101.20 
 
 1861 
 
 103.10 
 
 
 
 
 As appears from the foregoing table, gold was the cheaper 
 metal for the entire period above named in this country. 
 Meantime gold and silver at the ratio of 15^ of silver to one 
 of gold circulated at an equality of value throughout France, 
 Germany and the other leading nations of Europe. 
 
 OPTION OF PAYMENT BY EITHER GOLD OR SILVER. 
 
 In this country the steadily recognized right of all persons 
 to make a required pa}'ment of " dollars," either in silver or 
 in gold at his option, caused gold to be generally used in 
 place of silver. No outcry was raised about the use of 
 " cheap money," and no one was accused of dishonesty be- 
 cause he did not make payments in siK'er, — the most valuable 
 
ig2 
 
 SOCIAL STRUGGLES. 
 
 kind of money. Compared with silver, gold was " depreci- 
 ated," but the right to use it as a legal tender at the legal rate 
 of :23 22-100 grains of pure gold was unquestionable. At the 
 same time the right of any one to pay an obligation in silver 
 dollars was fully established both by law and by public senti- 
 ment. That comparatively few persons did so, but paid in 
 the cheaper metal, did not in the least affect their right to 
 make such a payment if they so desired. 
 
 The reader will please here note the important fact that 
 from 1792 up to 1873 the United States mints were open for 
 \\\Q unlimited coinage oi both gold and silver. Any holder 
 of bullion, no matter whether it was gold or silver, could 
 send it to the mints and have it coined at the public expense 
 into the standard national coins. The idea of limiting the 
 coinage of either silver or gold to a certain amount per 
 month was unheard of. 
 
 How this ancient and established order of things, and how 
 the moral and legal right of all persons to choose in which 
 one of the said methods they would make a payment re- 
 quired of them, came to be changed so that the legal right 
 no longer existed, we will next consider. 
 
 Before proceeding further in the history of the coinage 
 legislation of this country, several important points must be 
 noted and borne in mind. 
 
 First. Although both gold and silver were a legal tender 
 for all purposes, and there was no restriction whatever on 
 the coinage of either metal from 1792 to 1873, yet, in fact, 
 one of the metals was constantly used as money more than 
 the other. The other metal was not banished, — it remained 
 a legal tender and was always used to some extent. The 
 metal whose bullion value was lowest was employed as 
 money far more than the metal Avhose bullion- value for the 
 time being was highest. This arose from two facts. 
 
 TENDENCY OF COMMERCE. 
 
 Commerce naturally seeks the least expensive modes of 
 transaction. The fact that the least expensive money is al- 
 ways used whenever a choice is possible is a simple thing 
 
ESTABLISHED RIGHT OF ALL PERSONS. ig.? 
 
 which has been generally treated by "economists" as a 
 wonderful law of finance. 
 
 ESTABLISHED RIGHT OF BOTH CREDITORS AND DEBTORS. 
 
 It was an implied part of every contract which called for 
 the payment of a specified number of " dollars " that those 
 dollars should consist of either one of the legal-tender mon- 
 eys of the nation. This option naturally led persons who 
 paid money, either as loans or in payment of debts of any 
 kind, to employ the kind of "dollars" most readily ob- 
 tained, and these w^re usually dollars whose bullion value 
 was lowest. 
 
 Second. It was the established policy of the country to 
 have two kinds of legal-tender metallic money. The object 
 was, by having a larger amount and variety of metal from 
 which to coin money, to secure a greater stability of the 
 value of the coins than was possible by the use of a single 
 metal. It is more difficult to overturn a body with a large 
 base than a body with a small base. A small body of water 
 is much more easily raised or lowered in temperature than a 
 large body of water. The larger the amount of valuable 
 metal from which money is coined, the less that money is 
 liable to vary in \alue. 
 
 Although one of the precious metals for a time might be 
 in use as money to only a small extent, yet it was still per- 
 forming a useful function. It was standing guard over the 
 fluctuations in value of the metal most in use, ready to step 
 in and fill its place whenever a failure of mines, or an in- 
 creased demand from any other cause, should unduly increase 
 the value of the metal, which for some time had been cheap- 
 est and most generally employed. The tendency of one of 
 a pair of' precious metals to act as a balance^nd check on 
 an undue rise in the value of the other has been twice illus- 
 trated in a marked manner by the history of our coinage. 
 
 After the coinage act of 1834, silver rose in value, but no 
 commercial disturbance occurred in consequence, because its 
 fellow metal, gold, at once came into circulation and stead- 
 ied values. After 1834, owing to the fact that silver was 
 13 
 
jg. SOCIAL STRUGGLES. 
 
 worth more for shipment abroad in form of buUion than for 
 coinage in the standard dollar of 41 2>^ grains, compara- 
 tively little silver was coined at the United States mints. 
 
 The great money-lenders of Europe began the war on sil- 
 ver at the Paris convention in 1867. Thereafter it was ap- 
 prehended and foreseen that legislation would soon be en- 
 acted which would place gold under such difTerent condi- 
 tions from what had existed from time immemorial that 
 the demand for it, and consequently its value, would be 
 largely increased. 
 
 SILVER COINAGE. 
 
 In 1868 the coinage of silver dollars at the United States 
 mints was 54,800. In 1869 the value of gold had risen to 
 such an extent that silver dollars, to a greater extent than 
 previously, began to be coined at the United States mints, 
 and this coinage proceeded as follows : 
 
 1869 231,350 
 
 1870 588,308 
 
 1871 657,929 
 
 1872 1,112,961 
 
 1873 977.150 
 
 EFFECT OF DEMONETIZING SILVER. 
 
 It zvill be observed that the amount of eoinage was steadily 
 increasing until 1873, zuhen the coinage of silver dollars was 
 stopped. The law stopping the coinage of silver dollars was 
 passed February 12, 1873. The above figures therefore rep- 
 resent only a fraction of 1873. There is every reason to 
 believe that if the coinage laws had not been tampered with, 
 the coinage of silver dollars before the close of 1875 would 
 have risen to forty millions per annum. Silver coinage, by 
 diminishixig the demand for gold, would have prevented the 
 value of gold from rising to the price it reached at that time 
 and soon after. This would have saved thousands from 
 bankruptcy through forced sales at ruinously low prices. 
 By giving stability to values, it would have averted the ap- 
 prehension and fear of the future which paralyzed enter- 
 
EQUAL RIGHTS TO ALL. 
 
 195 
 
 prise and threw labor out of employment in 1876, 1877 and 
 1878. 
 
 Third. Prior to 1873, the chief argument of those op- 
 posed to paper money was a recital of the fact that as the 
 materials from which gold and silver coins are made are 
 limited in their amount by nature, the value of metallic 
 money is not subject to the caprice of legislators. They 
 said : " Laws can readily change the value of paper money ; 
 but it is generally admitted that legislators have no right to 
 meddle with the coinage of metallic money, and thereby 
 change existing contracts to the detriment of either debtor 
 or creditor." 
 
 Fourth. While comparatively few persons were familiar 
 with the fact that the value of gold and silver, like all other 
 values, is dependent entirely on surrounding conditions and 
 circumstances, and that changes in those conditions and 
 circumstances inevitably produce fluctuations in the value 
 of those metals, it was universally known that it is much 
 easier to obtain money in what are called " good times " 
 than in periods which are called " hard times." In practi- 
 cal application of the foregoing fact it was an implied 
 part of every contract either to pay, or to receive money, at 
 a specified future time, that both parties to the contract 
 should incur an equal risk of the money being hard or easy 
 to get, and therefore more or less valuable, when said time 
 arrived. 
 
 CONTAGIOUSNESS OF VICE. 
 
 No disease is more contagious than vice. This is espe- 
 cially so when vicious desires are put in form of criminal 
 acts, and these acts are both committed and sanctioned by 
 those whom the majority of the community regard as the 
 best examples of rectitude. In 1869, as we have heretofore 
 seen, Congress changed existing contracts and thereby com- 
 mitted a colossal theft at the instigation of holders of 
 United States bonds, and with the sanction of the majority, 
 who claimed to be actuated by the purest principles of 
 " honesty." The profitable result of this transaction nat- 
 
196 SOCIAL STRUGGLES. 
 
 urally led its authors and their imitators to consider and 
 devise means of reaping another harvest from a sim- 
 ilar legislative enactment which would insidiously change 
 existing contracts, and practically carry out the following 
 ideas proclaimed, in substance by the organs of the money- 
 lenders : 
 
 " The obligation to fulfill contracts does not apply impartially to all men 
 under all circumstances. The debtor and the tax-payer are always bound 
 to pay the exact number of dollars named in the contract ; but the cred- 
 itor has a right to go to Congress and promote laws which will change 
 his contract whenever events make it less advantageous to him. than he 
 hoped it would be when he made the bargain. The risk, which everyone 
 who makes a contract to be executed in the future inevitably incurs, that 
 the word ' dollars ' shall then have a different meaning, should be borne 
 only by the debtor and the tax-payer." 
 
 FALSE DOCTRINES FRAMED INTO LAW. 
 
 The foregoing detestable ideas were slyly incorporated 
 into Congressional law February 12, 1873, by the cunning 
 device of simply omitting from the revision of the coinage 
 laws all mention of the silver dollar. President Grant, who 
 signed the revision in order to make it a law, did not know 
 that silver was thereby demonetized. By this act a vast 
 amount of existing bonds, mortgages and other contracts, 
 which were originally payable in either silver dollars or 
 gold dollars at the option of the debtor, were made payable 
 in gold dollars. The option which previously existed was 
 canceled. At that time it was foreseen that silver would 
 soon be chosen by the debtors as the means of payment if 
 the bargain between them and their creditors were not 
 altered by legislation, and emboldened by the success of 
 the act of March 18, 1869, the money-lending interest pro- 
 cured the foregoing change in the contract existing between 
 them and their debtors. 
 
 This change of law, which practically was a theft of hun- 
 dreds of millions of dollars, was made with so little pub- 
 licity that not one person in a hundred thousand had knowl- 
 edge of it until long afterward. There was no debate on 
 the question, and, in fact, the general public had no infor- 
 
WHO ARE GUILTY. in -7 
 
 mation whatever of what was being done. The statutes 
 were revised in the committee room and quietly passed by 
 Congress. Who the authors of this plot were, we do not 
 know. But their existence and the class which they repre- 
 sented can be stated with the same certainty that the nat- 
 uralist describes birds Avhose foot-prints before historic times 
 were left on the sands. The natural inference as to who 
 instigated the aforesaid revision is conclusively proved cor- 
 rect by the known facts that this legislation has ever since 
 its passage been approved by the money-lenders. 
 
 A man becomes responsible for the unauthorized and 
 wrongful acts of his servant whenever he adopts and de" 
 fends them as his own. A defender of unjust legislation is 
 as guilty as those who enacted it. 
 
 FUNDAMENTAL FACTS ABOUT GOLD AND SILVER. 
 
 Before further considering the justice and wisdom of de- 
 monetizing silver in this country let us briefly review the 
 events in European countries which have made this ques- 
 tion of such great importance. 
 
 We have seen that up to 1872 silver and gold, at the ratio 
 of fifteen and one-half ounces of silver to one of gold, circu- 
 lated at an equality of value throughout Europe. In this 
 country, at the ratio of nearly sixteen to one,, the silver 
 dollar was worth a little more than the gold dollar. At 
 present the gold dollar is worth over 20 per cent, more 
 than the silver dollar. WHiat has made this change of rel- 
 ative value? Prior to 1872, it was almost universally taught 
 and believed, the world over, that silver and gold had a 
 " fixed value." Now it is generally stated that the value 
 of silver is a " fluctuating value." If silver had a " fixed 
 value " for centuries, what has recently made it fluctuate in 
 value ? 
 
 The physical qualities of both silver and gold are pre- 
 cisely the same as they were at the earliest period of which 
 we have knowledge. No change whatever has occurred in 
 the inherent, intrinsic qualities of either one of those metals, 
 
198 
 
 SOCIAL STRUGGLES. 
 
 and therefore the change in their relative value cannot be 
 due to such a cause. 
 
 The natural laws under which silver and gold had a rel- 
 ative value prior to 1872 are unchanged and unchangeable. 
 Natural laws are never repealed either in whole or in part. 
 Consequently we must dismiss the idea that a natural law 
 gave silver a " fixed intrinsic value " up to 1872, and since 
 that time this law has ceased to operate. 
 
 Since 1872 there has been no materially increased pro- 
 duction of silver.* On the contrary, many silver mines 
 
 * The following statements and tables are taken from a pamphlet 
 published by the National Bi-metallic Coinage Association, 1886. 
 
 GOLD AND SILVER PRODUCTION. 
 
 ' The advocates of the single gold standard have within the past few 
 years raised the cry " of dearth of gold and abundance of silver." To 
 probe the truth of this assertion we have only to compare the gold and 
 silver productions in past times, starting our investigation and comparison 
 with the discovery of America, A. D. 1492- 
 
 The yearly average, according to the best authorities, — at the head of 
 which Baron Alexander Von Humboldt's work, " Essai sur la Nouvelle 
 Espagne," stands,— was about 5000 pounds of gold and 20,000 pounds, 
 avoirdupois, of silver from 1493 to 1500. 
 
 The fairest and most easily comprehended method of comparison 
 would therefore be in groups of twenty years. 
 
 world's production, ESTIMATED IN POUNDS FOR TWENTY-YEAR 
 
 PERIODS. 
 
 1 501 to 1520 
 
 1 52 1 to 1540 
 
 1 541 to 1560 
 
 1 56 1 to 1580 
 
 1 581 to 1600 
 
 1601 to 1620 
 
 1621 to 1640 
 
 1 641 to 1660 
 
 1661 to 1680 
 
 168 1 to 1700 
 
 1701 to 1720 
 
 1 72 1 to 1740 
 
 1741 to 1760 
 
 Avoirdupois 
 pounds. 
 
 255,200 
 315,040 
 374-440 
 300,960 
 324,560 
 352,880 
 365,200 
 385,880 
 407.440 
 473,660 
 564,080 
 839,520 
 1,082,840 
 
 Avoirdupois 
 pounds. 
 
 1,880,000 
 
 3,968,800 
 
 13,710,400 
 
 13,178,000 
 
 18,431,600 
 
 18,607,600 
 
 17,318,400 
 
 16,017,200 
 
 14,828,000 
 
 15,043,600 
 
 15,646,400 
 
 18,972,800 
 
 23,458,380 
 
GOLD AND SILVER PRODUCTION. 
 
 199 
 
 have fallen off in productiveness, and the reports of enor- 
 mous amounts of silver ore in sight in the Nevada mines, 
 which were published from 1865 to 1869, have been shown 
 erroneous. During the discussion about the silver bill in 
 1878, its opponents gravely stated that five hundred million 
 
 1761 to 1780 
 
 1 78 1 to 1800 
 
 1801 to 1820 
 
 1 82 1 to 1840 
 
 1 841 to i860 
 
 1861 to 1880 
 
 Avoirdupois 
 pounds. 
 
 911,020 
 
 782,760 
 
 564,542 
 
 759,010 
 
 5,633,988 
 
 7,920,264 
 
 Avoirdupois 
 pounds. 
 
 28,718,560 
 
 38,678,000 
 
 22,039,260 
 
 30,291,690 
 
 36,876,870 
 
 69,012,574 
 
 The above returns show plainly that the production of gold has in- 
 creased in much greater ratio than that of silver. Since 1741 to 1760, 
 when the new mines of Brazil and Bolivia were discovered, up to the 
 present day, the production of gold has increased sevenfold, while that of 
 silver only threefold. 
 
 world's production of precious metals, estimated in dol- 
 lars FOR different PERIODS. 
 
 From 1 501 to 1883, inclusive. 
 
 I50I- 
 I60I- 
 I70I- 
 
 I80I 
 
 £851- 
 
 1856- 
 
 I86I- 
 
 1866- 
 
 I87I- 
 
 1876 
 
 1877 
 
 1878 
 
 1879 
 
 1880 
 
 I88I 
 
 1882 
 
 1883 
 
 -1600 
 -1700 
 -1800 
 
 -1850 
 
 -1855 
 
 -i860 
 -1865 
 -1870 
 
 -1875 
 
 383 years $7,180,252,387 
 
 $478 
 
 600 
 
 1,272 
 
 793 
 661 
 689 
 619 
 642 
 
 57I: 
 106 
 
 113 
 119^ 
 108, 
 106, 
 103, 
 
 ,362 
 ,982, 
 ,36a 
 
 .392, 
 ,286, 
 ,888 
 788 
 .481 
 ,416 
 ,286 
 
 947 
 092 
 
 436 
 023, 
 
 699. 
 
 94,027 
 
 ,240 
 800 
 480 
 240 
 880 
 ,880 
 ,480 
 ,200 
 ,480 
 ,588 
 
 173 
 786 
 807 
 786 
 078 
 588 
 901 
 
 PER CENT. 
 
 33-8 
 27.2 
 
 34-1 
 35-9 
 77-6 
 77-9 
 72.3 
 69.0 
 
 57-3 
 517 
 58.4 
 55-7 
 53-7 
 52.4 
 50.2 
 
 47-3 
 45.2 
 
 $972,267,840 
 
 1,608,690,240 
 
 2,464,1 19,360 
 
 1,413,666,000 
 
 191,400,960 
 
 195.478,320 
 
 237,828,960 
 
 289,248.480 
 
 425,395,920 
 
 99.305.538 
 
 81,040,655 
 
 94.882.177 
 
 96.172,628 
 
 96,704,978 
 
 102,168,354 
 
 109,952,251 
 
 1 14.217.733 
 
 66.2 
 72.8 
 65.9 
 64.1 
 22.4 
 22.1 
 27.7 
 31.0 
 42.7 
 
 48.3 
 41.6 
 
 44-3 
 46.3 
 47.6 
 49.8 
 52.7 
 54.8 
 
 or 45.6 ,$8,592,540,394 I or 54.4 
 
200 
 
 SOCIAL STRUGGLES. 
 
 dollars' worth of solid silver lay exposed in the Andes ready 
 to be sent to market and coined as soon as the chaos-pro- 
 ducing silver bill should be enacted. But nothing has been 
 since heard of this great mine. Therefore the theory that 
 the relative fall in the value of silver is due to an increase 
 in the production of silver mines must be placed in the list 
 of fancies unsupported by facts.* 
 
 world's production of gold and silver for 383 YEARS, ES- 
 TIMATED IN DOLLARS, FOR DIFFERENT PERIODS OF TIME. 
 
 From 1 501 to 1883, inclusive. 
 
 
 GOLD. 
 
 PER CENT. 
 
 SILVER. 
 
 PER CENT. 
 
 ■^i;o years 
 
 $3,145,097,760 
 
 3,184,861,920 
 
 850,292,707 
 
 32.8 
 70.4 
 51.8 
 
 $6,458,743,440 
 
 1,339.352,640 
 
 794,444,314 
 
 67.2 
 
 25 years 
 
 29.6 
 48.2 
 
 8 years 
 
 •^S'? years 
 
 $7,180,252,387 
 
 45.6 
 
 $8,592,540,394 
 
 54-4 
 
 
 The above tables show •conclusively that the total production of gold 
 since 1871 has been greater than the production of silver during that 
 time. The fact of a relatively small increase in the production of silver 
 for a few years does not change the total result. Since the time when 
 the silver dollar of 412-^ grs. was worth 2.57 per cent, more as bullion 
 than the gold dollar of 25^^ grs., as bullion, the relative production of 
 those metals was as follows : 
 
 Production of gold from 1871 to 1883 $1,421,709,187 
 
 Production of silver from 1871 to 1883 $1,219,840,234 
 
 Said figures demonstrate that the altered relative value of gold and silver 
 is due to the altered condition produced by demonetizing silver. , 
 
 See statistics published in report of United States Silver Commission 
 of 1877, and various reports of the director of the United States Mint 
 since that date. Also statements of the Secretary of the Treasury made 
 December, 1885, in appendix of this volume. 
 
 * That one of two metals, both of which are a full legal tender with 
 unlimited coinage, may be enormously increased in amount without suf- 
 fering any considerable depreciation in value relative to the other metal, 
 is fully shown by the results which have occurred at different periods 
 after the world's stock of the precious metals has alternately been in- 
 creased by the addition thereto of more silver than gold, or more gold 
 than silver. 
 
 One of the highest authorities on the precious metals, Prof. William P. 
 
FLUCTUATIONS IN VALUE OF SILVER. 20I 
 
 Moreover, if such increased production did exist, while it 
 would produce a fall in the value of silver, it could have no 
 part in creating the new feature in the attributes of silver 
 which those who favor gold as the sole currency declare its 
 most objectionable quality ; to wit, " a fluctuating value.'' 
 This gives us a greater interest in finding out why silver 
 has lately taken to itself a quality which it never had be- 
 fore, than to know why it has fallen relatively in value. 
 
 We look in vain for an explanation of the recent facts 
 
 Blake, computes the total production of gold and silver throughout the 
 world from 1848 to 1868 as follows: 
 
 Total production of gold $2,757,600,000 
 
 Total production of silver 81 3,400,000 
 
 Excess of gold production $1,944,200,000 
 
 By reference to the table, published by the director of the United 
 States mint, giving the relative value of a gold dollar of 25^ grs., and a 
 silver dollar of 41 2i grs., at those periods, we find the relative value of 
 those coins as follows : Value of a silver dollar of 41 2^ grs. stated in gold, 
 in 1848, was 100.88, and 102.57 in 1868. 
 
 Thus it appears that the production of over nineteen hundred million 
 dollars' worth of gold, from 1848 to 1868, in excess of the production of 
 silver, made a difference in the relative value of the gold and the silver 
 dollar of only one and sixty-nine hundredths per cent. 
 
 The reason of this fact is obvious when the nature of value is borne in 
 mind. So long as both metals are a full legal tender and have unlimited 
 coinage, they both perform the same monetary functions, and, as the raw 
 material of money, are under similar conditions. Relative to all other 
 commodities, they may both either rise or fall in value, while their re- 
 spective values, rclairve to each other, have undergone comparatively 
 little change. Thus, for the forty years immediately preceding 1848, 
 according to Prof. Jevons, both gold and silver, relative to all other com- 
 modities, rose 145 per cent, in value. Meanwhile their value, relative to 
 each other, was substantially unchanged. 
 
 If during that time one of those metals had been generally demone- 
 tized, a material change would at once have occurred in the conditions 
 under which it was placed, and a wide divergence of its value, relative to 
 the other metal, would have inevitably resulted from the altered condi- 
 tions. 
 
 From 1848 to 1868, both gold and silver, relative to all other commod- 
 ities, fell over 20 per cent, in value. This was due to the great produc- 
 
202 SOCIAL STRUGGLES. 
 
 regarding silver until we turn to the legislation of European 
 countries. We then find a series of enactments which took 
 place just before the aforesaid changes in the relative value 
 of silver, and we observe that these changes became more 
 marked just in proportion to the number and power of 
 those legislative forces. Cause and effect are closely linked 
 together; and, as we shall hereafter see, the probable cause 
 is amply sufficient to produce the obvious effect. 
 
 ATTEMPT TO DEMONETIZE GOLD. 
 
 Europe is mostly governed on the theory that the rich 
 and the privileged should make and administer the laws for 
 their own benefit just as far as can safely be done without 
 risk of goading the masses of the population to desperation, 
 and thereby bringing on a revolution which might endanger 
 both the property and lives of those now the dominant 
 classes. The creditor classes make the laws of Europe. 
 The debtors and tax-payers perform most of the labor, and 
 support both themselves and the governing classes. 
 
 Shortly after the discovery of gold in California and Aus- 
 tralia, the ruling classes of Europe became anxious lest 
 that event should impair the value of their bonds, and thus 
 lessen the amount of labor and tribute rendered them in 
 form of interest, salaries and rents. Hence they began to 
 devise means whereby their just obligations to receive a 
 certain amount of coin in payment of debts could be repu- 
 diated under the plausible pretense of a measure for " the 
 public interest." The proposition to demonetize gold and 
 make silver the sole lecral tender was discussed with consid- 
 
 tion of gold during that period. But, as heretofore seen, the value of 
 those metals, relative to each other, underwent comparatively little 
 change, as both were largely under similar conditions ; to wit, 
 legal tender with unlimited coinage. An increase in the production of 
 gold depreciated the value of silver to nearly the same extent that it did 
 the value of gold. In like manner, an increased production of silver 
 would have nearly the same effect on the value of gold as on the value 
 of silver ; provided both metals were full legal tenders with unlimited 
 coinasre. 
 
INCREASED USE OF GOLD. 
 
 20S 
 
 erable prospect of its general adoption. Holland in 1847 
 had demonetized gold. Prussia and Austria in 1857 prac- 
 tically made silver their sole legal-tender money. The 
 movement for the demonetization of gold would probably 
 have become general throughout Continental Europe had 
 it not been for the attitude of France. That nation 
 retained a lively remembrance of the lurid event called the 
 French Revolution, when the masses, maddened by oppres- 
 sion, arose and spread flame and carnage through the land. 
 France retained the double standard of both gold and silver 
 at the ratio adopted by her in 1 803, to wit: one of gold to 
 I5>^ of silver. This probably saved the world in i860 from 
 a financial crisis caused by demonetizing gold, similar to the 
 perturbations now existing from the disuse of silver. 
 
 In 1857 the annual production of gold declined, and has 
 on the average declined steadily from that time to the 
 present. Knowledge of this fact has stopped all agitation 
 in favor of making silver the sole legal tender. 
 
 PRESENT CONSUMPTION OF GOLD IN THE ARTS. 
 
 Neither the production of gold, nor the amount of it 
 used in the arts, is ever accurately known. Our knowledge 
 of such things is necessarily approximate. But from the 
 most careful estimates made, the conclusion is reached that hd/^ ^-u^ 
 the annual consumption of gold in the arts has so increased ^7^^^,^;^ 
 that it now e qu a ls ^the yearly product of the mines. Thus ' / ^. 
 the constantly increasing growth of commerce and popula- /^^ 
 
 tion is not met with a corresponding increase in the m.etal 
 which several nations now use as almost the sole material 
 from which to manufacture money. 
 
 ORIGIN OF THE WAR ON SILVER. 
 
 In 1861 the Nevada silver mines attracted attention, and 
 during that year produced about two million dollars' worth 
 of silver. The production steadily rose until 1867, when 
 the annual product reached thirteen and a half millions. 
 Coupled with this actual increase of silver production, the 
 most extravagant reports of the discovery of solid masses 
 
204 
 
 SOCIAL STRUGGLES. 
 
 of silver were published.'" These statements were circu- 
 lated in Europe, and produced a profound impression 
 among the money-lenders. 
 
 The agitation a few years previously in favor of demone- 
 tizing gold had attracted their attention to the feasibility 
 of increasing the value of money by diminishing the num- 
 ber of metals from which it could be coined. They were 
 somewhat alarmed ; and all experience tells us there is noth- 
 ing at once so unreasoning and so remorseless as frightened 
 selfishness. The tide of sentiment among the ruling classes, 
 that a few years before had been flowing in favor of demon- 
 etizing gold, now turned toward striking silver out of the 
 statute books as a legal-tender money. But this change 
 was one of form, and not of substance. In both cases the 
 essence and intent of the proposed diminution of the legal- 
 tender metals was to add to the wealth of the creditor 
 classes by making money and obligations to pay money 
 more valuable by lessening the volume of legal coins. 
 
 * Mr. Ross Browne, an agent of the United States, wrote a report con- 
 taining the following : 
 
 "The time is not far distant when the price of the precious met- 
 als, as compared with other proceeds of human labor, must fall. The 
 vast improvements that have been made both in gold and silver mining, 
 
 within the last 20 years, are applied only to a few mines If all the 
 
 argentiferous lodes of Mexico, Peru and Bolivia, known to be rich, were 
 worked with the machinery used at Washoe, their yield would really 
 flood the world New deposits of silver will be found, and innu- 
 merable rich lodes on the Pacific slope of the United States, not yet 
 opened, will be worked with profit. The present enhanced prices of 
 commodities and labor, the world over, measure, to some extent, the in- 
 creasing quantity and consequent depreciation in the value of the precious 
 
 metals, and clearly indicate the direction the change is taking 
 
 These two streams of the precious metals, poured into the current of 
 commerce in full volume, will produce perturbations marked and impor- 
 tant The creditor, public and private, will be affected by this 
 
 tendency." 
 
 Events have conclusively shown the gross error of the aforesaid report. 
 
WA YS THA T ARE DARK. 
 
 AN OLD SUBTERFUGE. 
 
 205 
 
 In 1867 a so-called monetary convention was held in 
 Paris. The ostensible purpose of this meeting was to ena- 
 ble scientific men to confer and decide what constituted 
 the best kind of money. Its real purpose was to create a 
 pretext that would enable the ruling classes, under the 
 guise of a scientific reform, to make gold the sole legal- 
 tender coin, and thus add to the wealth of the promoters of 
 this " scientific " scheme. As was well known before the 
 convention met, the so-called "scientists," who in fact were 
 merely the servants and attorneys of the money-lenders, 
 found that gold should be made the sole legal tender. 
 
 Of all the tricks which have been employed in this 
 hypocritical world to deceive mankind, that of calling a 
 meeting of pretended authorities on a certain subject for 
 the purpose of delivering an opinion known beforehand by 
 the projectors of the meeting, is at once the most frequent 
 and ancient. Formerly, chieftains who wanted to rob 
 another people would call a meeting of priests under pre- 
 text of a desire to learn whether the Lord favored their 
 scheme. These conventions invariably found an exact 
 coincidence between the desires of their masters and the 
 mind of the Supreme Being. Thereupon the enterprise 
 was pronounced a holy war, and carried on with great zeal 
 and piety. Recently, great crimes have been committed 
 and justified under the pretense that such conduct was in 
 accordance with the most profound teachings of science, 
 and in harmony with natural laws which decree the " sur- 
 vival of the fittest." 
 
 On December 4, 1871, Germany began to incorporate 
 the doctrines of the Paris convention into law. She then 
 stopped the coinage of silver and began to coin gold. July 
 9, 1873, another lav/ was passed which provided that after 
 three months' notice, thereafter to be given, gold should be 
 the sole legal-tender coin, except for small change. The 
 practical effect of these laws was an immediate change in 
 the conditions surrounding gold and silver. An increased 
 
2o6 SOCIAL STRUGGLES. 
 
 demand arose for gold, and this at once increased its rela- 
 tive value as compared with silver. Prices of labor and 
 commodities fell, and an era of " hard times," from which 
 she has not yet recovered, settled upon Germany. 
 
 On the 1 8th of December, 1872, by a convention between 
 the different States, Sweden, Norway and Denmark 
 adopted gold as the legal-tender money and demonetized 
 silver, except for small change. Each of these countries 
 has since that time carried out the provisions of said con- 
 vention. 
 
 In 1876 Spain announced her intention to make gold the 
 legal-tender money of that country. In 1874 the Latin 
 union, composed of France, Belgium, Italy, Switzerland 
 and Greece, made a treaty which limited the coinage of sil- 
 ver in their different countries. The object of this union 
 appears to be to unite those nations in such a common pol- 
 icy regarding coinage as events may make appear best for 
 the interest of the governing classes of those countries. In 
 1873 Holland temporarily suspended silver coinage. She 
 afterward resumed coinage until 1875, when its suspension 
 was ordered. 
 
 Japan has also recently made gold the national money. 
 A large amount of gold will continually be required by the 
 millions of that country. 
 
 EFFECT OF LEGISLATION ON THE VALUE OF A DOLLAR. 
 
 Let US now consider the practical effect on the value of 
 gold which has been produced by the aforesaid legislation. 
 In order to do this we must first consider facts which deter- 
 mine the value of money. 
 
 The value of a pound, a franc, a dollar, or any other one 
 of the units which form a national money is chiefly deter- 
 mined by the number of those units in circulation. An 
 increase in the total amount of money tends to diminish 
 the value of each one of the units which compose it. A 
 diminution in the total amount of money tends to increase 
 the value of each one of the units of which the money con- 
 sists. Whether these units be called pounds, dollars or 
 
RELATIVE USE, RELATIVE VALUE. 
 
 207 
 
 any other name, makes no difference in the result of increas- 
 ing or diminishing their number. 
 
 But the aforesaid effects are produced by an increase or 
 a diminution in the number of monetary units relative to 
 the amount of business they are used to transact. If the 
 amount of money in a certain country, or in the world, 
 remain stationary, and the population, wealth and com- 
 merce increase, the value of money rises because its amount 
 is lessened relative to the duties it performs. Therefore it 
 follows that the relation zuhich the amount of money in a 
 country bears to its use is the dominant thing which 
 determines the value of one of the units of that money. 
 If the use for money remain stationary, and its amount be 
 diminished, the value of the remainder is enhanced. If the 
 amount of money be increased relative to the demand for it, 
 the value of each one of the units of that money is dimin- 
 ished. The absolute amount of money in a country may 
 be increased without diminishing the value of each one of 
 its components, provided this increase coincides with an 
 increase in the wealth, population and commerce of that 
 country. In such case, the relative amount of money is 
 unchanged, and therefore its value is not affected. 
 
 VALUE OF ALL THINGS DEPENDENT ON THE SAME LAW. 
 
 The value of potatoes depends on the number of bushels 
 in market relative to the demand for them. The value 
 of the units which form -the national money depends on 
 the same principles as the value of potatoes. 
 
 The aforesaid principles and facts, and kindred ones 
 which flow from them, arise from changes in the conditions 
 and circumstances under which money is placed. If ten 
 men be required to properly manage a ship in mid-ocean 
 and three of them die, additional duties are thrown on the 
 survivors and the services of each individual becomes more 
 valuable. On the other hand, if thirteen men occupy a 
 place, the duties of which can readily be performed by ten, 
 the labor of each one of the thirteen is less valuable than it 
 would be if he performed one-tenth the total labor. The 
 
2o8 SOCIAL STRUGGLES. 
 
 value of each man's service depends on the circumstances 
 under which that labor is performed, and a similar thing, 
 for a kindred reason, is true of the value of each one of the 
 units which form a national currency. 
 
 The control of legislation over the value of money arises 
 from the power to change the conditions which surround it 
 by increasing or diminishing its amount. As money is 
 used to compute the value of all other things, it follows 
 that legislation, by changing the relative amount of 
 money, can affect the price of labor, and of everything 
 bought and sold in the country governed by such legisla- 
 tion. As the amount of debts due from individuals, 
 corporations, municipalities and nations is constantly 
 enormous, and as the obligations which represent those 
 debts call for the payment of a certain nuniher of units, 
 without regard to the value of each one of them, it also 
 follows that any material change in the value of money 
 caused by legislative enactment is always a legal robbery of 
 either the creditor or the debtor class. 
 
 AN EXAMPLE OF LEGISLATIVE THEFT. 
 
 A borrows $1500 of B and agrees to repay him ten years 
 thereafter. When the loan was made the wages of a com- 
 mon laborer were, and for a long time had been, $1.50 per 
 day and wheat was worth $1.50 per bushel. The loan there- 
 fore represented one thousand days' wages, or one thousand 
 bushels of wheat. 
 
 Before the ten years expire silver is demonetized, the 
 number of coins in circulation is diminished and each one 
 of those remaining becomes scarcer and more valuable. 
 Wages fall to one dollar per day and wheat to one dollar 
 per bushel. When the debt falls due it represents fifteen 
 hundred days' labor, or fifteen hundred bushels of wheat. 
 The debtor cannot say to the creditor: "I borrowed the 
 value of one thousand days' labor, or one thousand bushels 
 of wheat. A thousand dollars will now buy either of those 
 things. Here are your thousand dollars." He must pay 
 the number of dollars called for by the contract, not the 
 
A SPEC/MEN CONVERSA TION. 
 
 209 
 
 amount of value represented by those dollars. This is so 
 simple a matter that it is strange many otherwise intelli- 
 gent people are puzzled by it. 
 
 A TALK WITH A CLERGYMAN. 
 
 Let US illustrate this by an actual occurrence. In the 
 winter of 1877, a clergyman, of the kind usually styled "in- 
 tellectual," asked what had best be done with one of his 
 debtors who had recently failed to pay the interest on a 
 mortgage which the reverend gentleman held on the debt- 
 or's house. The clergyman said : "As provisions, clothing 
 and coal are all cheaper now than when he paid his interest, 
 I do not see any. good reason for such neglect of duty." 
 
 " How much is the interest on your mortgage?" 
 
 " Sixty dollars a year ; this is precisely the same that it 
 was when it was promptly paid." 
 
 " How does this man get money?" 
 
 " He has a horse and cart, and works with them himself 
 by the day." 
 
 " Then, in order to get a living his only resource is to sell 
 his own labor and that of his horse from day to day. How 
 much did he daily get from such a sale when the loan was 
 made ? " 
 
 " I never thought that a man who worked for wages sold 
 anything. But I don't know but it is so. I believe he 
 said that he got four dollars a day, and so I thought the 
 loan was safe." 
 
 " Then, when he got the money, the sale of fifteen days' 
 work would pay a year's interest. What does he now get 
 from the sale of a day's wages ? " 
 
 " He told me that he did not average over a dollar and a 
 half a day." 
 
 " Do you not see that it now takes forty days' labor to 
 pay your interest instead of fifteen days' ? " 
 
 " I had not thought of the matter in that light. But you 
 must concede that it does not cost him as much to live as it 
 did." 
 
 " It is true that his expenses cost a less number of 
 14 
 
210 SOCIAL STRUGGLES. 
 
 ' dollars ' than they did. But that is a delusive test. The 
 only way this man has to pay his expenses is from the sale 
 of his labor. He cannot sell a day's labor for as much, and as 
 many, of the necessaries of life now as he could five years 
 ago. Therefore, his living costs him, of what he has for 
 sale, more now than then. Furthermore, the interest must 
 be paid from what is left after the things absolutely 
 needful to keep himself and family alive are first paid for." 
 
 " I suspect your views on political economy are new, 
 and not in harmony with established authorities. A gold 
 dollar has always a fixed value." 
 
 " Can your debtor get as many gold dollars now for a 
 week's work as he could a few years ago ? " 
 
 " I believe not. But that has nothing to do with the 
 matter. This conversation is growing unpleasant. Good- 
 morning." 
 
 ONE PURPOSE UNDER VARIOUS PRETENSES. 
 
 Under various pretexts, silver was demonetized both in 
 Europe and in this country for the express purpose of mak- 
 ing the remaining money more valuable.* The practical ef- 
 fect was precisely the same as would have occurred if, in- 
 stead of demonetizing silver, the weight of both the silver 
 and the gold coins had been increased. An increased 
 amount of metal in each coin would have necessitated a 
 diminution in the number of those coins, and the present 
 results would have been produced with both silver and gold 
 coins in their former position of legal tenders. The dis- 
 honesty of the transaction would then have been plainer 
 than at present, but no greater. 
 
 * A large number of persons have favored making gold the sole legal 
 tender, without any desire to commit an injustice. But those ignorant 
 of the inevitable result of such a measure are merely private soldiers in 
 an army whose officers have a definite purpose which they know will be 
 accomplished by diminishing the amount of metal from which legal 
 tender can be coined. This is shown by the pertinacity with which they 
 adhere to their scheme after its mischievous nature has been fully dem- 
 onstrated. 
 
DANGER OF ROBBING OTHERS. 
 
 211 
 
 As heretofore stated, it was formerly held sound doctrine 
 that the number, and therefore the value, of coins could 
 only be justly modified by a relative increase or decrease in 
 the amount of gold and silver bullion in the world ; and 
 that the risk of the occurrence of one or other of these con- 
 tingencies should be borne equally by all parties to con- 
 tracts to be executed at a future time. Judging from the 
 past history of the production of gold and silver mines, it 
 was deemed improbable that such semi-natural causes 
 would occasion any change in the value of either gold or 
 silver rapidly enough to make a serious difference in their 
 value within a few years. Upon this presumption, coupled 
 with the idea that legislative interference with the value of 
 coins was unlikely to occur, lay the supposed great advan- 
 tage of a metallic over a paper currency. But the idea that 
 legislatures should not meddle with the value of coins has 
 recently been practically abandoned. 
 
 A DOCTRINE DANGEROUS TO CREDITORS. 
 
 In Europe, under the thin pretense of " establishing a 
 scientific currency," and in this country of "honesty," the 
 coinage laws have been changed by the creditor class, 
 thereby changing and repudiating their own bargains for 
 the sole and express purpose of robbing the debtor and the 
 laboring classes. The old idea that the value of metallic 
 money was not, and of right ought not to be dependent on 
 the caprice of legislators has been virtually replaced by the 
 doctrine that governments of right ought to change the 
 value of metallic money whenever in their judgment such 
 change is necessary to promote the interests of the creditor 
 class. The essence of all the clamor which is raised in this 
 country for " honest money " is the dangerous doctrine 
 that the majority in Congress have a right to change the 
 standard of value, and enact laws which will legalize rob- 
 bery ; provided, it be done in the interest of creditors and 
 under pretense of " honesty." 
 
 If the class in control of the Government have a right 
 to do as they hav^e recently done, then it logically follows 
 
212 SOCIAL STRUGGLES. 
 
 that if the debtor class should obtain legal power it would 
 have the right to make laws, the practical effect of which 
 would be to rob the creditors. With justice equal to the 
 demonetization of silver, the debtors might enact a decrease 
 in the weight, and consequently an increase in the number, 
 and a decrease in the value of both gold and silver legal- 
 tender coins. In such case the aforesaid supposed debt of 
 A could be paid with seven hundred and fifty days' labor, 
 or seven hundred and fifty bushels of wheat, because wages 
 would then advance to two dollars per day and wheat to 
 two dollars per bushel, or perhaps to still higher prices. 
 
 OUGHT THE SILVER DOLLAR TO BE MADE HEAVIER? 
 
 Without having studied the matter, many well disposed 
 people have been led by plausible arguments to favor an in- 
 crease in the weight of the silver doll-ar as a just solution of 
 the silver problem. The exact nature of this proposition 
 can perhaps be more easily seen by using an example. 
 
 Suppose a number of persons should contract to purchase 
 one hundred million bushels of wheat, to be delivered five 
 years hence at one dollar per bushel. Suppose they should, 
 after making this contract, manipulate legislation and have 
 the size of the bushel measure increased to thirty-six quarts, 
 and should justify their conduct by saying that as wheat 
 had fallen in value, " honesty, morality and religion " sanc- 
 tioned an increase in the size of a bushel. Suppose the 
 sellers of the wheat should ask for a restoration of the old 
 standard and the buyers should then call them '' repudia- 
 tors " who wanted "cheap" bushels. Would not the 
 sellers of the wheat justly have a poor opinion of the hon- 
 esty of the buyers? Those who denounce the old 412% 
 grain dollar act precisely as the buyers in the above sup- 
 posed case. They want to change the size of the bushel : 
 they ask that the bargain be violated and more grains put 
 in place of the agreed number. 
 
JUSTICE IS THE ONLY SAFETY. 213 
 
 DANGER OF ROBBING DEBTORS. 
 
 These men have not considered what results might flow 
 from the success of their schemes. 
 
 If Congress can justly increase the weight of the silver 
 dollar, it has a right to increase the weight of the gold dol- 
 lar. It also follows that Congress has a right to diniinisJi 
 the weight of both the gold and the silver dollar. 
 
 In ofeneral terms, the Southern and Western States are the 
 debtor States ; the Eastern States, Pennsylvania and New 
 York are the creditor States. Suppose the debtor States 
 should obtain control of the national Government, and, 
 smarting under a sense of unjust dealing, should say to the 
 creditor States : " Yoj.1 have robbed us by increasing the 
 value of coins. You' have changed the meaning of the 
 word Mollar.' Now, to make things equal, we will give 
 you a taste of your own medicine. We will change the 
 meaning of the word dollar in our interest." 
 
 W^hen a class in control of the Government use their power 
 for the purpose of legally plundering others, they have no 
 right to complain if the tide turn and the robbed becomes 
 the robber. History is full of such retribution. 
 
 When public policy requires a change in any of the stand- 
 ards of coinage, the sanctity of existing contracts should be 
 respected : the new money should apply only to new con- 
 tracts. If this obviously just principle were adopted, and 
 suitable measures taken to prevent its evasion by unscrupu- 
 lous persons, the clamor for an "honest silver dollar" 
 would immediately end, as its motive would be gone. 
 
 DEBT NOT DISREPUTABLE. 
 
 For the past twenty years a persistent effort has been 
 made to covertly teach the doctrine that it is disreputable 
 to be in debt, and that therefore the laws should be made 
 to aggrandize creditors at the expense of debtors. Curi- 
 ously enough, these doctrines are put forth by men who are 
 constantly asserting that legislation has no effect upon 
 value. 
 
 \ 
 
214 
 
 SOCIAL STRUGGLES. 
 
 No one can borrow without some one will lend. If the 
 borrower commit a wrong by so doing, the lender is an 
 equal partaker in the crime. If a city, a State, or a nation, 
 do a disreputable act by borrowing money, then every 
 owner of one of their bonds is a criminal. 
 
 Commerce and industry derive a great impetus from the 
 modern system of banks, by means of which small sums are 
 aggregated, and then loaned to industrious and skillful per- 
 sons in need of additional capital. Banks are thus the tools 
 for collecting little rills of capital and uniting them into 
 broad streams which turn the wheels of trade. What 
 would become of our savings banks and our banks of de- 
 posit if no one would borrow their money ? How would 
 the orphan and the widow be supported if no one 
 would hire the money which a provident father and hus- 
 band had accumulated for them? The only Avay in which 
 a person can live in a civilized country and not either di- 
 rectly or indirectly sustain the relation of debtor or creditor, 
 is to become a criminal or a pauper and be supported by 
 others. The cry " every man out of debt," if not a delu- 
 sion and an attempt to divert attention from a wrong, 
 would mean a return to barbarism. 
 
 THE TRUE DOCTRINE. 
 
 Equal and exact justice to all men is the correct doc- 
 trine. Both borrower and lender should have equal legal 
 protection as both relations are equally meritorious. Any 
 means whereby debtors or tax-payers are made to pay more 
 than they agreed to are therefore just as wrongful as 
 measures which defraud creditors. 
 
 NOTHING IS MORE DETESTABLE THAN HYPOCRISY. 
 
 A curious trait of human nature almost invariably leads 
 those who wrong others to add abuse and defamation to 
 the wrong committed. This is apparently done to afford a 
 pretext and justification for the aggressor's evil acts. The 
 English people recently added one to the thousands of pre- 
 viouslv existine illustrations of this isnoble characteristic of 
 
MEANNESS OF HYPOCRITES. 
 
 215 
 
 mankind. They sent their army into Africa on an errand 
 of robbery and murder, and, not content with this, the Eng- 
 lish press styled the men who were fighting against pirates 
 for the protection of their homes and country, " barbarous 
 rebels" and " ignorant fanatics," 
 
 Mr. Rogers, in his scholarly " History of WorH and Wages 
 in England," accurately describes this form of hypocrisy in 
 saying : " The charge of setting class against class has 
 always been made by those who wish to disguise their own 
 indefensible advantages by calumniating the efforts of those 
 who discover abuses and strive to rectify them. Liberty 
 and property, the two conditions of social order, have been 
 invoked as names by those who know nothing of any lib- 
 erty but their own privilege to do wrong, and no property 
 but that which custom has allowed them to appropriate." 
 
 THE CRY FOR HONESTY. 
 
 Those who have, for the past twenty years, been at work 
 altering bonds justly payable in greenbacks into bonds 
 payable in coin, and changing contracts by demonetizing 
 silver, thus legally robbing debtors and tax-payers, have 
 kept up a doleful howl about the '* dishonesty " of the men 
 they were intent on robbing. A desire for a currency 
 whose value is as stable as is possible to create, and a wil- 
 lingness to do just as agreed and no more, have been de- 
 nounced as " repudiation, inflation " and a " destruction 
 of national credit." Meanwhile the " honesty " of measures 
 which increased the burdens of debtors and tax-payers be- 
 yond the original contract has been loudly proclaimed. 
 This din of sophistry and falsehood has confused the minds 
 of many persons. 
 
 Let us endeavor to make this matter clear by an illustra- 
 tion which is a faithful picture of the aforesaid conduct. 
 Suppose a man should lease a farm for fifty years at a 
 yearly rental of two hundred bushels of wheat or four 
 hundred bushels of corn, the kind of grain to be at 
 the option of the tenant. For a long time wheat is not 
 worth twice as much as corn, and the rent is paid in 
 
2i6 SOCIAL STRUGGLES. 
 
 wheat. Finally, in consequence of a great demand foi* 
 wheat, its price rises so high that four hundred bushels 
 of corn are worth less than two hundred bushels of wheat. 
 The tenant comes to pay his rent and brings with him four 
 hundred bushels of corn. Now, suppose the landlord, in- 
 stead of doing as he agreed, should cry out : " What a 
 scoundrel you are ! This corn is dishonest corn. Corn 
 has begun to fluctuate in value. Let us be honest. Let 
 us strike corn out of the contract, so that the rent shall 
 hereafter be paid in wheat." 
 
 The farmer naturally objects to this proposition, and then 
 the landlord induces Congress to pass a law, the practical 
 effect of which is to prevent the tenant from paying his 
 rent in anything but wheat, although events have made it 
 probable that wheat will continue to be much higher than 
 it was when the farm was first hired. 
 
 There is only one thing lacking in this hypothetical case 
 to make it a perfect parallel to the conduct of those who 
 have procured legislation whereby contracts payable either 
 in gold or silver, at the debtor's option, were, practically, 
 made payable only in gold. That lacking thing would be 
 for the landlord to first succeed in having laws passed which 
 would increase the demand for wheat and thus raise its 
 value, and then get other laws passed which would prevent 
 the debtor from paying his rent in corn. 
 
 The cry for the stoppage of silver coinage comes from 
 those creditors who want to strike the • silver corn out of 
 the contract and compel the debtors and tax-payers to pay 
 the golden wheat. They want legislation which will save 
 them from the necessity of doing as they have agreed. 
 
 If the creditors have a right to go to Congress and ask 
 protection against the silver dollar because recent events 
 have lowered its relative value, is it not certain that the 
 debtors and tax-payers have an equal right to protection 
 against the gold dollar which has been raised in value ? 
 Every one will admit that it would be wrong to directly 
 increase the value of a gold dollar by increasing its weight. 
 Therefore, is it not equally wrong to raise the weight of a 
 
INCONVENIENCE OF BOTH GOLD AND SILVER. 
 
 217 
 
 gold dollar indirectly by striking silver from its ancient 
 place as a legal tender, thereby changing the conditions 
 under which gold is placed, and largely increasing its value ? 
 
 GROUNDLESS CHARGES AGAINST SILVER. 
 
 In 1871 Germany began the war against silver on the 
 plea of wishing to create for the Empire " a single standard 
 which should have a fixed and unvarying value." The na- 
 tions who followed the course of Germany did so on the 
 assumption that a currency of gold protected them from the 
 " fluctuations in value " to which silver had become subject 
 since Germany struck it from her statute books as a legal 
 tender. Those who advocate the policy of the United 
 States demonetizing silver rest their case almost entirely 
 upon the alleged fluctuations in the value of silver and the 
 stability of the value of gold. 
 
 The fact that a million dollars' worth' of silver is about 
 sixteen times as heavy as a million dollars' worth of gold is 
 virtually conceded to be of little importance, for two rea- 
 sons : First. Although silver is much the heaviest, it costs 
 but little more to transport it from place to place than it 
 does to carry the same value in gold. The increased weight 
 is counterbalanced by the diminished danger of theft. 
 A thief could readily seize five thousand dollars' worth of 
 gold coins and escape with them ; but five thousand silver 
 dollars would encumber him enough to make his capture 
 easy. 
 
 Second. The bulk and weight of silver is readily obviated 
 by depositing it in the Treasury vaults and issuing paper 
 certificates therefor. These do not weigh any more and 
 are just as convenient to use as certificates paj^able in gold. 
 A paper certificate for the payment of twenty silver dol- 
 lars is far more convenient than a twenty-dollar gold coin, 
 and is far more secure against the devices of counterfeiters. 
 
 WHY SILVER DOES NOT CIRCULATE. 
 
 A great outcry has been made by the enemies of silver 
 that the silver dollar does not circulate because of its in- 
 
2i8 SOCIAL STRUGGLES. 
 
 convenient size and weight. This is a dishonest quibble. 
 The plain fact is that the gold dollar does not circulate any 
 more freely than the silver dollar. The people prefer paper 
 money to either gold or silver. In England, with gold the 
 sole legal tender, it is estimated that over ninety-nine per 
 cent, of all payments are made without using gold. 
 
 The number of millions of silver dollars lying idle in the 
 Treasury vaults has been cited a multitude of times. But 
 candor requires that with this undoubted fact two other 
 facts should be stated. First. That the Secretaries of the 
 Treasury have steadily exerted their influence to hinder the 
 payment from the Treasury of the silver dollar. Second. 
 That while the amount of silver dollars lying idle in the 
 Treasury has been large, the amount of idle gold has been 
 still larger. Every argument against silver on the score of 
 convenience applies to gold, although not to so great an ex- 
 tent. But the use of gold coins to any considerable extent 
 as money is inconvenient and entails great hazard, both 
 from accidental loss and from theft. 
 
 SUPERIORITY OF PAPER MONEY. 
 
 The world has largely outgrown the actual handling of 
 gold in ordinary commercial transactions. Whether the 
 sum transferred from hand to hand be one dollar or a million 
 dollars, both silver and gold are inferior in convenience to 
 paper money. 
 
 Prior to the discovery of America, the invention of print- 
 ing, and before the beginning of what Mr, Lecky calls the 
 " industrial age," the bulk of commerce was carried on by 
 barter, and by a metallic currency. But as soon as trade 
 felt the quickening force of new ideas and inventions, it not 
 only became difficult to transact business with such cum- 
 brous mechanism, but this difficulty was enormously en- 
 larged by the increased ability which dishonest men pos- 
 sessed to debase and counterfeit the currency. In 1609, 
 the evils of counterfeit, worn and defaced coins, and the 
 labor, expense and danger attendant upon counting and 
 transferring genuine coins became so great that the Bank of 
 
COUNTERFEIT MONEY. 
 
 219 
 
 Amsterdam was established in what was then one of the chief 
 commercial cities of the world. This was a bank of de- 
 posit ; it received all kinds of coins, ascertained their value, 
 and issued paper certificates therefor. Bank-notes had not 
 come into use, and the title to the coin was transferred upon 
 the books of the bank. Purchases and sales were made by 
 a transfer of credits. The avowed object of the bank was 
 to avoid the nuisance of debased and spurious coins. 
 
 An immense business was done by this bank. The 
 amount of treasure in its vaults was variously estimated at 
 from twenty-five to four hundred millions of dollars ; but 
 as public scrutiny of its affairs was not allowed, no one 
 knew how much coin it really held. The commercial 
 world, however, had perfect confidence in the bank until 
 1790, when it was discovered that a large amount of Its treas- 
 ures had been loaned fifty years before ; and that the 
 balance had been steadily diminishing since then, so that 
 only a small portion remained. The bank then failed. 
 
 For the long time during which the credits and the paper 
 of the bank had little coin " back of them," they transacted 
 an immense business ; hundreds of millions were bought 
 and sold just as well and effectually as if the coin had been 
 lying in the bank vaults. Had the facts not become 
 known, the bank might have continued doing business in 
 that way for all time. The explanation of this is simple 
 when viewed from a correct standpoint. The credits and 
 the paper of the bank were not used, or issued, in excess 
 of the wants of trade ; they were limited in amount ; they 
 performed the same functions as coin, and were surrounded 
 by similar conditions. 
 
 Besides its superior convenience, paper money, es- 
 pecially Government paper money, has another great advan- 
 tage over gold coins, viz., it is far more difficult to counter- 
 feit. This is because the machinery necessary to perform 
 the elaborate and delicate engraving on paper money is very 
 expensive and ponderous, and can neither be made nor ope- 
 rated without considerable publicity. A single bank can 
 easily emit notes which its officials will readily distinguish 
 
220 SOCIAL STRUGGLES. 
 
 from spurious imitations, but the expense of making bills 
 so that the whole nation will be protected from counterfeits 
 is so great that the tendency is for banks of issue to avoid 
 it, except only so far as is thought necessary for the bank's 
 self-interest. Many of us remember when a counterfeit de- 
 tector was part of the furniture of every ofifice, store and 
 shop. Since our paper money has been made by the Gov- 
 ernment, the losses of the people from counterfeit currency 
 have been trifhng compared with what they were before 
 the war. As protection of the people from knaves is one of 
 the chief functions of Government, it follows that the mak- 
 ing of paper money should be exclusively in its hands. 
 And it also follows that after it has incurred the great ex- 
 pense of machinery which will bid defiance to counterfeit- 
 ers, that whatever saving or gain of interest may result 
 therefrom belongs to the Government, and not to any class. 
 
 As an argument against silver it is stated that silver has 
 depreciated since 1872, and, worse than that, has now ob- 
 tained " a fluctuating value." Curiously enough, none of 
 the multitudes who accept these statements as true have 
 made any serious attempt to explain such a startling phe- 
 nomenon, but have passed it by as an unknowable freak of 
 natural laws. But if these beliefs be true, what assurance 
 have we, that the mysterious fluctuations which to-day exist 
 in silver may not appear in gold to-morrow? 
 
 To a limited extent it is admitted that gold may slowly un- 
 dergo changes which in course of time may make a material 
 difference in its value. Thus, Jevons, a standard authority 
 in favor of gold, tells us that between 1789 and 1809 gold 
 fell forty-six per cent, in value, and from 1809 to 1849 
 gold rose one hundred and forty-five per cent. The last 
 named change made a loan borrowed in 1809 and repaid in 
 1849 cost the debtor, besides the interest, nearly two and a 
 half times the value of the original sum. 
 
 Thus we see that, by one of their own^ authorities and 
 partisans, it is conceded that within the period of forty 
 years the metal which is constantly spoken of as having a 
 fixed value remained nominally at par, but actually rose in 
 
THE ROOT OF THE MATTER. 221 
 
 value in the ratio of lOO to 245. Furthermore, Jevons tells 
 us that in a few years after 1849 Z^^^ ^^^^ 20 per cent, in 
 value, and that it fluctuates from 10 to 25 per cent, in value 
 during every panic. 
 
 The foregoing sketch of the various reasons advanced for 
 demonetizing silver brings us down to the ultimate point, 
 the decision of which must conclude the controversy either 
 in favor of gold alone or in favor of both gold and silver. 
 
 THE ESSENTIAL ALLEGATION IN FAVOR OF GOLD. 
 
 Omitting, as unworthy of debate, the superstition that 
 gold constitutes the only real wealth and has a supernatural 
 influence on sellers of goods, the claim in behalf of making 
 it the sole legal tender is in reality narrowed down to this 
 proposition : " Gold has a fixed value over which legislation 
 has no influence. Gold is endowed with mysterious quali- 
 ties which exempt it from the natural laws whose influence 
 is constantly raising and lowering the value of all other 
 things." In the language of David A. Wells, a prominent 
 writer in favor of a gold currency, " the gold dollar is the 
 dollar that is always at par." 
 
 There are a few persohs in favor of gold as the only legal 
 tender who concede that changes occur in the value of 
 gold, computed through long periods, and in exceptional 
 times. But even these individuals mostly fail to recognize 
 that the natural laws which produce changes in value are 
 constant and universal. Moreover, the aforesaid admitted 
 changes in the value of gold are inconvenient facts which 
 those in favor of " honesty and honest money " carefully 
 conceal from public knowledge. On the contrary, it is virt- 
 ually assumed by the majority of bankers, legislators and 
 public writers, especially so by the religious press, that gold 
 is exempt from the constant fluctuations in value which 
 natural laws create in all other things. The demonetization 
 of silver is demanded on the ground that it " fluctuates in 
 value," while gold has an " unvarying value." 
 
 Shall we examine this dogma or blindly accept it as 
 true ? 
 
222 
 
 SOCIAL STRUGGLES. 
 
 HAS GOLD A FIXED VALUE? 
 
 We have now arrived at the most important question in 
 the whole range of the problems of political economy under 
 debate, to wit : Are the aforesaid allegations, on which 
 those in favor of demonetizing silver rest their case, true ? 
 If they be, then it inevitably follows that silver should be 
 discarded, and there is no propriety in using it even for 
 small change. But if these fundamental propositions be 
 false, then the whole system which rests upon an assump- 
 tion of their truth must be false also. 
 
 Strange as it may seem, to this central point the vast ma- 
 jority, both of the public and of writers, have paid no atten- 
 tion whatever. But the financial policy of nations, the rel- 
 ative value of a vast amount of property, and the welfare of 
 many millions of people are all materially affected, either for 
 good or for evil, by its decision. 
 
 Let us now dissect the aforesaid assumptions and try to 
 discover what really are the fundamental facts and principles 
 which underlie this whole subject. We can then reason 
 from facts and build upon a good foundation. 
 
 THE BULLION REPORT. 
 
 In examining any subject or thing, the proper course is 
 to take advantage of the labors of predecessors. Therefore 
 the first question before us is this : What method of inves- 
 tigation has been pursued by those who have concluded 
 that gold has a fixed value; that silver, prior to 1872, had 
 also a fixed value, but since that time has both depreciated 
 and fluctuated ? 
 
 For ten years immediately succeeding 1808, England was 
 the theater of an extended debate in regard to her currency. 
 In January, 1810, Parliament appointed a committee to in- 
 quire into the permanence of the value of gold and silver. 
 This committee produced the famous Bullion Report which 
 was published in August, 18 10, and debated in Parliament 
 for several years thereafter. From the date of the publi- 
 cation of this report to the present time, nothing has been 
 
ESSENCE OF THE BULL/ON REPORT. 223 
 
 written which has been considered by the advocates of me- 
 tallic currency so high and conclusive an authority as that 
 document. It is therefore presumptively a condensed 
 statement of the best arguments which can be made to show 
 that gold and silver have an invariable value. 
 
 The essence of this report, and of the speeches in sup- 
 port of it, consists of this proposition : 
 
 " A pound of coined gold is always worth a pound of gold bullion of 
 the same fineness. A pound of coined silver is always worth a pound of 
 silver bullion of the same fineness. Therefore gold and silver coins 
 have an invariable and determinate value. But it is to the interest of 
 England to adopt gold as the sole legal tender, except for small change." 
 
 The reader will note that the aforesaid argument is ap- 
 plied to both gold and silver. But, during the past ten 
 years, those who insist on the " fixed value " of gold, while 
 continuing to regard the Bullion Report as the essence of 
 wisdom, have nevertheless dropped out the word " silver " 
 as forming no part of it, thus ignoring the fact that every 
 argument of the Report in favor of gold is also made in 
 favor of silver. At present, the central point of all argu- 
 ments for making gold the sole legal tender is this : " A 
 pound of gold coins is of the same value as a pound of gold 
 bullion of the same fineness ; therefore gold has a fixed 
 value." 
 
 England endorsed the Bullion Report as the height of 
 financial science. She enacted that after 1816 gold, except 
 for small change, should be the sole legal-tender metal. 
 
 Said Report and the action taken thereon have been con- 
 tinually cited as a sufficient argument and example to in- 
 duce us to imitate the policy of England. 
 
 But when we apply the same common-sense principles to 
 this matter that we do to all other things, we discover that 
 the aforesaid profound argument in favor of the stability 
 of the value of gold is a mere quibble. The same process 
 of reasoning would prove that everything whatsoever has a 
 fixed value. 
 
224 SOCIAL STRUGGLES. 
 
 FACTS WHICH OVERTHROW THE COMMON THEORY IN 
 REGARD TO GOLD. 
 
 At the same time and place, one thing is always worth 
 precisely as much as another thing exactly like it. At the 
 same time and place, one gold dollar is worth another gold 
 dollar, one silver dollar is worth another silver dollar, one 
 cabbage is worth another cabbage of the same size and 
 quality, and one pig is worth as much as another pig which 
 is precisely like it. So long as our comparisons of value 
 are restricted to comparing one thing with the value of a 
 precisely similar thing, we shall never find any changes in 
 the value of the things thus compared. 
 
 This must necessarily be so, for in such case we have, in 
 fact, made no comparison or investigation whatever. We 
 have virtually compared a thing with itself. It is as absurd 
 as if a man on being sent to measure the length of a stick 
 of timber should report that it was " as long as a stick of 
 timber." As long as what stick of timber? " Why, it is 
 just as long as itself." 
 
 ORIGIN OF A BELIEF IN THE FIXED VALUE OF GOLD. 
 
 The inquiry naturally arises : What has made it possible 
 for large numbers of otherwise intelligent men to adopt 
 such an absurd mode of comparing values as that aforesaid ? 
 With equal pertinency the same question could be asked 
 in regard to nearly every department of human knowledge. 
 
 A physician or surgeon who should now treat patients 
 precisely as they were treated by the most distinguished 
 and able medical men of a hundred years ago would soon 
 find himself in prison for malpractice and manslaughter. 
 And we have every reason to suppose those gentlemen 
 were just as conscientious as the practitioners of to-day. 
 
 We now wonder at the superstition of the few ignorant 
 persons who believe in witchcraft. But it is only about 
 two hundred years since a belief in witchcraft was almost 
 universal among the most intelligent people. Within that 
 time, the President of Harvard College and other persons 
 
SLOW GRO WTH OF KNO IVLEDGE. 225 
 
 in similar high positions sanctioned the hanging of women 
 and other persons accused of deahng with evil spirits. 
 
 Within the lifetime of living men, the possibility of a 
 locomotive and a steam-boat was denied by all the so- 
 called scientific men in the world. 
 
 Compared with the total length of human history, it is 
 but yesterday since it was universally believed that the 
 earth stood still and the sun moved round it. Assuming 
 that this fundamental idea was correct, for thousands of 
 years all the learned astronomers and " scientists " of the 
 world were at work trying to explain the various phenom- 
 ena of the heavens. But notwithstanding the fact that 
 these learned gentlemen had the wisdom of " conservatism," 
 and were not guilty of any " eccentricity " in conducting 
 their investigations, their treatises were similar to much of 
 what to-day is called " political economy." The " science " 
 of astronomy was formerly obscure, pretentious, and con- 
 tinually contradicted by facts. In truth, it was not a 
 science. No sooner was a new theory of the heavens con- 
 structed than some inharmonious fact would appear, and 
 then the complex theory would have to be adjusted on 
 another hypothesis. At length, the idea of inquiring into 
 the truth of what had so long been assumed as true occurred 
 to Copernicus. 
 
 Amazed at the wonderful results which floAved from 
 starting with the idea that the earth revolved and the sun 
 stood still, he spent the greater portion of his life in con- 
 sideration, before publishing what was deemed such a 
 " crazy theory." In 1543 Copernicus published the results 
 of his prolonged studies. They were almost universally 
 pronounced by the "scientists " of that day as the work of 
 a visionary. 
 
 In 1616, Galileo, the pupil of Copernicus, was tried for 
 the offense of teaching the heresy that the sun stood still, 
 and if he had not recanted, would probably have been 
 tied to a post and roasted as "an agitator." It was as- 
 sumed that Galileo was wrong, simply because all the so- 
 15 
 
226 SOCIAI. STRUGGLES. 
 
 called scientific authorities for ages had said that the earth 
 stood still. 
 
 A short time ago, a colored preacher in Virginia, by the 
 name of Jasper, created a sensation throughout the country 
 by preaching sermons in which he asserted that " De sun do 
 move." Mr. Jasper thought his statements proved by 
 citing the undoubted facts that the sun does appear to 
 move, and that all the wisdom of the world until lately said 
 that the earth stood still and the sun moved. 
 
 In all departments of knowledge, it has been gradually 
 demonstrated that a belief is not necessarily true simply 
 because it has been deemed so for a long time by a great 
 number of persons. 
 
 The world has slowly learned that Copernicus and Ga- 
 lileo were right ; we now smile at the ignorance of Jasper, 
 but we should remember that the Rev. Mr. Jasper uses the 
 same form of reasoning and logic to show that the earth 
 stands still that is commonly used to show that gold stands 
 still. So long as we measure and compare the earth only 
 with itself, it certainly does appear to stand still, and the 
 sun to move through the heavens. The truth can only be 
 reached by comparing the earth with other planets besides 
 itself. 
 
 BY COMPARISON WITH THINGS OTHER THAN ITSELF IS THE 
 ONLY WAY IN WHICH WE CAN ASCERTAIN AND STATE 
 ANY OF THE QUALITIES OF ANY OBJECT OR THING. 
 
 When we wish to ascertain or state the color of an object, 
 we do not compare its color with its own color. We com- 
 pare it with the colors of the rainbow. When we wish to 
 determine the weight of a ham, we do not put a similar 
 ham in the other side of the scales. We learn its weight 
 by comparing it with a pound weight. When we wish to 
 determine the form of an object, we do not compare it with 
 itself. We compare it with geometric lines and figures. 
 When we wish to determine the value of a pig, we do not 
 simply compare it with the value of another precisely sim- 
 
HOW WE LEARN VALUES. 
 
 227 
 
 ilar pig. We compare it with the value of a dollar, or 
 something else. 
 
 Thus we say : This pig is worth five dollars ; meaning 
 thereby to state our opinion that the pig is worth five 
 times as much as one dollar. Or, in like manner, we may 
 compare the pig with some other animal or thing. 
 
 In fact, with the exception of gold and silver, it has long 
 been a universally recognized principle that the only proper 
 way to ascertain any of the qualities of anything whatso- 
 ever is to compare it, not with itself, but with some other 
 object or thing. 
 
 But, singularly enough, the vast majority of mankind 
 have failed to see the plain fact that those metals are 
 governed by the same natural laws, and therefore should be 
 submitted to the same methods we employ in testing the 
 various qualities of all other things. Within the past fif- 
 teen years, this ancient custom has been modified. Silver 
 is not now tested by comparing its value with that of itself. 
 But the value of gold is still estimated by the old way of 
 comparing gold with gold. 
 
 ALL IDEAS ARE RELATIVE. 
 
 Experience and reason have taught us that all ideas 
 respecting the qualities of everything are relative. When 
 we say that a certain thing is long or short, heavy or light, 
 hard or soft, or that it has any other quality, the statement 
 always involves a comparison of that thing with something 
 else. Very solid butter is often called " as hard as a stone." 
 When butter is quite soft, we do not say : " As soft as 
 butter," but the expression is often used : " This butter is 
 as soft as lard." Cheese is sometimes said to be " as soft 
 and rich as butter," and, in a similar manner, we compare 
 the qualities of one thing, not with the qualities of the 
 same thing, but with those of some other thing. When a 
 surgeon examines an arm supposed to be broken, he com- 
 pares the injured arm with the sound one. When we wish 
 to know whether a column of mercury is rising or falling 
 we do not compare it with another similar column of mer- 
 
228 SOCIAL STRUGGLES. 
 
 cury. We compare it with the glass tube which contains 
 it. If our thermometers had two tubes alongside of each 
 other, and if the mercury in one tube were simply compared 
 with the mercury in the other, we should then find mer- 
 cury, like Mr. Wells' gold dollar, "always at par," For at 
 all seasons, the apparent height of a column of mercury, 
 tested as aforesaid, would be unchanged. 
 
 NEED OF COMPARING ONE THING WITH SOMETHING 
 BESIDE ITSELF. 
 
 If we get in a boat floating on a tide-water stream, it is 
 impossible to tell whether we are going out or coming in, 
 or in fact, whether we are in motion or remaining in one 
 spot, so long as our eyes are kept fixed upon the boat. 
 The facts of the case must be learned by comparing the 
 boat with something besides itself. We must look at the 
 bottom of the stream, at the shore, or at some other object 
 besides the one we are resting on and moving with. For a 
 similar reason, it is often difficult to tell whether the boat you 
 are on is in motion or the boat alongside of you. Persons 
 in railroad cars at depots are often puzzled to know 
 whether their train has started or not. They see a train 
 alongside of them in apparent motion, and, unless they see 
 the ground or buildings, the jarring of their own car is the 
 only way of deciding whether they have started or are 
 being passed by a train going in an opposite direction. 
 This arises from not being certain that they are comparing 
 their own train with a fixed object ; with something besides 
 itself. 
 
 No one can deny that as long as we measure the length, 
 weight or size of a given thing by a precisely similar tiling, 
 it will always appear unchanged. For example, a man has 
 an iron rod one hundred feet long, and he wishes to learn 
 whether its length varies at ioo° from its length at zero. 
 If he measure it by a precisely similar rod, exposed to the 
 same temperature, it will appear unchanged and unchange- 
 able. But the moment he measures it by other things, he 
 discovers a material change. 
 
LOGICAL AND ABSURD CONCLUSIONS. 
 
 229 
 
 This demonstrates that measuring one thing by compar- 
 ing it with something precisely Hke it is not, in reaHty, a 
 measurement £lt all, because no new facts are learned by 
 such a proceeding. 
 
 VALUE SHOULD BE TESTED AS ALL OTHER THINGS ARE. 
 
 No valid reason can be given showing that what is called 
 " value" should not be scrutinized by the same methods 
 of examination which experience has taught us are the 
 only reliable means of ascertaining and testing other attri- 
 butes. All other qualities of any given thing are learned 
 by testing and comparing them with the qualities of some 
 other thing. Hence we must conclude that the common 
 mode of ascertaining the value of gold by simply compar- 
 ing it with itself, is delusive. 
 
 We are told that gold is always at ** par." We ask : Par 
 with what ? The answer must be : Par with gold ; for it 
 must always be at par when compared only with itself. 
 
 If an advocate of the idea that gold has a fixed value be 
 asked to state the evidence that gold is always at par, he 
 will tell you that it is proved by the fact that a piece of 
 gold bullion one thousand times as large as one gold dollar 
 is always worth one thousand gold dollars. 
 
 Under free coinage this must be so. It is also true that, 
 with free coinage, a bar of silver bullion one thousand 
 times as large as a silver dollar is always worth one thou- 
 sand silver dollars. If we coined two-ounce dollars out of 
 copper, without charge for coinage, we should find that un- 
 der all circumstances two thousand ounces of copper bullion 
 were always worth one thousand dollars, so long as wx 
 stated the value of the copper bullion in copper dollars. 
 
 The word " par " means of equal value. One thing at 
 the same time and place is always on an equality of value 
 with a precisely similar thing. Therefore one thing at the 
 same time and place is always of the same value ; /. e., "al- 
 ways at par " with a similar thing. If we test the value of 
 potatoes in this way, we shall find potatoes " always at par." 
 
230 SOCIAL STRUGGLES. 
 
 This would be so, because one bushel of potatoes would be 
 worth exactly another bushel, at the same time and place. 
 
 The mint price of 25 8-10 grains of standard gold is one 
 dollar, paid in gold ; therefore a gold dollar is always the 
 price of 25 8-10 grains of standard gold. Suppose the mint 
 price of one hundred grains of copper were one dollar, paid in 
 a copper dollar of one hundred grains. Then a copper dol- 
 lar would always be the price of one hundred grains of cop- 
 per, and the price of copper, vicasiired in these copper dol- 
 lars, would always be the same ; just as the price of a gold 
 dollar is always a gold dollar. In 1859 gold compared 
 with gold was at par ; compared with the silver dollar of 
 4123^ grains it was about 95. Compared with itself, gold 
 is now at par just as it was in 1859, but compared with the 
 bullion value of the silver dollar, gold is now about 125. In 
 1859 silver compared with itself was at par ; it now stands at 
 the same point as it did in 1859, provided we still com- 
 pare it with a silver dollar. No matter of what materials 
 dollars are made, nor how many, nor how few in number, 
 they will always be at "par "so long as compared only 
 with themselves. 
 
 But, as we shall hereafter see, this fact affords no infor- 
 mation whatever in regard to the actual value of those dol- 
 lars ; that is, their value tested as we do the value of all 
 other things. 
 
 LOGICAL RESULTS OF COMPARING GOLD ONLY WITH 
 
 GOLD. 
 
 Let us see to what absurd conclusions we are driven 
 whenever we adopt the so-called "scientific" method of 
 testing the value of gold, and follow it to its logical and in- 
 evitable conclusions. So long as we use no other test of 
 value but to estimate the value of 23 22-100 grains of pure 
 gold at one dollar, and the value of one dollar at 23 22-100 
 grains of pure gold, neither the amount of gold in the 
 world, nor the greater or less demand for it for coinage, or 
 any other purpose whatever, can have any effect on the 
 
TRUE TEST OF VALUE. 23 1 
 
 value of gold. It would always be worth itself, and there- 
 fore " always at par." 
 
 If mines were discovered which yielded a thousand mill- 
 ion dollars' worth of gold bullion annually, gold would not 
 fall below "par," simply because "par" means nothing 
 more nor less than that 23 22-100 grains of pure gold is one 
 dollar ; and one dollar is 23 22-100 grains of pure gold. 
 
 If the value of gold be not changed by increased supply, 
 then the discovery of a solid mountain of gold would not 
 affect its value ; if we measured gold bullion only with 
 gold dollars it would surely remain at par. On the other 
 hand, if all the silver in the world were destroyed, so that 
 the demand for gold was three times as great as at present, 
 gold would not rise in value, — it would remain at par. 
 Even if all the silver and three-quarters of the gold were 
 destroyed, still there would be no advance in the price of 
 gold. Moreover, we might follow out this process until the 
 amount of gold in the world was reduced to 23 22-100 
 grains. We should then find this solitary dollar still only 
 at par, because, incas2ircd only by itself, it would have the 
 same value under all circumstances ; i. e., it would be worth 
 as much as itself, neither more nor less. 
 
 RESULT OF UNLIMITED COINAGE OF SILVER. 
 
 Suppose we place the coinage of silver on the same basis 
 that the coinage of gold now is, and thus restore silver to 
 the position it had up to 1873. We should then find silver 
 dollars at par with silver bullion, and silver bullion at par 
 with silver dollars. 
 
 This would be so for precisely the same reason that gold 
 bullion is now at par with gold dollars. If a man own 
 23,220 grains of pure gold, and, without expense to himself, 
 can have them coined into a thousand gold dollars, he 
 knows that the bullion is equal in value to a thousand gold 
 dollars ; and he also knows that the dollars are worth as 
 much as the bullion. 
 
 But is the foregoing fact any test of the real value of 
 gold? We have simply divided a lump of bullion into one 
 
232 
 
 SOCIAL STRUGGLES. 
 
 thousand equal parts, and then found that one of those 
 parts was worth one thousandth part of the whole lump. 
 We c^n do the same thing with silver, or any other divis- 
 ible substance or thing, and always arrive at the same re- 
 sult. We can divide a bushel of wheat into thirty-two 
 quarts. We shall then find each quart worth just as much 
 as another quart, and the thirty-two quarts put together 
 again worth just as much as a bushel. But this process 
 does not determine the value, either of a quart, or of a 
 bushel of wheat. It is simply childish folly, but essentially 
 the same process by which the " unvarying value of a gold 
 dollar " is arrived at. 
 
 We do not need to be told that one quart of wheat at 
 the same time and place is worth just as much as another 
 quart of wheat of the same quality. When we desire to 
 know the value of wheat, we want its relative value stated ; 
 i. e., its value stated in some other commodity or thing be- 
 sides wheat. 
 
 CORRECT MODE OF STATING THE VALUE OF GOLD AND 
 
 SILVER. 
 
 The only rational way to test the value of gold and silver 
 is to treat them just as we do everything else ; i. e., compare 
 their value with the value of other things, — state their rela- 
 tive value. 
 
 When the value of gold is under consideration, the 
 proper question is one which compares it, not with one, but 
 with a number of other valuable things. What are the 
 market prices, paid in gold, of wheat, cotton, wool, iron, 
 hemp, corn, pork, beef, sugar, hardware, clothing and labor? 
 In other words, what is the relative value of gold compared 
 with the value of the various articles of commerce ? Com- 
 parison with two or three of those articles might be mislead- 
 ing, because they might be exceptionally plenty or scarce. 
 But a comparison of the value of gold bullion with the 
 value of a large number of other valuable things tells us at 
 once whether gold bullion has risen or fallen in value, and, 
 if so, to what extent. In like manner, a comparison of the 
 
THE KEY TO A PROBLEM. 233 
 
 value of silver bullion with the value of a large number of 
 other valuable things tells us, with unfailing certainty, 
 whether silver bullion has risen or fallen in value, and, if 
 so, to what extent. By this means, the relative value of 
 gold or silver can be determined. When that is done, we 
 have in hand a key which will unlock the problems which 
 bewilder those who follow round and round the narrow 
 track made by comparing one thing with a precisely similar 
 thing. 
 
 This true method of testing value is called '' a general 
 pricing of commodities." 
 
 WHAT A PRICE IS. 
 
 When we put a " price " upon a thing, we thereby state 
 our opinion of its relative value compared ivitJi the thing in 
 which zve state the price. In other words, two things are 
 compared with each other and the "price " is expressed as 
 the result of the comparison. For example, in a commu- 
 nity where eggs are used as money, a farmer takes a basket 
 of eggs to the village and inquires the price per pound of a 
 certain kind of sugar. He is told, " Half a dozen eggs," 
 This is equivalent to saying that the price of eggs is two 
 pounds of sugar, per dozen. When the trade is completed, 
 the farmer has bought sugar and the grocer has bought 
 eggs. The value of each one of the traded commodities is 
 stated by comparing it with the other. The process is the 
 same as if the price of the sugar were stated at eight cents 
 a pound, and the price of the eggs at sixteen cents a dozen. 
 
 When a grocer exchanges two dollars wnth a farmer for 
 ten dozen eggs, we ordinarily say that the grocer has 
 bought, and the farmer sold eggs. But in fact the grocer 
 has sold his money just as truly as the farmer has sold his 
 eggs. And the farmer has bought two dollars just as cer- 
 tainly as the grocer has bought ten dozen eggs. While we 
 commonly speak of the " prices " of commodities, by so do- 
 ing we also virtually speak of the " price of money." 
 
 This should be steadily remembered, as it is very impor- 
 tant. 
 
234 
 
 SOCIAL STRUGGLES. 
 
 MONEY CHANGES IN PRICE LIKE OTHER THINGS. 
 
 Money is higher priced, when a less amount of it will buy 
 a given amount of the necessaries of life. Money has fallen 
 in value, when a greater amount of it is required to buy a 
 given amount of a considerable number of the leading arti- 
 cles of commerce. 
 
 A farmer takes a hundred bushels of wheat to market and 
 sells them for fifty dollars. He has then bought fifty dol- 
 lars and paid a price of one hundred bushels of wheat for 
 them. If he had received one hundred dollars for his wheat, 
 the "price " of each one of those dollars would have been 
 just one half what it was. In the aforesaid case, the ques- 
 tion arises : Did the dollars bring a high price, or did the 
 wheat bring a low price ? So long as our field of observa- 
 tion is confined to the facts of this one case we are unable 
 to decide those questions. The only way to determine them 
 is to test and compare the value of both wheat and dollars 
 by comparing each and both of them with a number of 
 other things. If the price of a considerable number of 
 commodities, on the average, be relatively much higher 
 than wheat at half a dollar a bushel, we know that special 
 circumstances have lowered the value of wheat. But if we 
 find that the prices of all other things, on an average, have 
 sunk to the relative level of wheat, then we know that half 
 a dollar a bushel for wheat means a rise in the value of 
 dollars. 
 
 HOW TO TEST THE PRICE OF MONEY. 
 
 The average scale of the prices of a considerable number 
 of leading commodities denotes the price of money. A uni- 
 versal rise in the prices of all kinds of goods denotes a fall 
 in the value of the dollars in which those prices are stated. 
 Dollars are cheaper than previously. The evidence of this 
 is the fact that they can be bought with a smaller amount 
 of other valuable property Or labor. 
 
 A general lowering of the scale of the prices of commodi- 
 ties and labor denotes a rise in the value of the dollars in 
 
COMMON SENSE. 
 
 235 
 
 which those prices are stated. Dollars are dearer than they 
 were. The evidence of this is the fact that a larger amount 
 of other property is required to buy a given number of dol- 
 lars than before the change occurred. 
 
 THE PRICE OF GOLD. 
 
 Let us apply the foregoing facts and principles to deter- 
 mining whether a gold dollar has a fixed value, or not. If 
 it have an unvarying value, then it has an unvarying price, 
 because a price is simply a short and handy way of stating 
 our ideas of value. If gold dollars have an unvarying price, 
 then they can always be bought with the same amount of 
 other property. 
 
 The fact however is, that on the average, whoever goes in 
 the market to buy gold dollars in 1886 finds that their price 
 is over twenty-five pe-r cent, higher than in 1870. In other 
 words, over twenty-five per cent, more of labor and of the 
 various products of labor, on the average, must be given in 
 1886 than in 1870 to buy.a given number of gold dollars. 
 The price of gold has risen. Instead of a fixed value it has 
 an unstable value. 
 
 Every man who works for wages, paid in gold or its equiv- 
 alent, buys gold and pays for it with labor. 
 
 Every man who produces any one of the various forms of 
 wealth and sells it for a price paid in gold is a buyer of gold 
 and pays for it, either directly or indirectly, with labor. 
 
 Every man who is obliged to sell his house or his farm 
 for gold, is a compulsory buyer of gold, and receives a 
 smaller amount of it in exchange for his property than he 
 would if gold had not risen in price. 
 
 The owners of gold, and the owners of bonds, mortgages 
 and other securities which are made payable in gold by mak- 
 ing it, in effect, the sole legal tender, have a far greater abil- 
 ity to control, or purchase all the other property in the coun- 
 try, in consequence of this rise in the price of gold. Such a 
 rise also gives them an advantage over laborers for w^ages, 
 because the laborer must sell his work at a low price for 
 gold at a high price. This increases the amount of tribute 
 
236 
 
 SOCIAL STRUGGLES. 
 
 which labor is compelled to pay to capital. Suppose a man 
 hold a hundred thousand dollars' worth of bonds or mort- 
 gages at an interest of six thousand dollars per year. Labor 
 is then two dollars per day. A year's interest will then buy 
 three thousand days' labor. 
 
 If the price of gold rise so that wages fall to one dollar 
 per day, the aforesaid capitalist would be able to buy six 
 thousand days' labor with a year's interest. If the rate of 
 interest fall to four per cent., he will still be able to buy a 
 thousand days' labor more than he formerly could with his 
 income. 
 
 The rate of interest paid during recent years on Govern- 
 ment bonds and called loans does not correctly indicate the 
 rate of interest actually paid by the great mass of debtors. 
 The great bulk of existing indebtedness throughout the na- 
 tion consists of personal notes and mortgages on real estate. 
 On many of these instruments, the rate of interest is the 
 same as it was in 1873. In cases where a reduction in rate 
 has been made, this reduction has not equaled the fall in 
 the prices of labor and its products. 
 
 CORRECT TEST OF THE RATE OF INTEREST. 
 
 The real test whether interest is high or low is : How 
 much labor does the man who borrows money have to ex- 
 pend in order to pay the interest ? The four per cent. 
 United States bonds are a heavier burden on the American 
 tax-payer now than the six per cent, bonds were fifteen 
 years ago, because wages have been reduced and our ex- 
 ports sell for much lower prices in gold than they did then. 
 The interest on loans in this State has been reduced from 
 seven to six per cent., but in reality interest is higher in- 
 stead of lower. It remains at this high rate because so vnich 
 debt already exists. Were it not for the vast mass of 
 debts from which debtors cannot immediately escape, 
 interest would at once fall to more nearly its actual value, 
 and the property of the country would cease its pres- 
 ent rapid transfer from the debtor to the creditor class. 
 
HO W B URDENS ARE INCREASED. 2 ^ 7 
 
 The debtors have been surprised by legislation in the in- 
 terest of the creditors. 
 
 One important fact in this connection is generally over- 
 looked by those who have written about the present situa- 
 tion of affairs. Those who pay interest can only do so 
 permanently from their savings. A reduction of wages and 
 prices often reduces the amount possible for a debtor to 
 save far more than the fall of prices. Thus, if a farmer's 
 products be reduced twenty-five per cent, in price, such a 
 reduction may reduce his profits and savings fifty per cent. 
 
 PUBLIC DEBTS AND TAXES. 
 
 Every self-supporting person pays taxes, either directly 
 or indirectly, on everything he uses or consumes. Men who 
 pay large tax bills do not, as a general rule, pay them from 
 their own property, except upon and for such portion as 
 they personally use or consume. For the residue, they are 
 merely sub-collectors of taxes from their tenants, debtors and 
 employees. 
 
 We are burdened with large national, State, county and 
 city debts. The interest and principal of these debts are 
 paid by the tax-payers. The rise which has occurred in the 
 value of gold has added to the burden of this debt because 
 it takes more labor to pay it than when it was contracted, 
 and this has caused increased taxation upon every consum- 
 er. These additional taxes have been levied upon laborers 
 in form of a reduction of wages ; the laborer's taxes are 
 thus collected every time a week's or a month's wages are 
 paid him. Our railroad corporations owe enormous debts. 
 The interest and principal of these debts are paid from 
 freight and fare. As railroad charges are, in effect, a tax 
 upon everything transported by those roads, every self-sup- 
 porting person thus indirectly pays a tax upon whatever lie 
 uses which is carried by rail. 
 
 AN EXAMPLE OF BENEVOLENCE. 
 
 The aforesaid facts explain the yearly occurrence in this 
 country of a remarkable example of unselfishness and piety. 
 
238 
 
 SOCIAL STRUGGLES. 
 
 A considerable number of persons travel in the aggregate 
 thousands of miles, at their own expense, and organize into 
 what is called a " Bankers' Convention." The persons 
 composing these conventions largely represent the capital- 
 ists and money-lenders of the nation. They never exhibit 
 the slightest desire to promote the selfish interests of their 
 own class. But, on the contrary, they always express a 
 great solicitude that " the laboring man " should be well 
 taken care of. To this end they invariably point out the 
 injustice of paying wages in anything but gold, or its 
 equivalent in value ! 
 
 THE TRUE EXPLANATION. 
 
 By referring to the fundamental laws, heretofore stated, 
 which govern the creation of value, we find a complete ex- 
 planation of the recent rise in the value of gold. We have 
 heretofore found that all values are the result of certain 
 conditions and circumstances, and that therefore the value 
 of a thing must necessarily change whenever a change oc- 
 curs in the conditions and circumstances which created 
 that value. 
 
 WHAT HAS CHANGED THE VALUE OF GOLD. 
 
 Since 1872, four important changes have taken place in 
 the conditions under which gold is placed. First. An in- 
 creased demand for gold to fill the place previously occu- 
 pied by paper money and by silver coins, in several na- 
 tions. 
 
 Second. An increased demand for gold, caused by a ma- 
 terial falling off in the yearly production of gold mines. 
 
 Third. An increased demand for gold, caused by a. large 
 increase in the amount of gold consumed in the arts. It 
 has been generally proclaimed, as a sound principle of polit- 
 ical economy, that a rise in the value of a precious metal 
 diminishes its use in the arts. But, during the past ten 
 years, this doctrine has been shown false by the fact that, 
 right in the face of a steady rise in the price of gold, the de- 
 mands of art for gold have been greater both in variety and 
 
, IV//V PRODUCE HAS FALLEN IN PRICE. 039 
 
 amount than ever before. Two facts have produced this 
 result: ist. The increased appHcation of scientific princi- 
 ples and new inventions to arts and processes in which 
 gold is employed ; 2d. The steady increase in the wealth of 
 those who desire to display their riches by adorning their 
 persons and houses with works of art of which gold forms a 
 component part. 
 
 Fourth. The fact that during the past twelve years large 
 amounts of gold have been hoarded by nations, banks and 
 individuals. The large amount hoarded in the United 
 States since 1875 has been largely drawn from Europe. 
 By diminishing the amount of gold in Europe, this process 
 has raised its price on that continent. Consequently, the 
 gold we have bought in England and other European na- 
 tions has cost us a much higher price than it would if the 
 United States had not adopted a policy which inevitably 
 increased the demand for gold. 
 
 AMERICA BEARING DOWN THE PRICES OF AMERICAN 
 
 GOODS. 
 
 The result of this policy has been low prices for our cotton, 
 wheat, cheese and other products, and high prices for gold. 
 The American nation has thus been acting the part of a 
 bear on the prices of the commodities which American 
 citizens sent abroad for sale. Every dollar of debt held by 
 foreigners against us, which has been canceled since 1873, 
 has cost the people of this country a much larger amount 
 of goods than it would if we had not adopted the policy of 
 raising the price of foreigners' gold, and thus enhancing the 
 value of the securities paid them in gold. 
 
 EFFECT OF LOWERING PRICES IN ENGLAND. 
 
 Taking gold from England depressed wages and the 
 prices of manufactured goods in that country. This en- 
 abled English shippers to lower the prices of the goods ex- 
 ported to this country. In order to compete in price with 
 the imported goods, American manufacturers have been 
 obliged to lower the prices of their wares. This has neces- 
 
240 SOCIAL STRUGGLES. 
 
 sitated a reduction of the wages of factory operatives. 
 Lower wages have diminished the abiHty of the operatives 
 to purchase the amount and variety of things formerly used 
 by themselves and families. This has resulted in first lessen- 
 ing the amount of retail, and next in reducing the amount 
 of wholesale trade. A diminished sale for stocks of goods 
 on hand has lessened the ability of merchants to pay their 
 debts. This is frequently followed by bankruptcy and loss 
 to those who have trusted the merchants. Thus the circle 
 has spread from class to class, and person to person, until 
 what are called " hard times " generally prevail. 
 
 THE DELUSION THAT GOLD PRICES WOULD NOT FALL. 
 
 When Germany demonetized silver, the belief in the 
 " fixed value " of gold was so general that the great major- 
 ity supposed prices stated in gold alone would be the same 
 as when stated in both gold and silver. This certainly 
 Avould have been so, if gold had possessed the " fixed value " 
 that was ascribed to it. But, in fact, prices began to fall as 
 soon as silver was disused, and this fall in prices extended 
 from one thing to another, and finally extended from nation 
 to nation. 
 
 Meantime it has been declared that " gold has remained 
 at par." How has it come to pass that so many people 
 have been deceived by this trick of the " par value of 
 gold"? 
 
 In a nation with gold as the sole legal tender, a price is 
 fixed by law on one commodity, and all other things have no 
 price but the market price. Thus, in this country, the law 
 fixes the price of gold bullion at one dollar for 23 22-100 
 grains of pure gold, and this price is subject to no change 
 whatever. This proceeding causes the term " gold dollar " 
 to mean 2."- fixed thing''' But it by no means confers a 
 fixed valu'e on the thing designated as a dollar. It merely 
 obscures the real value of gold, and causes it to appear sta- 
 tionary while all other prices are in motion. It causes people 
 to make the same mistake that was made when the earth 
 was supposed to stand still and the sun to move around it. 
 
RESUL T OF LEG IS LA TIOlY. 34 1 
 
 EFFECT OF MAKING A METAL LEGAL TENDER. 
 
 The attachment of a legal-tender price on a metal places 
 it under conditions which render it difficult to determine 
 how much of its value is dependent on the legal-tender law, 
 and how much on other facts. We know that a portion of 
 its value is derived from the legal-tender law, because that is 
 one of several other conditions luhich create all its value. 
 But what proportion of its total value is due to the condi- 
 tions created by the legal-tender quality being affixed to it, 
 can only be known by actual test. 
 
 We know with absolute certainty that if several of the 
 leading nations of the world were to demonetize gold, that 
 the demand for that metal would be largely diminished and 
 its value proportionally reduced. But exactly how great a 
 reduction of the value of gold would thereby be occasioned, 
 no one can predict with certainty. 
 
 As heretofore seen, the practical operation of a legal-ten- 
 der law is to mislead ordinary observers into supposing that 
 the value of the legal-tender metal would be the same if no 
 law existed ; that the law merely records a fact produced by 
 other causes. But such a law also has a tendency to lead 
 persons to suppose that the repeal of laws under which sil- 
 ver is a fellow legal tender could have but little effect in 
 raising the price of gold. 
 
 Even so intelligent an observer as Prof. Jevons seems to 
 have greatly underestimated the effect of legal-tender laws 
 on the value of gold. 
 
 In 1875 Prof. Jevons, in writing about the demonetization 
 of silver, said : 
 
 " Mr. Wolowski has earnestly warned Europe against the danger of 
 abrogating the law of the double standard, and demonetizing silver. 
 Germany, in adopting a gold standard, is causing a considerable demand 
 for gold, and at the same time throwing many millions of silver coins 
 upon the market. Austria, Denmark, Sweden and Norway are likely to 
 follow her example. If other countries were to insist upon suddenly 
 having a gold money, it is evident that gold would tend to rise in value 
 compared with silver, which might be largely depreciated. If France, 
 Italy, Belgium and other countries now possessing theoretically the 
 16 
 
242 SOCIAL STRUGGLES. 
 
 double standard, were to allow the free action of their monetary laws, 
 the depreciated silver would flow in and replace the appreciated gold, 
 so that the change of values would be moderated. Mr. Wolowski as- 
 serts that if this compensatory action be suspended, and the demonetiz- 
 ation of silver be extended, there must ensue a disastrous rise in the 
 value of gold, thus rendered the sole standard of value. All debts, pri- 
 vate and. public, will be legally due in this metal, and all burdens will be 
 greatly increased. 
 
 " Within the last year or two the predictions of M. Wolowski may seem 
 to have been verified in some degree. The price of standard silver, 
 which was at one time 62^ d. per ounce, has already fallen as low as 
 57 3-4 d., while the demonetization of silver in Germany is only partially ac- 
 complished. The whole effect of the great discoveries of gold was only to 
 raise the price from about 59 3-4 d. to a maximum of 62^ d., while the 
 double standard system freely worked ; but since its action has been sus- 
 pended, as we shall see, the minting operations of a single government 
 can affect the price in a greater degree. 
 
 " As regards the gold required to replace silver, it does not seem to be 
 evident that there will be any scarcity. The adoption of the gold stand- 
 ard does not necessarily involve the coining of much gold, for some 
 countries may, like Norway, or Italy, or Scotland, have a principal currency 
 almost entirely composed of paper. The current supply of gold from 
 the mines is still very large, and we cannot be sure that it will not be in- 
 creased by fresh discoveries. 
 
 " In short, then, the amount of supply and amount of demand of both 
 the precious metals depend upon a number of accidents, changes, or leg- 
 islative decisions, which cannot, in any way, be predicted. The price of 
 silver has fallen in consequence of the German currency reforms, but it 
 is by no means certain that it will fall further than it has already done. 
 That any great rise will really happen in the purchasing power of gold is 
 wholly a matter of speculation. We cannot do more than make random 
 guesses on the subject, and. as a mere guess, I should say that it is not 
 likely to rise. Gold has, since 1851, been falling in value, and an in- 
 creased demand for gold is not likely to do more than slacken, or at the 
 most arrest the progress of depreciation." 
 
 Events have shown that Prof, Jevons did not appre- 
 ciate the tremendous effects of legislation on values. He 
 thought the relative fall in the price of silver to 57 3-4 pence 
 per ounce was the probable final measure of the rise of gold 
 occasioned by the partial demonetization of silver. But at 
 present (September, 1885) silver is quoted at 47 pence per 
 
THE TRADE DOLLAR. 243 
 
 ounce in London.* If the lamented professor could now 
 write on the same subject, he would probably say that the 
 predictions of M. Wolovvski were rapidly being verified. 
 
 We have recently made an experiment in this country 
 which practically shows the effect produced by afifixing 
 a legal-tender quality to a coin, and then removing that 
 quality. In 1873, Congress authorized the coinage of 420 
 grains of standard silver into a '' trade dollar." Although 
 the legal-tender quality of this dollar up to 1876 was re- 
 stricted to only five dollars, and sums under that amount, 
 yet so great was the demand for them caused by the de- 
 monetization of the dollar of 412^ grains and an unlimited 
 legal tender, that over fifteen millions of those dollars were 
 coined in the years 1874, 1875, and 1876. On July 22, 
 1876, Congress repudiated money of its own creation by 
 enacting that the trade dollar should no longer have any 
 legal-tender quality whatever. On February 28, 1878, 
 Congress partially restored the silver dollar of 412^ grains 
 to its original position. 
 
 Thus two United States silver dollars now are, and for 
 several years have been, in existence. One, a legal tender 
 of 4121^ grains, circulates as one dollar. The other, a coin 
 bearing the United States certificate that it weighs 420 
 grains, but not a legal tender, is sold for eighty cents when a 
 buyer can be found at that price. 
 
 As an illustration of the absurd conclusions to which false 
 economic theories may lead a person, it may be stated that 
 our present Secretary of State recently argued that it would 
 be ''dishonest" for the United States Government to itself 
 receive a coin bearing its superscription, at the same price 
 it was issued from the United States mints ! 
 
 HAS SILVER DEPRECIATED IN VALUE? 
 
 Having examined the truth of the common belief that 
 gold has a fixed value, let us now investigate the al- 
 
 * While this work is under revision, August, 1886, silver is quoted at 
 42^ d. per ounce. 
 
244 
 
 SOCIAL STRUGGLES. 
 
 leged recent depreciation and fluctuation in the value of 
 silver. 
 
 The following table, giving the price per ounce of silver 
 bullion for the ten years preceding the .demonetization of 
 the silver dollar, has been furnished by the Director of the 
 United States Mint: 
 
 
 Price per 
 
 Price per ounce 
 
 Value of Silver bullion 
 
 
 in United 
 
 in the silver dollar of 
 
 Year. 
 
 ounce in 
 London. 
 
 States gold 
 
 412J grains in United 
 
 
 coin. 
 
 States gold coin. 
 
 
 Pence. 
 
 Cents. 
 
 
 1863 
 
 61 3-8 
 
 121.09 
 
 104.06 cents. 
 
 1864 
 
 61 3-8 
 
 1 2 1 . 09 
 
 104.06 " 
 
 1865 
 
 61 1-16 
 
 120.47 
 
 103.52 " 
 
 1866 
 
 61 1-8 
 
 120.59 
 
 103.63 " 
 
 1867 
 
 60 9-16 
 
 119.48 
 
 102.67 " 
 
 1868 
 
 60 1-2 
 
 119.36 
 
 102.57 " 
 
 1869 
 
 60 7-16 
 
 119.24 
 
 102.47 
 
 1870 
 
 60 9-16 
 
 1 1 9. 48 
 
 102.67 
 
 1871 
 
 60 1-2 
 
 119.36 
 
 102.57 " 
 
 1872 
 
 60 5-16 
 
 118.99 
 
 102.25 " 
 
 1873 
 
 59 1-4 
 
 116.90 
 
 100.46 " 
 
 It will be seen from this table that the bullion in a silver 
 dollar is of the same value as the bullion in a gold dollar 
 when silver bullion is worth in London about 59 pence per 
 ounce. Thus it appears that the demonetization of silver 
 was begun when the bullion value of the silver dollar was 
 greater than the bullion value of a gold dollar. Since 1873, 
 the relation of silver and gold has steadily changed. At 
 present (September, 1885), an ounce of silver bullion can 
 be bought in London for 47 pence stated in the value of 
 gold bullion. This shows that the value of silver bullion, 
 compared with the value of gold bullion, has depreciated 
 about twenty per cent, since 1873. 
 
 If we assume that gold has an invariable value, as is usu- 
 ally done, we at once arrive at the conclusion that silver is 
 about twenty per cent, less valuable now than in 1873. But, 
 we have heretofore found that gold has not a fixed value. 
 Moreover, we have found that gold, since 1870, has ad- 
 vanced about twenty-five per cent, in value. Therefore, if 
 
NEED OF COMMON SENSE. 
 
 245 
 
 we wish to learn the relative value of silver to-day, com- 
 pared with its value in 1870, we must subject it to some 
 other test than merely comparing it with gold. 
 
 HOW TO TEST THE VALUE OF SILVER. 
 
 The value of silver depends on precisely the same natural 
 laws which give value to wheat, cotton, wool, gold, iron, 
 steel, copper, lead and all other things which we term " val- 
 uable." Therefore it follows that the value of silver bul- 
 lion can only be correctly determined by testing its value 
 in precisely the same way we do the value of other things. 
 We have heretofore found that the only proper way to as- 
 certain the value of a thing is by comparison with some- 
 thing besides itself. Furthermore, we have found that this 
 comparison is inadequate and worthless if made with only 
 one other thing, because special events may have either 
 raised or lowered the value of that one thing. We have also 
 found that a correct comparison of value could be made by 
 comparing the value of the one tJiing under examination 
 with the value of all other things, or a very considerable 
 number of other things. 
 
 Small portions of the ocean rise and fall in form of waves 
 and tides. But the general level of the ocean, the great 
 mass of water, is undisturbed by the influences which are 
 constantly raising and lowering small portions of it. In 
 like manner, sudden and great changes may occur in the 
 value of a small portion of the valuable things in the 
 world. But the great mass of values, like the body of the 
 ocean, it is impossible to rapidly and materially elevate or 
 depress. When we fancy that such a change has been sud- 
 denly made in all the valuable things in the world, it is 
 only because we have used a false and delusive standard 
 and mode of measurement. 
 
 Like all other material things which are bought and sold, 
 silver possesses peculiar intrinsic qualities over which legis- 
 lation and other conditions have no effect whatsoever. 
 But value is neither an inherent intrinsic quality of silver 
 nor of anything else. Value is an appraisal of the import- 
 
246 SOCIAL STRUGGLES. 
 
 ance of owning or using one thing, relative to the import- 
 ance of owning or using the object of comparison, at a cer- 
 tain time and place and under certain circumstances. A 
 statement of such an appraisal, such a comparison, is a 
 statement of value. 
 
 Let us apply these indisputable principles to the question 
 before us and test the value of silver bullion to-day, com- 
 pared with its past value, just as we would test the value 
 of iron, copper, lead, or anything else. 
 
 How much of other property, on the average, can be 
 bought with a thousand ounces of silver bullion now, as 
 compared with what could have been bought when the 
 bullion in a silver dollar was worth as much as the bullion 
 in a gold dollar? In 1873 a thousand ounces of silver 
 were worth, in London, 59,250 pence stated in gold coin. 
 A thousand ounces of silver are now worth, in London, 
 47,000 pence stated in gold. Will 47,000 pence now buy as 
 much property on the average in London as 59,250 pence 
 would buy in 1873 ? The market quotations of London 
 answer this question in the affirmative. 
 
 Li 1873 a thousand ounces of silver bullion were worth, 
 in New York, $1169 in United States gold coin. To-day, 
 a thousand ounces of silver bullion can be bought in New 
 York for about $9352. Will $9352 now buy as much prop- 
 erty of all kinds on the average as $i 169 would in 1873? The 
 market quotatio.ns of New York answer : Yes, and more too. 
 
 The New York Sun of September 25, 1885, contained 
 the following editorial regarding the last annual statement 
 of wholesale prices made by the London Economist. 
 
 " The Economist starts with the prices of leading articles of commerce 
 in the London market for the six years preceding 1850, the year when 
 the new supplies of gold began to produce their effect. Calling the 
 average price for this period of each article 100, it denotes the relative 
 price of that article at the beginning of each subsequent year by a num- 
 ber which bears a corresponding relation to 100. Thus, if coffee sold at 
 an average of 10 pence per pound from 1845 to 1850, and at 17.3 pence 
 January i, 1875, its number would be 100 for the first period and 173 at 
 the later date. The result of this method of computation is as follows : 
 
 I 
 
RELATIVE PRICES. 
 
 247 
 
 ARTICLES. 
 
 Coffee 
 
 Sugar 
 
 Tea 
 
 Tobacco 
 
 Wheat 
 
 Butchers' meat. 
 
 Cotton 
 
 Raw silk. . . . . . 
 
 Flax and hemp 
 
 Wool 
 
 Tallow 
 
 Leather 
 
 Copper 
 
 Iron 
 
 Lead 
 
 Tin 
 
 Cotton cloth. 
 
 1845-50 1875 
 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 
 lOJ 
 
 100 
 100 
 
 173 
 
 68 
 
 100 
 
 256 
 
 80 
 
 137 
 1 1 1 
 
 115 
 
 95 
 
 145 
 
 108 
 
 153 
 105 
 
 138 
 137 
 118 
 116 
 
 151 
 70 
 141 
 180 
 88 
 119 
 no 
 
 135 
 
 78 
 
 117 
 
 102 
 
 144 
 
 81 
 
 92 
 
 112 
 
 109 
 
 95 
 
 Totals 1,700 2,155 1,924 1.782 1,846 1,766 1.685 "'571 
 
 1 22 
 60 
 100 
 161 
 82 
 146 
 105 
 130 
 
 71 
 120 
 
 89 
 144 
 
 75 
 
 79 
 
 87 
 
 no 
 
 lOI 
 
 100 
 
 67 
 
 89 
 
 222 
 
 84 
 
 125 
 
 102 
 
 139 
 
 75 
 
 108 
 
 103 
 
 139 
 86 
 86 
 88 
 
 134 
 99 
 
 82 
 60 
 
 240 
 
 n 
 145 
 
 89 
 126 
 
 68 
 106 
 1 1 1 
 
 139 
 80 
 
 78 
 
 83 
 
 114 
 
 92 
 
 106 
 
 54 
 
 92 
 
 200 
 
 73 
 
 123 
 
 92 
 
 "7 
 
 76 
 
 98 
 113 
 
 139 
 71 
 69 
 70 
 
 104 
 88 
 
 93 
 37 
 78 
 
 228 
 60 
 
 122 
 93 
 89 
 78 
 92 
 
 87 
 144 
 60 
 75 
 65 
 90 
 80 
 
 " These figures show that, with the exception of tobacco, butchers' 
 meat, and leather, every article mentioned in the table was lower at the 
 beginning of the present year than it was at the beginning of 1880, 
 and that all, without exception, are very much lower than they were 
 at the beginning of 1875. As to the astounding assertion that average 
 prices are no lower now than before 1850, it is seen to be utterly un- 
 true. Only tobacco, butchers' meat, and leather have numbers above 
 100, while of the rest, coffee and cotton have 93, and sugar is down 
 to 37. The totals of the numbers of the seventeen articles men- 
 tioned is only 1571, whereas in 1845-50 it was 1700. That is to say, 
 the average price of these seventeen articles at the beginning of this year 
 was lower than it was in 1845-50 by the difference between 1700 and 
 1 57 1. Or, to put it in another way, $1571 now will buy as much of the 
 seventeen articles enumerated as $1700 would in 1845-50. The fall 
 from 1875 to 1880 was from $2155 to $1924, and since then each year 
 has seen a further decline. During the present year some articles — 
 sugar, for example — have advanced, but wheat, cotton, and other great 
 staples have gone on falling, and are to-day lower than they have been 
 for forty years. 
 
 " The fall in the price of silver has kept pace with that of other products. 
 Prior to 1875 silver ruled steadily at about 60 pence sterling per ounce. 
 To-day it is quoted at about 47 pence. According to the notation 
 adopted by the Economist this is a fall from 100 to 79, which is no 
 greater than the fall in tea, flax, copper and cotton cloth, and far less 
 than that in sugar, wheat, copper, iron, and lead. Silver, therefore, as 
 mere bullion, is still an equitable standard of value, notwithstanding 
 
248 
 
 SOCIAL STRUGGLES. 
 
 its depreciation as compared with gold, since its purchasing power 
 remains about as great as it ever was. 
 
 " Measured by its power to purchase the necessaries of life, the value of 
 gold is shown by our table to have increased and to be still increasing. 
 Whether this proceeds from the growing scarcity of gold, as some say, 
 or from the greater abundance of all other commodities, as insisted by 
 others, is immaterial. The fact remains that, relatively to other things, 
 gold is getting dearer and dearer, since it commands more and more of 
 other things in exchange. The result is that, under the gold standard, 
 every man who owes money or who sells goods has to give more, while 
 the man to whom money is owed or who buys goods gets more, by the 
 difference between looand 79, than he would under the silver standard.'' 
 
 The following article is taken from the Chicago Tribune 
 of August, 1885 : 
 
 " The following table (see p. 249) shows the average prices of a num- 
 ber of leading articles in this market for twelve years past, on a currency 
 basis, and those of the present time. These figures are not the highest and 
 lowest reached during the period named, but the table gives a fairer view 
 of the nominal range in values from one year to another than would an 
 attempt to record the minor fluctuations of the several markets. The 
 prices are wholesale and generally for the standard grade, as No. 2 in 
 grain, and cargo prices for common lumber. The table is compiled 
 from the yearly averages given in 77^1? Tribwie Anmial Review for 
 each of the years named. 
 
 " The figures are very suggestive in regard to the purchasing power of 
 the dollar during most of the time that has elapsed since the great fire in 
 Chicago. They show that with the exception of wheat, corn, and live 
 stock, prices are now at the lowest point, and in those articles the pres- 
 ent selling values have been more in favor of the buyer only in excep- 
 tional seasons. The general average is 35 per cent, less in currency, and 
 28 per cent, less in gold than that of the year succeeding the panic of 
 1873, and 26 per cent, less than that of 1881. If we should take the top 
 prices of that year for comparison, the difference would be much greater." 
 
 The facts, tabulated, show that debtors are being forced 
 to pay debts in a manner not contemplated by the original 
 contract ; and that an attempt is steadily made to conceal 
 this rascality by clamoring about the " dishonest silver 
 dollar." But this dishonest dollar has remained more 
 valuable than the gold dollar was before cunning and arti- 
 fice raised its value as a sly mode of oppression and wrong. 
 
RELATIVE PRICES. 
 
 249 
 
 b b b b b b c/^oj bb-ibb-ibbw-^Jtyiw-t^bo 
 
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 Xj\ OD C0+» '-iM-^i-cvjoj^ON 00-M ^J 
 
 l4-*4-i Kf-K+-. Kt- |^)» (j^ 
 
250 
 
 SOCIAL STRUGGLES. 
 
 Table A. 
 
 Table showing the rise and fall in Prices of the principal Com- 
 modities IN the New York Market, taking the period of three 
 years 1870-1872 as a basis, and the average price of Silver each 
 YEAR, Compiled by E. O. Leech, Computer of Bullion. 
 
 Articles. 
 
 Average gold prices in New York. 
 
 
 
 Flour : 
 
 Superfine barrel . 
 
 Rye-flour barrel. 
 
 Corn-meal barrel . 
 
 Wheat: North'n. .bushel . 
 
 Rye bushel. 
 
 Oats bushel . 
 
 Corn bushel. 
 
 Coal : Anthracite .... ton . 
 Coffee : 
 
 Rio pound. 
 
 Java pound. 
 
 Cotton: Upland. . pound. 
 Fish: 
 
 Cod cwt . 
 
 Mackerel barrel. 
 
 Hops pound. 
 
 Iron : Scotch ton . 
 
 Lead: Pig cwt. 
 
 Leather pound. 
 
 Molasses : N. O. . .gallon. 
 
 Nails: Cut pound. 
 
 Naval stores : 
 
 Turpentine gallon. 
 
 Rosin barrel . 
 
 Paint: Red-lead cwt. 
 
 Pork : 
 
 Mess barrel . 
 
 Hams pound. 
 
 Lard pound. 
 
 Rice cwt . 
 
 Salt : Liverpool . . . .sack. 
 Sugar : 
 
 Cuba pound. 
 
 Loaf pound. 
 
 Tallow : 
 
 American pound. 
 
 Wool : 
 
 Common pound. 
 
 Merino pound. 
 
 Pulled pound. 
 
 Average London price 
 of silver per ounce 
 fine 
 
 $5,046 
 
 4-579 
 
 3-725 
 
 1-397 
 
 .867 
 
 •495 
 
 .712 
 
 5.068 
 
 .151 
 .185 
 .176 
 
 5.407 
 
 15.968 
 
 .247 
 
 34-554 
 
 5-70 
 
 .270 
 
 -603 
 
 .041 
 
 .476 
 2.689 
 8.158 
 
 16.954 
 
 . 120 
 
 .105 
 
 7.279 
 
 2-133 
 
 .077 
 . 109 
 
 .263 
 
 ■550 
 .426 
 
 i35j$4-439 
 616I 3.524 
 804J 3.070 
 
 1-307 
 1.024 
 
 253, 
 934' 
 
 43^1 
 547; 
 
 128' 
 
 2X61 
 I2I1 
 
 .625 
 4.216 
 
 .116 
 
 -173 
 .115 
 
 18 
 
 9961 5-449 
 200] 18. 990 
 197I .201 
 24.44526 
 
 233 
 
 4.858 
 
 212 
 
 -234 
 
 370 
 
 .467 
 
 037 
 
 •037 
 
 308 
 
 .470 
 
 397 
 
 2.067 
 
 900 
 
 6.290 
 
 143 
 
 17. 299 
 
 084 
 
 .116 
 
 06 s 
 
 . 120 
 
 S90 
 
 6. 200 
 
 690 
 
 -750 
 
 070 
 
 086 
 063 
 
 254 
 414 
 
 349 
 
 1.325 
 
 958 
 
 247 
 918 
 277 
 833 
 575 
 796 
 
 335 
 
 098 
 160 
 118 
 
 574 6 
 
 79017 
 
 458 
 
 75324 
 
 960 
 
 237 
 587 
 041 
 
 ,077 
 
 , TOO 
 .070 
 . 290 
 
 •454 
 364 
 
 515 
 2. 115 
 6.300 
 
 17.040 
 
 . 140 
 
 .119 
 
 5.900 
 
 •750 
 
 -073 
 .099 
 
 .083 
 
 .306 
 
 •455 
 .386 
 
 1.145 1.138 1.136 1.110 
 
 16, 
 
 410 
 
 723 
 922 
 206 
 730 
 503 
 644 
 350 
 
 104 
 177 
 103 
 
 3" 
 
 520 
 562 
 000 
 
 340 
 232 
 
 529 
 039 
 
 428 
 623 
 
 690 
 
 139 
 100 
 400 
 710 
 
 068 
 091 
 
 078 
 
 302 
 440 
 381 
 
 I2.859 
 
 2.694 
 
 3-038 
 
 1. 016 
 
 .691 
 
 .368 
 
 .616 
 
 4.106 
 
 . 109 
 .165 
 .109 
 
 5.267 
 
 21-534 
 
 .245 
 
 21.618 
 
 3.822 
 
 -237 
 .512 
 •038 
 
 .324 
 I ••35 1 
 5.700 
 
 16. 363 
 •131 
 
 •043 
 
 6. 1 00 
 
 . 700 
 
 •053 
 .074 
 
 .071 
 
 • 265 
 .409 
 •339 
 
 $3,205 
 
 3.040 
 .970 
 .709 
 .361 
 .528 
 
 3^825 
 
 -093 
 .125 
 .082 
 
 4.274 
 20.419 
 
 .134 
 20.630 
 
 3-925 
 .221 
 
 •507 
 .022 
 
 •343 
 1-137 
 5-490 
 
 11.645 
 
 .108 
 
 .068 
 
 5-384 
 
 -732 
 
 •053 
 .069 
 
 .056 
 
 •343 
 .266 
 .298 
 
 1.113 1.064 
 
RELATIVE PRICES. 
 
 251 
 
 Table B. 
 
 Articles. 
 
 Flour : 
 
 Superfine barrel. 
 
 Rye-flour barrel . 
 
 Corn-meal barrel . 
 
 Wheat : 
 
 Northern bushel. 
 
 Rye bushel. 
 
 Oats bushel . 
 
 Corn bushel. 
 
 Coal : Anthracite ton . 
 
 Coffee : 
 
 Rio pound. 
 
 Java pound. 
 
 Cotton: Upland, .pound. 
 Fish: 
 
 Cod cwt. 
 
 Mackerel barrel. 
 
 Hops pound. 
 
 Iron: Scotch ton. 
 
 Lead : Pig cwt . 
 
 Leather pound . 
 
 Molasses : 
 
 New Orleans. . ..gallon. 
 
 Nails: Cut pound. 
 
 Naval stores : 
 
 Turpentine gallon. 
 
 Rosin barrel. 
 
 Paint : 
 
 Red-lead cwt . 
 
 Pork: 
 
 Mess barrel 
 
 Hams pound. 
 
 Lard pound. 
 
 Rice cwt. 
 
 Salt: Liverpool. .. .sack. 
 Sugar : 
 
 Cuba pound. 
 
 Loaf pound. 
 
 Tallow : 
 
 American pound . 
 
 Wool : 
 
 Common pound . 
 
 Merino pound . 
 
 Pulled pound. 
 
 Average 
 
 Comparison of prices of 1880 and subsequent years, with 
 the average prices of 1870-1872, expressed in 1,000 
 
 *■' Q.00 
 
 1,000 
 1,000 
 1,000 
 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 
 1,000 
 1,000 
 1,000 
 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 
 I, 000 
 1,000 
 
 1,000 
 1,000 
 
 I, 000 
 
 1,000 
 1,000 
 I, 000 
 I, 000 
 1,000 
 
 1,000 
 1,000 
 
 1,000 
 
 1,000 
 
 I, 000 
 
 I, 000 
 
 1,000 
 
 819 
 • 790 
 
 753 
 
 S97 
 
 1,077 
 885 
 768 
 807 
 
 847 
 
 1,168 
 
 687 
 
 1, 109 
 
 1,077 
 798 
 709 
 74 
 785 
 
 614 
 90 
 
 647 
 
 520 
 
 968 
 
 598 
 700 
 619 
 
 905 
 
 909 
 
 7S9 
 
 768 
 
 966 
 
 753 
 819 
 
 80-, 
 
 . 880 
 769 
 824 
 
 936 
 1,181 
 
 978 
 878 
 832 
 
 768 
 935 
 653 
 
 1,008 
 1,189 
 814 
 707 
 852 
 867 
 
 7S9 
 902 
 
 987 
 769 
 
 771 
 
 1,020 
 967 
 
 1,143 
 852 
 
 354 
 
 I, 000 
 917 
 
 854 
 
 1,103 
 825 
 
 854 
 
 884 
 
 784 
 
 709 
 
 1,052 
 
 914 
 
 961 
 
 1, 162 
 
 1,118 
 
 855 
 
 649 
 865 
 670 
 
 I, 216 
 
 1,177 
 
 1,874 
 
 774 
 
 870 
 
 878 
 
 973 
 1, 00c 
 
 787 
 
 772 
 
 1,005 
 I, 167 
 
 1,133 
 811 
 
 354 
 948 
 
 r, 012 
 
 1,163 
 827 
 906 
 
 951 
 
 676 
 
 813 
 
 784 
 
 863 
 
 842 
 
 1,016 
 
 904 
 
 858 
 
 957 
 
 585 
 
 I, 167 
 1,097 
 
 2,275 
 695 
 761 
 859 
 
 877 
 951 
 
 604 
 711 
 
 1,158 
 952 
 
 879 
 
 835 
 
 951 
 
 1,148 
 800 
 
 894 
 
 goo 
 
 567 
 588 
 816 
 
 T^l 
 797 
 
 743 
 865 
 810 
 
 722 
 
 892 
 619 
 
 974 
 1,349 
 992 
 626 
 670 
 87S 
 
 849 
 927 
 
 681 
 
 502 
 
 699 
 
 965 
 1,092 
 
 790 
 838 
 328 
 
 688 
 679 
 
 866 
 
 1,008 
 
 744 
 796 
 
 791 
 
 63s 
 803 
 816 
 
 694 
 818 
 729 
 742 
 755 
 
 616 
 676 
 
 790 
 ,279 
 543 
 597 
 688 
 819 
 
 841 
 537 
 
 721 
 
 423 
 
 687 
 900 
 648 
 740 
 343 
 
 633 
 683 
 
 1,304 
 484 
 700 
 
 711 
 
2C2 SOCIAL STRUGGLES. 
 
 From Table A it appears that in 1870- 1872 the average 
 price of superfine wheat flour, stated in gold, was $5,046. 
 It would follow that 100 barrels of such flour were then 
 worth $504.60 in gold. At the same time, the average 
 price of silver was $1,325 per ounce in gold. Therefore, 
 380 and 83-100 ounces of silver in 1870- 1872 would buy 100 
 barrels of superfine wheat flour. 
 
 Table A also shows that in 1885. the average price of 
 superfine wheat flour was $3,205 stated in gold. In that 
 year loo barrels of such flour therefore cost $320.50 in gold. 
 At the same time, the average price per ounce of silver was 
 $1,064 in gold. Therefore ,301 22-100 ounces of silver, in 
 1885, would buy the same amount and quality of flour that 
 380 83-100 ounces of silver would in 1870-1872, 
 
 In other words, in 1885, 100 barrels of superfine wheat 
 flour would buy 79 and 61-100 less ounces of silver than the 
 same amount and quality of flour would buy in 1 870-1 872. 
 A few figures will show the reader that with the excep- 
 tion of fish and common wool, articles subject to exceptional 
 influences, a similar diminution as above found in case of 
 wheat flour exists in the amount of silver which can be 
 bought with a given amount of commodities in 1885 as 
 compared with 1870- 1872. It clearly appears that instead 
 of being '' depreciated," as alleged by its enemies, silver has 
 actually risen in value since 1872. And, be it remembered, 
 in 1872 the bullion value of a silver dollar was 2}{ per cent, 
 greiter than the bullion value of a gold dollar. 
 
 From Table B it appears that if the figures 1000 be as- 
 sumed to represent the total average of prices stated in 
 Table A, the figures 711 represent the total average prices of 
 the same commodities in 1885. From Table A it appears 
 that the ratio of decline in the price of silver bullion stated 
 in gold, from 1870-1872 to 1885, is from $1325 to $1064. 
 This is equal to about 19.7 per cent.; this percentage repre- 
 senting the decline in the value of silver relative to gold for 
 the time stated. 
 
 From 1870-1872, commodities declined in value by 
 gold figures 28.9 per cent. That is, 28.9 per cent, would 
 
WHA r THE WAR ON SIL VER MEANS. 
 
 25; 
 
 need to be subtracted from the average prices of 1870- 
 1872 to produce the average prices of 1885. 
 
 The foregoing figures show that the bulHon-purchasing 
 power contained in a silver dollar in 1885 was about nine per 
 cent, greater than the bullion-purchasing power contained in 
 a gold dollar in 1870- 1872. If we now had unlimited coin- 
 age of silver dollars, each dollar would be worth, at least, 
 the value of the bullion from which it was made. It follows 
 that the " flood of debased money " of which we hear so 
 much would be nothing more nor less than the coinage of 
 dollars, each one of which would contain bullion of a greater 
 value than a gold dollar had in 1870. 
 
 The real nature of the " cheap money " cry can perhaps be 
 shown by a dialogue between a farmer and a money-lender 
 who has stated his aversion to cheap money. 
 ■" Are you opposed to everything being cheap ? " 
 
 " No. It is a great blessing to have cheap bread, meat, 
 clothing, and in short to have everything cheap. I do not 
 care how cheap all commodities become. But my property 
 would be depreciated if I am paid off in ' cheap silver.' 
 
 " In that case the number of your dollars would not be 
 diminished ; and would not the fact that with these ' cheap ' 
 dollars you could buy more property than with the dollars 
 you loaned be conclusive evidence that their valnc was 
 unimpaired ? The fact is, you want to have the value of 
 land, labor and everything else put down, except the value 
 of money. You want to curtail the production of dollars 
 while the production of all things else goes on without 
 limit. Do you not see that this is simply a mode of rob- 
 bing the rest of the community for your benefit and others 
 like you ? " 
 
 ANOTHER COMPARISON OF PRICES. 
 
 The following table, prepared by H. C. Burchard, late di- 
 rector of the United States Mint, has been copied from an 
 interesting and valuable pamphlet, " The American Dollar," 
 by Judge R. M. Hughes : 
 
254 
 
 SOCIAL STRUGGLES. 
 
 Average and Comparative Prices of the Principal Domestic 
 Commodities Exported from the United States from 
 Declared Values at Time of Export, in Gold : 
 
 commodities. 
 
 Hogs head 
 
 Mules " 
 
 Sheep " 
 
 Ashes, pot and pearl, pound 
 Beer : 
 
 I-n bottles dozen 
 
 In casks gallon 
 
 Barley bushel 
 
 Bread and biscuit pound 
 
 Indian corn bushel 
 
 Indian corn meal barrel 
 
 Oats bushel 
 
 Rye " 
 
 Rye flour barrel 
 
 Wheat bushel 
 
 Wheat flour barrel 
 
 Brick M 
 
 Candles pound 
 
 Coal : 
 
 Anthracite ton 
 
 Bituminous " 
 
 Copper, pig and bar. . .pound 
 Cordage, rope, twine.. . " 
 Cotton : 
 
 Sea Island " 
 
 Other " 
 
 Colored yard 
 
 Uncolored " 
 
 Apples, dried pound 
 
 Glue " 
 
 Hay ton 
 
 Hops pound 
 
 Ice ton 
 
 India-rubber boots, etc . .pair 
 Iron : 
 
 Pig pound 
 
 Bar . .- " 
 
 Boiler plate " 
 
 Railroad bars .... " 
 Sheet, band, etc.. . " 
 
 Car wheels piece 
 
 Nails and spikes pound 
 
 Steel ingots " 
 
 Boots and shoes pair 
 
 Average price during fiscal years. 
 
 $15-736 
 
 141.055 
 
 2.405 
 
 .072 
 
 2.091 
 
 •357 
 ■549 
 .057 
 .924 
 
 5.001 
 .629 
 
 1 . 131 
 
 5-514 
 
 1 .289 
 
 6. 112 
 
 II . 112 
 
 . 164 
 
 4.710 
 6.632 
 
 .174 
 .205 
 
 •537 
 -235 
 . 170 
 .162 
 .094 
 .251 
 
 17-423 
 •153 
 
 4.068 
 
 3-245 
 
 .016 
 .050 
 .046 
 .036 
 .054 
 19.914 
 .057 
 .119 
 1.519 
 
 $16,896 
 
 114-835 
 
 3-424 
 
 .058 
 
 1.854 
 
 -375 
 
 ,690 
 
 .049 
 
 -683 
 
 2.670 
 
 .506 
 
 .764 
 
 4.156 
 
 1 . 126 
 
 5-955 
 
 8.854 
 
 .124 
 
 4-747 
 
 3 440 
 
 •157 
 
 . 109 
 
 . 107 
 
 .077 
 
 .083 
 
 .077 
 
 .181 
 
 19.656 
 
 .718 
 
 2.599 
 
 1.382 
 
 .015 
 
 • 034 
 .036 
 .032 
 .049 
 10.662 
 
 -035 
 
 .092 
 
 1 .219 
 
 $13,528 
 131 . 162 
 
 3-105 
 .056 
 
 1.896 
 
 •309 
 
 .556 
 
 .048 
 
 .611 
 
 3-238 
 
 -398 
 
 .695 
 
 4.136 
 
 1 .066 
 
 5.588 
 
 7.590 
 
 . 126 
 
 3.061 
 
 4.705 
 .148 
 .096 
 
 •323 
 .105 
 .072 
 
 -075 
 
 .071 
 
 . 164 
 
 18.322 
 
 .242 
 
 2.305 
 
 1 .208 
 
 .013 
 .030 
 
 Percentage of 
 price of 1884 
 to price of 
 
 1870. 
 
 .029 
 
 .047 
 
 9-427 
 
 •033 1 
 
 . io6| 
 1 . 20 1 
 
 85.9 
 
 92.9 
 129. 1 
 
 90.6 
 86.5 
 
 lOI .2 
 84.2 
 
 66.1 
 
 64.7 
 63-3 
 61 .4 
 75.0 
 82.7 
 91.4 
 68.3 
 76.8 
 
 64.9 
 70.9 
 85.0 
 47.0 
 
 60. 1 
 
 44-7 
 42-3 
 46.3 
 75-5 
 65-3 
 105.2 
 158.2 
 56.6 
 37-2 
 
 81.2 
 60.0 
 
 80.5 
 87.0 
 47-3 
 57-9 
 89.0 
 79.0 
 
RELATIVE PRICES. 
 
 255 
 
 COMMODITIES. 
 
 Lime and cement barrel 
 
 Oil cake pound 
 
 Mineral oil, crude gallon 
 
 Naphthas, benzine, etc. " 
 
 Illuminating oil ^ " 
 
 Lard oil " 
 
 Neatsfoot oil " 
 
 Sperm oil " 
 
 Whale oil " 
 
 Linseed oil " 
 
 Gunpowder pound 
 
 Bacon " 
 
 Hams " 
 
 Fresh beef " 
 
 Salted beef " 
 
 Butter 
 
 Cheese " 
 
 Eggs .... dozen 
 
 Fish : 
 
 Dried cwt 
 
 Pickled barrel 
 
 Lard pound 
 
 Pork . . .pound 
 
 Onions bushel 
 
 Potatoes 
 
 Quicksilver pound 
 
 Rags " 
 
 Rice " 
 
 Salt bushel 
 
 Cotton seed pound 
 
 Soap " 
 
 Spermaceti " 
 
 Spirits of Turpentine . .gallon 
 
 Starch pound 
 
 Sugar : 
 
 Brown " 
 
 Refined " 
 
 Molasses gallon 
 
 Tallow pound 
 
 Tobacco, leaf " 
 
 Varnish gallon 
 
 Beeswax pound 
 
 Boards, planks M feet 
 
 Timber, sawed cubic feet 
 
 Wool, raw pound 
 
 Zinc, plates and bars. . " 
 
 Average 
 
 Average price during fiscal years 
 
 1870. 
 
 $1,972 
 .021 
 .206 
 . 104 
 •305 
 1.375 
 1.295 
 
 1.589 
 
 .734 
 
 1.058 
 
 .157 
 .157 
 • 157 
 .072 
 
 .044 
 •293 
 •153 
 
 ■395 
 
 5.187 
 
 8.185 
 
 .165 
 
 •133 
 1.675 
 .690 
 .406 
 .089 
 .059 
 .401 
 
 .080 
 
 •329 
 .418 
 .082 
 
 .112 
 .125 
 .300 
 
 . lOI 
 
 •"3 
 
 1.587 
 
 •396 
 
 20. 732 
 
 .171 
 
 .096 
 
 $1 .608 
 .013 
 .074 
 .076 
 .087 
 
 .931 
 .892 
 
 1.055 
 
 .508 
 .638 
 
 •153 
 . 109 
 . 127 
 . 102 
 .089 
 .185 
 . 112 
 .208 
 
 5.571 
 7.185 
 .118 
 .099 
 .945 
 •975 
 .369 
 .018 
 .063 
 
 •319 
 .009 
 .051 
 .167 
 .442 
 .046 
 
 .086 
 .091 
 . 223 
 .082 
 .082 
 1. 941 
 .296 
 16.788 
 
 •153 
 • 342 
 .083 
 
 $1,649 
 .014 
 .079 
 .071 
 .092 
 .707 
 .941 
 .948 
 •390 
 .660 
 
 •157 
 . 102 
 . 102 
 .099 
 .076 
 .182 
 .103 
 .212 
 
 5.824 
 
 6.593 
 .095 
 
 .079 
 .859 
 .675 
 
 .344 
 .019 
 .060 
 
 •392 
 .012 
 .049 
 .187 
 
 •344 
 .045 
 
 • 073 
 .071 
 .152 
 .076 
 .091 
 1.963 
 .310 
 17.063 
 .112 
 .296 
 .076 
 
 Percentage of 
 price of 1884. 
 to price of 
 
 1870. 
 
 83.6 
 
 66.6 
 
 38.3 
 68.2 
 30.1 
 
 5i^4 
 72.4 
 59.6 
 
 53.1 
 
 62.4 
 
 100. o 
 
 •64.9 
 
 64.9 
 
 137.5 
 
 172.7 
 
 62. 1 
 
 67.3 
 
 53.7 
 
 112. 2 
 
 80.5 
 57.5 
 59-4 
 51-3 
 97.8 
 55.7 
 21.3 
 101.7 
 
 97.7 
 
 61 .2 
 56.8 
 82.3 
 54.8 
 
 65.2 
 57.6 
 50.7 
 75.2 
 80.5 
 123.7 
 78.3 
 82.3 
 65.5 
 
 79.2 
 
 73-9 
 
256 
 
 SOCIAL STRUGGLES. 
 
 OUGHT AN EQUALITY TO BE MAINTAINED BETWEEN THE 
 VALUE OF THE GOLD AND THE SILVER DOLLAR ? 
 
 Some persons favor coinage of silver to the greatest ex- 
 tent consistent with maintaining an equaHty between the 
 silver and the gold dollar. Beyond that point they are not 
 willing to go. 
 
 A little reflection shows that such persons are ready to 
 sacrifice the positive advantages of a currency of uniform 
 value to the superstition that gold has an " unvarying value." 
 The foregoing tables show conclusively that gold has risen 
 largely in value. Suppose, in consequence of an increased 
 use of gold in the arts, a diminution of the productiveness 
 of gold mines, or from any other cause, gold should continue 
 to rise. Instead of a rise of twenty-six per cent., suppose it 
 should rise fifty or sixty per cent, and prices stated therein be 
 correspondingly depressed. In such case, which is probable, 
 shall we contract and limit the number of silver dollars in 
 order to raise each one of them to whatever value gold may 
 reach? But this absurd conclusion is precisely what the 
 doctrine aforesaid inevitably brings us to, if we logically ad- 
 here to it. 
 
 The theory that we should make it a cardinal point to 
 maintain an equality between the value of the gold dollar 
 and the silver dollar is utterly false. It ignores the estab- 
 lished principle that the only way to preserve uniformity in 
 the value of dollars is to maintain uniformity in their rela- 
 tive number, without reference to the materials of which 
 those dollars are composed. 
 
 STATEMENTS OF THE NEW YORK TRIBUNE. 
 The New York Tribune of January 8, 1885, says : 
 
 "About the 13th of December, 1884, the market for products touched 
 the lowest level of prices ever reached in this country since records of 
 prices began. The range of prices is now below that of October, 1878, 
 then the lowest reached for many years. When the depreciation of 
 paper currency vanished in October, 1878, it was found that prices were 
 more than 15 per cent, below the specie level of i860, the last preceding 
 year in which prices had been made in gold." 
 
VA L UE OF SIL VER. 
 
 257 
 
 In the summer of 1885, the New York Tribune contained 
 another editorial, the essence of which was stated in the 
 heading, "'Prices tzventy per cent, loiver than in i860 ." As 
 the Tribune is an advocate of demonetizing silver, the 
 significance of the above admission is apparent. A little 
 reflection ought to have shown this editor that in these 
 articles he refuted all that he had been constantly saying 
 about the "depreciation of silver.". For, by his own show- 
 ing, the change in values arose, almost entirely from stating 
 prices in gold, enhanced in value, while prices stated in 
 silver were little changed. 
 
 SILVER MORE STABLE IN VALUE THAN GOLD. 
 
 First. Its amount is greater. The total value of all the 
 silver in the world is greater than the total value of all 
 the gold in the world. The smaller the amount of any 
 commodity, the more easily and readily it is affected by 
 any influence which tends either to increase or diminish the 
 demand for it. 
 
 In 1828, the Russian Government, owning the principal 
 platinum mines in the Ural Mountains, in view of the inde- 
 structible qualities of platinum, commenced to coin it into 
 money. But it was soon found that, owing to the small 
 stock of platinum in existence, any increased demand for 
 those coins caused a great increase in their value. Coin- 
 age of platinum was soon abandoned in consequence. This 
 experiment of Russia demonstrated what could have been 
 foretold from reasoning ; viz., the value of the materials 
 from which metallic money is made is raised or lowered by 
 an increased or a diminished demand for them, just as an 
 increase or a diminution of the temperature to which they 
 are exposed raises or lowers the heat of different sized 
 bodies of water. A few hours of warm sunshine will ma- 
 terially raise the temperature of a small dish of water. 
 Much less effect, by the same rays, will be produced on a 
 barrel of water. On a deep lake, the effect would be inap- 
 preciable. The same phenomena are produced by the ex- 
 17 
 
258 
 
 SOCIAL STRUGGLES. 
 
 posure of different sized bodies to cold. The shallow water 
 will freeze while the deep water remains open. 
 
 The amount of gold being smallest, it js first, and to the 
 greatest extent, affected in value by an increased demand 
 for it. In the language of brokers, it is easily " cornered." 
 Silver, being- larger in amount and value than gold, is less 
 readily affected by changes of conditions than gold. And 
 when gold and silver are both used as full legal tenders 
 with unlimited coinage, it is more difficult to either raise 
 or lower their value than when one metal is used singly. 
 The stock of metal on hand is then greater and there is 
 more inertia to overcome. 
 
 Second. Silver is owned and held by a m.uch greater 
 number of persons than gold. This fact produces an effect 
 similar to the superior stability in temperature of a large 
 body of water. It is far more difficult for any new condiv 
 tion or event to suddenly affect the value of what is held 
 by six hundred millions of people than to affect something 
 held by two hundred millions. 
 
 Third. Money, whose value is practically identical with 
 the value of the materials from which it is made, is perfect 
 just in proportion to the stability of the value of those 
 materials. Said materials will remain stable in value just 
 to the degree that the conditions surrounding them are 
 stable ; that is, they must increase in amount when an in- 
 creased demand arises for them and they must diminish in 
 amount when a diminished demand occurs. Otherwise 
 the altered demand will inevitably alter their value. This 
 is one reason why money made of silver is less liable to 
 fluctuate in value than money made of gold. Gold mining 
 partakes more of chance and accident than silver mining. 
 Silver ore can be more certainly and readily increased in 
 amount by the application of additional machinery and 
 labor than gold bullion can. In other words, silver mines 
 are more in the nature of a permanent, regular industry, and 
 consequently are more responsive to the stimulus of an in- 
 creased demand for silver bullion than gold mines. Espe- 
 
 I 
 
STABLE PRICES AND STABLE MONEY. 
 
 259 
 
 cially is this comparison true when made with reference to 
 gold placer mines. 
 
 But it is obvious that neither one of said metals can be 
 as fully controlled in amount as may be necessary in order 
 to insure absolute stability in the value of the money made 
 therefrom. 
 
 Fourth. Its greater bulk and weight make it more dif- 
 ficult to hoard silver than to hoard gold. It is not the 
 amount of money in a country which affects prices so much 
 as the amount of money in actual circulation. Hence a 
 combination of capitalists, by hoarding a large amount of 
 money, can depress prices at pleasure. It is more unlikely 
 that a country with a silver currency should be suddenly 
 drained of a large portion of its coin, as the combined re- 
 sult of exportation and the hoarding which often accom- 
 panies large foreign shipments of bullion, than in case of a 
 country with a gold currency. 
 
 STABILITY OF PRICES IS THE PRACTICAL RESULT OF A 
 STABLE CURRENCY. 
 
 Stability in the average scale of prices is the practical re- 
 sult of a currency whose value is stable. In fact, the market 
 quotations of prices, on the average, are simply a record of 
 the fluctuations in the value of the money in which those 
 prices are computed and paid. This test shows that for 
 the past quarter of a century, the period which includes the 
 years when several nations have made war upon silver, 
 the value of silver has been more stable than the value of 
 gold. Any one can readily test the accuracy of the above 
 statement by comparing the prices of commodities each 
 year, stated in gold, with what those prices would be if 
 computed in silver. He will find that the apparent fall in 
 the value of silver has kept about an even pace with the 
 apparent fall of prices ; thus demonstrating that the value 
 of silver has remained nearly stationary while the value of 
 gold has been forced up by increased demand over twenty- 
 five per cent. 
 
 A great cry has been raised about the '' depreciation " 
 
26o SOCIAL STRUGGLES. 
 
 of silver. The " 8o-cent dollar " cry is so apparently true 
 that it deludes a multitude of persons. But every cloud- 
 less day presents a similarly apparent fact ; to wit, the 
 motion of the sun. It certainly does look as if it rose in 
 the morning and traversed the sky throughout the day. 
 What wonder that all mankind until within less than 300 
 years supposed the earth stood still ! The " fixed value of 
 gold" is an idea superficially and apparently true; — but 
 in fact it rests on a delusion similar to the old belief that 
 the earth had a fixed position. 
 
 The only scientific test of the actual value of silver is 
 found in a comparison of prices. Prices are an unfailing in- 
 dication of the value of money, because average prices are 
 the average judgment of mankind in regard to the relative 
 value of different things, stated in money terms. 
 
 In 1864 the silver dollar of 4.12% grains was worth four 
 per cent, more than the gold dollar. But 1000 ounces of 
 silver bullion will now buy more property than 1000 ounces 
 of silver bullion would in 1864. Silver has therefore actually 
 a greater value now than in 1864. 
 
 THE 125-CENT DOLLAR. 
 
 The facts would be correctly stated if it were said that the 
 gold dollar has become the 125-cent dollar, and that who- 
 ever lent gold in 1873 and is now paid in silver dollars re- 
 ceives more value than he loaned. Instead of " cheap silver " 
 he would be paid in silver dearer than gold in 1873. 
 
 LABOR, A TEST OF VALUE. 
 
 Adam Smith for a long time has been considered one of 
 the ablest writers on political economy. Adam Smith says : 
 " Labor is the only universal, as well as the only accurate 
 measure of .value, or the only standard by which we can com- 
 pare the values of different commodities at all times and 
 places." 
 
 As a result of progress in science and its application to 
 art, more labor is yearly performed by machinery ; less mus- 
 cular exertion is required from human hands to accomplish 
 
TEST OF VALUE BY LABOR. 26 1 
 
 a given result. Consequently, whoever loaned 10,000 days' 
 labor a hundred years ago, and is repaid now with the same 
 number of days' labor, gets more value than he loaned. In 
 addition to the labor loaned, he receives back the interest 
 and the amount of products which 10,000 days' labor now 
 represent in excess of what they were the equivalent of 
 when the loan was made. But suppose we apply the method 
 recommended by Adam Smith to comparing the value of 
 silver in 1885 with its value twenty years previously. In 
 1865 nothing had been heard about the "depreciation and 
 fluctuation of silver." The bullion value of the silver dol- 
 lar of 412^ grains was then 3 52-100 per cent, higher than 
 the bullion value of the gold dollar of 25 8-10 grains. A 
 hundred ounces of standard silver bullion were then worth 
 about $1204 in New York. A hundred ounces of silver 
 are now (1885) worth about $960 in New York. 
 
 Will $960 buy as much labor in New York in 1885 as 
 $1204 would in 1865? Any one with the slightest famil- 
 iarity with the wages of labor would answer this question in 
 the affirmative. In fact, on the average throughout the 
 United States, a smaller amount of labor was required to 
 buy a hundred ounces of silver at any time for the ten years 
 prior to 1872 than is required now. 
 
 SILVER HAS RISEN IN VALUE. 
 
 Thus we find that instead of having fallen in value, as 
 commonly alleged, a given mtinbcr of ounces of silver bullion 
 has a greater value noiv, thus determined, than tvhen the bull- 
 ion value of the silver dollar zvas more than that of the gold 
 dollar. The abused silver dollar in 1885 has actually a 
 greater bullion value than the gold dollar had in any one of 
 the ten years before the demonetization of silver, when meas- 
 ured in the manner recommended by Adam Smith. 
 
 WHY SILVER HAS NOT FALLEN IN VALUE. 
 
 The question naturally arises: Why has not silver bullion 
 fallen in value in consequence of being demonetized by sev- 
 eral nations ? It has thereby been placed under more unfav- 
 
262 SOCIAL STRUGGLES. 
 
 orable conditions than formerly. .Why has it not fallen in 
 value, not merely relatively to gold, but absolutely, when 
 tested in a proper manner? 
 
 If the demonetization of silver had been the only event 
 occurring to change the various conditions which give value 
 to silver, it would undoubtedly have largely depreciated. 
 But several other causes have modified the result that 
 otherwise would have followed silver demonetization. 
 
 First. A steady increase both in the population and in the 
 commercial and industrial activity of several nations, thus 
 creating more demand for both gold and silver. 
 
 Second. An increase in the consumption of- silver in the 
 arts. This arises both from a greater use of silver for pur- 
 poses to which it was formerly applied, and from new in- 
 ventions and new applications of its use. 
 
 Third. The falling off in productiveness of some silver 
 mines and the dissipation of former expectations that enor- 
 mous amounts of silver would be easily mined. 
 
 Fourth. The resumption of " specie payments " by several 
 nations. A new paper dollar which performs all the functions 
 of a metallic dollar has the same influence on the value of all 
 metallic dollars in existence as the addition to the currency 
 of a metallic dollar has. That is, every additional paper 
 dollar depresses the value of every existing metallic dollar. 
 On the other hand, the destruction of paper money enhances 
 the value of existing metallic money just to the extent that 
 the destruction of an equal amount of metallic money would. 
 There is more demand for what is left in circulation, and its 
 value is proportionally increased. 
 
 We have replaced fractional paper money with silver coins, 
 and have partially remonetized the silver dollar. In this way 
 we have created a marlcet for over two hundred million dol- 
 lars' worth of silver. If the United States should stop the 
 coinage of silver, the tendency of such a measure would in- 
 evitably be to still further enhance the value of gold, and to 
 correspondingly depress the value of silver, relative to the 
 value of gold. 
 
 As heretofore stated, the value of a thing always depends 
 
WHA T HAS AL WA YS OCCURRED. 263 
 
 on the conditions under which it is placed. But it must 
 be remembered that value does not depend on one condi- 
 tion, but upon the aggregate influence of the whole num- 
 ber of conditions. In the case of silver since 1872, one con- 
 dition, viz., its disuse in several nations as a legal tender, 
 tended to lower its value. But the various other condi- 
 tions, above named, have so far neutralized the effect of de- 
 monetization as to prevent any fall in its value. 
 
 SILVER HAS ALWAYS FLUCTUATED IN VALUE. 
 
 The aforesaid facts and principles explain the phenom- 
 ena which have been a mystery to many ; viz., what 
 have been called "recent fluctuations" in the value of a 
 metal which for so long a time has been regarded as having 
 a fixed value. 
 
 Silver and gold have both always been subject to fluctua- 
 tions in value. So long as a legal price was afifixed to both of 
 them, these fluctuations were obscured by what is called 
 the " par value test." Besides that, the actual changes in 
 the value of a currency composed of both gold and silver 
 are less than the changes in value of a single metal. To 
 make what is called " the fluctuation of silver " appear still 
 greater, a combination of new conditions have been placed 
 around gold, all of which have tended in one direction ; viz., 
 to enhance its value. 
 
 The legislative change of existing contracts produced by 
 demonetizing silver and thus raising the value of the re- 
 maining legal-tender metal is not the only nor the greatest 
 evil inflicted on its citizens by a nation which adopts such a 
 policy. By ceasing to use two legal-tender metals, and us- 
 ing only one, a nation reduces by one-half the total volume 
 of metal from which to coin its legal tender. As before 
 illustrated by bodies of water of different sizes, a small 
 amount of metal is more susceptible to changes of condi- 
 tion than a large amount. Changes in its value are there- 
 fore more easily produced, occur more frequently, and are 
 greater in degree. 
 
 Since England, in 18 16, adopted gold as the sole legal 
 
264 
 
 SOCIAL STRUGGLES. 
 
 tender, the value of her currency has been subject to 
 greater fluctuations than that of any other nation. Prof. 
 Jevons, himself a native and resident of England, says: 
 
 " It is certain that the sensitiveness of the money market will increase, 
 and it is probable that commercial crises will from time to time recur, 
 even exceeding in their violence and disastrous consequence those whose 
 history we know too well." 
 
 The advocates of a single gold standard invite us to step 
 upon this "sensitive" foundation which leads to such fre- 
 quent panics. 
 
 WHY ENGLAND HAS A GOLD CURRENCY. 
 
 Why does England maintain gold as the sole legal tender 
 when experience has shown that such a course creates 
 great changes in the value of her money ? 
 
 England has largely increased in wealth since she adopted 
 the gold policy. But she has had severe panics every five 
 or ten years since that time. Her wealth is mostly in few 
 hands. The rich are very rich and the poor very poor. 
 There is an appalling amount of pauperism. England is 
 governed by the rich and by an aristocracy. These persons 
 believe that a few should govern the country, and that it is 
 better for those few to own most of the wealth of the 
 country. A gold policy is in harmony with these ideas be- 
 cause it makes it easier to carry them out. English ideas 
 and institutions have many rich and snobbish admirers in 
 this country. These persons are almost unanimously in 
 favor of making gold the sole legal tender. 
 
 A gold policy makes it easier for a rich man to grow 
 richer and harder for a poor man to become rich, because, 
 under it the amount of money in circulation is subject to 
 frequent and rapid changes. This causes great fluctuations 
 both in the "prices of commodities and labor, and in the 
 rate of interest for money. Fluctuating prices operate 
 specially to the disadvantage of the poor, and persons in 
 very moderate circumstances. The rich can take advan- 
 tage of a fall in prices to buy, and of a rise in prices to sell 
 
A DECEITFUL CRY. 
 
 265 
 
 property. But a poor man, or a business m'an with little 
 capital of his own, is often driven by his necessities to buy 
 and sell at a disadvantage. He is also often forced to pay 
 exorbitant rates of interest to prevent an utter sacrifice of 
 his business and property. 
 
 Those who ascribe all our troubles to the coinage of the 
 silver dollar should remember that the industrial classes 
 of England are far worse off than those of this country. 
 
 SHOULD WE MAKE TIMES HARDER IN EUROPE? 
 
 It has been urged by many persons that we should stop 
 the coinage of silver for the express purpose of making 
 times in Europe still harder than at present, and thus in- 
 ducing her remonetization of silver by internatio-nal agree- 
 ment. 
 
 But it should be borne in mind that the distress in Eu- 
 rope caused by the rise in value of gold enriches the cred- 
 itor classes ; and these are the classes which dictate Euro- 
 pean policy. These persons would like to have their bonds 
 made still more valuable than at present. Moreover, such 
 a proceeding would increase the robbery of the debtors and 
 tax-payers of this country. 
 
 It is a suspicious circumstance that nearly every one who 
 originally denounced the Silver Bill of 1878 is now raising a 
 doleful wail for its repeal, under pretense of a desire to 
 compel other nations to coin silver. As Falstaff said : 
 " How this world is given to lying." 
 
 ARE PAYMENTS IN SILVER HONEST? 
 
 For several years a cry has been raised that payment of 
 debts with silver dollars would be a dishonest thing for the 
 United States Government, or for private individuals, to do. 
 The denunciation of those who advocate the payment of 
 Government bonds in silver dollars has been especially 
 fierce. The national administration has thus far been con- 
 ducted on the theory that silver dollars cannot rightfully 
 be used in payment of bonds ; and consequently many mill- 
 ions of silver have lain idle in the vaults while interest-bear- 
 
266 SOCIAL 'STRUGGLES. 
 
 ing bonds were due. Let us examine the facts of this mat- 
 ter. 
 
 In the first place, it is clear that the United States Gov- 
 ernment is bound, in honor, to do precisely as it agrees. 
 The evidence of the agreement is the written bond to 
 which every bondholder gave his assent when he bought 
 and accepted it. If the Government pay less than agreed, 
 it robs the bondholders ; if it pay more than agreed, then 
 it robs the tax-payers. 
 
 Nearly all the outstanding Government bonds were is- 
 sued by authority of law passed in 1870. These bonds 
 bear upon their face in conspicuous letters, this inscription : 
 " This bond is issued in accordance with the provisions of 
 an act of Congress, entitled, 'An act to authorize the re- 
 funding of the national debt,' approved July 14, 1870 ; 
 amended by an act approved January 20, 1871, and is re- 
 deemable at the pleasure of the United States, after, etc., 
 in coin of the standard value of the United States on said 
 July 14, 1870, with interest in such coin." This constitutes 
 the contract between the Government and the bondholders. 
 It shows upon its face that it was contemplated that Con- 
 gress might change the standard of value, and that it was 
 expressly stipulated that the legal coins of July 14, 1870, 
 were agreed upon as the means of paying both principal 
 and interest. On July 14, 1870, there were two legal-ten- 
 der coins, either of which could be lawfully tendered in pay- 
 ment of debt, viz., the silver dollar of 412)^ grains or the 
 gold dollar of 25 8-IO grains. 
 
 At that time, the silver dollar was worth 2 67-100 per 
 cent, more than the gold dollar. The money-lending inter- 
 est made no effort to have the word " gold" inserted in the 
 bonds. They evidently preferred to have it worded as it is. 
 In the light of their conduct since that time, it is certain 
 that if events had made the gold dollar worth considerably 
 less than the silver dollar, that the bondholders would now 
 denounce the gold dollar as " dishonest." 
 
 A agrees to deliver B 1000 tons of coal, one year hence, 
 at $5 per ton. When the year expires, if coal is worth $6 
 
 I 
 
SUPERIORITY OF WRITTEN CONTRACTS. 
 
 267 
 
 per ton, A is both legally and morally bound to deliver the 
 coal at $5 per ton. If coal is then worth $4 per ton, B is 
 both legally and morally bound to receive and pay for it at 
 the rate of $5 per ton. Suppose C should rent his farm to 
 D and agree to receive either 200 bushels of wheat or 400 
 bushels of corn for the yearly rent, D to have the option 
 of selecting the kind of grain. If corn fell in price so that 
 400 bushels of it were worth less than 200 bushels of wheat, 
 C would have neither legal nor moral right to refuse to re- 
 ceive the corn as agreed. Every principle of law and equity 
 in these assumed cases applies to the bondholders. The 
 incidental and unavoidable risks of contracts should be borne 
 by them just the same as by other citizens. Every pur- 
 chaser of a coin bond agreed thereby to receive payment 
 therefor of the number of "dollars" on the face of it. 
 These " dollars " were to be represented by 25 8- 10 grains 
 of gold, or by 41 2_^ grains of silver. The option of select- 
 ing the kind of dollar rested with the Government. 
 Whether silver have risen or fallen in value, is not a ques- 
 tion which the bondholders have a right to raise ; they 
 made their own bargain and are now bound to abide by it. 
 
 WRITTEN CONTRACTS MORE RELIABLE THAN VAGUE UN- 
 DERSTANDINGS. 
 
 It is claimed that there was " an understanding " that the 
 bonds were to be paid in gold. This is urging the Govern- 
 ment to adopt a principle that not one of those who so 
 urge would adopt for a moment in the conduct of his own 
 private affairs. If after entering into clear and explicit 
 written contracts, a man, or a government, should permit 
 the setting aside of such contracts, and the substitution 
 therefor of vague '* understandings," all business would be 
 reduced to chaos. It would be impossible to decide just 
 what those indefinite understandings were. 
 
 What is true of the national debt is largely true of State, 
 city and private debts. The great majority of them were 
 created under the contract of the debtor's option to dis- 
 charge them either in gold or silver. Equity requires that 
 
268 SOCIAL STRUGGLES. 
 
 original contracts be executed as agreed upon. A great 
 cry has been raised that such a course would be " dishon- 
 est " because it would be payment in "the cheapest kind 
 of money." But the creditors have invariably lent the 
 '' cheapest kind of money." They never lent silver, when 
 gold was cheapest ; nor gold, when paper would answer. 
 Why then should not the same privilege be granted the 
 debtors ? 
 
 A MAN CANNOT LOSE WHAT HE NEVER OWNED. 
 
 Elaborate tables have been published showing how much 
 the national bondholders and different classes of other 
 creditors would " lose " if silver should be used instead of 
 gold. A man cannot " lose " something he never possessed. 
 As a matter of fact, the Government bonds were originally 
 paid for in paper money, worth, on an average, over thirty 
 per cent, less than the silver dollar then was. If paid in 
 silver, the national bondholders will merely " lose " an- 
 opportunity to take from the tax-payers and debtors some- 
 thing to which they have neither legal nor moral right. A 
 similar thing is true of other classes of creditors. 
 
 DIFFERENCES IN RELATIVE VALUE OF GOLD AND SILVER. 
 
 As one of the chief arguments in favor of demonetizing 
 silver, it has often been said that a bi-metallic currency 
 occasions great losses and inconvenience because the two 
 metals are liable to vary in value with regard to each other; 
 and thus a nation with both gold and silver as legal tenders 
 is liable to have changes occur in its kind of money, — gold 
 displacing silver and silver displacing gold. Several plain 
 facts are a sufficient answer to this argument. 
 
 First. The material of which a nation's money is com- 
 posed is secondary in importance to the stability in value 
 of that money. When a change occurs in consequence of 
 the appreciation of one of the metals relatively to the other, 
 justice requires that the one remaining most stable shall be 
 employed. So long as both metals are legal tenders with- 
 out limit, a sudden change in their relative value is impos- 
 
HOW WE HARNESS HORSES AND OXEN. 
 
 269 
 
 sible, because the disuse of one metal in one country will 
 at once liberate a large amount of that metal for use in 
 another country, and thus nearly restore the equilibrium. 
 The dire commercial distress of the United States in 1876, 
 1877, and 1878 was chiefly due to our engaging in a fierce 
 competition with European nations for a supply of gold, 
 enhanced in value by such a struggle. If we had not 
 demonetized silver in 1873, the silver dollar would soon 
 have become our metallic money, and prices in Europe and 
 America would not have fallen as a result of struggles to 
 keep and get gold. We should have let Europe quietly 
 keep it, until without any disturbance it came to us in 
 exchange for commodities, or for silver needed for the 
 East. 
 
 Second. It is almost impossible to find two horses, or 
 two oxen of precisely equal size, strength and endurance. 
 But, in fact, we constantly harness such unequal animals in 
 pairs without a thought of the " absolute impossibility" of 
 having them perform an equal amount of work. We sim- 
 ply put an "evener" behind, or between them, and thus 
 obviate all trouble which might otherwise arise from differ- 
 ences in their fleetness or strength. In like manner, it is 
 perfectly feasible to devise an "evener" which will obviate 
 any inconveniences arising from changes in the * relative 
 value of gold and silver. It could be done throughout the 
 world by international agreement. A single nation, the 
 United States, for instance, could make an " evener " of its 
 own which would always keep gold and silver in concurrent 
 circulation. 
 
 A SUGGESTION FOR CONSIDERATION. 
 
 At the risk of being deemed presumptuous, I venture to 
 suggest the following for consideration. For all future 
 contracts, let gold and silver be- made semi-legal tenders, 
 /. e., all coin debts to be only legally payable by delivery of 
 one-half their amount in gold dollars of 25 8-10 grains, and 
 the other half in silver dollars of 412^ grains. Any con- 
 tract or device to avoid this bi-metallic system to be voidable 
 
2/0 
 
 SOCIAL STRUGGLES. 
 
 by either party as contrary to public policy. The debtors 
 vested option to pay in such metal as he chose to remain 
 undisturbed with regard to all existing obligations. 
 
 It appears that this would tend to create a greater stabil- 
 ity in the value of a given number of " dollars " than exists 
 under the present system. Both kinds of coin would be 
 kept in circulation because neither creditor nor debtor 
 could use silver to the exclusion of gold, or gold to the 
 exclusion of silver. A fall in the value of one kind of coin 
 would almost inevitably be accompanied by a correspond- 
 ing rise in the value of the other metal. It would be a 
 mode of balancing, or compensating a fluctuation in the 
 value of silver by a reverse change in the value of gold. 
 Both metals could be blended by melting them into one 
 coin, but this has been deemed impracticable on account 
 of the danger of counterfeiting created by such a measure. 
 The foregoing suggestion probably has some defect which 
 would make it valueless. But it is morally certain that 
 whenever the people desire the maintenance of a bi-metallic 
 currency, in actual circulation, their combined wisdom will 
 find a way to accomplish such a purpose. Moreover, as 
 elsewhere pointed out, one of two legal tenders is per- 
 forming an important duty when not in circulation, but 
 standing guard to prevent an undue rise in value of the 
 legal tender actually in use. 
 
 Third. Although we are daily told that it is impossible 
 to concurrently use both gold and silver as money, yet the 
 plain fact is that it has been done from time immemorial. 
 Substantially nothing was heard about the evils of using 
 both gold and silver, until the creditor classes conceived 
 the scheme of increasing their wealth by demonetizing one 
 of the precious metals. The truth of the old adage : " He 
 that wishes to whip a dog can always find a stick," was 
 thereby again demonstrated. 
 
 Fourth. If the allegations, that silver and gold cannot 
 be concurrently used as money, and that gold is far supe- 
 rior to silver in stability, be true, it logically follows that 
 silver should be entirely demonetized throughout the world. 
 
DANGERS FROM RASH CHANGES. 2^1 
 
 For if the arguments used in favor of gold be true, how 
 can a nation with a gold currency trade advantageously 
 with a nation with a silver currency? In fact we are told 
 that if we have a silver currency, commerce with gold-using 
 countries will be impossible. If this were so, the silver- 
 using nations could not trade with England as they now 
 do. Those who make such statements forget the demon- 
 strated fact that such an event would not interrupt our 
 commerce for an hour. 
 
 RESULT OF ENTIRE DEMONETIZATION OF SILVER. 
 
 If silver were thus universally demonetized, conjoined, 
 as such a measure naturally would be, by a proportionate 
 destruction of paper money, the result would chiefly appear 
 in an enormous fall in prices and consequent wholesale 
 confiscation of the property of debtors. Laborers' wages 
 would fall to a few cents a day. Every person materially 
 in debt would at once be made hopelessly bankrupt. 
 Nearly every nation, State and city on the globe would be 
 forced either to repudiate its indebtedness, or to levy a tax 
 so oppressive as to precipitate a bloody revolution if a for- 
 cible attempt were made to collect it. In a short time all 
 debts would be wiped out, either by bankrupt laws or by 
 revolutionary decrees. Short-sighted creditors who ex- 
 pected to seize the property of their debtors by virtue of 
 the new contracts thus made by changing entirely the 
 meaning of the word "dollar," "pound," etc., would 
 probably find themselves seized by an outraged people. 
 After a period of anarchy, the world would clearly see 
 that it had suffered greatly, and gained nothing thereby 
 but sad experience. 
 
 THE IDEA OF COERCING ENGLAND. 
 
 Many persons urge that the United States should at once 
 suspend coinage of silver for the express purpose of still 
 further depressing the value of silver relative to gold, mak- 
 ing times still harder in England, and thus forcing her to 
 remonetize silver. 
 
272 
 
 SOCIAL STRUGGLES. 
 
 Such persons forget two things. First. Harder times in 
 England, thus made, means harder times for us. Second. 
 The men who would suffer by still harder times in England 
 are not the ruling class. England is ruled by creditors to 
 whom such a measure, until revolution occurred, would 
 bring increased w^ealth. If we could thus severely pinch 
 the nobility and money kings of England, the case would 
 be different. But even then we should look after our own 
 interests and not attempt to interfere with the affairs of 
 other nations, except by setting a good example. 
 
 OUGHT PRICES TO BE DEPRESSED BY LEGISLATION? 
 
 The attorneys of the money-lenders substantially argue 
 that as prices rose in consequence of the increased amount 
 of gold yielded by the mines of California and Australia, 
 therefore it is right for legislation to demonetize silver and 
 thus put prices back where they were before 1850. 
 
 But if this argument be a sound reason for legislative in- 
 terference with coinage in behalf of money-lenders, why 
 stop at the scale of prices just before the gold mines of Cali- 
 fornia were discovered? On the same principle, why not 
 go back to the scale of prices prevaihng in the world be- 
 fore 1492? The discovery of the American mines of gold 
 and silver revolutionized prices and commerce. If the 
 doctrine be true that the amount of metallic money should 
 be regulated by legislation, it follows that the only limit to 
 legislative interference in that direction is the opinion of 
 law-makers. 
 
 Suppose we concede the groundless claim that silver has 
 so increased in amount that it would have fallen in value 
 even if it had not been demonetized. If this be reason for 
 the creditor classes to demonetize silver, does it not follow 
 that the debtor classes have an equal right to protection ? 
 Have they not a right to say : " Gold mines are failing, — 
 gold is growing scarcer and dearer ; let us diminish the 
 weight of the gold coins." 
 
ANOTHER DELUSIVE CRY. 
 
 THE BEST KIND OF MONEY. 
 
 273 
 
 A ballot taken among a pack of wolves would always show una- 
 nimity in support of the proposition, that sheep should be allowed un- 
 limited freedom and not be hampered and injured by the restrictions of 
 armed, vigilant and odious shepherds. 
 
 The advocates of making gold the sole legal tender never 
 weary of reiterating that such a policy would give us the 
 "best kind of money." Let us see what this phrase means. 
 For whom, for what classes, is gold the " best " money ? It 
 is undoubtedly thought " best " for some persons else they 
 would not desire it. The conduct of mankind is largely 
 controlled b}- selfish considerations. Hence, when we see 
 a class of persons who eagerly labor for the adoption of a 
 ' certain policy, it is safe to presume that such a policy in 
 their opinion is " best " for them. 
 
 Money which is " best " for one class of persons is not 
 necessarily best for the whole community. Money that 
 is easily counterfeited is undoubtedly the " best kind of 
 money " for those who wish to get their living by counter- 
 feiting ; but for all other classes that money is best 
 which is most difficult to counterfeit with impunity. 
 
 Money which is steadily and inevitably increasing in value 
 is " best " for those who own large amounts of bonds and 
 mortgages. While such an event does not alter the nom- 
 inal value of their securities, and is therefore often unnoticed 
 and always superficially fair, it nevertheless does change 
 their real value. For a man who loaned $100,000, due ten 
 years thereafter, when an average day's labor of a common 
 laborer was worth one dollar, that money is '' best " which 
 will enable him when the loan is repaid to buy with it the 
 equivalent of 120,000 days' labor. But such money is not 
 " best '' for the debtors who are thus obliged to pay the 
 equivalent of 20,000 days' labor more than received when 
 they borrowed the money. 
 
 For the purpose of speculators who have bought prop- 
 erty to be delivered in future, that money is " best " 
 
274 
 
 SOCIAL STRUGGLES. 
 
 which is rapidly depreciating in value. By such arn event, 
 the market price of what they have agreed to take at a 
 fixed price is raised above the stipulated sum, and a profit 
 thus made for them. This is so because their agreement 
 was not to pay a fixed amount of value for the purchase, 
 but a fixed number of "dollars"; no matter how much 
 these " dollars " may have fallen in value, payment of the 
 number named in the contract legally entitles them to the 
 property. 
 
 Money which can most easily be "cornered" is "best" 
 for those who wish to create, at will, fluctuations in the 
 stock and produce market. The smaller the amount of 
 legal tender,, the more readily such schemes can be success- 
 fully consummated. 
 
 Those whose business is to deal in money, bills of 
 exchange, stocks, bonds ; and to continually buy and sell 
 all kinds of portable property, find profit in constant fluctu- 
 ations in the value of money, and consequent incessant 
 changes of market prices. Sometimes they lose largely by 
 such changes ; but, as their facilities for acquiring and act- 
 ing on information in regard to the markets are usually 
 better than those of the general public, on the average, 
 they make a profit out of these fluctuations. This is done 
 by continually throwing the losing side of said fluctuations 
 on the laborers, farmers, manufacturers and others whose 
 occupations tend to lead them to think more about the 
 general usefulness of things than about the changes in 
 market prices. For such traders, that money is "best" 
 which fluctuates most largely and most frequently in 
 amount. 
 
 STABLE MONEY BEST FOR THE MASSES. 
 
 The interests of the great majority of the community 
 are different from those of the aforesaid classes. For the 
 masses, that money is " best " which is most stable in value. 
 Fluctuations in the value of money produce fluctuations 
 in the prices of all things bought and sold ; and, on the 
 whole, the general public are the losers by such changes in 
 
JVJ/y MEN THINK DIFFERENTLY. 275 
 
 prices. A few alert and cunning traders gain by changing 
 prices, and this gain is always some one's loss. 
 
 A STABLE CURRENCY BEST FOR DEBTORS. 
 
 It is imagined by some persons that debtors are bene- 
 fited by a depreciating currency. A few debtors may thus 
 receive benefit ; but, on the average, the interests of debt- 
 ors are best promoted by a currenc^^ stable in value. Debt- 
 ors undoubtedly have one interest in the direction of 
 money falling steadily in value; but the preponderance of 
 their interests lies in favor of securing the greatest possible 
 uniformity in the value of money. To a merchant, largely 
 in debt for the goods in his store, the benefit derived from 
 public prosperity largely outweighs any advantage he 
 might derive from paying his debts in money less valuable 
 than when he bought the goods. His aim is to maintain 
 steady sales and get the difference between the wholesale 
 and the retail price of his goods. Anything which is not 
 to the public interest tends to diminish his sales in propor- 
 tion to the injury thereby inflicted on the public. Thus 
 the debtor's interests are, on the average, identical with 
 the interests of the public ; viz., they are best promoted by 
 a stable currency. 
 
 WHY DIFFERENT CLASSES HAVE DIFFERENT IDEAS. 
 
 The foregoing considerations explain why different 
 classes have different ideas as to what constitutes the " best 
 kind of money." Men's actions are usually the best indi- 
 cation of their thoughts and wishes. From whence did the 
 movement for making gold the sole legal tender originate ; 
 and by whom has it been carried on ? Before looking for 
 an answer to this question, we should naturally expect that 
 those whose wealth would be increased by a currency rising 
 in value, most easily controlled, and subject to the greatest 
 fluctuations in purchasing power would be the ones to 
 favor a currency possessed of those attributes. We should 
 not expect such persons to zealously advocate a stable cur- 
 
276 
 
 SOCIAL STRUGGLES. 
 
 rency, because that would not best promote their selfish 
 interests. 
 
 A NOTORIOUS FACT. 
 
 The notorious and undisputed fact is that those who 
 originated and have maintained the movement toward 
 making gold the sole legal tender, are precisely the classes 
 whose interests are best served by an appreciating and a 
 fluctuating kind of money. The money-lenders, the bank- 
 ers, the speculators and the brokers, are the chief advocates 
 of gold. Where silver has been demonetized, we find that 
 such a step was not originated by the people ; but by the 
 bankers, brokers, money-lenders and their various attorneys. 
 Foxes do not spend a great deal of time and labor in devis- 
 ing means for the protection of quail, partridges and other 
 animals they feed upon. When a bankers' convention says 
 that gold is the " best money," it means, in reality, that 
 it is best for the bankers and those with kindred interests. 
 
 The conspiracy for creating money " best " for the con- 
 spirators will come to naught whenever the majority of the 
 people fully see that the money " best " for a few is adverse 
 to the interests of the many. 
 
 A LETTER FROM AN "ECONOMIST.' 
 
 The following letter is a good sample of the kind of 
 argument commonly used to prove that gold, as the sole 
 legal tender, is the best kind of money for the laboring 
 classes. 
 
 " In a recent article in the Sun, entitled the ' Cry of the Savings Bank 
 Presidents,' and in opposition to their petition against the further coinage 
 of silver, I find the following : 
 
 " ' What the petitioners fear is evidently the depreciation of deposits, 
 which they think would be caused by the victory of the silver standard. 
 They assume that the dollars which are now worth 125 cents would sink 
 to 100 cents, and depositors would lose the difference.' 
 
 " In thus asserting or assuming that there are, or may be, two kinds 
 of dollars in circulation, one worth 125 cents and the other 100 cents, you 
 effectually knock out, it seems to me, from under the advocates of 
 
THE LABORING MAN'S INTEREST. 
 
 277 
 
 further or unlimited silver coinage every support to their position. Let 
 us reason about it a little. 
 
 " When any person, more especially one who depends upon the 
 results of each day's toil to meet each day's needs, earns a dollar by his 
 labor, what sort of a dollar is he entitled to receive } Manifestly the very 
 best dollar. Manifestly, further, the laborer or bread earner, whoever he 
 may be or wherever he may live in all this great country, can now have 
 the best dollar of 125 cents (purchasing power) just as readily and 
 cheaply as he can have the other kind of a dollar, presently or prospec- 
 tively worth less ; and he can continue to have it just so long as nothing 
 is done to impair the power of the national treasury to exchange silver 
 for gold on demand. Now why should the laborer be willing to abate 
 anything of this privilege } And is not the man who advocates a poHcy 
 whereby the laborer is compelled to receive a dollar inferior to the best 
 inflicting an injury upon him .' Is he not the workingman's enemy ? 
 
 " Again, the laboring man is told that he should favor free or continued 
 coinage of silver, because the ' gold bugs ' don't want silver. But is not 
 the argument based on such an averment all the other way ? A gold 
 bug is one who is credited with knowing all about money and looking 
 sharp after his own interests. Well, if the gold bug is satisfied that a 
 gold dollar is best for him, and the laborer can have a gold dollar for 
 every one hundred cents that are due him, as he now can for the asking, 
 why are not the interests of the gold bug and the laborer one and the 
 same ? Is it a good reason because the gold bug wants roast beef and 
 plum pudding that the laboring man should be asked to content himself 
 with brown bread and raw turnips ? Can you furnish me or your readers 
 with a pair of spectacles that will make this business of continued silver 
 coinage look differently.'* 
 
 "David A, Wells. 
 
 " Norwich, yl/arc/^, 1886." 
 
 In the first paragraph of what he is pleased to call " rea- 
 son," Mr. Wells informs us that a laborer can get a dollar 
 worth 125 cents just as '' readily and cheaply" as one worth 
 100 cents. This statement necessarily implies that a 
 laborer can obtain as many dollars, worth 125 cents each, 
 for a week's wages as he could obtain for the same labor if 
 those dollars were worth only 100 cents each. If this 
 assumption were true 125-cent dollars would clearly be to a 
 laborer's interest. Furthermore, it would be to the work- 
 man's interest to further contract the currency so that a 
 dollar would be worth 150 or 200 cents. 
 
 The only difficulty with Mr. Wells' assumption is that it 
 
278 
 
 SOCIAL STRUGGLES. 
 
 is not true. The number of dollars paid a laborer for a 
 week's wages depends on the value of each one of those 
 dollars. The higher the value of the dollar, the smaller the 
 number of those dollars paid for a given amount of work. 
 Hence there is no truth in the assertion that 125-cent dol- 
 lars can be had as "cheaply" as dollars worth 100 cents 
 each. Employers are not in the business of giving 125 
 cents' worth of money for 100 cents' worth of work. The 
 greater the value of a dollar the greater the number of 
 hours' labor must be given in exchange for one. 
 
 Mr. Wells next informs us that " the interests of the gold 
 bug and the laborer are one and the same." That is, the 
 interests of the owners of the eight thousand millions of 
 national, State, municipal and rail road bonds, due from the 
 people of this country, are identical with the interests of 
 those whose labor must directly or indirectly pay both 
 interest and principal of those bonds. Is this true? 
 
 If every one of the " dollars," which in the aggregate 
 form this vast public debt, be worth 100 cents, and at the 
 same time an average day's wages be worth 100 cents, then 
 eight thousand million days' labor will pay these bonds. 
 But if we increase the value of each one of the " dollars " 
 constituting those bonds to 125 cents, then it will require 
 ten thousand millions of days' work to discharge this debt. 
 By increasing the value of a dollar to 125 cents, the bond- 
 holders have increased the value of their bonds to the 
 extent of two thousand millions of days' labor. Are the 
 interest-6 of those who are to receive this extra two thou- 
 sand millions of days' work identical with the interests of 
 those upon whom this additional burden has been laid and 
 who must/^rj/ it from reduced wages? 
 
 The laborers of this country owe a great number of " dol- 
 lars." When this debt was created each one of these " dol- 
 lars " represented a certain number of hours' labor. Is it 
 to the laborers' interest to increase the number of hours' 
 work which must be paid for a dollar, and thus increase the 
 amount of work which will have to be performed to cancel 
 said debt ? 
 
CHANGING THE MEANING OF A WORD. 
 
 279 
 
 Mr. Wells argues that when the meaning of the term 
 "one dollar" is so changed that it really means 125 cents, 
 those who owned or had due them thousands of millions 
 of those " dollars " do not profit by such a change any 
 more than those who had no " dollars " on hand, and who 
 must buy these enhanced dollars by giving more hours' 
 work for each one of them. He labors to persuade us that 
 when a debt of one hundred dollars is changed by sly legis- 
 lation to a debt of one hundred and twenty-five dollars, the 
 creditor and the debtor have the same interest in this ras- 
 cality. 
 
 Mr. Wells omits stating the vital point ; to wit, that when 
 legislation practically changed the meaning of the term 
 "one dollar," the number of those dollars paid for a week's 
 or a year's wages was diminished, but the number of those 
 dollars due the owners of evidences of debt remained un- 
 changed. 
 
 Mr. Wells and his co-laborers are like Louis XVI. A 
 revolution is in progress and they are oblivious of the fact. 
 The American people have fairly begun to think for them- 
 selves. Pretenders to a monopoly of economic knowledge 
 will not be able to mislead them in future as easily as they 
 have heretofore. They are beginning to see that a legal 
 restriction of the number of either gold or silver dollars may 
 be " best " for a fciv, because it silently increases the value 
 of their property and lowers the value of that of all other 
 persons. 
 
CHAPTER X. 
 
 Is Money Capital ? — Nature of Capital. — Similarity between Money and 
 Blood. — Money helps Production without forming Part of Products. — 
 No kind of Capital produces without Labor. — Many kinds of Capital 
 have special Functions. — All Hoarded Things are Useless when 
 Hoarded. — A useless Thing is not Capital.— When Money is used. — 
 The true Test of Money. — Control of Money is Control of Labor. — 
 How Money may be Controlled. — Who should control the Amount 
 of Money. — The true Doctrine. — Jeffersonian Democracy. — A Con- 
 servative Measure. 
 
 A single false premise may be the parent of a long train of 
 evils. 
 
 It is generally taught that money is not capital. A 
 recent writer of an orthodox treatise on money says : 
 
 " Except in a qualified and peculiar sense, money is not capital. It 
 has no direct agency in production ; does not enter as a constituent part 
 into the products of industry, like iron or cotton. Of itself, it produces 
 nothing ; brings no gain to the holder. What is called interest is earned 
 wholly by capital, and is paid exclusively out of the profits of the latter. 
 He who has money and wishes to obtain an income from it, exchanges 
 it without delay for capital. For the purpose of hoarding, without refer- 
 ence to use, it is worth no more than any other measur say a bundle 
 of yardsticks." 
 
 The above quotation misstates an elementary principle 
 and propounds a doctrine, the general belief in which has 
 led to serious legislative errors. Taws have been made 
 based on the assumption that, as money is not capital, 
 meddling with money is not an interference with capital. 
 
 NATURE OF CAPITAL. 
 
 In our study heretofore of the nature and attributes of 
 capital, we found that any tool, machine, or agency which 
 makes it easier for labor to create wealth than it otherwise 
 could, is capital in the full sense of the term. A farm- 
 
 280 
 
WHAT CAPITAL IS. 28 1 
 
 er's oxen, plow, and cart, are capital ; they are the tools 
 which help and lighten his labors. A railroad car is capital, 
 because it facilitates the interchange of commodities and 
 thereby aids those engaged in producing the necessaries 
 and comforts of life. As rapid transmission of information 
 is a potent auxiliary of fruitful industry, the telegraph is 
 capital. Money is capital, because money is used as a rep- 
 resentative, and as a storehouse of labor ; and because 
 money makes it easier for mankind to exchange labor and 
 the products of labor than it would be by barter. Money 
 facilitates the creation of wealth by acting as a distributing 
 agent. 
 
 SIMILARITY BETWEEN MONEY AND BLOOD. 
 
 The function of an animal's blood is to carry and bring 
 materials of various kinds to and from all parts of the or- 
 ganism. Money performs a similar duty for the body of 
 society that blood does for the body of an animal. Blood 
 associates each part of an organism with every other part, 
 and thus renders it possible to divide the labor and func- 
 tions necessary for maintaining life among different organs 
 remote from each other. Money performs a similar duty 
 for society ; it makes it easier for mankind to associate to- 
 gether, and to divide the multitude of labors requisite to 
 maintain society in that high state of perfection which gives 
 each man, while performing a single special duty, benefit 
 from the great variety of different duties performed by 
 other individuals. Money is the life-blood of commerce. 
 In an advanced stage of society, it is the most useful of all 
 forms of capital, because it is the medium which brings 
 the various kinds of capital in relation and association with 
 each other, and with labor, and thus enables them to mutu- 
 ally help each other. 
 
 MONEY HELPS PRODUCTION WITHOUT FORMING PART OF 
 
 PRODUCTS. 
 
 The aforesaid writer tells us that money "has no direct 
 agency in production and does not enter as a constituent 
 
282 SOCIAL STRUGGLES. 
 
 part into the products of industry." This is true, but does 
 not in the slightest degree prove that money is not capital. 
 No one will deny that a railroad and its equipments run- 
 ning through the middle of a fertile and populous agricultural 
 district are capital The railway cars have no " direct 
 agency " in production, — they neither plow nor reap. Fur- 
 thermore, the cars and engines are not wrought into " con- 
 stituent parts of any of the products " of industry. The 
 function of the railroad is distribution. It carries to the 
 farmers the various things they need to cultivate their farms, 
 and to supply the wants of themselves and families. It 
 carries /"rc";// the farmers the surplus products of their farms, 
 and takes them to their destination, — the consumers of 
 those products. The railroad thus helps the distant work- 
 ers in the factory and the forge ; and the farmers of lands 
 in another climate producing different products, to hold 
 commercial intercourse with the farmers adjacent to its de- 
 pots. A railroad is capital because it helps labor to associ- 
 ate with labor, and capital to associate both with labor and 
 with other forms of capital. Money is capital for the same 
 reasons that a railroad is. 
 
 NO KIND OF CAPITAL PRODUCES WITHOUT LABOR. 
 
 The above author further says : " Money of itself pro- 
 duces nothing." But does this prove that money is not cap- 
 ital ? Plows of themselves produce nothing. They are ut- 
 terly useless unless associated with labor and other forms of 
 capital. Nevertheless, no one will deny that plows are cap- 
 ital of a very useful kind, — they help labor produce w^ealth. 
 What is true of plows is true of all other kinds of capital ; 
 they create and produce nothing of themselves. Their use- 
 fulness begins only when associated either with labor, or 
 with both labor and other kinds of capital. 
 
 MANY KINDS OF CAPITAL HAVE SPECIAL FUNCTIONS. 
 
 Our author admits that money in a " qualified sense " is 
 capital. He thinks money is capital only in the sense that 
 it can be exchanged for capital, and thus performs only a 
 
WHEN A THING IS NOT CAPITAL. 
 
 283 
 
 special function. But this fact makes money capital in all 
 senses of the word. Many kinds and forms of capital have 
 special functions and duties. A threshing machine is good 
 for nothing whatever but to thresh grain. A reaper is good 
 for nothing but to cut grain. A wagon is good for nothing 
 except as a machine to facilitate the transportation of vari- 
 ous things. But no one will deny that threshing machines, 
 reapers and wagons are capital. What is true of them is 
 true of every other form and kind of capital. The range 
 of use to which different kinds of capital can be put varies, 
 but all are controlled by the same principle ; limitation to 
 helping labor perform special duties. 
 
 ALL HOARDED THINGS ARE USELESS WHEN HOARDED. 
 
 The aforesaid teacher also tells us that *' for the purpose 
 of hoarding without reference to use," money is useless. 
 This he appears to think conclusive evidence that money is 
 not capital. 
 
 But is not this true of all other forms of capital ? A car- 
 penter's tools are capital. But if stored away in the garret, 
 without reference to use, they are useless. So long as 
 stpred, they are not a help to labor, and are of no more 
 value than so many chips. The machinery of a factory is 
 capital. But if taken down and stored " without reference 
 to use," it is useless. Similar things are true of all other 
 forms of capital. So long as hoarded and idle, they are 
 practically destroyed and useless. What use would any 
 tool or machine be, if " stored without reference to use "? 
 
 It has been said that " if moneybe capital, and if money 
 can be made of paper, or other cheap materials, that an un- 
 limited issue of paper money would create an unlimited 
 amount of capital, and thereby enrich the nation doing so. 
 Whereas history shows the contrary to be true." 
 
 A USELESS THING IS NOT CAPITAL. 
 
 The aforesaid argument is the offspring of ignorance of 
 the nature of value and how it is created. A barn is capital 
 to a farmer, — it helps his labors in storing crops and shelter- 
 
284 
 
 SOCIAL STRUGGLES. 
 
 ing cattle. But because two or three barns are capital, it 
 by no means follows that an unlimited number of barns 
 would be. They would merely encumber the ground, and 
 until removed would injure the farm, A similar thing is 
 true of all other farming capital. Of what use would a 
 dozen threshing machines be to a man who only needed 
 one ? The additional eleven machines \yould not add to 
 the farmer's capital, simply because they would not facili- 
 tate his labors. A thing is of no value unless it supplies a 
 want. Its value therefore depends upon the conditions 
 under which it is placed. Nothing is capital unless it sup- 
 plies a want of labor, or of other capital, and thereby assists 
 either the production or exchange of valuable things. 
 
 When a community is supplied with a sufficient amount 
 of capital in form of paper money, an addition to the 
 amount of that money would not add to their capital. 
 This would be so, for precisely the same reason that would 
 make an additional ice house of no value to a man who al- 
 ready had one, and needed no more. 
 
 A queer man in my neighborhood once made and used a 
 wagon with five wheels. But his methods of thought were 
 no more absurd than the methods of those who argue that, 
 because one certain thing is capital, possession of an un- 
 limited number of those things would necessarily increase 
 the capital of their owner. 
 
 Most of the foregoing mistakes are due to the prevalent 
 idea that money has mysterious qualities. A man who 
 recognized clearly the simple fact that money is governed by 
 precisely the same laws that govern all other things, would 
 never imbibe the error of supposing that money is not cap- 
 ital, in the fullest sense of the term. 
 
 WHEN MONEY IS USED. 
 
 We have heretofore seen that in a simple state of society, 
 and under some circumstances, labor can associate with 
 labor, and capital can associate both with labor and with 
 other forms of capital, by means of barter. As society ad- 
 vances, its labors are more and more divided among differ- 
 
A/OjVEV MAY CONTROL LABOR. 
 
 285 
 
 ent persons, each performing a single special duty. This 
 renders commercial intercourse between the different mem- 
 bers and portions of society more difificult and expensive, if 
 carried on by means of barter. Money has been invented 
 to remedy this difficulty? By its use, the citizens of a 
 populous country, engaged in a great diversity of occupa- 
 tions and inhabiting a large area of territory, can associate 
 commercially with each other as freely as the residents of a 
 small area can by barter. 
 
 THE TRUE TEST OF MONEY. 
 
 The excellence of the quality of money is properly meas- 
 ured by the same test we apply to any other form of cap- 
 ital created to perform a special duty ; viz., the efificiency 
 and cheapness with which it performs its work. A set of 
 harness made of plain good leather is capital. Its value, as 
 capital, to its user would not be any greater if it were plated 
 wuth gold or silver. As heretofore shown, mankind have 
 steadily improved the excellence of their money, until ex- 
 changes by its use can generally be made cheaper than by 
 barter. It follows that wherr a people have largely out- 
 grown barter as a means of industrial and commercial inter- 
 course, and as a means of associating the various forms of 
 labor and capital, that the labor of that country is then de- 
 pendent on the thing which has taken the place of barter ; 
 viz., money, the capital w^hose chief function is the associa- 
 tion of labor and capital. Moreover, as capital is useless 
 unless associated with labor, it also follows that the disuse 
 of barter makes all the other forms of capital in a country 
 largely dependent on the form of capital we call money. 
 
 CONTROL OF MONEY IS CONTROL OF LABOR. 
 
 Therefore, whatever class controls the money of a coun- 
 try controls both the capital and the labor of that country 
 to a large extent. Those who control the money of a coun- 
 try are in a position similar to that of a person w'ith control 
 of the blood-vessels supplying an animal's system with the 
 
286 SOCIAL STRUGGLES. 
 
 means of associating its different parts and organs with 
 each other. 
 
 The fact has been partially brought to public attention 
 that when a few men control the railroads of a country they 
 largely control the means of communication, and, conse- 
 quently, the commerce and industry of that country. By 
 an apparently slight addition to either freight or fare, they 
 can levy an enormous tribute from the nation. They can 
 thus diminish the profits of other forms of capital, and the 
 wages of labor, by a general tax on all property and persons 
 transported ; and this tax will be more or less distributed 
 until it reaches every self-supporting person in the land. 
 
 But railroad control is of little influence in a country, 
 compared with the tremendous power inciderit to the con- 
 trol of the money of a country. Such a control means that 
 the facilities for the association of all the labor of that 
 country, both with itself and with various forms of capital, 
 are largely in the hands of those who govern the capital 
 called money. Such a power is the more dangerous, be- 
 cause it can be so insidiously exerted that the great major- 
 ity of its victims do not know the real source of their 
 troubles, and are prone to attribute them to things which 
 have no influence whatever. 
 
 Large numbers of workmen have engaged in strikes 
 against low wages, supposing them due to the tyranny of 
 employers, when, in fact, their employers had been made 
 helpless by those who controlled their chief means of com- 
 mercial intercourse and association. They have acted as 
 men frequently do when pressed in a crowd. Instead of 
 reflecting that those who push, do so because they are 
 crowded by others, they grow angry and strike persons who 
 are helplessly jostled against them. 
 
 •HOW MONEY MAY BE CONTROLLED. 
 
 There are four principal means of controlling the money 
 of a country. First. By increasing its amount. This can 
 be done by diminishing the weight and fineness of coins, 
 or by the issue of paper money. Second. By diminishing 
 
REGULATION OF THE AMOUNT OF MONEY. 38/ 
 
 its amount. This can be done by increasing the weight 
 of coins ; by diminishing the number of legal tenders, as 
 has been done by demonetizing silver, or by diminishing 
 the amount of paper money. Third, By changes in the 
 rate of interest. Fourth. By hoarding the money in exist- 
 ence, thus practically, for the time being, diminishing its 
 amount as effectually as if the money were destroyed. 
 
 WHO SHOULD CONTROL THE AMOUNT OF MONEY. 
 
 Two opposing ideas exist in regard to the proper method 
 of controlling the money of a country. One class of per- 
 sons say that the people are competent to make national 
 and State constitutions ; to make civil laws of all kinds ; 
 to direct how men shall deal with each other ; how con- 
 tracts shall be enforced ; how laws shall be administered ; 
 how the sexes shall marry and be divorced ; how property 
 shall be taxed, held, and divided ; and how orphans and 
 widows shall be protected. Most of this class regard the 
 idea that there should be a union of church and State as a 
 relic of barbarism. They believe the people are capable of 
 regulating their moral and religious conduct for themselves 
 without being governed by an oligarchy of priests. They 
 also admit that the people are competent to make and ex- 
 ecute criminal laws ; that it is safe to entrust them with 
 power to declare when a man shall have liberty ; when he 
 shall be put in prison, and when he shall be hung. 
 
 But although they concede all these things, they hold 
 that the people who use and are dependent on the money 
 of a country as a means of associating labor and capital, 
 and as a potent help in distributing wealth, should not 
 have the control of that money. 
 
 This class holds that the amount of metallic money in a 
 country should be controlled by the rich men of that 
 country ; that whenever there is a probability that in- 
 creased production of mines shall result in such an in- 
 creased amount of coin as to raise the wages of labor and 
 the prices of the products of labor, that the Legislature 
 should interfere.' The character of this interference, they 
 
288 SOCIAL STRUGGLES. 
 
 hold, should consist of demonetizing one or other of the 
 legal-tender metals ; or of increasing the weight of the 
 coins, the extent of this to be decided by the money- 
 lenders. 
 
 This class further propose that all the paper money of a 
 country should be issued and controlled by an oligarchy, 
 and that the yearly salary of these officials, in the aggre- 
 gate, shall be from twenty to forty millions of dollars. 
 This oligarchy to have power to contract or inflate the 
 currency, and to raise or lower its rate of interest, at will. 
 In other words, they are to be legally invested with power 
 to regulate the association of labor and capital, and to raise 
 or lower the prices of all the commodities, real estate and 
 labor of the country in such manner as may seem judicious 
 to their minds and most likely to increase their own 
 wealth. 
 
 These ofifiicers are to be styled NATIONAL BANKERS, and 
 their salaries collected and paid with the interest on debts, 
 in the form of promissory notes, issued by themselves. 
 
 The foregoing ideas are essentially those which recently 
 have largely controlled the policy of this country. On 
 their side are arrayed the majority of the capitalists ; and, 
 as a sequence, the greater portion of the politicians and 
 newspapers. 
 
 THE TRUE DOCTRINE. 
 
 The otJicr idea is that the people are competent to make 
 laws of all kinds ; civil, criminal, religious and finan- 
 cial ; that the people are the best guardians of their own 
 interest ; and that it is wiser, safer, and cheaper to trust 
 the people to issue money than it is to put their rights 
 into the hands of an oligarchy whose selfish interests are 
 often opposed to the interests of the masses. 
 
 The masses of the people formerly had no voice in mak- 
 ing laws of any kind. Their property, liberty and lives 
 were at the mercy of a monarch, or of an oligarchy. For 
 centuries the people have been slowly assuming their right 
 of self-government. Although the idea that all power 
 
GENUINE DEMOCRACY. 
 
 289 
 
 rests rightfully in the hands of the people is the corner- 
 stone of American institutions, we have retained the mo- 
 narchical principle that the people are unfit to take care of 
 themselves financially and must be controlled by a small 
 class. 
 
 The selfish interests of a few rich men are frequently 
 apparently advanced by great fluctuations in the value of 
 the national money , whereas, the interests of the majority 
 of the people are promoted by securing the greatest possi- 
 ble stability in the value of the currency. 
 
 JEFFERSONIAN DEMOCRACY. 
 
 Those who fully believe in genuine Democracy ask that 
 the principle of self-government be carried to its logical con- 
 clusion ; that we take one step more in the direction in 
 which the race has been progressing ; that as the people 
 have taken control of civil and criminal legislation, taxa- 
 tion, religion, and education, they should also control 
 the finances entirely ; and that the intelligence of the 
 WHOLE PEOPLE is greater and more trustworthy than that 
 of a few bankers. 
 
 These persons therefore desire • First. That the estab- 
 lished standards of coinage should not be tampered with in 
 the interest of a few, either by raising or lowering the 
 weight or fineness of coins, or by demonetizing either of 
 the precious metals. 
 
 Second. That the issue of paper money should be taken 
 entirely away from the banks, and be so regulated in amount 
 as to produce the greatest possible stability in its value. 
 
 A train of cars can gradually run up and down a chain of 
 mountains with safety, while an abrupt change of a few feet 
 in the grade would produce an utter wreck. Business can 
 adjust itself to new conditions with little industrial disturb- 
 ance, provided the changes are made very gradually. As 
 business is so largely dependent on the capital called 
 money, all financial changes should be begun only after the 
 fullest debate and the widest possible publicity. Even 
 then, they should be proceeded with very slowly and cau- 
 19 
 
290 
 
 SOCIAL STRUGGLES. 
 
 tiously. As large bodies move much more slowly than 
 small ones, rash changes in the national money are much 
 less liable to occur by the act of the whole nation than by 
 the act of a small class. The demonetization of silver, and 
 several other bad measures, could never have been carried 
 out if full publicity had been given them. 
 
 A CONSERVATIVE MEASURE. 
 
 True conservatism bids us place the regulation of money 
 in what experience shows is the safest repository of all 
 other power: /. e., in the hands of the people. It was 
 formerly imagined unsafe to have judges elected by univer- 
 sal suffrage ; but extended experience has shown that to be 
 the safest mode of securing an upright and able judiciary. 
 If the people be unfit to control their financial affairs they 
 are surely unfit to control their religious affairs, and we 
 need a State religion controlled by a few men. If the peo- 
 ple should not assume full control over everything, then we 
 should logically restrict suffrage, and take one right after 
 another from them until we reached a government akin to 
 that of King John before the Barons threatened him at 
 Runnymede. 
 
CHAPTER XI. 
 
 Effect of Changes in the Amount of Money.^ — What a Dollar is. — Why 
 Prices fall to such an Extent when the Coinage is Contracted. — 
 How we state the V^alue of a Dollar. — Effect of Habit on Ideas of 
 the Value of a Dollar. — ^DoUars and Bushels are Governed alike. — 
 How Monopoly can Change Prices. — ^JVlonopoly -can Change the 
 Value of a Dollar. — Monopolies in California. — Money Kings wish 
 to Corner Money. — Creditors can be robbed by Inflating the Cur- 
 rency. — History of Inflations. — Paper Money is not Helped by What 
 is " back of it." — Inflation is possible without Issuing Paper Money. 
 — Paper Money Inflation a Pretext for Crime. — Not a Fancy Sketch. 
 — Sudden Changes in the Currency Paralyze Business.— Why Money 
 is hoarded when Prices are falling. — The true Test of the Cheap- 
 ness of Money. — Difference between Temporary Possession of 
 Money and Ownership of it. — A Mistake in Diagnosis. — A Typical 
 Writer. — Lack of Confidence ia Prices is the Reason Men hoard 
 Money. — Effect of slow Changes in the Amount of Money. — What 
 we should seek. 
 
 TJie chief distinction between Wealth and Poverty is that 
 rent and interest are paid by the poor and received by the rich. 
 Contraction of the amount of money insidiously increases the 
 tribute paid by labor to capital. 
 
 We have heretofore found that ordinary commercial 
 transactions are carried on by the use of an imaginary 
 money, — the money of account ; the terms in which values 
 are compared, computed and recorded. We have also 
 found that this imaginary money has a variety of represen- 
 tatives in form of coins and paper money. Furthermore, 
 we have learned that from habit and experience, the resi- 
 dents of each country have continually, and largely uncon- 
 sciously, in mind an idea of the value of the unit of the 
 money of account. Having this in mind, they readily com- 
 pare and compute values without direct reference to the 
 current money, the particular representative of the money 
 of account, which may chance to be in actual use. We 
 
 291 
 
292 
 
 SOCIAL STRUGGLES. 
 
 will now more fully inquire how the value of this unit of 
 the money of account first becomes established in the pub- 
 lic mind, and how this idea of value may be changed by 
 influences which affect the current money. We have here- 
 tofore seen that all values are compared and computed by 
 a numerical method. We start with one dollar, one pound, 
 one franc, or from some similar standpoint ; but our com- 
 parisons are always with the unit, ONE. Once having in 
 mind, the value of this unit, it is readily multiplied and 
 divided, and thus all amounts of value are estimated and 
 stated. Our inquiry therefore is complete, when we find 
 how the value of the unit of all moneys of account is first 
 obtained, and how this idea of value may be changed. 
 
 WHAT A DOLLAR IS. 
 
 As the principle is the same in all moneys of account, for 
 convenience we will confine ourselves to a study of the 
 "dollar," how we first get an idea of the value of a dollar 
 and how this idea may be changed. 
 
 A dollar is an unit of value. Value is a mental concep- 
 tion — a judgment, or estimate, of the relative amount of 
 labor or sacrifice which a given thing is worth. We use 
 the term " dollars " in stating this idea, as a means of mak- 
 ing ourselves understood by others, just as we use the fig- 
 ures I, 2, 3, as a help in conveying our ideas in regard to 
 numbers. A given number of " dollars" represents an idea 
 of value similar to the manner that certain letters represent 
 an idea of sound, or certain figures represent an idea of 
 quantity. 
 
 Much has been lately said about " 8o-cent dollars," "90- 
 cent dollars," etc. This is merely a loose way of stating 
 loose ideas. The cent is not the unit of value — it is sim- 
 ply one hundredth part of a dollar. Therefore every " dol- 
 lar," no matter what its real value, contains just one hun- 
 dred cents. 
 
 Money derives value from the fact that its use is not 
 only always convenient, but almost absolutely necessary to 
 carry on the extended and intricate commerce of modern 
 
VALUE OF A DOLLAR. 293 
 
 times. It is the form of capital by whose intervention all 
 other kinds of capital are brought in relation and intercourse 
 with each other. It is the medium through which the 
 association of labor and capital is chiefly conducted. 
 
 The value of one dollar depends on its relative importance 
 in commercial transactions just as the military importance 
 of one soldier depends on his relation to the whole force. 
 One soldier is of considerable consequence in a squad of 
 ten men but of very little importance as one of an army of 
 fifty thousand. In one case, he forms ten per cent, of the 
 whole force ; in the other case he is only one fifty thou- 
 sandth part of the army. What a single dollar shall be 
 worth is determined by the total number of dollars in cir- 
 culation. 
 
 The greater the number of dollars, the smaller the rela- 
 tive importance of each dollar. The relative importance, 
 and therefore the value, of ONE DOLLAR is governed by the 
 same law that governs the relative importance and value of 
 any' other ONE thing. The dollar is the unit of value and 
 the worth of this unit depends on the relation whi^h exists 
 between the total value of the exchanges daily effected by its 
 use, and the total number of these units in circulation. 
 For example, if seven hundred millions of units be in cir- 
 culation in a country like Peru or Chili, each unit will have 
 a less value than it would if seven hundred million of units 
 were in circulation in a great, rich nation like the United 
 States. If a hundred million units be in circulation, a man 
 with a million dollars has one per cent, of the money in the 
 country ; increase the amount of circulation to a thousand 
 millions and a man with a million will then have one-tenth 
 of one per cent, of all the money, and his ability to purchase 
 property will be correspondingly decreased. 
 
 When Paris was surrounded by the German army, the 
 idea of value previously attached to each barrel of meat 
 and flour was increased. The demand for food was sub- 
 stantially unchanged, but the number of barrels of food 
 was daily growing smaller. Hence each barrel steadily 
 became of greater relative importance, simply because the 
 
294 
 
 SOCIAL STRUGGLES. 
 
 relation between the number of barrels and the demand 
 therefor was steadily changing. The total number of bar- 
 rels, therefore determined the importance and value of one 
 barrel. 
 
 When a considerable portion of the grain crop of a 
 country is destroyed, each bushel of the remainder becomes 
 more valuable. This is so, for precisely the same reason 
 that each dollar remaining in a country, becomes more val- 
 uable by a partial destruction of the dollars in that country. 
 In one case, the NUMBER of bushels is lessened. In the 
 other case, the NUMBER of dollars is lessened. Each remain- 
 ing " bushel " has been raised in value because the NUM- 
 BER of those bushels has been diminished. Each remaining 
 "dollar" has been raised in value because the NUMBER 
 of those dollars has been diminished. 
 
 If the number of dollars in circulation be reduced from 
 one hundred millions to fifty millions, a man with one 
 million dollars, instead of having one per cent, of all the 
 money in the country (as he would have when a hundred 
 millions were in circulation), would have two per cent, of it. 
 But the difference between one and two per cent, would not 
 be a correct index of the amount of property which a million 
 dollars would then buy. 
 
 WHY PRICES FALL TO SUCH AN EXTENT WHEN THE 
 CURRENCY IS CONTRACTED. 
 
 The value of all the money in a country is always only a 
 small percentage of the value of all the other property in 
 that country. A trifling change in the short arm of a steel- 
 yard causes a considerable movement in the long arm. 
 Money may, therefore, be fitly compared to the short arm 
 of a steelyard, and all other property to the long arm. A 
 slight change in the amount of money makes a very decided 
 change in the amount of property that can be bought with 
 it. In 1872, the premium on gold in this country was about 
 ten per cent. Most of our " statesmen " and "scientific 
 financiers " thought that an immediate ten per cent, con- 
 traction of the currency would only make a difference of 
 
WffA T A PRICE IS. 
 
 295 
 
 ten per cent, in the amount of property which a given 
 amount of dollars would buy ; but events showed that the 
 fall in prices was far more than that. 
 
 HOW WE STATE THE VALUE OF A DOLLAR. 
 
 We state our ideas of the value of a dollar by what we 
 call " prices." That is, the price of a thing is our idea of 
 its relative value as compared with a dollar. 
 
 When there are one hundred millions of dollars in circula- 
 tion, a man who puts a price of one hundred dollars on his 
 horse thereby really (but usually unconsciously) says : " I 
 will sell my horse for one millionth part of the money in 
 the country." Diminish the circulation in the same country 
 to ten millions of dollars and it would then require an enor- 
 mously more valuable horse than in the aforesaid supposed 
 case, to bring a hundred dollars, as that sum would then 
 be one hundred-thousandth part of all the money in the 
 country. 
 
 The average scale of prices in a country represents the 
 average judgment of the community in regard to the 
 relative value of commodities and money, just as the above 
 supposed price of a horse does that of its owner. These 
 results are usually reached by daily and insensible changes 
 in the judgment of individuals with regard to prices, and 
 not by a conscious analysis of the subject. 
 
 During the late war an acquaintance in Alabama sold a 
 little steer for twenty-five hundred dollars. The price was 
 apparently high, but not so in reality. It was merely the 
 judgment of both seller and buyer in regard to the relation 
 Avhich then existed between the value of the steer and the 
 fraction of all the money in the Confederacy which twenty- 
 five hundred represented. The money of the Confederacy 
 had been so increased in amount that a larger number of 
 dollars were required to represent the proportion which 
 the value of the steer bore to the money. Therefore, 
 prices are the estimate of mankind of the relative value of 
 one thing to another, as compared with money. The term 
 "price "is ordinarily employed to denote the amount of 
 
296 
 
 SOCIAL STRUGGLES. 
 
 value possessed by a given thing expressed in terms of 
 money. Thus, when we say, " Wheat is worth two dollars a 
 bushel," two dollars is the "price" of a bushel of wheat. 
 But while we constantly use language in such way as to 
 imply that the value of the thing to which we affix ' ' a price " 
 is the sole fact we wish to determine, in reality, we put a 
 price on the money just as much as we do on whatever we 
 " price." When we say " corn is worth half a dollar per 
 bushel," we virtually say that the price of a dollar is two 
 bushels of corn. 
 
 The average scale of prices, or, what is called the " mar- 
 ket price," represents the average judgment of the commu- 
 nity in regard to this relation. This dominant opinion is 
 the result of daily interchange of thought between the 
 various members of society and of the incessant bantering 
 and bargaining between sellers and buyers. The market 
 prices are fixed, and change in men's minds without their 
 usually being conscious of the sources of their opinions. 
 
 EFFECT OF HABIT ON IDEAS OF THE VALUE OF A DOLLAR, 
 
 When the money of a country for a considerable number 
 of years has remained at a nearly uniform volume, prices 
 tend to become established, and all debts and contracts are 
 made with reference to the prevailing prices. To state the 
 same fact in another way, by long habit the value of the 
 dollar, the unit of the money of account, becomes so fixed 
 in the public mind that we estimate a given number of 
 " dollars " with little reference to the actual thing which 
 represents them. After this idea of the value of the unit 
 of the money of account is once fixed in the mind of a 
 nation, it requires a considerable time and striking events 
 to dislodge it. However, when current money is rapidly 
 and largely increased in amount, the money of account 
 slowly but finally changes to meet the altered condition. 
 But the former ideal money of account is reinstated in 
 public opinion soon after the accidental conditions which 
 changed it are removed. 
 
 Thus from 1789 to 1796, the currency of France was 
 
CHANGES IN PRICES. 
 
 297 
 
 enormously inflated by is'sues of paper money. These issues 
 were so large in amount that prices rose to one, two, and 
 three hundred times their original sum. Prices rose so 
 rapidly that people's ideas of value, stated in money, were 
 mere g-uesses. It seemed as if the money of account had 
 been utterly destroyed by this carnival of folly. But after 
 the inflated paper money had all been wiped out by repu- 
 diation, it was seen that the money of account had survived 
 the storm. The community immediately began to resume 
 trade with the old money of account. 
 
 A similar thing occurred in the Southern States during 
 the late war. When a pair of boots cost three or four hun- 
 dred dollars, it seemed as if all previous ideas of the value 
 of the dollar had been obliterated. But immediately after 
 the close of the war, the money of account re-asserted it- 
 self. 
 
 In a reverse manner from that aforesaid, the money of 
 account may be changed by a diminution of the amount of 
 money in circulation. This has been going on for over ten 
 years in Europe. The money of account in the various 
 nations of that continent had been slowly formed from the 
 average public judgment of values predicated on the use of 
 both gold and silver as legal-tender metals. But since the 
 demonetization of silver, the meaning of the terms, one 
 franc, one mark, etc., affixed to the different monetary units, 
 has been slowly changing. Hence a growing change in the 
 money of account. But the ancient money of account will 
 assert itself whenever silver is restored to its former right- 
 ful position, and the necessary increase made in the 
 amount of paper money. 
 
 DOLLARS AND BUSHELS ARE GOVERNED ALIKE. 
 
 A widely spread feeling exists that the value of money 
 changes in such a mysterious way that no one can either 
 predict what effect a given policy will produce, or explain 
 events after they have occurred. But in fact the value of 
 a dollar, no matter of what material it is eomposed, is deter- 
 mined by precisely the same principles that give value to 
 
298 
 
 SOCIAL STRUGGLES. 
 
 a bushel of wheat, a bushel of potatoes, or other valuable 
 things. 
 
 The value of a bushel of wheat depends entirely on the 
 conditions in which it is placed. Chief of these conditions 
 is the number of bushels for sale at a free market price, 
 relative to the need and demand for those bushels. It is 
 not the number of bushels in existence which decides the 
 value of one bushel ; so long as the existing wheat can be 
 hoarded and kept out of market, for the time, it is practi- 
 cally destroyed. 
 
 HOW MONOPOLY CAN CHANGE PRICES. 
 
 The great speculative operations which have taken place 
 during recent years in wheat, pork and other commodities 
 have been based on the fact that whoever can control and 
 keep from market, at will, a sufificient proportion of all, or, 
 a very considerable part of a given thing, which exists in 
 the world, thereby acquires, to a large extent, the power to 
 change the value and the price of that thing. The success 
 of such an operation depends chiefly on the completeness 
 with which a given thing is thus monopolized, the length 
 of time the hold can be maintained, and on the extent to 
 which other things can come into use as substitutes for the 
 thing withheld from market, 
 
 MONOPOLY CAN CHANGE THE VALUE OF A DOLLAR. 
 
 The value of " one dollar " depends on similar facts and 
 similar principles to those which give value to bushels of 
 wheat or barrels of pork. Othe-r things being equal, its 
 value is increased whenever the number of dollars for sale 
 is diminished ; its value is diminished whenever the num- 
 ber of dollars is increased. Combinations can be made to 
 keep dollars from sale, just as combinations can be made to 
 keep wheat, or other things from sale. 
 
 Such combinations are made easier and more likely to 
 succeed by the same causes which render " corners " in 
 other things more easily successful ; viz., a diminution in 
 the number of dollars, a diminution of the sources from 
 
CORNERING MONEY. 
 
 299 
 
 which they can be obtained, and a diminution of the 
 number of persons who possess and control those dollars. 
 
 MONOPOLIES IN CALIFORNIA. 
 
 Before the construction of the Pacific railroads, Califor- 
 nia was isolated from the sources from which many of the 
 necessaries used by her population were derived. Con- 
 sequently that State was famous for creating " corners " in 
 various things. One man would buy all the bacon in the 
 State and contract for all in transit thereto. He would 
 then advance the price of bacon and make a fortune before 
 the people could obtain supplies from another source. 
 
 Another man would buy all the sugar ; another would 
 control all the coffee, and another would buy all the Spices 
 in the State. In this way the people of the State were 
 plundered by monopolies rendered possible by the condi- 
 tions under which that State was then placed. The open- 
 ing of the railroads has put an end to the facility of these 
 speculations. New supplies can more readily take the 
 place of those withheld from market by speculators. 
 
 MONEY KINGS WISH TO CORNER MONEY. 
 
 California thus affords an explanation of the desire of 
 the money kings of the world to limit the legal tender 
 which the people must use. By restricting it to gold, and 
 by placing the issue of paper money in the hands of a few 
 bankers, it is made far easier for a combination of rich men 
 to make a " corner " in dollars whenever they choose. 
 With the mints open freely to both gold and silver, and 
 the control of paper money taken out of the hands of 
 the bankers, the people would then be as much safer from 
 an injurious hoarding of money, compared with the pres- 
 ent, as the people of California are now safer than for- 
 merly from the hoarding of articles of food. 
 
300 SOCIAL STRUGGLES. 
 
 CREDITORS CAN BE ROBBED BY INFLATING THE CURRENCY. 
 
 Let us now by examples show some of the practical effects 
 of making great changes in the amount of money in circula- 
 tion. In i860 A buys a farm in Georgia for $10,000. He 
 pays $2000 down, and gives his note for $8000, secured 
 by mortgage on the farm. The average price of wheat 
 for several years has been $1.25 per bushel. The price of 
 other things being in proportion to that of wheat. Said 
 mortgage, therefore, at the time of sale of the farm, re- 
 presents the value of 6400 bushels of wheat. War breaks 
 out and an enormous issue of paper money takes place. 
 The price of wheat rises to $25 per bushel. The mort- 
 gage then represents the value of 320 bushels of wheat. 
 The owner of the farm can then pay the mortgage with 320 
 bushels of wheat. By the trick of inflating the currency, 
 the seller of the farm has been robbed of the value of 6080 
 bushels of wheat. 
 
 HISTORY OF INFLATIONS. 
 
 The history of all unlimited issues of paper money is sim- 
 ilar to the story told in the foregoing example : viz., an 
 enormous rise in prices ; robbery of creditors and derange- 
 ment of industry. The history of our Continental currency 
 during the Revolutionary War with England is substantially 
 a history of all excessive issues of paper money. It re- 
 mained at par with coin, until about nine million dollars had 
 been put in circulation ; it then gradually depreciated with 
 the issue of each successive and additional million until it 
 finally became almost worthless. The unsuccessful attempts 
 to use a public debt as currency all owe their failure to one 
 cause, viz.: TJie amount of debt put in circulation as money 
 was not limited to the actual needs of trade, on the basis of the 
 existing scale of prices. 
 
 The trade of a given nation, or community, daily trans- 
 fers from one person to another a certain amount of labor 
 and coijimodities. This transfer is more conveniently ac- 
 complished by the use of a certain volume of value in the 
 
VALUE OF PAPER MONEY. 
 
 301 
 
 form which we call "money." No matter of zvhat material 
 this money be composed, — no matter whether it be convertible 
 into coin or not, so long as its volume does not exceed the quan- 
 tity requisite for the convenioit exchange of this value, it 
 loill perform all its functions without depreciation. 
 
 PAPER MONEY IS NOT HELPED BY WHAT IS " BACK OF IT." 
 
 The idea that paper money derives its value from what 
 there is " back of it " is a mistake. Paper money does not 
 need anything " back of it" any more than a half bushel 
 measure needs something back of it. It simply needs to 
 be Hmited to the amount needed to carry on business. 
 Further than that, " something back of it " is of no effect 
 whatever. It makes no difference what guarantees of its 
 payment may exist, nor how much wealth may be pledged 
 behind it, whenever more money is permanently put in cir- 
 culation than is requisite to conveniently effect the ex- 
 changes of a certain locality, such money begins to depre- 
 ciate ; — it generally remains nominally at par, its decline in 
 value being shown by the rise in the price of commodities 
 stated in such money. 
 
 The idea that an unlimited issue of paper money can be 
 safely made, if an equal or greater amount of property be 
 pledged for its payment, is essentially the error which led 
 France to issue assignats during the French Revolution. 
 
 This notion has arisen from the idea that paper money is 
 good only when it is " redeemed " in coin. Redemption of 
 paper money in coin adds to its value only so far as it limits 
 its Amount. Aside from that one purpose, it is as useless to 
 "redeem" a paper dollar as it would be to redeem a gold 
 dollar ; or to " redeem " a peck measure, or a yardstick. 
 The efificiency of all schemes for the so-called " redemption ", 
 of paper money is determined solely by the degree in which 
 they maintain a uniform relative amount of paper money in 
 circulation. 
 
 It has been asked : If unlimited paper money produce 
 such disasters, is not paper money more dangerous than 
 metallic money? Yes; for the same reason that a locomo- 
 
,02 SOCIAL STRUGGLES. 
 
 tive engine, unless in intelligent hands, is more dangerous 
 than an ox team. The more powerful and efficient the 
 agent, the more need of careful management. An '' unlim- 
 ited " horse runs away and does damage to the carriage and 
 its occupants. " Unlimited " fire burns cities ; "unlimited" 
 steam explodes boilers ; gunpowder will ignite and tear us in 
 pieces — in fact, every useful agent or power is only useful 
 when intelligently used. If we cease to employ things be- 
 cause, if not regulated, they would inflict injury, we should 
 at once discard steam, electricity, fire, water, and, in short, 
 almost everything which helps to make civilization. We 
 should return to primitive barbarism. 
 
 INFLATION IS POSSIBLE WITHOUT ISSUING PAPER MONEY. 
 
 Furthermore, there is nothing in the Constitution which 
 prevents Congress from enormously inflating our gold and 
 silver coins. It could be done by enacting a law that a ten- 
 dollar gold piece should contain only fifty grains of stand- 
 ard gold instead of two hundred and fifty-eight grains as at 
 present. This always must be so, because the power to de- 
 clare what shall be a legal tender is an attribute of sover- 
 eignty, and must be lodged with the national legislature. It 
 cannot be destroyed without destruction of the independ- 
 ence and sovereign power of the nation. 
 
 Inflation to-day is not prevented by law, nor by the use 
 of metallic currency, but by the people having been edu- 
 cated to abhor a change in the currency which robs one 
 ■class for the benefit of another. Public intelligence and 
 publicity of all proposed changes in the volume of mOney 
 are the best safeguards against inflation. 
 
 PAPER MONEY INFLATION A PRETEXT FOR CRIME. 
 
 The fact that unlimited issues of paper money have in- 
 flicted injuries on society in the past, has been used as a 
 pretext to justify crimes on the community in a direction 
 the opposite of inflation. A sketch of the practical opera- 
 tion of one of these acts on a single individual will illus- 
 trate their effect on a large portion of the community. 
 
ROBBERY OF DEBTORS. 
 
 303 
 
 In 1872, B buys a farm in Pennsylvania for $10,000. In 
 payment, he gives $2500 in cash and his note for $7500, 
 secured by mortgage on the farm. Wheat in that vicinity 
 has for several years been worth an average of $1.50 per 
 bushel. The price of other articles in proportion to that 
 of wheat. The debt of B t^ius represents 5000 bushels of 
 wheat, or a proportional amount of other produce. 
 
 In 1873 silver was demonetized. There was no petition 
 for such an act, either by the people or by representative 
 bodies. The voters never assented to it — it was never 
 made a portion of a political platform. The whole affair 
 was managed so quietly that very few persons knew anything 
 about it until months after it had been done. It was not 
 generally known until public distress led to inquiries as to 
 the cause of hard times. 
 
 The currency is thus contracted and prices fall. Gold is 
 the sole metallic legal tender, and the demand therefor and 
 its value are thereby increased. Taxes and interest are un- 
 changed but the price of wheat goes steadily down from 
 year to year until it reaches ninety cents a bushel. 
 
 When B first got his farm he could pay the yearly in- 
 terest on his debt with 300 bushels of wheat. It now re- 
 quires 500 bushels to pay the interest. The whole debt 
 could originally be paid with 5000 bushels of wheat, — but 
 now it would require about 8383 bushels of wheat to pay it. 
 Other produce has fallen in price as much as wheat, and B 
 finds himself unable to pay the interest on the mortgage. 
 
 B then tries to sell his farm, but finds that land has fallen 
 in price so that no one is willing to pay the mortgage for 
 the farm. B then goes to his creditor and offers to return 
 the farm in payment of his debt, thus sinking the $2500 
 paid down. But the creditor refuses to accede to B's re- 
 quest. Finally the creditor forecloses the mortgage, gets 
 back the farm, and, from an action on B's note, takes all his 
 cattle and farming utensils which the lavv^ will allow him. 
 Thus, B has lost several years' labor, many valuable im- 
 provements made on the farm, the $2500 and most of his 
 cattle and tools. 
 
304 
 
 SOCIAL STRUGGLES. 
 
 While this cheerful process has been going on, B has read 
 in his newspaper that the hard times were caused by the 
 Suez Canal, the Bankruptcy Act and over production : — that 
 we have grown so rich as to make hard times, and that a 
 few rascals wanted to have silver coined. 
 
 NOT A FANCY SKETCH. 
 
 That the foregoing example is not a mere fancy sketch 
 many thousands of persons know from bitter experience. 
 A vast number of persons have been reduced to poverty. 
 Another multitude have spent the best years of their lives 
 in industry and economy, without being able to pay any- 
 thing more on the mortgages on their homes than the in- 
 creased burden of interest thrown upon them by contraction 
 of the currency. 
 
 SUDDEN CHANGES IN THE CURRENCY PARALYZE BUSINESS. 
 
 When the currency is undergoing either rapid and great 
 inflation, or is undergoing rapid contraction, industry is par- 
 alyzed. The principle which produces this industrial pros- 
 tration is identical in both said cases ; viz., the capital, called 
 money, whose function is to associate capital and labor, is 
 deranged. The distribution of wealth is retarded. 
 
 But the immediate source of trouble is precisely opposite 
 in one case from the other. When inflation is going on so 
 that no one knows if he sells goods to-day how much he will 
 have to pay to replace them to-morrow,— people hoard their 
 goods. When contraction is going on so that no one knows 
 if he buys goods to-day whether they will not be lower priced 
 to-morrow, people hoard their money. 
 
 For the past few years, money has been hoarded simply 
 because it was increasing in value. When prices are stead- 
 ily falling, holders of money prefer to either hoard it, or 
 loan it on call with ample security. This has led to the ac- 
 cumulation of large sums of money in our financial centers, 
 and to its being loaned, on call, at one or two per cent, per 
 annum. Thereupon it has been said : " While business is 
 
IVHA T CHEAP MONE V IS. 
 
 305 
 
 depressed and prices low, there is an abundant supply of 
 cheap money." 
 
 WHY MONEY IS HOARDED WHEN PRICES ARE FALLING. 
 
 The aforesaid talk about "cheap money" is a stumbling 
 block over which many fall. But it is really a very simple 
 matter. The fact that money can be borrowed at two per 
 cent, per annum is no evidence whatever of the actual value 
 of that money. The lender of money, on call, does not part 
 with the ownership of the money, — he has not so/d his 
 money. He has merely sold the temporary possession of hjs 
 money, and has taken what he deems ample security that 
 the possession of the money shall be given back " on call." 
 
 THE TRUE TEST OF THE CHEAPNESS OF MONEY. 
 
 In order to ascertain whether money is " cheap," as al- 
 leged, the proper way is to go into the market and endeavor 
 to buy money : — that is, try to exchange other property for 
 money. The same persons who tell us money is "cheap," 
 say that prices are low. This cannot be. When two dif- 
 ferent things are put in the opposite sides of evenly bal- 
 anced scales, one side or the other must go down. One side 
 is down and the other up. One side is low and the other 
 high. When prices are down, money is up. When prices 
 are up, money is down. Money is actually " cheap " when 
 it is on sale at low prices — that is, ivhen its absolute oivner- 
 sJiip can be bought for a comparatively moderate amount of 
 property or labor. In such case what we call " prices " are 
 high. 
 
 DIFFERENCE BETWEEN TEMPORARY POSSESSION OF MONEY 
 AND OWNERSHIP OF IT. 
 
 The owners of money, when the currency is contracting, 
 are in the condition of the owner of a vacant lot in the cen- 
 ter of a rapidly growing town. The value of such a lot is 
 steadily rising. Its owner cares little' who may have the 
 temporary occupation of it so long as its ownership re- 
 mains in his hands. He may be willing to lease it for 
 
 20 
 
2o6 SOCIAL STRUGGLES. 
 
 three or five years at a very low rent, but this low rent 
 does not prove that the lot is " cheap." It merely shows 
 that its owner is so convinced that it will be worth more in 
 the future than at present, that he prefers to temporarily 
 dispose of its possession instead of at once selling its owner- 
 ship. 
 
 Whenever the owners of money think it will be worth 
 less in the future than at present, they make haste to sell 
 their money ; that is, as far as they can, they exchange it 
 for other property which they think will rise in price. It 
 has constantly been said that the large amount of idle 
 money in New York was due to " fear of inflation." If such 
 a fear actually existed, the owners of that money would im- 
 mediately seek to protect themselves by investing in prop- 
 erty less liable to be harmed by inflation than money. 
 
 The aforesaid considerations show that the hoarding of a 
 large amount of idle money in New York and other finan- 
 cial centers is a symptom that money is dear and steadily 
 growing dearer. Some of the owners of the capital called 
 money, which should be employed in associating other cap- 
 ita*! with labor, and distributing the products, are lying in 
 wait to see how much of previously created wealth they 
 can obtain for their money. This conduct withdraws 
 money from circulation just as effectually, for the time it is 
 hoarded, as if it were destroyed. The contraction going on 
 from other causes is thus intensified. 
 
 If our currency were still more contracted, it would ap- 
 pear more abundant and cheaper to the superficial ob- 
 server than at present. Money would be rising in value 
 faster than it now is. More money would then be lying 
 idle, and the rate of interest on call loans would be lower 
 than at present. When the purchasing power, and there- 
 fore the actual value of money is increasing at the rate of 
 ten per cent, per annum, whoever borrows money to be re- 
 paid one year thereafter, must return to the creditor, not 
 only whatever interest he agreed to pay, but a principal 
 more valuable by ten per cent, than was originally bor- 
 rowed. Consequently, if the currency is being contracted 
 
HOW BANKRUPTS ARE MADE. 
 
 30; 
 
 enough, no one expecting to repay it would borrow money, 
 even without any interest whatever. This would be so, be- 
 cause the rise in the value of the money would be more 
 than the borrower could reasonably expect to make as 
 profits out of the business in which the borrowed money 
 was used. 
 
 A MISTAKE IN DIAGNOSIS. 
 
 The phenomena which are indicative of a contracted cur- 
 rency, have been mistaken by those who "profess" a sci- 
 entific knowledge of money for evidence of inflation. 
 These persons and their followers have increased their 
 clamor for further contraction just in proportion as the 
 trade centers have become congested, the interest on call 
 loans lower, and business and prices more depressed. 
 
 When medical men were more ignorant than at present, 
 many diseases characterized by a full, bounding and rapid 
 pulse were supposed to arise " from the patient having too 
 much strength and too much blood." On this theory, 
 bleeding was the proper remedy. In this way, vast num- 
 bers of persons have been brought at once " down to hard 
 pan " beneath the sod. Physicians have slowly learned 
 that such patients have neither too much strength nor too 
 much blood. The circulating medium is unbalanced , and 
 instead of opening veins and letting it out, they now take 
 measures to restore its normal equilibrium and functions. 
 
 In like manner, financial doctors, ignorant of the facts 
 and principles involved, have mistaken the congestion of 
 the circulating medium, produced by contraction, for symp- 
 toms of too much money and toa much wealth. In their 
 minds, low prices and a great derangement and depres- 
 sion of industry indicate " inflation and overproduction." 
 There is no doubt that inflation can produce great pros- 
 tration of commerce and industry. But this derangement 
 of business is always, and necessarily, accompanied with 
 abnormally high prices. Whereas the paralysis caused by 
 contraction is always attended with low prices. 
 
 Since contraction has been going on in this country it has 
 
308 
 
 SOCIAL STRUGGLES. 
 
 been repeatedly stated that multitudes of persons were 
 made bankrupt because fear of inflation made capitalists 
 refuse to help debtors with loans. Most bankrupts became 
 such, not because they could not borrow more, but because 
 they had already borrowed too much. They did not need 
 more " borrowed money," — they needed more money of 
 their own. They needed to be able to sell their goods, or 
 their property, at a fair price; inability to do that, caused 
 their failure. They were forced to exchange their goods 
 for money dearer than the money with which those goods 
 were bought. 
 
 A TYPICAL WRITER. 
 
 As a specimen of the prevalent ignorance on this topic, 
 the following quotation is made from the Christian Uition 
 of Feb. 4, 1886. The Union is one of the so-called relig- 
 ious papers which steadily advocates the dominant ideas of 
 Wall Street. 
 
 " The gradual approach of Congress to the discussion of the sih'er 
 question is felt and expressed in the reluctance of business men and cap- 
 italists to enter into any new or larger enterprises until the policy of the 
 Government with respect to silver has become settled. The various pro- 
 jects offered in Congress illustrate the feeling that something must be 
 done, if possible, to ease the burden which the radical silver men insist 
 shall continue to be borne ; i. e., a continuance of coinage of standard 
 silver dollars. It is hoped that among these projects something will be 
 found that can lighten the great cloud which otherwise will continue to 
 overshadow the country. Confidence, it would seem, is ready to assert 
 itself, but the utter doubt as to the issue of the growing agitation of the 
 silver coinage question acts as a paralysis and holds all of our wealth- 
 producing sources in absolute check. For this reason we find our banks 
 again accumulating idle capital. At the close of last week there was a 
 surplus reserve of over $35,000,000 in the New York City banks, repre- 
 senting just so much distrust or doubt. This idle reserve is growing 
 from week to week so that the money market rules about one and a half 
 per cent, for money on call at the Exchange." 
 
 The editor of the Union seeks to persuade his readers 
 that the amount of idle money constantly increases because 
 its owners believe the coinage of silver dollars will not be 
 
 1 
 
THE ACTUAL BELIEF. oqq 
 
 stopped. He says; "Confidence is ready to assert itself." 
 We ask : Confidence in what ? What feehng is it that in- 
 duces men to prefer lending money at one and a half per 
 cent, on call instead of investing it in business enterprises? 
 
 The moment we drop visionary theories and use our com- 
 mon sense, the answer to the above questions is obvious. 
 The owners of the aforesaid idle money are guided by the 
 same principles which influence the majority of other 
 property owners. That is, they use their property in the 
 way which they think will yield the greatest profit. Their 
 conduct shows that they think it more profitable to keep 
 their money under constant control than it would be 
 to invest it in real estate, buildings, machinery, com- 
 modities, or any other form of wealth. So much, no one 
 will deny. 
 
 The next question is : Why do they think as they evi- 
 dently do ? The Union imagines the owners of this idle 
 money do not invest it in productive industry because they 
 fear silver will continue to be coined, and the prices of ma- 
 chinery, buildings and goods consequently rise. Just think 
 of this proposition one minute. Do men refuse to invest 
 in things which they think will soon command a higher 
 price ? Is it not perfectly certain that, like all other per- 
 sons, the owners of this idle money are ready to make a 
 profit ? Is it not also certain, that these men would at 
 once invest in productive business, if they expected a rise 
 in the price of the property in which their money would be 
 invested in such case? 
 
 LACK OF CONFIDENCE IN PRICES IS THE REASON MEN 
 HOARD MONEY. 
 
 The editor of the Union would be right, if he completely 
 reversed his ideas. Wealth is kept in form of money for 
 the simple reason that there is want of confidence in the 
 stability of prices. , There is fear that prices will go still 
 lower. There is a belief that money will rise in value and 
 all other property fall in price. Whenever it is perfectly 
 certain that the coinage of silver will be permanently con- 
 
3IO 
 
 SOCIAL STRUGGLES. 
 
 tinued, and the coined silver put in circulation by paper 
 certificates, the owners of money will be guided by the 
 same principles they are now. They will invest their prop- 
 erty where it will bring the most profit , viz., they will 
 change it from money into something they think will pro- 
 duce more income. Hoards of idle money will be replaced 
 by money in active circulation, prices will rise and " better 
 times " will appear. 
 
 EFFECT OF SLOW CHANGES IN THE AMOUNT OF MONEY. 
 
 The foregoing are the chief symptoms when either infla- 
 tion or contraction occurs rapidly enough to be perceptible. 
 But inflation and contraction of the currency often take 
 place so slowly as to be imperceptible except by comparing 
 prices separated by long periods of time. In the end, 
 prices reach the same point, no matter whether the change 
 in the amount of money be very slow or comparatively 
 rapid. But the effects of the change.of price are modified 
 by the fact that, in such case, other conditions can partially 
 adjust themselves to the change. 
 
 A rapid inflation of the money of a country is nearly as 
 disastrous to the interests of that country as a rapid con- 
 traction of it. But when the increase in the amount of 
 money takes place very slowly, many good results flow 
 therefrom. 
 
 In society, organized as it mostly has been on the prin- 
 ciple that each man should engage in competition for what- 
 ever wealth he can get, with comparatively little legal reg- 
 ulation of this struggle, the inevitable tendency is for 
 wealth to accumulate in few hands. Some men have 
 greater capacity than others to fairly get wealth. When 
 this capability is united, as it frequently is, with cunning 
 and unscrupulousness, the probabilities are greatly that 
 such a person will obtain more wealth than is best for the 
 rest of the community; at least, such is the tendency. A 
 diminution in the amount of money intensifies this ten- 
 dency, because the value of loans, when they fall due, is 
 constantly greater than when the debt was incurred. 
 
A SLOW RISE OF PRICES. 
 
 311 
 
 For example, a family with a hundred thousand dollars 
 invested at six per cent, in 1809 could spend six thousand 
 dollars every year, and find themselves in 1849 i" possession 
 of property as valuable as two hundred and forty-five thou- 
 sand dollars were in 1809. This would be their reward for 
 keeping out of business. If, during that time, there had 
 been a gradual increase in the amount of money, and a con- 
 sequent fall in its value, this family would find their income 
 gradually diminished in purchasing power ; they would see 
 their industrious neighbors growing richer while they grew 
 poorer, and this would impel them to educate their sons 
 and daughters to habits of industry irtstead of lives of 
 fashionable idleness. A slow rise in prices by increasing 
 the reward of labor, and thus stimulating productive indus- 
 try, tends to increase the wealth of a nation. It tends to 
 keep men from retiring from business as soon as they would 
 if they could convert their property into money, loan it, 
 and feel that they were not only receiving interest thereon, 
 but that the principal was growing more valuable. This 
 retains valuable ability longer in the service of society, and 
 prevents enterprises from falling into inexperienced hands, 
 thus wasting both capital and labor. It is also a great in- 
 centive to industry on the part of young men — it makes it 
 easier for them to rise from poverty to positions of wealth 
 and honor. 
 
 It is sound public policy to have the wealth of the nation 
 in many hands ; to have the masses contented and inter- 
 ested in the preservation of order and in whatever measures 
 tend to advance the common interests. If the friends of 
 the English financial system succeed in their plans, the 
 amount of money will slowly diminish, because the demon- 
 etization of silver will extend from one nation to another, 
 until gold, except for small change, will be the sole legal 
 tender throughout the world. This would tend to give an 
 unfair advantage to capital, in the form of money, and to 
 place the wealth of the world for the most part in compara- 
 tively few^ hands. 
 
 Whenever a large number of persons are poor, and with- 
 
312 
 
 SOCIAL STRUGGLES. 
 
 out hope of anything better, they have little interest in the 
 public welfare, and easily become dangerous to society. 
 Such persons feel, that no matter what occurs, tJiey have 
 little to lose. 
 
 WHAT WE SHOULD SEEK. 
 
 The ideal condition is to have the value of money uniform 
 from generation to generation, and the covetousness of able 
 men placed under wholesome legal restraints. The inter- 
 ests of the landlord and tenant, and of the lender and the 
 borrower are not identical. The constant tendency of 
 human selfishness is therefore to make RENT AND INTEREST 
 the two chief forms by which capital lays labor under tribute, 
 higher than absolute justice would sanction. The creation 
 of a stable currency would be a long step toward an equi- 
 table regulation of rent and interest. 
 
 Uniformity in the value of money can only be obtained 
 by making the dominant condition which gives value to 
 money uniform. The NUMBERS of the unit of money, 
 RELATIVE to the numbers of the units of all other valuable 
 things, must be uniform. That is, an increased or a dimin- 
 ished production and exchange of wealth should be simul- 
 taneously accompanied with an increased or diminished pro- 
 duction of the units of money. The numbers of " dollars" 
 should perfectly reflect the aggregate numbers of all other 
 commercial things. The production of money should keep 
 even pace with the creation of all other products of labor. 
 
CHAPTER XII, 
 
 Alleged Causes of Hard Times : The Real Causes are not usually 
 Assigned. — Actions are more Trustworthy than Words. — No Lack 
 of Confidence in Silver Dollars. — The Confidence Cry. — The Bank- 
 rupt Law did not make Hard Times. — Overproduction. — What 
 Production is. — Tendency of Poverty. — Tramps. — Capacity to La- 
 bor is a form of Property. The Farmers and Overproduction.^Who 
 
 are Benefited by Falling Prices. — London and New York are the 
 Chief Authors of the Cry " Overproduction." — A Temporary Cure 
 of " Overproduction." — Great Changes in the Amount of Money in 
 Circulation Destroy Wealth. — When a Thing has the Greatest 
 Value. — What each Person should Possess. — Examples of Destruc- 
 tion of Value. — Report of an Embassy from China. 
 
 No matter hoiu' iniicJi distress among the laboring classes 
 is caused by bad financial legislation, they seldom complain 
 of fluetiiating money ; the actual source of their misfortune is 
 not usually recognised. 
 
 During the years of business depression which have oc- 
 curred since 1872, various things have been assigned as 
 causes thereof. Some of these allegations, in all probabihty, 
 were originally put in circulation by persons who knew 
 better, for the express purpose of diverting the attention of 
 the public from the real source of their troubles. But as 
 they have been generally believed, some examination of 
 them should be made. 
 
 The first allegation was • " The greenbacks make all the 
 trouble. There is no confidence in the greenback. De- 
 stroy the greenbacks and the hard times will be over." 
 
 Human nature is unchanged. If men feared inflation, 
 they would act as history shows us men have always acted 
 whenever they lost confidence in the value of their money. 
 They would at once seek to exchange the suspected money 
 for something which they thought had more permanent 
 value than the money itself. They would not eagerly seek 
 possession of what they had no confidence in. 
 
 313 
 
5 14 SOCIAL STRUGGLES. 
 
 ACTIONS ARE MORE TRUSTWORTHY THAN WORDS. 
 
 Moneyed men have said they were afraid of inflation, but 
 what a man says is of no account so long as his conduct 
 shows that he does not believe it himself. Capitalists are 
 mostly men who look out for their own interests pretty 
 shrewdly. Personal property of all kinds and real estate 
 were very low, when the cry, " No confidence in greenbacks," 
 was at its height. If there had been fear of inflation, cap- 
 italists would have bought land or personal property in 
 order to secure themselves and get the benefit of the rise 
 in price which they knew would take place under inflation. 
 The result would have been a brisk demand for commod- 
 ities and real estate, and a consequent rise in their price. 
 But nothing of this kind has happened. Capitalists have 
 sought greenbacks, or personal property readily convertible 
 into greenbacks, and this shows what they have really be- 
 lieved. Men do not eagerly desire things in which they 
 lack confidence. During all this time, United States 
 bonds, expressly payable in currency, have been higher 
 than the bonds payable in coin. 
 
 NO LACK OF CONFIDENCE IN SILVER DOLLARS. 
 
 Lately, it has been said, that the hard times are due to 
 want of confidence in the silver dollar. But the owners of 
 those dollars have not shown any anxiety to exchange 
 them for real estate, machinery and the various other kinds 
 of property. The same facts which show that there has 
 not been a want of confidence in the greenback are true in 
 regard to the silver dollar. England has no silver dollars ; 
 but her business is more depressed than ours. In fact, 
 there has been for years want of confidence in the miinber 
 of dollars which any kind of property, real or personal, 
 would sell "for. In other words, all classes of persons have 
 felt no confidence in their ability to judge to what extent 
 the currency would be contracted. Business has not re- 
 vived because prices were falling. As the demonetization 
 of silver by Germany, the United States, and several other 
 
CAUSE OF speculation: 
 
 315 
 
 nations, created new and untried conditions, no one could 
 tell how far prices would fall. 
 
 Manufacturers have been unable to sell their goods at a 
 ■profit because the contracting currency steadily lowered 
 prices. Business men will eagerly push forward whenever 
 they think contraction has ceased ; or, in other words, 
 whenever business can be done without danger that goods 
 will have to be sold for less than first cost, rent, clerk-hire 
 and other expenses. 
 
 THE CONFIDENCE CRY. 
 
 When a person proclaims that " confidence " is all that is 
 needed to restore good times, it is sometimes well to ask 
 him : Confidence in what ? The majority of such persons 
 imagine that " confidence " in the cessation of silver coin- 
 age and the still further lowering of prices would revive 
 business! If such persons had their way, what next would 
 they want confidence in ? 
 
 The opening of the Suez Canal and a large number of 
 railroads have been assigned as a cause of hard times. If 
 an increase in our facilities for transportation cause hard 
 times, then all labor-saving machinery is a detriment. 
 Ignorant mobs have frequently destroyed labor-saving 
 machinery simply because they were thoughtless. Rail- 
 roads and every other labor-saving invention facilitate the 
 creation of wealth, and thus tend to make better times for 
 the human family. The men who attribute the hard times 
 to railroads are those who positively told us that the green- 
 backs made all the trouble. In the spring of 1878, the same 
 persons were predicting universal ruin in case the silver 
 bill became a law. If our superior modes of transportation 
 have plunged millions of people into dire financial distress, 
 we had better fill up our canals, destroy our railroads, and 
 return to the primitive ox-cart. 
 
 We have undoubtedly built more railroads than were 
 needed. In many cases, railroads have been built, not to 
 benefit the section of country through which they pass, but 
 to help the men who built them. There has been a lack of 
 
3i6 
 
 SOCIAL STRUGGLES. 
 
 judgment shown in building railroads. It is true that 
 the capital and labor used in building a railroad not needed, 
 are wasted. But this loss does not materially affect the 
 value of that form of capital called money, which is always 
 deranged in its workings whenever business is depressed. 
 
 Many persons have ascribed railroad speculation to the 
 existence of greenbacks. But to say that selfishness, want 
 of discretion, and lack of judgment, are due to greenbacks 
 is as unreasonable as to attribute the yellow fever to the, 
 gold in the Treasury. Human infirmities existed before 
 paper money was invented. 
 
 The idea that railroad manias are prevented by " gold 
 payments " is utterly fallacious. Those who embrace it 
 forget that England had "gold payments " in 1844, 1845, 
 and 1846, and during that time she squandered large sums 
 in a wild railroad speculation. The historian. Smiles, in 
 speaking of that period, says : 
 
 " Speculators were left at full liberty to project and carry out lines 
 almost parallel with those of existing companies. A powerful stimulus 
 was thus given to the existing spirit of speculation which rose to a fear- 
 ful height in 1845, turning the whole nation into gamblers." 
 
 Speculation is a natural tendency of human nature and 
 cannot be prevented by any kind of currency whatever. 
 Speculation has for its parents : Desire for gain, and 
 
 " Hope that springs eternal in the human breast." 
 
 Bad financial legislation, distress, and disaster may smother 
 it for a short time, but it will reappear in spite of calamity 
 and misfortune. To stop it would be to suppress the virt- 
 ues of courage and energy, and, in short, to change the 
 constitution of the human mind. 
 
 California illustrates the mistake of supposing that " hard 
 money " generates business conservatism, while paper money 
 creates speculation. That State has always had a gold cur- 
 rency, but no place has been the theater of more and crazier 
 speculations. She has steadily had speculations in real es- 
 tate, grain, mines, merchandise, and, in fact, in almost 
 
EFFECT OF THE BANKRUPT LAW. 2 17 
 
 everything which can be bought and sold. Those who 
 think gold a remedy for speculation should visit San Fran- 
 cisco when business is " lively." They would then see a 
 crowd acting like a lot of madmen, and would probably be 
 cured of that delusion. 
 
 THE BANKRUPT LAW DID NOT MAKE HARD TIMES. 
 
 Prior to its repeal, it was widely proclaimed that the Bank- 
 rupt Act caused the hard times. It was said that such a law 
 enabled persons to escape payment of their debts. It was 
 forgotten that when a man has not enough property to pay 
 his debts, he always " escapes " payment. The bankrupt 
 law took all the debtor had ; it is difficult to see how he 
 could surrender more. The immense number of persons 
 forced into bankruptcy were a result of the hard times, not 
 the cause of them. Attributing hard times to the bankrupt 
 law was as rational as to ascribe changes of temperature to 
 thermometers. Bankruptcies are symptoms, not original 
 causes. 
 
 The same persons who clamored for the repeal of the 
 bankrupt law, as a remedy for the hard times in 1876, de- 
 manded its re-enactment in the hard times of 1884. 
 
 Bankrupt laws simultaneously sponge out all a debtor's 
 property and debts. He can then start anew with legal se- 
 curity that his very first earnings and savings will not be 
 seized as part payment of a debt so large that the interest 
 alone renders its payment hopeless. By thus lifting men 
 out of despair and giving them an incentive to industry and 
 economy, bankrupt laws preserve to society much valuable 
 service which is lost when no hope exists of ever peacefully 
 owning and possessing property. It is no benefit to soci- 
 ety to oblige a man to do business in some one's else name, 
 or practice some kindred subterfuge in order to earn a liveli- 
 hood. 
 
 OVERPRODUCTION. 
 
 Next to the idea that we have too much money, the cause 
 of hard times most frequently alleged is" overproduction." 
 
318 
 
 SOCIAL SMUGGLES. 
 
 Manufacturers and merchants have had on hand more goods 
 than could be sold except at ruinously low prices, and this 
 has led to a belief that we have "too much of everything," 
 and therefore suffer from hard times. 
 
 The minds of many have been confused on this subject, 
 by the fact that while it is impossible to produce too much 
 of all kinds of wealth, we can produce too much of a very 
 few kinds, and thus create a glut in the market for a short 
 time of those particular things. In other words, produc- 
 tion may be to a small extent misdirected, temporarily. 
 But misdirected production soon cures itself. Manufact- 
 urers could make more plows than were wanted, but they 
 would then divert part of their force to making other kinds 
 of tools, so that mistakes of that kind soon pass away with- 
 out serious detriment to society. At some times and 
 places the supply of certain goods may be either in excess or 
 deficient, but when the social forces are not deranged by 
 pernicious legislation these irregularities work their own 
 remedy in a short time without producing material disturb- 
 ance of industry. 
 
 WHAT PRODUCTION IS. 
 
 Production is a term used to define the creation of wealth ; 
 the manufacture of those things which supply man's neces- 
 sities, comforts and desires. Therefore, discoveries in 
 science and inventions in art are not a curse, but a blessing. 
 Every new labor-saving device, or machine, should be 
 hailed as a friend whose benefactions rightfully belong to the 
 whole human family. If new inventions cause overproduc- 
 tion and overproduction cause hard times, inventions 
 ought to be stopped at once. Let us go back to a system 
 when there was less invention and less wealth. 
 
 But in fact, we have not now, and never have had too 
 much wealth ; we have not too many houses, too much fur- 
 niture, too much food, too many cattle and too much labor- 
 saving machinery. We hear no complaints of that kind. 
 People complain of poverty — not of wealth. A great deal 
 has been said of the " blessings of poverty." But most of 
 
WHA T PO VER TV US U ALL Y DOES. 2 1 g 
 
 US are so unselfish that we are wilhng to resign our propor- 
 tionate amount of such a "blessing" and surrender its 
 enjoyments and advantages to other persons. 
 
 Prominent men have told us that we have too many- 
 laborers ; that we have improved too many farms ; raised 
 too much farm produce ; made too many goods ; and 
 opened too many mines. If that be so, then we have been 
 too industrious ; we have not enough drones and parasites ; 
 and, as a result, we have grown so rich that we are poor and 
 distressed ! 
 
 TENDENCY OF POVERTY. 
 
 A few individuals may be richer than is best for them, 
 but mankind on the whole are in no danger of becoming too 
 wealthy. If poverty be a good thing to improve mankind, 
 the pauper quarters of great cities should be the best and 
 happiest, as they have the greatest amount of this 
 " heavenly discipline." The statistics of crime tell us a dif- 
 ferent story. They show that crime increases in the same 
 ratio that a nation or a locality is impoverished. The temp- 
 tation to do wrong is increased, and the will-power to resist 
 temptation is weakened, by want. Thousands of mechanics 
 are sober and reputable citizens as long as they have 
 employment at fair wages. But when idle and poverty- 
 stricken, they are unable to withstand the accompanying 
 depression of spirits, and seek refuge in the rum shop to 
 drown their misery in still lower depths. Wise Benjamin 
 Franklin said : " It is hard for an empty bag to stand 
 upright." 
 
 Poverty has a tendency to deteriorate the physical, intel- 
 lectual and moral condition of an individual, a community, 
 or a nation. Poverty narrows a man's sources of intellect- 
 ual recreation ; it diminishes his physical comforts ; it low- 
 ers his self-respect ; it breeds discontent, misery and crime. 
 History teaches that it is almost impossible to elevate the 
 moral or intellectual position of a people without first im- 
 proving their material condition. 
 
320 SOCIAL STRUGGLES. 
 
 TRAMPS. 
 
 The "tramp problem," which has been such a mystery to 
 many, is the old, old story ; it is the logical and inevitable 
 result of creating such changes in contracts by legislation as 
 to derange the capital used in associating labor and capital ; 
 and, consequently, impoverishing a considerable portion 
 of the population. 
 
 Those who are weakest in mental and moral resolution are 
 most liable to succumb first to the pressure of hard times ; 
 they become discouraged, lose self-respect, feel embittered 
 and thus become tramps. Many of those who favor a law 
 which makes poverty a penal offense would soon become 
 tramps themselves if their property and means of livelihood 
 were taken from them. In fact, some of the fiercest denounc- 
 ers of tramps have never earned a dollar in their lives by 
 honest productive labor, but live on means inherited from, or 
 created by others. Essentially they are paupers themselves, 
 because they have never been self-supporting; have never 
 contributed to society as much as they have received from it. 
 The world does not " owe a living " to idle persons. Sound 
 morality requires that all who are physically able to earn 
 their own living should do so. 
 
 The derangement of the money of the country, the 
 machinery of distribution, is shown by the stoppage of 
 mills and factories. This is because thousands of people 
 in bitter need of goods have either been out of employment, 
 or have been working at such low wages that they have not 
 money to buy them. There is no propriety in saying there 
 are too many boots and coats in the world, when, at the 
 same time, the number of persons in need of boots and 
 coats is greater than in times when nothing is said of over- 
 production. But there is good sense in saying that the 
 machinery by which boots and shoes are distributed is not 
 working smoothly when multitudes of persons, willing to 
 work, are in enforced idleness and obliged to go without 
 boots, coats and many of the comforts of life. 
 
W/-/y THE FARMERS HAVE SUFFERED. 321 
 
 CAPACITY TO LABOR IS A FORM OF PROPERTY. 
 
 Whenever the production of any of the forms of wealth 
 be either wholly or partially suspended, that event necessarily 
 implies the throwing out of employment of one or more 
 persons. The capacity to labor is a species of property. 
 But it is the most perishable of all kinds of property. It 
 is destroyed by the passage of a day. Therefore, when a 
 man possess only that kind of property which is com- 
 posed of a capacity to daily perform some useful service to 
 society, he loses all his means, — all his property has gone 
 to waste every day of his idleness. Consequently his power 
 to buy and use his fair quota of the various forms of wealth 
 is destroyed. This diminution of the property of an idle 
 man lessens his consumption of the wealth produced by 
 other men, and still further contributes to retard the distri- 
 bution of wealth. What is childishly called " overproduc- 
 tion " then exists, and charlatans clamor for an increase of 
 the very conditions which cause it. 
 
 THE FARMERS AND OVERPRODUCTION. 
 
 During recent political campaigns in which the pro- 
 priety of making gold the sole legal tender was advocated, 
 the farmers were told that gold payments would raise the 
 price of their crops. The argument was that the price of 
 wheat, beef, pork, and cotton was then fixed in gold in 
 Liverpool — that gold had a " fixed value, " and that there- 
 fore prices of farm products could not decline ; but that 
 the prices of most goods consumed by the farmer would 
 be cheaper, as the farmer would have the gold for his grain 
 to buy them with, and would thus save the gold premium. 
 But events have shown that gold payments have produced 
 an enormous fall in prices of farm products, and now many 
 of the papers talk about an " overproduction " of pork, corn, 
 wheat, and similar things. 
 
 The " overproduction " of farm products is merely this : 
 their price, like that of everything else, depends largely 
 upon the amount of money in circulation, — that has been 
 21 
 
322 
 
 SOCIAL STRUGGLES. 
 
 diminished and therefore prices have fallen. The price of 
 farm produce has fallen in Liverpool just as it has here; 
 and for precisely the same reason. The American demand 
 for gold has increased the demand for gold in Liverpool ; 
 this has made gold relatively scarce and dear, and as a result, 
 the prices of farm products have fallen in Liverpool. 
 
 The farmer who sells cheese must now milk more cows, to 
 obtain the same amount of gold that he did before 1872. 
 In like manner, the cotton planter must raise more cotton, • 
 the wheat grower must raise more wheat, and he who sells 
 pork must raise more hogs. In short, more of all kinds of 
 farm products, on the average, must be given as the price of 
 25 8-10 grains of gold. 
 
 WHO ARE BENEFITED BY FALLING PRICES? 
 
 The question naturally arises : Who receive the benefit of 
 this additional amount of produce which the farmers now 
 raise to get the original amount of gold ? The answer is 
 self-evident : It is those who own the same number of 
 dollars they did when each one would buy less farm prod- 
 uce than at present. The owners of bonds, mortgages 
 and other forms of indebtedness, and those who have sub- 
 stantially fixed salaries are the persons for whose benefit 
 the farmer raises more produce for the same money. The 
 cry of " overproduction " always arises from those classes. 
 
 LONDON AND NEW YORK ARE THE CHIEF AUTHORS OF 
 THE CRY "OVERPRODUCTION." 
 
 England has heretofore been the greatest creditor nation 
 on the globe. England originated the gold policy. The 
 cry, " overproduction," has been heard in England more 
 than in any other country. If too much wealth is produced 
 in England, how is it that hundreds of thousands of her 
 people are homeless and constantly on the verge of star- 
 vation? 
 
 New York is the greatest creditor city of this country. 
 New York is the fiercest advocate of a currency exclusively 
 
WHEN A THING HAS GREATEST VALUE. 
 
 323 
 
 of gold. New York raises the cry of " overproduction " 
 more than any other American city.* 
 
 A TEMPORARY CURE OF "OVERPRODUCTION." 
 
 We have seen that the morbid condition which persons, 
 either ignorant or designing, call " overproduction " is 
 usually treated as absurdly as the old plan of withholding 
 water from patients consumed with fever. How then is a 
 temporary cure of what is called " overproduction " usually 
 brought about ? 
 
 Simply by changing the amount of business and scale of 
 prices relative to the amount of money in circulation. The 
 amount of money in circulation is diminished, but the busi- 
 ness to be done with it is diminished still more. After 
 twenty-five thousand business, men have been made bank- 
 rupt, they need less money than before, and the amount 
 of money is thus relatively increased. After prices are re- 
 duced below the level they have stood for a long time, a 
 smaller amount of money will serve to exchange the same 
 amount of goods. When a smaller number of men are at 
 work, and those at work get lower wages, it requires less 
 money to maintain such an industrial organization, than 
 when all are at work at good wages. 
 
 Commercial and industrial equilibrium are thus restored 
 by a destructive and costly method. In fact, an industrial 
 war burns over the country ; and a vast amount of created 
 wealth, and of possible energy in form of willing labor, is 
 destroyed in the process, and this is what is called "scien- 
 tific financiering." 
 
 * A false, absurd theory once fully lodged in the minds of a majority 
 of mankind has a marvellous vitality. Over sixty years ago, Lord Wel- 
 lington told the suffering laborers of England who were clamoring for 
 bread, that their troubles all arose " from raising too much wheat." 
 Quite recently, the Emperor of Germany made a speech in which the 
 business depression which has existed in that country since the demon- 
 etization of silver was alluded to. Like the Duke of Wellington, the 
 Emperor thought " overproduction " the cause of all the industrial 
 derangement. 
 
,24 SOCIAL STRUGGLES. 
 
 Suppose a farmer have eight sons and land enough by his 
 method of farming to furnish four of them with employ- 
 ment. Further, suppose that instead of adopting wiser 
 and better modes of cultivating his land, or instead of di- 
 versifying the employment of his sons, he should set them 
 to fighting until only four were left alive. The above case 
 would be similar to the present plan of maintaining our 
 social system in existence by frequent industrial wars known 
 as periods of " overproduction " and " hard times." 
 
 GREAT CHANGES IN THE AMOUNT OF MONEY IN CIRCU- 
 LATION DESTROY WEALTH. 
 
 It is commonly supposed that sudden changes in prices 
 and alterations in contracts made by legislation, while they 
 take property from one class of persons and give it to 
 another, do not actually reduce the total amount of Value 
 in the country. Recent changes in the ownership of prop- 
 erty have been styled by prominent economists, " a redis- 
 tribution of wealth." That is, legislation has taken wealth 
 from one class and given it to another. The plain truth is 
 that a man when committing burglary is engaged in " re- 
 distributing " wealth. But, in fact, such legal robbery does 
 not merely transfer property from one man to another ; it 
 diminishes the total amount of value in the country. There- 
 fore it should be called a partial destruction of wealth by 
 rascally laws. 
 
 WHEN A THING HAS THE GREATEST VALUE. 
 
 We have heretofore found that the value of a thingf .o a 
 man depends entirely on the circumstances and condition in 
 which that man is placed. Consequently, a thing has its 
 highest value, when in the possession and ownership of a 
 man whose wants and capabilities are exactly supplied by 
 that thing. Its lowest value exists when owned and pos- 
 sessed by a man who has no use whatever for it, and has no 
 capacity to put it to good use. Between these two extremes, 
 a thing may have various degrees of value. A woolen mill 
 is far more valuable to a man who understands its manage- 
 
HOW VALUE MAY BE DESTROYED. 
 
 325 
 
 ment, than to a person familiar only with running a steam- 
 boat. A chemical factory may be valuable to one skilled in 
 the manufacture of chemicals, and of very little value to a 
 farmer. Dental instruments would be of little use to a black- 
 smith. Numberless similar examples could be given. 
 
 WHAT EACH PERSON SHOULD POSSESS. 
 
 The tendency of society under proper organization and 
 conditions is for each person to become the possessor of 
 that kind of property which his peculiar, natural, or ac- 
 quired abilities make him best fitted to use and manage to 
 the best advantage. Not only the kind of property which 
 a man shall own is thus regulated, but the amount of certain 
 kinds of property which can advantageously be possessed 
 by different persons, also tends to such self-regulation, when 
 just principles govern. 
 
 When the various forms of wealth in a country have been 
 more or less perfectly adjusted to fit the special wants of 
 individuals differing widely in both natural and acquired 
 capacities, a forcible dislocation of the distribution of this 
 property inevitably destroys, in greater or less degree, the 
 relations and conditions which give value to different 
 kinds of wealth. 
 
 AN EXAMPLE OF DESTRUCTION OF VALUE. 
 
 For example, here is a man engaged in the business of 
 bending wood for the manufacture of carriages and other 
 similar purposes. He owns a factory fitted up with machin- 
 ery specially adapted to the purpose of bending wood and 
 good for nothing else, A lawyer holds a mortgage on that 
 ifactory for about half its value to the wood-bender in pros- 
 perous times. Suppose the industries of the country are 
 deranged, by considerably contracting the currenc}\ The 
 wood-bender, unable to sell his wares, fails to pay the inter- 
 est on the mortgage. The mortgage is foreclosed and the 
 lawyer becomes the owner of the factory. The wood- 
 bender, impoverished and discouraged by the uncertainty of 
 
326 
 
 SOCIAL STRUGGLES. 
 
 mechanical business, goes west on a farm. The factory- 
 stands idle. 
 
 In the above case there has been an actual destruction 
 of value, and not merely a transfer of value from one man 
 to another. Like all other values, the value of the factory 
 and machinery were not intrinsic or inherent, but depended 
 on conditions, — on their being in the possession and manage- 
 ment of some one with industry and skill to properly man- 
 age them. When these conditions were destroyed, a con- 
 siderable portion of the value of the machinery and build- 
 ing was also destroyed. 
 
 Suppose two farmers live near each other and each one 
 has work on his farm enough to employ four horses. One 
 lends the other money in good times, and in hard times 
 takes all his debtor's horses for the debt. The creditor has 
 then eight horses, and has use for only four of them. Part 
 of the value of the four horses taken from the debtor is 
 destroyed, because their usefulness is impaired by the 
 changed conditions. 
 
 If value, as commonly supposed, were an intrinsic qual- 
 ity, such changes of value as occur, by reason of unfortu- 
 nate changes in conditions and circumstances, could not 
 take place. As a matter of fact, values are often enor- 
 mously changed by changes in the circumstances surround- 
 ing a thing. In some cases the effects of changes are 
 greater than in others ; but, in all cases whatsoever, a mate- 
 rial change of conditions necessarily involves more or less 
 change in value. Thousands of examples similar to those 
 aforesaid could be cited to illustrate the fact that forcible 
 transfers of property not only often consummate a gross 
 wrong but usually are an actual destruction of a portion of 
 the value of the property thus transferred. 
 
 An immense number of mortgages have been foreclosed 
 during the past ten years. In the great majority of these 
 cases, the value of the property so transferred shrunk in 
 consequence of its not being as well adapted to the wants 
 of its new, as of its original owners. But this has been 
 trifling compared with the destruction of values which 
 
WHAT THE CHINESE WOULD THINK. 
 
 327 
 
 would have inevitably occurred if the wishes of the bankers 
 and "scientists" had been gratified by destroying the 
 greenbacks, refusing to coin silver, — thus making gold 
 the sole legal tender, and still further contracting the cur- 
 rency. 
 
 REPORT OF AN EMBASSY FROM CHINA. 
 
 While the nation is suffering to a serious extent ffom 
 what is often called " overproduction," suppose an embassy 
 should arrive in this country from China charged with the 
 duty of studying our " scientific," monetary and social cus- 
 toms and ideas and reporting the ascertained facts to the 
 Chinese Government. In substance, a portion of such 
 report would read as follows : 
 
 " We landed at a port called New York. This, we were told, is the 
 most populous and the richest city in the whole land. As our informants 
 told us New York had more wealth than ten vast provinces, which they 
 here call States, we wondered how it would seem to walk through a city 
 where there was so much wealth and no one was poor. Soon after our 
 arrival we had the honor of being invited to dine with some of the princes 
 of New York. We were utterly amazed at the display of wealth made 
 at these feasts. They were not held, as in China, in the day time, but at 
 night. Soon after dark appears to be the middle of the day with the 
 princes and queens of high rank in this wonderful country. These high 
 dignitaries have beautiful palaces, elegant dresses, and such a multitude 
 and profusion of dishes that the greater part of the dinner was simply, 
 soiled and wasted. This we thought would be lamented in China, but 
 in this plentiful country where there is so much wealth, and too much of 
 everything, we supposed it made no difference how much good food was 
 thrown away. 
 
 " At first we passed our time in the palaces of this great city, and con- 
 versed with the great men, who told us many strange and interesting 
 stories about the way too much wealth of all kinds was produced in this 
 country. But we finally walked abroad to see for ourselves some of 
 these wonders. We had been told 'there was too much of everything,' 
 and, as we had never heard of such a thing before, we wanted to see 
 how it seemed and learn how it could be. To our surprise, we soon saw 
 great numbers of persons who appeared to be very poor. To make sure 
 of this, we followed some of these persons to their homes and found that 
 multitudes of mechanics and artisans were crowded into one poorly 
 furnished house. We asked why they lived so, and found them truly too 
 
328 
 
 SOCIAL STRUGGLES. 
 
 poor to hire more commodious quarters. When we got back to the pal- 
 ace where we stayed, we sent for some of the wise men and asked why- 
 more houses were not built so as to have room enough to give every one 
 a decent home. But the wise men told us the great trouble was that 
 there had been an overproduction of houses and there were too many 
 already. This seemed very queer to us. 
 
 " Oji our next walk we found that many workmen complained of not 
 being able to get sufficient food for themselves and famihes. When we 
 asked the wise men how this could be, we were told that bread was so 
 hard to get because so much land had been cultivated and the crops had 
 been so abundant that there was too much grain in the country, and that 
 made it bad for poor people. 
 
 " We next inquired why more of this surplus grain had not been ground 
 into flour to make bread for the hungry laborers. Then the wise men 
 told us that the poor people found it difficult to get flour because too 
 much flour had already been made, and so the surplus flour made it hard 
 to get bread. 
 
 " It puzzled us very much to find things so different in this country 
 from what they are in China. Upon further inquiry how it could be that 
 the artisans were in want when there was too much flour, we were told 
 it was because they were not at work, and so had no money to pay for 
 bread. 
 
 " We then asked if everything were finished, and if there were nothing 
 more to be done in this country, and found that a multitude of enterprises 
 were clamoring for some one to complete them. But we were told that 
 the workmen were without work because the money with which their 
 wages were paid was too abundant. It amazed us to find that the reason 
 the laborers were without money was because money was too plenty. 
 
 " We talked with the chief money changers of the city and asked 
 why it was that the plentiful money was not used to hire idle men and 
 set them to work. We were told there was plenty of idle money, but no 
 one would hire it to carry on business with unless he was already in bus- 
 iness and was obliged to keep on. This also seemed very curious to us, 
 and we were still more surprised when told that men did not borrow 
 money to start new business with because the rate of interest was so low. 
 
 " We then asked if men did not borrow money because the interest 
 was too low, why the money changers did not raise the rate of interest ? 
 Thereupon, the wise men laughed at us and said, if times grew much 
 worse, business men would not borrow even if no interest were asked for 
 use of the money. This left us more perplexed than ever, because in 
 China men find it easier to pay a low rate of interest than to pay a high 
 rate. 
 
 " The news in all the public prints was that merchants in great num- 
 bers were unable to pay their debts and were becoming bankrupts. 
 
VERY CURIOUS THINGS. 
 
 329 
 
 This we asked the wise men about, and were told that merchants failed 
 because they could not borrow money to carry on their business, and that 
 too much money in the country made this trouble. In China, when 
 money is plenty, merchants who want money do not borrow ; they sell 
 their goods and get money of their own. We wondered why the mer- 
 chants of this country did not do as our own merchants do. But we 
 finally learned that they did not sell their goods because no one would 
 buy them. We found that the people did not wish to exchange the 
 money of which they had too much for the goods of which they had too 
 Uttle. This is so contrary to anything which happens in China that we 
 can find no way to explain it. 
 
 " In hopes to learn some way of understanding the many curious 
 things which are continually happening in this strange land, we journeyed 
 to a great city in an interior province on the shores of a fresh-water sea. 
 This city is named Chicago, and is called a great place for distributing 
 wealth. So we expected to find that wealth had been distributed to every 
 one. But we were surprised to notice, on our first walk through the 
 streets, a crowd of ragged workmen, some of whom were barefooted. 
 As the weather was not warm, we felt sorry for these men, and wondered 
 how in such a rich place, where there were so many goods, these things 
 could be. 
 
 " The great scholars of Chicago told us the workmen were ragged be- 
 cause there was too much cloth in the country When we inquired why 
 this cloth had not bjeen made into garments for poor people, we found 
 that great trouble had arisen because so many clothes were already made 
 up and could not be sold. This, we were told, was because machinery 
 now made cloth and clothes so rapidly that there was too much clothing 
 in the country. We also found that many natives of this extraordinary 
 country went barefooted because there was too much leather, and too 
 much machinery whereby boots and shoes were made in too large 
 amounts. 
 
 " At night we saw many persons in the streets begging for a warm 
 shelter, and complaining that they had not enough blankets to keep them 
 warm. Then we studied the learned magazines, books, and newspapers 
 of this wonderful land and learned that this was because the warehouses 
 and shops were overstocked with blankets. We also learned that a 
 great supply of a thing always forced multitudes to go without that plen- 
 tiful thing. As people in China get abundant things more easily than they 
 do scarce things, this amazed us very much. 
 
 " We next journeyed among the farmers, and heard sad complaints 
 that they were unable to pay their taxes and other debts, and buy the 
 cloth, sugar, tea, and other things wanted in their houses. The farmers 
 told us that this hardship was because the men in the villages and cities 
 to whom they sold their produce paid such very low prices for it. Upon 
 
330 
 
 SOCIAL STRUGGLES. 
 
 going to dealers in farm products, and inquiring why such a fact existed, 
 we were told that several great scholars from a high school of learning, 
 had been in that province and stated that the low prices of farm produce 
 were caused by too much money. Now, in China, produce is always 
 high priced when money is plenty, and low priced when money is dear 
 and scarce, and so we were once more bewildered by the events taking 
 place in this extraordinary country. 
 
 " We next traveled to a great smoky city called Pittsburg. There we 
 saw great numbers of idle laborers who bitterly complained of lacking 
 the necessaries of life, and among other things, said they were suffering 
 from cold. This made us think that provisions and fuel must be scarce 
 in that province. We asked the workmen why they suffered, and some 
 of them said it was because the convicts in States' prisons were kept at 
 work. These workmen thought if the convicts were supported in idle- 
 ness it would be better for the laborers whose toil would feed the con- 
 victs. 
 
 " But the chief rulers of the city soon informed us that the true reason 
 for the sufferings of the workmen was because too much coal had been 
 mined, and so the laborers had to suffer for want of fuel. These learned 
 men also told us that too much beef, pork, and flour were in the ware- 
 houses, and that this made the workmen great distress. As the work- 
 men in China have plenty to eat when there are plenty of provisions in 
 the land, and plenty of fuel when coal is plenty, this also seemed very 
 queer and difficult to explain. 
 
 " We have vainly traveled over much of this strange land in search of 
 some way to explain the things which happen therein. Nearly everything 
 here seems exactly the opposite of what it is in China. So much is this 
 so that we have begun to reason directly contrary to the way we reasoned 
 in China. Whenever a thing becomes very plenty in this country, it im- 
 mediately becomes very hard to get. And when things are scarce, it is 
 very easy to get them. When a man in this nation becomes very pious, 
 it is taken as a sure proof that he is a knave and a cheat. When a man 
 calls himself ' a patriot,' it is considered evidence that he is trying in 
 some way to defraud his country. And we find that in this country a 
 ' benevolent man ' is a person who gives for charitable purposes a small 
 portion of the property he has defrauded other persons of. 
 
 " In order to be able to tell our countrymen how these strange things 
 come to pass, we have diligently studied the books and have talked a great 
 deal with the princes and the learned men of this marvellous nation. And 
 among other efforts to understand these curious things, we have talked 
 with a class of people which is quite large, and whom the natives call 
 'statesmen.' These statesmen got their name because they are men 
 who are constantly planning to live on the State ; so the natives call them 
 statesmen. These wise and distinguished persons told us that the 
 
IVHA T A SCHOLAR IS. 
 
 331 
 
 present amazing condition of things did not always exist in this country, 
 but that it often accidentally happened. 
 
 " Then we tried to find out what kind of an accident occurred to 
 create such curious facts, but no one could tell us. They all thought 
 something had happened, but what it was no one knew. Why too much 
 of everything existed at one time and not at another, we could not 
 learn. 
 
 " Next, we asked the statesmen why the rulers of the land did not order 
 the destruction of the surplus wealth that caused such distress among 
 the poor people. We tried to learn why the flour, meat, buttfer, cloth, 
 shoes and other things which were made so hard to get because there 
 was too much of them, were not partly burned up so as to relieve the 
 existing distress. The statesmen told us such an order would be a 
 good thing if it could be enforced ; but that two things stood in the way 
 of burning up the surplus goods. First. The poor people would say: 
 ' These are just the things we are in need of — give them to us, instead of 
 burning them up.' These poor people are ignorant of political economy, 
 they cannot see the advantage of destroying surplus goods which cause 
 hard times, and would raise a riot if such thing were attempted. 
 Second. No one could be found who would be willing to have part of 
 his surplus goods destroyed. Each man denies that he has too much, and 
 insists that other people have too much of the very thing he needs. 
 
 " We have talked with a kind of men in this country that are called 
 scholars. This word has a meaning here different from what it has in 
 China. We call men who think, scholars. In this strange country, the 
 word ' scholar ' means a man who does not think himself but who has 
 read what some dead scholar wrote about some other dead scholar who 
 wrote about another dead scholar. We asked these scholars why the 
 men who had too much of one thing and too little of another thing did 
 not exchange goods with one another, and thus mutually supply each 
 others' wants. We asked why the man with more wheat and less cloth 
 than he wanted did not trade with the man who had more cloth and 
 less wheat than he wanted. 
 
 " The scholars told us this was so because trade in America was car- 
 ried on with money, and there was so much money that trade had partly 
 stopped. Then we asked, if trade had so stopped because the money 
 . was so plenty that no one wanted it, and would not give his goods in ex- 
 change for it. The scholars said that, on the contrary, every one was 
 anxious to sell his goods for money ; but money was so excessively plenty 
 that those who had possession of money did not wish to exchange it for 
 goods, and therefore trade could not be carried on because money was 
 hoarded. 
 
 " These sayings of the scholars puzzled us very much. We cannot see 
 why Americans should act so unlike the people of China. In China, 
 
,,2 SOCIAL STRUGGLES. 
 
 people hoard scarce things ; they do not hoard what is so plenty that no 
 one wants it. We find that whenever hard times come on in America 
 (for hard times is the name Americans give to times when there is too 
 much of everything), and there is too much money, the laborers get less 
 money for a day's labor than when money is scarce. And, whenever 
 there are too much food and clothing in the country, the number of 
 beggars increases. The more these curious people are in want, and the 
 greater and wider-spread the destitution, the more certain the American 
 scholars are that there is too much of everything, Events in this country 
 produce results directly opposite from what they do in* China. Plenty 
 is as much dreaded here as famine is in our own country." 
 
 ^' In traveling, we have been frequently pained by evidence that 
 most of the people of this country have great contempt for China and 
 Chinese customs. To learn why this is so we have privately talked 
 with several 'statesmen,' and have been told that this ill feeling is 
 because its holders suppose our countrymen are mere imitators, follow- 
 ers of old customs, without independence of thought or conduct. 
 
 " Upon inquiring if the people of this country were original in thought 
 and conduct, we were much amazed to discover that very few of them 
 were, and that these few were called ' cranks,' ' lunatics,' and other deri- 
 sive names. 
 
 " We could write about many other perplexing things, but they are so 
 numerous and so impossible of understanding we beg for our speedy 
 recall to our native land where mysterious things do not beset the peo- 
 ple on every side." 
 
CHAPTER XIII. 
 
 Prices : They are Always an Appraisal of two Things and a Comparison 
 of One With the Other. — What Hard Pan is. — 13th-century 
 Prices. — A Wedding in 1528. — Causes of Fluctuations in Prices. — 
 Natural Remedies. — Discounting the Future. — Dangers of Debt 
 under the present Monetary System. — Power of Combined Money 
 Capital. — Irregular Prices. 
 
 Variations in prices are not the result of either accident or 
 
 chatice. They are the legitimate effect of unvarying natural 
 
 laivs acting under different circumstances and conditions. 
 
 TJie product of an unchanging law, acting amid cJidnging 
 
 facts, nuist vary zvith the altered facts. 
 
 Heretofore, we have incidentally stated some of the princi- 
 ples which govern prices, but some further consideration of 
 this topic may be desirable. 
 
 Considerable literature exists on this subject. Its value 
 however is largely impaired by the fact that its authors 
 have mostly assumed that the price of a thing" at different 
 times simply represents the variations in the supply of, and 
 the demand for, that thing. Misled by the " par value " 
 theory, heretofore discussed, they have usually assumed that 
 the value of gold and silver was stationary, and, in conse- 
 quence, have been bewildered by facts, simple when viewed 
 in a proper light, but impossible to explain on the usual 
 hypothesis. 
 
 Prices express ideas of the value of things stated in the 
 money of account. Variations may occur in the price 
 of a small number of things, owing to their increased or 
 diminished supply relative to the demand, without any 
 change in the value of money. But variations of the 
 general average of prices always imply either a rise or 
 a fall in the value of the money in which the price is stated. 
 
334 
 
 SOCIAL STRUGGLES. 
 
 WHAT HARD PAN IS. 
 
 Much has been said during recent years of the desirabiHty 
 of getting prices down to " hard pan." Many persons im- 
 agine it easy to put prices down to a level where they will 
 remain without further fall. This can be done by putting 
 prices at nothing, and in no other way. There is only one 
 limit to which prices may either rise or fall, and that is the 
 limit to which the currency may either be expanded or 
 contracted. Contract the currency sufificiently and prices 
 will inevitably fall to where they were six hundred years ago. 
 What is now called a hard-pan price, would then be called 
 ''an inflated and fictitious value." 
 
 13TH-CENTURY PRICES. 
 
 In the 13th century, in England, money was very scarce 
 and prices correspondingly low. Beef was worth one- 
 quarter of a penny per pound ; butter, three-fourths of a 
 penny per pound ; wheat, from six to ten pence a bushel ; 
 cheese, one-half penny per pound. Ordinary tillable land 
 could be bought for six shillings an acre. Laborers' wages 
 were from half a penny to two pence a day. Carpenters 
 received about three pence a day. 
 
 Prof. Rogers gives us the following list of average prices 
 in England from 1449 to 1450 : 
 
 Wheat, 5 s. 10 d. a quarter, i. <?., 8 bushels ; oatmeal, 5 s. a 
 quarter ; beef, 4 s. i d. per cwt. ; mutton, 4 s. 6 d. per cwt. ; 
 pork, 5 s. per cwt. ; geese, 4 d. apiece ; fowls, i 1-2 d. apiece ; 
 pigeons, 4 d. a dozen ; candles, i s. i d. per dozen pounds ; 
 cheese, 1-3 d. a pound ; butter, 1-2 d. a pound ; eggs, 5 3-4 d. 
 for ten dozen. For nine months of the year, a master 
 mason got 4 s. a week. Ordinary masons got 3 s. 4 d. a 
 week for ten months of the year, and 2 s. 10 d. a week for 
 the other two months. 
 
 A WEDDING IN 1 528. 
 
 How slowly prices have risen is shown by the following 
 table, which is a price-list of some of the things consumed 
 at a wedding feast in England in 1528 : 
 
WHY PI^ICES CHANGE. 
 
 335 
 
 £ s. d. 
 
 82 Geys I o 7 
 
 47 Pyggs • I 3 10 
 
 64 Capons I 9 ^i 
 
 74 Chekyns 8 2 
 
 5 O.xen 6 13 4 
 
 24 Weathers 3 4 o 
 
 6 Calves 20 o 
 
 600 Eggs 6 o 
 
 19 Gallons Mylke i 7 
 
 72 Barrels Beer 12 10 
 
 Since 1873 we have been drifting rapidly back toward the 
 prices in the above table. When " mylke " was sold for one 
 penny a gallon how much wages did the man get who 
 milked the cows? 
 
 CAUSES OF FLUCTUATIONS IN PRICES. 
 
 Many of the causes of fluctuations in prices are as com- 
 plex as the workings of the human mind. Hopes tend to 
 elevate prices, and fears tend to depress them. Fear of an 
 impending evil, or change, will often lower prices more than 
 the event itself. A slight decrease or a slight increase of 
 the average amount of a crop of any kind often raises or low- 
 ers the price far more than the percentage of change in its 
 amount would seem to warrant. Mankind are largely gov- 
 erned by emotions which are always contagious and often 
 assume the form of epidemics. Men often follow their lead- 
 ers as blindly as a flock of sheep. Whole nations will be- 
 come excited with hope or plunged into gloom by distrust 
 and apprehension. All changes in laws and customs, 
 every invention, new developments in agriculture, mining, 
 mechanics, and commerce, in short, every revolution of 
 the social machinery of our race has a tendency to affect 
 prices. 
 
 Therefore, although changes in the amount of money are 
 a dominant cause of changes in prices, they are by no 
 means the sole cause of such changes. It must be borne in 
 mind that as value is human judgment of the comparative 
 worth of things, prices are therefore statements of relative 
 appraisal, — they are estimates of relative value. Conse- 
 
336 
 
 SOCIAL STRUGGLES. 
 
 quently whatsoever cause sways human judgment, influ- 
 ences prices. 
 
 Those who have made the most careful examination esti- 
 mate that from 1492 to 1800 the gold and silver mines 
 of America poured into Europe about thirty times the 
 amount of gold and silver that previously existed there. 
 Allowing about one-half of this amount for losses, con- 
 sumption in the arts, and shipment to the East, v/ould still 
 leave the amount of precious metals fifteen times as great as 
 before. Such estimates, however, must only be approxi- 
 mate. 
 
 Various computations have been made of the rise in 
 prices which took place during the aforesaid period. These 
 differing observers substantially agree on two points : First. 
 The increase of gold and silver was a dominant cause of 
 a great rise in the average scale of prices during said time. 
 Second. The rise in prices did not keep pace with the 
 increase in the amount of the precious metals. 
 
 That doubling the amount of gold and silver in a country 
 during a period of fifty years will not double the prevailing 
 scale of prices in that countr}^ a little reflection will show. 
 In the first place, such multiplication of gold and silver is 
 usually accompanied with a great increase in the population, 
 commerce and wealth of that country. So that although 
 the absolute amount of the precious metals may have doub- 
 led, yet, at the same time, their relative amount has been 
 comparatively little augmented. A change in the number 
 of ounces of gold and silver in a country is governed by the 
 same law which presides over a change in the number of bush- 
 els, or the number of any other valuable things ; to wit, it 
 is always the change relative to all other circumstances and 
 conditions that determines what the result of such change 
 shall be. Thus in a country whose commerce is steadily 
 growing, "the amount of gold and silver should simulta- 
 neously augment to meet the increased demand for them ; 
 otherwise, the amount of those metals will steadily grow 
 relatively smaller and a tendency for prices to fall will nec- 
 essarily b-e produced. 
 
BALANCES AND COMPENSATIONS. 337 
 
 NATURAL REMEDIES. 
 
 A principle extends throughout the entire reahn of 
 natural law whereby every manifestation of force carries 
 with it a correlative one. This related force has a ten- 
 dency to modify or abate the action of its predecessor ; or in 
 someway to supply what has been called a compensatory or 
 balancing result. 
 
 For example, a great wave of hot air immediately sets in 
 action forces whose tendency is to limit its duration and les- 
 sen its effect. The melting of snow brings with it a cool- 
 ing effect which retards a rise in temperature. In like man- 
 ner, every natural process has its remedy and counterbalance ; 
 and what is true of inanimate things is true of mankind. 
 All forms of human conduct have an attendant, as insep- 
 arable from them as a shadow from the substance, which 
 alters what otherwise would have been their product. 
 
 Thus the actual condition of individuals and nations, in 
 all respects, is not simply the fruit of their ignorant desires 
 when they committed certain isolated acts or steadily fol- 
 lowed a definite policy; the final results of their conduct are 
 always modified by attendant influences ordained by the 
 Creator of natural laws. It is as if a beneficent spirit were 
 constantly at hand seeking to interpose a cushion between 
 us and the blows evoked by our folly. One manifestation 
 of this principle is called by medical observers the " remedial 
 force of nature," the "self-limitation of disease," a general 
 understanding of which would revolutionize many of our 
 modes of treating the sick. It deadens our physical suffer- 
 ings, dulls the edge of mental anguish and often rescues us 
 in spite of ourselves. 
 
 The aforesaid plain considerations show how a rise of 
 prices tends to check itself, and prevents it from reaching 
 the height which otherwise would be attained. It necessi- 
 tates the use of more money to exchange the same amount 
 of property, and thus indirectly diminishes the amount of 
 money relative to the demand therefor. In a similar man- 
 ner, falling prices bring with them a tendency to check 
 
33^ 
 
 SOCIAL STRUGGLES. 
 
 the fall, and give prices an upward movement. Lower 
 prices lessen the amount of money needed to transfer a 
 given amount of value, and thus increase the relative amount 
 of money in circulation. 
 
 DISCOUNTING THE FUTURE. 
 
 It is also apparent that the statement of opinion which 
 forms a price is not based simply on the present situation 
 of affairs. What the future is likely to be,, often enters into 
 the calculations of those who estimate values, more than 
 the actual existing facts. Events, the influence of which 
 will certainly depress prices, in the future, to an unknown 
 extent, are often unduly magnified in importance. 
 
 A belief that prices are not to be lowered in the immedi- 
 ate future leads to two things, each of which tends to raise 
 the previous scale of prices. First. Less money is hoarded, 
 and, consequently, more is put in circulation. In effect, 
 more money is thrown upon the market and offered for 
 sale. When it is supposed that prices will rise, it is also 
 believed that hoarding of money will result in loss to its 
 owner. Whatever a person wishes to buy can then be 
 bought with less money than after the anticipated rise actu- 
 ally occurs. Second. More business is done with substitutes 
 for legal-tender money. People are more willing to give 
 promissory notes and other evidences of indebtedness when 
 they feel that the property bought therewith will not depre- 
 ciate in value. 
 
 In this way, prices often rise after some contraction of 
 the legal tender has occurred, because an expansion of the 
 substitutes for legal tender has taken place to an extent 
 greater than the legal-tender currency was diminished. 
 The highest range of prices occurs when a large amount of 
 legal tender is in active circulation, and, at the same time, 
 public hope is such that private credit in form of promissory 
 notes is also largely employed. Prices are lowest when the 
 legal tender is contracted simultaneously with a widely 
 spread public distrust of the future, which induces a general 
 contraction of private credit. Contraction of the legal- 
 
FALLING PRICES HINDER SALES. 
 
 339 
 
 tender currency is apt to produce a contraction of private 
 credit in proportion as the fact is known, and the legal- 
 tender contraction is supposed to be permanent. 
 
 Prices are liable to undergo great changes just in propor- 
 tion to the relative smallness of the amount of legal-tender 
 money. This is so, because the use of private credit, as a 
 substitute for legal-tender money, has then more relative 
 influence in creating and supporting prices than when a 
 greater proportion of legal tender is in use. The extent to 
 which private credit shall be used is largely determined by 
 human judgment of future prices, — by hope and by fear. 
 Therefore, a nation which has a small amount of legal- 
 tender money, and makes large use of private credit in form 
 of promissory notes, bank bills, and other evidences of debt, 
 is peculiarly liable to sudden and great fluctuations in 
 prices. Instead of the "hard pan" that is talked of by 
 friends of the English monetary system, the actual basis of 
 prices in that country is the ever swaying emotions, 
 thoughts, and conclusions of the human mind. 
 
 The percentage which prices fall in periods of so called 
 " overproduction " is only a portion of the losses thereby 
 sustained by business men. The feeling that prices are 
 going still lower largely stops sales at any price. The ma- 
 jority of mankind are so constituted, that, when goods and 
 real estate steadily fall in price until they are offered for 
 one-half the former rate, they refrain from buying because 
 fearful, if they do so, that the price will sink to one-quarter 
 of the original sum. Many persons would be less likely 
 to buy property for one-quarter its usual price than if the 
 price had advanced beyond its ordinary level. This occurs 
 because values and prices are statements of human judg- 
 ment ; and the majority have little confidence in their own 
 judgment independently of the opinions of other people. 
 
 DANGERS OF DEBT UNDER THE PRESENT MONETARY 
 
 SYSTEM. 
 
 The foregoing considerations show the hazard incurred 
 under our present financial system by those who carry on 
 
340 
 
 SOCIAL STRUGGLES. 
 
 enterprises, to a considerable extent, with borrowed capital. 
 A man with a hundred thousand dollars of his own borrows 
 a hundred thousand. The country is on what he supposes 
 " hard pan " ; i. e., specie payments. He imagines his 
 property has an " intrinsic value " which cannot be shaken. 
 
 Suddenly, the judgments of a large number of persons 
 are influenced by fear. A few large failures have occurred, 
 and there are rumors of more ; no one wants anything but 
 legal-tender money, and the amount of that, relatively small 
 at first, is diminished by hoarding. No one will take his 
 notes. When he tries to sell his property, he finds that 
 the intrinsic quality, he supposed it had, is gone. Men's 
 judgments have changed, and values have changed with 
 them. Meanwhile, interest, rent, the wages of employees, 
 and other expenses go on without cessation. In the end, 
 all his property is taken to pay a " hard pan " debt of one- 
 half the original value of his estate. 
 
 Quite often in such cases, not only is all the debtor's 
 property gone, but a considerable amount of debt remains 
 unpaid. In consequence of the delusion that hard times 
 were created by a bankrupt law, that act has been repealed. 
 The debtor thus finds himself stripped of property and 
 without hope of ever getting any. But he has the satis- 
 faction of constantly reading that " our financial system is 
 highly scientific." * 
 
 * According to the census of 1880 the public and railroad indebted- 
 ness at that time was as follows : 
 
 United States debt, $2,120,415,063 
 
 State and other public local debts 821,967,447 
 
 Railroad debts, 2,812,116,296 
 
 Total $5,754,498,806 
 
 The total population of the United States at that time was found to be 
 50,155,783." Therefore, in round numbers each man, woman and child 
 in the United States in 1880, on the average, had to pay the interest, 
 directly or indirectly, on $114.00 of public and railroad debt. At five 
 per cent., a family of father, mother and three children would have, on 
 the average, to pay $28.50 per annum for interest. If fifty cents can be 
 saved from each day's pay, this means the savings of 57 days' labor. If 
 
CAPITAL NEEDS RESTRICTION. 34I 
 
 POWER OF COMBINED MONEY CAPITAL. 
 
 The concentration of wealth shown by the foregoing 
 figures suggests the facility with which the money capital 
 of the country can combine for the purpose of securing 
 such financial legislation as may suit its purposes. It is a 
 very moderate statement, to say that one thousand men 
 can readily be selected from the various financial centers of 
 the United States, who, by virtue of their personal wealth 
 
 only 25 cents can be saved from each day's wages, it means the savings 
 of 1 14 days' labor. The more hours' labor " a dollar " means, the heavier 
 the burden of public debt on the laboring classes. The danger that a 
 course of procedure similar ta that above sketched will be occasionally 
 sprung, like a trap, upon unsuspecting debtors grows greater in propor- 
 tion as the capital of the country accumulates in a comparatively few 
 hands. 
 
 The census of 1880 presents some facts which illustrate the tendency 
 of our present social organization to concentrate wealth in few hands and 
 consequently in few places. According to that report, the total assessed 
 value of real and personal property in seventeen States was as follows : 
 Virginia, $308,455,135; West Virginia, $139,622,705; North Carolina, 
 $156,100,202; South Carolina, $133,560,135; Georgia, $239,472,599 ; 
 Florida, $30,938,309; Alabama, $122,867,228; Mississippi, $1 10,628,129 ; 
 Tennessee, $211,778,538 ; Arkansas, $86,409,364 ; Kansas, $160,891,689 ; 
 Louisiana, $160,162,439; Texas, $320,364,515; Nebraska, $90,585,782; 
 Colorado, $74,471,693; Nevada, $29,291,459; Oregon, $52,522,084. 
 Total, $2,428,122,005. At the same time the following seventeen counties 
 and cities were assessed as follows : San Francisco Co., Cal., $244,626,- 
 760 ; Cook Co., 111., $148,982,393 ; Orleans Co., La., $91,794,350; Bristol 
 Co., Alass., $100,029,138; Essex Co.. Mass., $155,241,900; Middlesex 
 Co., Mass., $258,392,568 ; Suffolk Co., Mass., $658,220,621 ; Worcester 
 Co., Mass., $127,690,969; Baltimore, Md. (CityV $244,043,181 ; St. Louis 
 (City), $165,288,400 ; Essex Co., New Jersey, $107,385,475; Kings Co., 
 New York, $244,556,977; New York Co.. New York, $1,094,069,335; 
 Hamilton Co., O., $207,324,047; Allegheny Co., Penn., $170,708,301; 
 Philadelphia Co., Penn., $581,729,759; Providence Co., R. L, $178,448,- 
 469. Total, $4,898,532,653. It further appears that Suffolk Co., Mass., 
 New York Co., New York, and Philadelphia, Penn., had a total wealth 
 of $2,334,019,715. If we omit the State of Mississippi from the foregoing 
 list of States, the three cities, Boston, New York and Philadelphia have a 
 greater wealth than the other aforesaid sixteen States with their vast area 
 of fertile land. 
 
242 SOCIAL STRUGGLES. 
 
 and leadership of other rich persons, can devise and indi- 
 cate the policy which the concentrated capital of the land 
 will combine its energies to secure. This is to say that, at 
 any time during the past twenty years, the financial legisla- 
 tion of the United States would have been completely 
 reversed, if one thousand of the leading capitalists, whose 
 wealth is chiefly in money and evidences of indebtedness, 
 had thought it to their personal pecuniary interest to 
 reverse it. 
 
 The remedy for preventing concentrated capital, by its 
 control of the press, the platform, and the pulpit, from 
 securing special legislation is obvious. The mass of voters 
 should learn economic principles sufficiently to immediately 
 recognize measures cunningly intended for the aggrandize- 
 ment of a special class, at the expense of all other citizens. 
 They should fully understand that the major portion of the 
 practical effect of financial legislation is the influence it will 
 exert either to raise or lower the average scale of prices. 
 Furthermore, they should recognize that prices are, on 
 the average, uniform just to the extent that the volume of 
 circulating money enlarges and diminishes simultaneously 
 with an increased or a diminished demand for it. There- 
 fore a money and its regulation are perfect just in the 
 degree that money maintains a uniformity of amount RELA- 
 TIVE to the demand for it ; and such uniformity is only 
 possible when the materials. from which the money is made 
 are immediately responsive to either an increased or a 
 diminished demand for money; i., c, there should never be 
 a dearth of the raw materials of money, and upon a cessa- 
 tion of the demand therefor, surplus money should rapidly 
 disappear from circulation. Then prices would be com- 
 paratively uniform. 
 
 IRREGULARITY OF PRICES. 
 
 The following article, taken from the New York Tribune 
 of August 2, 1886, is a good specimen of the kind of reason- 
 ing used by those who believe in the mysterious, "unvary- 
 ing " value of gold : 
 
PRICES CHANGE UNEQUALLY. 34^ 
 
 " WHY SILVER FALLS. 
 
 " An ounce of bar silver was worth a bushel of wheat at New York a 
 year ago, and is worth a bushel of wheat at New York now. Then sil- 
 ver sold at 49.i9d. per ounce in London, and wheat 99 1-4 at New York. 
 Silver was held at 42 3-4d. on Saturday in London, and wheat at 85 1-4 
 at New York. Silver has fallen over 13 per cent., but wheat has also 
 fallen over 13 per cent, during the year. 
 
 " Careless thinkers say, ' This is only an increase in the purchasing 
 power of gold, which has been made artificially scarce.' If it were so, 
 other prices would be changed in like manner and measure. But corn 
 then worth 52 1-4 cents is now worth 50; cotton then worth 10 1-2 cents 
 is now worth 9.56; lard then worth 63-4 is now worthy; pork then 
 worth $1 1.50 now commands the same price ; coffee then worth 8 5-8 now 
 sells at 9 1-2 ; sugar then worth 5.06 now sells at 4.69; iron then worth 
 $17.75 is now worth $18; Bessemer rails then worth $27.25 are now 
 worth $34.50 ; tin then worth 22 1-4 is now worth 21 3-4; copper then 
 worth II cents is now worth 10; lead then worth 4. 1 5 is now worth 4.80. 
 Here are changes so irregular that there has certainly not been a general 
 increase of 13 per cent, in the purchasing power of gold." 
 
 The above is followed by a verbose way of saying that 
 silver coinage " operates to degrade and depress silver as 
 nothing else could." 
 
 The exercise of a little common sense and a little consid- 
 eration of the facts which occur when prices are either 
 steadily falling or steadily rising will explain the aforesaid 
 irregular prices. 
 
 When the currency is contracting, general prices, say of 
 a hundred leading articles, never fall in a uniform manner. 
 The price of some things may decline within a year fifteen 
 per cent, and of others only five per cent. Meantime, some 
 prices may remain unaffected, or may even advance. Spe- 
 cial facts and conditions may temporarily be potential 
 enough to keep a few things from sharing in the general 
 decline of prices. A notable illustration of this is seen in 
 the price of real estate. For the past thirteen years, in con- 
 sequence of contracting the currency, there has been a 
 general tendency for real estate to fall largely in price. But 
 the land situated in a few locations has meanwhile risen in 
 
344 
 
 SOCIAL STRUGGLES. 
 
 value, as the result of the special circumstances under 
 which it was placed. 
 
 A similar fact occurs when the currency is expanding and 
 prices are consequently rising. There is never a regular 
 ratio and percentage in the manner by which prices change 
 from month to month and from year to year. The line of 
 advance, like that which marks the changes of the seasons, 
 is an irregular one. While the prices of a majority of ar- 
 ticles have risen, by a varying percentage, a few things may 
 stand at the old quotations, or even be lower than before 
 the general rise of prices set in. This may easily be verified 
 by examining a file of commercial newspapers published 
 from 1 86 1 to 1864. 
 
 The aforesaid irregularity with winch the prices of differ- 
 ent things vary can only be explained by reference to the 
 causes which produce all changes in prices. The range of 
 prices at a given time is the resultant, the product, of the 
 different forces and conditions which are then, and for some 
 time previously, have been in existence and the public judg- 
 ment thereon. 
 
 An increase or a diminution of the currency changes the 
 conditions from which prices spring in two ways. First, by 
 the broad general influence exerted by such increase or 
 diminution. 
 
 Second, this general influence operates in various ways on 
 different things, because each of those things is more or less 
 surrounded with special conditions and circumstances. 
 
 A heavy rain-storm operates in different ways on a crop of 
 grass. It may benefit it, but if the grass have been cut and 
 dried it may largely destroy its value. A general influence 
 of any kind thus produces results varied by the conditions 
 it affects. 
 
 A tendency to a general rise or fall in prices sets in 
 motion and operation currents and forces within the general 
 influence. The result of these opposing forces is seen in 
 the fact that the order and ratio in which prices rise and 
 fall vary both in time and in degree. These fluctuations of 
 prices are a prominent evil of a currency subject to great al- 
 
UNEQUAL PRICES CAUSE INJUSTICE. 345 
 
 terations in relative amount. If prices of all things thereby 
 steadily rose and fell by a regular ratio and percentage, 
 such prices could be estimated and allowed for with little 
 difificulty in all forecasts of the future. In fact, if that were 
 the case, no matter what changes prices were undergoing, a 
 little arithmetic would enable a business man to translate an 
 expanding or a contracting currency into a stable one. 
 
 But where a general tendency has set in action a hundred 
 minor forces, each of which is meeting a different resistance 
 and operating under special facts and circumstances, not 
 fixed but constantly changing, it is utterly impossible for 
 any one to accurately predict what the price of a given 
 thing at a specified date will be. The result is to reduce 
 mercantile transactions, more or less, into a game of hazard, 
 in which shrewd, cunning persons who watch the markets 
 have an advantage over the masses whose thoughts are di- 
 rected solely toward the creation of commercial products. 
 
 Even between persons who have no desire to join the 
 predatory classes, the aforesaid inequalities of prices often 
 cause one person to inflict an unintentional injury on 
 another. A forcible example of this occurred during the 
 life of the Southern Confederacy, in which an acquaintance 
 of mine was one of the actors. She sent her child to a 
 school at which the yearly charges, before the war, were $100, 
 but at that time said charges were $1500. She had a steer 
 which in ordinary times was worth about $30. This animal 
 she sold for $1500, and with the money paid the yearly 
 charge, — thus discharging the debt with less than one-third 
 the value she would ordinarily have justly paid. 
 
 The above was one of a vast number of instances in the 
 Confederacy in which the equities between individuals were 
 not fulfilled because of unsettled prices. Great as the evil 
 of an enormous rise of prices was, that wrought only a por- 
 tion of the mischief actually done. The irregularity of that 
 rise, the eccentricity of prices, the fact that the products 
 of one man's labor rose in price much more, within a given 
 time, than the products of another person's labor, was also 
 a fruitful source of evil. This arose from the lack of estab- 
 
346 SOCIAL STRUGGLES. 
 
 lished uniformity of public opinion and judgment in regard 
 to the value of various things relative to the value of money. 
 Circumstances changed so rapidly that time did not permit 
 the formation of substantial unanimity as to what consti- 
 tuted a fair appraisal and comparison of relative values. 
 
 The idea expressed in said editorial, that the way to raise 
 the price of silver would be to diminish the demand there- 
 for, has heretofore been so fully discussed that it is needless 
 to do more than suggest, if that be so, the converse is also 
 true, viz., the greater the demand which may hereafter 
 arise for silver, the lower the value of that metal will be. 
 This simply contradicts all reason and all human experience 
 in regard to silver and everything else. 
 
 WHY FALLING PRICES THROW WORKMEN OUT OF 
 EMPLOYMENT. 
 
 When prices are steadily falling, large numbers of persons, 
 able and willing to Avork, are always unable to obtain em- 
 ployment. This fact is well known, but the cause of it is 
 generally misunderstood. It is said, in a great variety of 
 ways, that there are then more laborers than requisite to 
 perform the work which employers wish done. And, 
 curiously enough, those who make this almost self-evident 
 statement fancy they have thus described the malady from 
 which society is suffering. In fact, they have merely stated 
 one symptom the source of which has not attracted their 
 attention. 
 
 In order to find out why one hundred thousand persons 
 hire less workmen than come to them for employment, let 
 us examine the conduct of one of those employers. A 
 owns a large number of vacant lots, and is willing and 
 anxious to erect houses thereon, provided the houses when 
 finished can be sold for the cost of building them. This can 
 be done when prices are stable. But when prices are fall- 
 ing, so that a building which cost five thousand dollars can- 
 not be sold for more than forty-seven hundred dollars, if A 
 build a house and sell it, he is three hundred dollars worse 
 off than if he had done nothing. The result is that he will 
 
RESULT OF FALLING PRICES. 
 
 347 
 
 stop building houses for sale, and consequently will not em- 
 ploy the workmen he otherwise would. 
 
 In the aforesaid case, the reasoning and the conduct of A 
 are precisely analogous to the reasoning and actions of a 
 multitude of other persons who, under a great variety of sim- 
 ilar circumstances, would like to engage in enterprises which 
 necessitate the employment of labor. They refrain from 
 them, not because there is too much wealth already created, 
 but because the work, when completed, cannot be sold for, 
 or will not yield in some form, the munber of dollars which 
 were required to complete it. 
 
 A number of wagons may cost ten thousand dollars to 
 build and can only be sold for nine thousand five hundred 
 dollars. But some one says : Are not the nine thousand 
 five hundred dollars of as much value when the wagons are 
 sold as the ten thousand dollars were when the wagons were 
 in construction? Granted. But that fact does not help the 
 matter. On the contrary, it is the root of the difficulty. 
 The wagon builder says: *' If I had remained idle and loaned 
 my money for nothing, on good security, I would now be 
 worth five hundred dollars more than I am. I will lock up 
 my shop until prices have ceased to fall. There is neither 
 pleasure nor profit in spending fifty dollars on a wagon and 
 then selling it for forty-five dollars." 
 
 When occurrences similar to the aforesaid take place, the 
 " dollar," although nominally of the same value — i. e., at par 
 — is actually steadily rising in value. Meantime, interest is 
 apparently low and there is a common belief that " money 
 is cheap." 
 
CHAPTER XIV. 
 
 Specie Payments. — National Banks. — The essential Condition requisite 
 to give Value to Paper Money. — Specie Payments. — Chief Objection 
 to Specie Payments. — How Banks of Issue raise and lower Prices. 
 — Essential feature of Specie Payments. —How Bankers evade their 
 Promises. — The Chief Evil of Specie Payments. — What occurred in 
 1857. — ^What Experience has shown. — Legitimate Banking. — Na- 
 tional Banks have Special Privileges. — National Banks are unfair 
 Monopolies. — The Flow of Coin. — Results of Draining away Money. 
 — A Universal Natural Law. — What we should Attempt. — The End 
 toward which we are Traveling. 
 
 A great outcry would arise if legislation zvere proposed 
 which would enable any farmer, ozvning and tilling one hun- 
 dred acres of land, to borrozv one-Jialf the value of that land 
 of the Government at one per cejit. per annum. But would 
 this privilege be any more unjust to other citizens, than to per- 
 mit national bankers to borroiv Government money at one per 
 cent, per annum ? 
 
 hi an advanced stage of civilisation, bankers are as neces- 
 sary and useful members of society as blacksmiths. The 
 issue of paper money by bankers is a wrong not necessarily 
 or properly connected zvith their legitimate business and 
 should not be confouiided zvith it. 
 
 To give a small class of persojis such pozver, and place them 
 in such circumstances that they can, wit Ji profit to themselves, 
 injure the business and property of all other citizens, is both 
 unzvise and unsafe. When a nation places its sovereign right 
 to issue money into the hands of bankers, it gives those persons 
 the power to so manipulate the currency as to raise or lower 
 prices, thus placing them under temptation to enricJi tJiem- 
 selves at the public expense. 
 
 We have heretofore found that the value of one of the 
 units of a nation's money depends chiefly on the number of 
 those units in circulation. No matter of what material this 
 circulating money be made, whether silver, gold, or paper, it 
 is all subject to the same general law. Many persons have 
 
 348 
 
LIMITATION OF MONEY. 249 
 
 been confused on this topic from not remembering one 
 practical fact relating to the manufacture of money. 
 
 The raw material from which gold and silver coins are 
 made is limited by nature to a comparatively small amount. 
 This renders any other limitations on its coinage unneces- 
 sary. For century after century those metals have had no 
 artificial restriction on the amount of them which should be 
 coined. The existing limitation on the coinage of silver is 
 of recent origin and will probably soon be removed. 
 
 But the material from which paper money is made can 
 be produced in such enormous quantities that an artificial 
 limitation on the amount of money made from it is abso- 
 lutely necessary. When properly limited in amount, paper 
 money is superior to all other kinds. 
 
 THE ESSENTIAL CONDITION REQUISITE TO GIVE VALUE 
 TO PAPER MONEY. 
 
 It needs on it no promise of redemption in coin or bonds. 
 All that is necessary is the stamp of the sovereign power, 
 making it a full legal tender and LIMITATION IN AMOUNT. 
 Congress can pass a law by virtue of which all the existing 
 greenbacks and bank-notes shall be destroyed, and their 
 place filled by an issue of paper money which shall simply 
 bear an inscription similar to that now placed on gold and 
 silver coins ; viz., " United States of America. One dol- 
 lar," and a kindred inscription for other denominations. 
 
 The issue of any paper money, except these bills, by any 
 person or authority, to be forbidden, both in peace and war, 
 under any pretext whatsoever. This money to be a full 
 legal tender at its face value, and to be regulated in amount 
 by some efficient check. Such money would be superior to 
 any we have ever had. But this is not yet generally 
 known. 
 
 SPECIE PAYMENTS. 
 
 Our monetary system represents the prevalent belief that 
 paper money is more convenient than any other, but worth- 
 less unless it has printed thereon a promise of its being re- 
 
350 
 
 SOCIAL STRUGGLES. 
 
 ceived at its face value, and an equal amount of coin given 
 in exchange therefor. The issue by corporations of prom- 
 issory notes to be used as money and redeemed by the mak- 
 ers, in coin on demand, is therefore called " specie payments." 
 The notes so issued as money are theoretically always 
 worth as much as coin, and are loaned on interest by dis- 
 counting promissory notes due in a short time. The profit 
 of this business therefore depends on the amount of paper 
 money which can be kept out at interest, in proportion to 
 the amount of coin kept on hand for its redemption. If no 
 more paper were issued than coin kept in the bank, the 
 only advantage of bank paper would be in the superior con- 
 venience of paper money over coin and the smaller danger 
 of its being counterfeited. But as these advantages would 
 inure to the public and not to the bank, there is no induce- 
 ment for a bank to pursue such a course. 
 
 Bankers who issue convertible notes are prone to inflate 
 paper money, and to keep on hand the smallest possible 
 amount of coin. They are in the position of a judge trying 
 a case in which, personally, he has a large pecuniary interest. 
 The system of convertible bank-notes thus violates the 
 established principle that '* human nature should not be 
 tempted." 
 
 CHIEF OBJECTION TO SPECIE PAYMENTS. 
 
 Therefore the chief objection to what is called " specie 
 payments " is the fact that it does not secure stability in the 
 amount of the money in circulation. When the currency 
 should be contracted, the bankers are prone to inflate it ; 
 and when they should increase it, they are apt to contract. 
 They are governed solely by what they deem their own in- 
 terest with little reference to what is best for the whole 
 community. Before the war, the Connecticut State banks 
 were considered as safe and strong as any in the Union ; in 
 fact, their notes stood much higher than the average. In 
 1861, when the Connecticut banks suspended specie pay- 
 ment, their reserve of coin was higher than their average re- 
 serve for the previous twenty-five years. Their coin, how- 
 
EVILS OF BANKS OF ISSUE. 35 1 
 
 ever, was only twelve per cent, of their paper. They could 
 maintain specie payments only on condition that seven- 
 eighths of their paper were not presented for payment. 
 
 HOW BANKS OF ISSUE RAISE AND LOWER PRICES. 
 
 When public confidence that prices are not likely to fall, 
 and in the immediate future of business is high, there is 
 little demand for coin, as there is then little use for it. The 
 banks are then constantly tempted to issue more notes, as 
 all the notes they issue draw interest, and this increases 
 their profits. The issue of additional notes tends to cause 
 a rise in prices. A rise in prices generates increased confi- 
 dence in the future, and affords buyers an opportunity to 
 make a profit by purchasing to the full extent both of their 
 means and credit. This causes an increased demand for 
 bank-notes with which to make these purchases and meet 
 the credits when they fall due. Thus one cause reacts on 
 another, until more or less excitement is produced. An in- 
 crease of excitement increases the amount of buying and 
 selling and still further raises the demand for bank-notes. 
 Finally, some disaster occurs which alarms the public mind ; 
 — a rush is then made for coin and a disastrous panic is the 
 result. The outstanding bank paper is not legal tender; 
 and, as in a panic, nothing is good to pay debts with but 
 legal-tender money, there is a fierce struggle to get legal 
 tenders. This is intensified by the generally known fact 
 that there is not coin enough to redeem all the outstanding 
 paper, and therefore those who apply first will get coin and 
 the rest will find that the bank has suspended payment. 
 In the panic of 1873, the tendency of men, under such cir- 
 cumstances, to eagerly want legal tender was illustrated by 
 the fact that greenbacks then rose to a premium of four per 
 cent, over national bank-notes. A man bound to pay his 
 note before a given hour, or fail, wants something which the 
 creditor is legally bound to accept. This feature of a panic 
 would be materially mitigated by making all the paper 
 money a legal tender for all purposes. But in order to do 
 that, the .whole idea at the bottom of the specie payment 
 
352 
 
 SOCIAL STRUGGLES. 
 
 plan must be abandoned. We must adopt some other and 
 more efficient mode of regulating and limiting the amount 
 of paper money. 
 
 ESSENTIAL FEATURE OF SPECIE PAYMENTS. 
 
 Specie payments, so called, is nothing more nor less than 
 a system whereby the amount of paper money is limited 
 solely by the liability and obligation which the bank issuing 
 it is under to redeem paper dollars with silver or gold dol- 
 lars. Subject only to that check, there is no limitation 
 whatever to the issue of an indefinite amount of paper 
 money under the convertible note system. 
 
 Under our national bank organization, the issue of addi- 
 tional notes must be preceded by a deposit of additional 
 bonds for security of the notes. But as these deposited 
 bonds draw interest, this plan, while it affords another bar- 
 rier against an undue increase of the circulating medium, 
 presents nothing which obviates the chief objection to this 
 mode of limiting and regulating the amount of paper 
 money ; viz., the diversity of self-interest between those 
 who issue paper money and the public. 
 
 HOW BANKERS EVADE THEIR PROMISES. 
 
 A convertible bank-note is a promise on the part of the 
 bank to pay its face value in specie on demand. How is 
 this promise fulfilled whenever an active demand for coin 
 exists ? 
 
 The banks, knowing that their issue of paper money is 
 greater than the amount of their coin, and fearing to trust 
 either one another or the people, adopt what seems the 
 safest course for their own protection, without any regard 
 whatever for the interests of the public. They receive in 
 payment their own notes as fast as current payments re- 
 turn them, and refuse to re-issue them for new discounts. 
 This rapidly contracts the volume of the currency, increases 
 the rate of interest and produces such a sharp demand for 
 bank-notes with which to pay bank debts that the holders 
 of these notes are more or less prevented from demanding 
 
SPECIE PA YMENT INFLA TION. 
 
 353 
 
 their payment in specie. Instead of freely paying specie, 
 according to the intent of their legal and moral obligations, 
 the banks resist it with all the means in their power, and 
 often avoid a suspension themselves by making many of 
 their customers bankrupt, simply through inability to bor- 
 row money for which they had ample security at the ordi- 
 nary scale of prices. 
 
 Bad inflations and panics have repeatedly occurred under 
 specie payments both in this country and in England. An 
 especially destructive panic occurred in England in 1825. 
 This was shortly after she had resumed " specie payments," 
 and, as was fancied, had placed her finances on a stable 
 basis. The years 1814, 1816, 1825, 1837, 1838, 1839, ^^A7i 
 1857 and 1861 are notable demonstrations of the weakness 
 of the convertible note system. Many who have not ex- 
 amined the matter have imbibed the notion that England 
 has had a stable currency since she adopted the gold stand- 
 ard in 1 8 16. But in fact, no country has witnessed more 
 frequent commercial revulsions. 
 
 The Bank of Glasgow has comparatively recently shown 
 us the weakness and evils of the system called specie pay- 
 ments ; it has practically demonstrated that the amount of 
 paper money in circulation needs more ef^cient and certain 
 means of regulation. 
 
 THE CHIEF EVIL OF SPECIE PAYMENTS. 
 
 The radical evil of so-called " specie payments " is, that 
 under it the amount of money in circulation, and, conse- 
 quently, the average scale of prices are placed in the hands 
 of a comparatively few bank officers. By means of expand- 
 ing or contracting their promises to pay, they can make 
 money plenty, or scarce, and diminish or increase the rate 
 of interest whenever their imagined self-interest prompts 
 them to unite for a common purpose. Thus the power to 
 change the meaning of the vast number of outstanding con- 
 tracts, in form of debts, is practically placed in the hands 
 of men whose conduct is guided, not with reference to the 
 23 
 
354 
 
 SOCIAL STRUGGLES. 
 
 welfare of the nation, but almost entirely with regard to 
 theii* own narrow interests, as they see them. 
 
 WHAT OCCURRED IN 1 857. 
 
 When the panic of 1857 began, the New York banks had 
 in their vaults less than twelve millions of specie, and to re- 
 tain this they made a desperate struggle. They kept up a 
 steady contraction of bank facilities at the rate of a million 
 dollars a day for sixty-six days. The rate of interest rose 
 from eight to thirty-six per cent, per annum. Property 
 shrunk enormously in value, and swift and widely-spread 
 bankruptcy ensued. But even this severe blow at the peo- 
 ple did not enable the banks to retain their coin. About 
 the middle of October, four millions of specie were with- 
 drawn and the banks suspended payment. The attempt to 
 retain twelve millions of coin in the banks cost the nation, 
 by stoppage of industrial enterprises, sudden derangement of 
 business and loss of production by unemployed labor, at 
 least one hundred millions, and careful writers have esti- 
 mated the loss at three hundred millions of dollars. 
 
 The action of the banks in 1857 is not an exceptional 
 one. The system of allowing bankers to issue promises 
 which will be used as money, as long as times go on 
 smoothly, and be generally presented for redemption in 
 legal tender only when the business world gets alarmed, 
 places such persons in a position of antagonism to the 
 public. Self-interest prompts them to unduly contract 
 their issues just at the time when such a course will greatly 
 aggravate the existing troubles. 
 
 Having found that a bankers' mode of doing so will nat- 
 urally and inevitably be adverse to the public welfare, we 
 are warranted in concluding that the issue of money is not 
 a proper function for a bank to perform. The chief object 
 of governrnent should be to so organize society that one 
 class of persons will not have it in their power, without 
 violating laws and subjecting themselves to severe penal- 
 ties, to inflict great injuries on the rest of the community. 
 
WHA r LEGITIMA TE BANKING IS. 
 
 WHAT EXPERIENCE HAS SHOWN. 
 
 355 
 
 The world's experience has slowly but fully shown that 
 the performance of any function or duty whatsoever, in 
 which the selfish interests of those who perform it are 
 often necessarily the opposite of the public good, should 
 not be placed in the hands either of individuals or corpora- 
 tions. The people's interests should be in the hands of 
 persons who are employed by the people, and are surrounded 
 with such checks as to make their selfish interests identical 
 with those of the nation. Many things which were once in 
 private hands have during the past century been taken 
 charge of by the public. Who but a few persons that 
 might make money out of it, would wish to see the carriage 
 of letters taken from the Government and restored to pri- 
 vate hands ? Formerly a considerable number of persons 
 in every country were allowed to have private mints and 
 issue metallic money. But this function has been taken 
 charge of entirely by the sovereign power, and its 
 advantages so clearly demonstrated that scarcely any one 
 now thinks of a private mint. This has occurred because 
 the selfish interests of private individuals or corporations 
 are so often not in unison with the public welfare. 
 
 LEGITIMATE BANKING. 
 
 Legitimate banking consists of the purchase and sale of 
 bills of exchange, the reception of deposits and the mak- 
 ing of discounts, both with their own money and with a 
 portion of the deposits. This is a proper and useful bus- 
 iness for all parties concerned. 
 
 Our national banking system cannot be properly called 
 " good," because it is based on a false principle. That it 
 is better than State banks is not a sufficient reason for its 
 existence. Measles are not as bad as small-pox but measles 
 are not therefore desirable. National banks, although bet- 
 ter than State banks, are not as good as no banks of issue 
 whatever. The real question should not be evaded. 
 
356 SOCIAL STRUGGLES. 
 
 NATIONAL BANKS HAVE SPECIAL PRIVILEGES. 
 
 National banks are associations who receive special privi- 
 leges from the Government. These privileges consist in 
 the right to draw interest on their debts. Ordinary persons 
 pay interest on their notes. The national banks draiv in- 
 terest on their notes. 
 
 Bank-notes are not as good as greenbacks. They are not 
 a legal tender between individuals. The bank-notes are 
 redeemable in greenbacks, thus showing on their face that 
 they are inferior to greenbacks ; for why should a supe- 
 rior money be "redeemed" in an inferior money? Much 
 has been said to show that greenbacks cannot be money 
 because they are a debt. Every national bank-note is a 
 debt ; it bears on its face the inscription : " The Na- 
 tional Bank promises to pay." This promise is to pay in 
 greenbacks. It is said that as greenbacks are a debt, they 
 should be burned as soon as paid, because a paid note 
 should be canceled. But those who propose this forget 
 that, logically, every bank-note in like manner should be 
 burned as soon as redeemed. This would soon leave us 
 without any paper money at all, — a condition which no 
 one advocates. 
 
 Attorneys of the national banks have had the assurance 
 to state that holders of national bank-notes have greater 
 security than holders of greenbacks, because the greenbacks 
 might be repudiated ; whereas the bank-notes are secured 
 by United States bonds. It is true that the United States 
 could repudiate the greenbacks. But it is also true that 
 they could repudiate the bonds. As national bank-notes 
 are redeemable in greenbacks, it follows that if greenbacks 
 become worthless, the bank-notes will then be redeemable 
 in worthless greenbacks. 
 
 The greenbacks are secured by the faith of the people of 
 the United States which is pledged to receive them as a 
 legal tender in payment of taxes, and as a legal tender in 
 payment of debts. Their value is also secured by their 
 limitation in amount, and by the people's willingness to use 
 
UNFAIRNESS OF NATIONAL BANKS. 357 
 
 them as a medium of exchange. The greenbacks bear no 
 interest — hence their use has reheved the people of taxa- 
 tion for that purpose. Had no national bank-notes ever 
 been printed, we could have issued more greenbacks and 
 avoided issuing over three hundred millions of interest- 
 bearing bonds. 
 
 Considerable ink has been used in showing the dangers 
 of too many greenbacks. A national bank-note "inflates" 
 as much as a greenback. But we do not hear lamentations 
 over the amount of bank-notes ! ! The national bank-notes 
 are printed at the expense of the United States Govern- 
 ment. 
 
 NATIONAL BANKS ARE UNFAIR MONOPOLIES. 
 
 How can national banks be justly called monopolies when 
 all persons are free to start national banks, and every one is 
 at liberty to buy national bank stock? 
 
 Because the national banking law is a gift of the public 
 credit ; a gift of the use of the public necessity for paper 
 money [which is public property] to the few persons who 
 are in a situation to accept such gift and make it profitable. 
 It is misleading to say there is universal liberty to own na- 
 tional bank stock, — necessity prevents all but a compara- 
 tively few persons from owning bank stock. For example, 
 we have a Green in the center of this city. Every citizen 
 owns a portion of that land, — it is public property intended 
 for the use of all. Suppose the city authorities should say : 
 "Any citizen can have a building lot on the Green, free of 
 charge, provided, he build thereon a house worth $20,000. 
 If this were, and could be legally done, a few men could 
 thus get a lot for nothing ; the Green would be taken up 
 for building purposes to the detriment, and at the expense 
 of the great majority who were unable to build such an ex- 
 pensive house. Is it not clear that the few persons who 
 should thus appropriate the Green would be monopolists ? 
 Under legal forms, by virtue of their wealth, they would be 
 taking an unfair advantage of the public, and appropriating 
 
358 
 
 SOCIAL STRUGGLES. 
 
 to their own use public property without giving an equitable 
 consideration therefor. 
 
 The above supposed case would be a monopoly similar to 
 the national banking system. While all citizens are nommally 
 free to engage in the issue of paper money, according to the 
 provisions of the national banking act, yet only a few can 
 acUtally do so. 
 
 The majority are obliged to keep all their means invested 
 in a farm or a homestead ; or in the animals, buildings, 
 machinery, or merchandise necessary to carry on their bus- 
 iness. They have no surplus to invest in bank stock, hence 
 they lose their portion of the value of the right to issue 
 paper money, and are subject to increased taxation in order 
 that those who are able to buy bank stock may get the 
 benefit of borrowing money of the Government at one per 
 cent, per annum. Government should be as simple and 
 cheap as possible, and a great step in that direction would be 
 taken by wiping out the whole machinery of officers and 
 means whereby bank-notes are distributed to banks and the 
 one per cent, tax collected thereon. Instead of handing 
 notes over to the banks after certain formalities, and then 
 paying men to watch the banks and collect its dues, the Gov. 
 ernment should issue all the paper money directly. 
 
 The issue of paper money by individuals and corporations 
 is an old usage, but an abuse or a wrong is never made right 
 by the length of time it has been committed. 
 
 A persistent attempt has been unfairly made to justify 
 the special privileges of the banks, by the plea that they 
 pay such a large sum annually in form of taxes. Suppose 
 the farmers or the manufacturers should compute the an- 
 nual amount of tax which they pay, and then say to the 
 Government : " We pay so much tax ; therefore, you should 
 lend us money at one per cent, per annum." This would 
 be no more absurd than the plea of the banks. 
 
 THE FLOW OF COIN. 
 
 The advocates of specie payments tell us that under 
 such a system the amount of money in a country is properly 
 
THE TENDENCY OF MONEY. 
 
 359 
 
 regulated by the automatic export and import of coin ; that 
 when there is too much coin, prices are so high that mer- 
 chants export coin instead of commodities ; that when 
 there is a scarcity of coin, prices are so low that foreign 
 merchants send in coin instead of commodities ; that this flow 
 of coin soon restores an equilibrium of prices thoughout the 
 commercial world, and also supplies each country with just 
 the amount of coin it needs ; and, as convertible paper 
 money is based on coin, therefore specie payments provides 
 every nation with its proper amount of money. 
 
 This statement is not true unless made subject to several 
 limitations. It is more correct to say that under specie pay- 
 ments there is a tendency for coin to ebb and flow as above 
 stated, but that this tendency is often so antagonized by 
 other forces as to produce comparatively but little effect. 
 Sometimes these opposing tendencies cause the flow of coin 
 to cease entirely, and sometimes they retard it so that it 
 produces but little practical effect on commerce and prices 
 for a considerable period of time. 
 
 All conditions are the resultant of two or more opposing 
 forces which balance each other. Perhaps it would be more 
 accurate to say that every occurrence — every natural phenom- 
 enon, or fact, is an indication of the result of a conflict which 
 is taking, or has taken place between two or more causes 
 acting as opposing forces, in different directions. For exam- 
 ple, in obedience to the law of gravitation, there is a ten- 
 dency for the moon to fall to the earth. Its centrifugal 
 force has a tendency to project it into space away from the 
 earth. The two forces are so balanced that the moon circles 
 around us. Tendencies frequently have no effect whatever. 
 There is a tendency for wind to blow down houses, but ordi- 
 narily it is not strong enough to overcome the inertia and re- 
 sistance of the building, hence no effect is produced. Before 
 a tendency can become effectual, it must be powerful enough 
 to overcome or modify the existing conditions ; and, in ad- 
 dition to that, it often needs to be strong enough to over- 
 come new resistance and new opposing tendencies which its 
 action has evoked. 
 
360 
 
 SOCIAL STRUGGLES. 
 
 Money ordinarily commands about twice as high a rate of 
 interest at St. Paul, Minnesota, as it does in New York City. 
 There is therefore a tendency for money to flow from New 
 York to St. Paul until an equilibrium be reached. Money re- 
 mains permanently, and apparently disproportionately, high 
 in St. Paul, because the tendency to a level between its price 
 there and in New York is opposed by another tendency, viz., 
 the tendency of the money-lenders to keep their money 
 close at home. The rate of interest is much higher in 
 New York than in Amsterdam, Holland. This creates a 
 tendency for Amsterdam capitalists to send their funds to 
 New York. This they do to a limited extent; nevertheless, 
 the rate of interest between those places remains different. 
 The natural desire of capitalists to invest their funds within 
 easy reach is strengthened by the fact that in places where 
 money commands a high rate of interest it is ordinarily much 
 more difficult, and often impossible, to securely loan large 
 amounts of money in single sums. 
 
 RESULTS OF DRAINING AWAY MONEY. 
 
 In a country with a contracted currency, prices of com- 
 modities are too low and remain so until the proper 
 increase of money occur. Theoretically, it is easy to see 
 how such a nation can speedily supply itself with coin. It 
 has only to stop all imports, except those of coin, and to 
 export its cheap commodities in exchange for coin. But, 
 practically, there are a host of obstacles which make such 
 an undertaking a slow and difficult one. While these obsta- 
 cles are being overcome, the value of property in that coun- 
 try is lowered by reason of forcible, arbitrary changes in the 
 conditions under which it is placed ; debtors are despoiled 
 for the benefit of creditors. 
 
 The actual and threatened contraction of the currency in 
 this country which occurred after 1873, lowered the prices 
 of our farm produce so that America was the cheapest coun- 
 try for foreign nations to buy in. But several things pre- 
 cluded us from getting a speedy supply of coin from sales of 
 farm products. A fall in the price of wheat in America has 
 
RESULT OF LOWERING PRICES SUDDENLY. 
 
 361 
 
 a tendency to immediately depress prices of grain all over 
 the world. This tends to create instant competition, at low 
 rates, by other nations. 
 
 The amount and value of the articles available for export 
 in a country are always very small compared with the total 
 wealth and business of that country. This is especially true 
 in regard to a nation like the United States, which has a rel- 
 atively smaller amount of personal, and more real property, 
 than an old country like England. 
 
 A general lowering of the scale of prices produces finan- 
 cial disturbance and depression of business. Whenever this 
 occurs in one country, it has a tendency to disturb the in- 
 dustries of the nations with whom such country has a con- 
 siderable trade. If one country cease to import goods, the 
 country from whom they were formerly bought has less abil- 
 ity to consume and pay for commodities taken in exchange. 
 
 The amount of coin that any country can spare without 
 financial disturbance is relatively very small, provided the 
 nation losing its coin have what is called specie payments. 
 When that small amount has been taken, the balance of the 
 sum called for by foreign creditors, or trade, is paid either 
 by commodities, by giving evidences of debt of the purchas- 
 ing nation, or by returning the bonds of the selling nation. 
 The latter has recently taken place, to some extent, to settle 
 balances between America and England. 
 
 Importations can be diminished, but a cessation, even if 
 possible, would produce great commercial distress. Some 
 importations supply habitual comforts and luxuries, the ab- 
 sence of which would produce much popular discontent ; 
 while other importations are the raw materials without 
 which the creation of wealth in various forms would be 
 seriously diminished. 
 
 Massachusetts printed her first paper money in 1692. 
 For fifty years before that time money was so scarce in that 
 colony that cattle and grain were used and made a legal 
 tender for taxes. During that period there was undoubted- 
 ly a tendency for coin to " flow " into Massachusetts, but 
 other and stronger tendencies kept it out, except to a very 
 
362 
 
 SOCIAL STRUGGLES. 
 
 limited extent. The chief of these tendencies was the fact 
 that the people were so poor that they did not feel able to 
 afford the expense of gold or silver money. Capital was so 
 deficient, in comparison to the demand for it, that it was 
 more profitable to keep it invested in other forms and dis- 
 pense with metallic money. 
 
 A UNIVERSAL NATURAL LAW. 
 
 This was simply an exemplification of the fact that when- 
 ever an individual, a community, or a nation is hard pressed 
 in the struggle for existence, no matter what form that 
 struggle may take, the things apparently least vitally nec- 
 essary to carry on the warfare are naturally dropped first. 
 Metallic money is a form of capital for which substitutes can 
 be found more easily than for some other kinds of capital. 
 Hence, a nation engaged in a war, so desperate that every- 
 thing must be used with the greatest effect, always 
 exchanges its metallic money for other forms of capital. 
 
 A country, as was the case with England in 1839, "^"^Y 
 be rapidly drained of its metallic money, because several 
 nations simultaneously draw it away. But when once lost, 
 its recovery is a slow and painful process, during which 
 time real estate and other non-exportable things are at a 
 disadvantage and sink to a very low price. At the same 
 time great financial embarrassment exists among business 
 men, especially among those whose capital is more or less 
 borrowed, and this creates suffering among the laboring 
 classes. A nation, under such circumstances, is in a condi- 
 tion similar to that of a man forced to raise money by sell- 
 ing his property at auction. 
 
 We are frequently told that a dollar is really worthless 
 unless it is as valuable in foreign countries as in our own 
 country. ^ But persons who talk so might as well say that the 
 laws of the State of New York are worthless because they are 
 of no validity in South America or Asia. American laws, 
 American schools and American money should be created 
 for the best good of American citizens, without having spe- 
 cial reference to the Hindoos, the Russians, or the Turks. It 
 
THE IDEAL DOLLAR. 363 
 
 is not desirable to have the bulk of our national money 
 made of materials that are liable to be affected in value by- 
 commercial disturbances in other countries. 
 
 WHAT WE SHOULD ATTEMPT. 
 
 We need to secure the greatest attainable stability in the 
 value of our money. The ideal dollar never changes in 
 value. To effect this, we should, as far as possible, shut' 
 off possible causes of fluctuation. 
 
 In 1866 commercial failures for enormous amounts 
 occurred in England and created a panic in that country. 
 Had our currency been composed chiefly of gold we should 
 then have been immediately involved in similar trouble. 
 Owing to the fact that gold formed only a small fraction of 
 our money at that time, this financial storm in London did 
 not materially disturb business in New York. 
 
 A uniform steadiness in industrial enterprises and pro- 
 ductive business of all kinds would be promoted by having 
 the capital whose special function is to exchange and dis- 
 tribute wealth put in such form as to be free from danger 
 of exportation. What would be thought of the sagacity of 
 a machinist who should have the tools of his shop placed 
 under the control of parties in London, Paris or Amster- 
 dam? The money used by the American people bears the 
 same relation to the industries of this country that a 
 machinist's tools do to the workmen in his employ. Just 
 in proportion as the tools are disturbed or taken away, the 
 business of that shop is deranged. Just in proportion as 
 the instrument of commerce, called '* money," is disturbed 
 or taken away, the industries of the country from which it 
 is taken are deranged. 
 
 THE END TOWARD W^HICH WE ARE TRAVELING. 
 
 We have heretofore found that the history of the devel- 
 opment of the art of commerce shows a steady and irre- 
 sistible tendency toward the final entire disuse of both 
 gold and silver as money. We have nearly reached that 
 point. The best authorities estimate that only about one- 
 
3^4 
 
 SOCIAL STRUGGLES. 
 
 half of one per cent, of the total exchanges made in Lon- 
 don are effected by the use of metallic money. The rest 
 are made with paper. 
 
 But nearly reaching a point and getting there are two 
 different things. We are traveling inevitably toward the 
 exclusive use of paper money but have not yet reached that 
 point. Except as they may be educational means, our 
 progress in that direction cannot be hastened by special 
 measures, because it depends on, and must keep pace with 
 the slow growth of intelligence in all other respects. Even 
 if we could, if would not be wise to make undue haste 
 because a metallic currency is the best, unless a nation has 
 risen to a sufificient height of intelligence and morality to 
 wisely use a better one ; just as a strong despotism is best 
 adapted to a people incapable of self-government, and of 
 enjoying the blessings of liberty without falling into 
 anarchy. 
 
 In all probability, the United States are nearly ready to 
 take two important steps. First. A removal of the present 
 limitation of the coinage of silver, and consequently, of the 
 limitation of the issue of silver certificates. Second. The 
 entire abolition of national bank-notes, and the issue of 
 the same amount of greenbacks to take their place. 
 
 After the above measures have been a few years in force, 
 the next step will be the adoption of some more efificient 
 and reliable mode of regulating the amount of paper 
 money than by its redemption in coin. The final measure 
 will be the transaction of all business without metallic 
 money. 
 
 How long time will elapse before the aforesaid events 
 will happen no one -can tell. But their occurrence is just as 
 certain as the further development of the intelligence of 
 the American people. 
 
CHAPTER XV. 
 
 Franchises.— What a Patent is. — Patents may be used to plunder the 
 Community. — What a Franchise is. — What a Railroad Franchise 
 is. — Watered Stocks. 
 
 TJie people liave JiitJierto given azv ay valuable francJiises. 
 In the future, they zvill retain the oivnersJiip of all franchises 
 and either use them directly or give leases subject to constant 
 right of revision or cancellation. 
 
 Through their agents, the members of State Legislatures, 
 the people annually vote away a considerable number of 
 franchises. Most of these franchises are given without the 
 people, to whom they really belong, being fully aware of 
 the real nature of the transaction which then takes place. 
 As some franchises are very valuable it behooves every 
 voter to inform himself on this subject in order to guard 
 his property from spoliation. A striking illustration of the 
 necessity of this occurred a few years ago in this city. The 
 voters actually cast a majority of ballots in favor of giving 
 away, without consideration, a franchise for supplying New 
 Haven with water which carried with it ownership and con- 
 trol of all the available water supply. On the day that vote 
 was cast, said franchise was worth five hundred thousand 
 dollars ; and it is now worth much more than that sum. 
 This happened in a city which fancies itself possessed of 
 superior education and intelligence. 
 
 WHAT A PATENT IS. 
 
 A patent is an exclusive right to manufacture, sell, and 
 use a certain thing. Patents are usually granted for only a 
 few years, after which the special right of manufacture and 
 sale is gone, and every one is at liberty to make and use 
 what was previously protected by the patent law. A large 
 amount of money is yearly spent in inventing things which 
 can be patented, because the exclusive privilege of making 
 
 365 
 
366 
 
 SOCIAL STRUGGLES. 
 
 and selling a thing, especially if it be something which 
 many persons want, often brings a large income to its pos- 
 sessor. This is so chiefly because no one can enter into 
 competition with those working under authority of the pat- 
 ent while it is in force. No matter how unreasonably high 
 the price of the patented article may be, nor how large the 
 profits of those who make it, no one has a legal right to 
 make a similar thing himself, even though it could be made 
 for one-tenth part of its selling price. This removes those 
 owning the patent from danger of others making the pat- 
 ented article and selling it at a reasonable profit. 
 
 PATENTS MAY, BE USED TO PLUNDER THE COMMUNITY. 
 
 An invention which saves labor is an addition to the 
 wealth of mankind, because by its use more wealth can be 
 produced with the same amount of labor than with the 
 means previously employed. But during the time for 
 which the patent be granted, its owner can force the public 
 to give to him a considerable portion of the wealth created 
 by using the patented article. After the patent expires, 
 the whole community shares the benefit of the invention. 
 For example, sewing machines and machines for cutting 
 grass and grain sold at exorbitant prices until their patents 
 expired. Such machines can now be had for one-half or 
 one-quarter the price once charged. 
 
 WHAT A FRANCHISE IS. 
 
 A franchise resembles a patent. It is a particular and 
 special right or privilege granted by the Legislature to one 
 or more persons to use, enjoy, and make profit from a cer- 
 tain property or thing. It usually differs from what we call 
 " a patent " in this : It is granted forever and not for a 
 few years only. A franchise, therefore, is not a patent 
 which will end in seventeen years and thus thereafter let 
 the whole people share its profits and benefits. It is a pat- 
 ent for all future time. When a city gives a water com- 
 pany the franchise of distributing water and collecting a 
 water rate, it gives a perpetual patent to sell a prime neces- 
 
A FREQUENT FOLLY. 367 
 
 sary of life. This folly will be less frequently committed 
 when the nature of a franchise is more generally known. 
 
 Suppose a merchant could now, as in the middle ages, 
 get the exclusive privilege of making, or selling cloth in a 
 certain city. Then no other manufactory or store could be 
 opened in that city without his consent. Even if his prices 
 were not extravagant, such an exclusive privilege would be 
 valuable because it would prevent competition at lower 
 prices. Such an exclusive right would be a franchise for 
 making or selling cloth. 
 
 The world has largely outgrown the practice of giving 
 such franchises as the aforesaid. Formerly every business 
 or trade which could readily be made the subject of a fran- 
 chise was sold or given to a few individuals. It seems 
 strange to us now, to think of a man having a franchise 
 which gave him the exclusive right to grind grain into flour 
 in a certain neighborhood. But it is only a comparatively 
 short time since nearly every important occupation was 
 made the subject of a franchise. 
 
 Franchises are now restricted to a comparatively few 
 things. A few bankers still retain the franchise of issuing 
 paper money. A few cities grant franchises to companies 
 for the purpose of bringing water into those cities and sel- 
 ling it. But the great majority of franchises are now given 
 to railroad, steam-boat, horse-car, and other transportation 
 companies. 
 
 When a franchise is given to build a railroad, the owners 
 of that franchise have not only the right to prevent anyone 
 else from building a road on the designated route, but 
 they also have a legal right to take the. property of any one 
 they choose in the way of their road. It is true, they are 
 required to pay for the property so taken, but this payment 
 is often inadequate compensation. 
 
 WHAT A RAILROAD FRANCHISE IS. 
 
 Railroad franchises, in many cases, are very valuable. 
 Practically, they are a perpetual patent on one of the great- 
 est inventions of modern times; viz., the invention of 
 
368 SOCIAL STRUGGLES. 
 
 building steam locomotives and laying smooth tracks on 
 which to carry passengers and freight. The advantages of 
 this invention are so enormous that competition by other 
 forms of land carriage is practically impossible. 
 
 In the absence of restraining laws, the owners of this per- 
 petual patent, have therefore got the power to do precisely 
 what the owners of sewing-machine patents did a short 
 time ago ; viz., charge exorbitant rates for letting the public 
 use the invention on which they hold a patent. There are 
 cases of railroads charging six dollars per ton for carrying 
 grain eighty miles. 
 
 WATERED STOCK. 
 
 Within a comparatively short time a new scheme has been 
 devised whereby the public are made to pay an usurious 
 rate of interest on the capital invested in railroads, while 
 at the same time it appears as if only a fair rate of interest 
 were charged. This cunning theft is accomplished by issu- 
 ing stock for much more than the cost of the railroad and 
 then charging interest on all this fictitious stock. To 
 prevent the legislature from enacting laws which will pre- 
 vent such wholesale robbery, this watered stock is artfully 
 sold to a considerable number of innocent persons. The 
 proceeds of such a sale are then used for originating and 
 completing another similar transaction. It is a curious 
 fact that those who have grown rich by such conduct are 
 nearly unanimously in favor of " honest money " ; i. c, 
 money which can most readily be used as an instrument 
 for still further spoliating the toilers of the land. 
 
 Three facts prominently appear in regard to railroad 
 franchises. First. It is an imperfect remedy for the mis- 
 take of giving them away, to sanction the building of par- 
 allel roads. Experience has shown this to be not only use- 
 less but an actual addition to the burdens of the commu- 
 nity. Second. It is vain to trust that either the inherent 
 honesty, or the self-interest, of railroad officials will lead 
 them to forego opportunities to illegitimately enrich the 
 railroad at the expense of the public. Such persons are 
 
THE PEOPLE SHOULD OWN FRANCHISES. 
 
 369 
 
 neither better nor worse than other individuals. But, as 
 centuries of experience have originated and confirmed the 
 maxim that " a judge should never sit in trial of a case in 
 which his own interests may influence his decision," we are 
 warranted in treating railroad officers as if they might possi- 
 bly be led into temptation. Third. Franchises should be so 
 granted as to insure the fullest and most immediate con- 
 trol by the people. In all controversies between the roads 
 and the public, both sides should be fully heard by an im- 
 partial and intelligent tribunal. When a price is paid in 
 consideration of a franchise, it should always be in form of 
 a percentage of gross receipts instead of a sum which is 
 given and received as full payment. This places the road 
 under better control, and makes the public sharers in 
 the increased business created by the labors of the 
 public. In other words, the public should never part with 
 the ownership of a franchise. When a disposition is made 
 of it, other than operation by Government employees, the 
 transfer should be by a lease which expressly states the 
 right of the people, at any time, after reasonable notice, to 
 revise its provisions or terminate it entirely. But all control 
 of public facilities for transportation by individuals or cor- 
 porations implies an imperfect state and organization of 
 society. 
 24 
 
CHAPTER XVI. 
 
 Interest of Money. — The Rate of Interest is too High. — Why Men pay 
 any Interest. — Human Nature is Unchanged. — Capital is Neces- 
 sary to Existence. — Free Interest. — The Difference between the 
 Rich and Poor. — Different rates of Interest. 
 
 What proportion of tJie product of the union of labor a7id capi- 
 tal shall be paid to labor is largely determined by the rate of 
 interest. 
 
 Let us suppose- that Columbus when he discovered Amer- 
 ica had found a sovereign power competent to contract with 
 him for the Sale of the entire North American Continent. 
 Suppose Columbus had made such a contract, and agreed to 
 pay therefor his note dated in 1492, for one hundred dol- 
 lars, drawing six per cent, interest, compounded semi-an- 
 nually, and due in the year 1892. If such a bargain had 
 been made, the successors of Columbus, when the note 
 fell due would have found that all the personal and real 
 property in Mexico, the United States and Canada which 
 has been created and made valuable by the labor of millions 
 of persons, insufificient to pay the debt. 
 
 When we compute the result of putting a large sum at 
 interest for a comparatively sJiort time, we find it similar to 
 putting a small sum at interest for a long time. If the 
 United States had allowed all the expenses incurred in the 
 late civil war to accumulate at six per cent, compound in- 
 terest until the year 1900, the bondholders would then have 
 owned all the property in the country. Interest would 
 have outstripped the accumulated savings of labor. 
 
 THE RATE OF INTEREST IS TOO HIGH. 
 
 The foregoing facts, and a multitude of kindred ones 
 which could be adduced, show that on the average the rate 
 of interest usually paid is much -more than the average net 
 
 370 
 
HUMAN NA TURE. 
 
 371 
 
 increase of the national wealth. In other words, the average 
 rate paid for the interest of money is greater than the average 
 savings of those ivho horroiv the money. That is : eapital, on 
 the average, gets more than a strietly equitable share of the 
 product created by its nnion ivith labor. 
 
 The question arises : Why does the average man pay a 
 higher rate of interest than he can afford ? Why do not the 
 natural laws of trade reduce the rate of interest to a level 
 with the earnings of the money for the use of which it is 
 paid ? 
 
 WHY MEN PAY ANY INTEREST. 
 
 A deeper question lies behind the foregoing. Before in- 
 quiring why men pay more interest than they can afford to, 
 let us see why men pay any interest. Whatever diversity 
 of opinions may exist in regard to some of the final con- 
 clusions of Darwin, Huxley, Tyndall and their co-laborers, 
 no one doubts or disputes their statement that the earth 
 from the earliest period to the present day, has been the 
 theatre of an unceasing struggle among all forms of animal 
 life. The existence of every animal is maintained only by 
 a constant effort to adapt itself to the ever changing cir- 
 cumstances by which it is surrounded, — by unceasing efforts 
 in self-defense or war with other species, and by continual 
 struggles with other animals of its own race. What is true 
 of the lower animals is pre-eminently true of man. History 
 is merely a record of the struggles of the human race for 
 existence, — it is the story of the efforts of man to unfold 
 the secrets of nature, to make the elements his servant and 
 not his master, and it tells us what fierce and unremitting 
 war has been waged between man and man. 
 
 Germany and France are no less antagonists to-day than 
 they were a few years ago. The mode of contest is all that 
 has changed. England and France, in essence, are just as 
 truly at war at present, as when Pitt controlled England 
 and Napoleon ruled France ; and England is still at war 
 with the United States of America. 
 
372 
 
 SOCIAL STRUGGLES. 
 
 Instead of the rude violence of physical combat and open 
 war, the arts of diplomacy and commerce are employed.* 
 
 Instead of organizing great masses of men for the purpose 
 of obtaining mastery by butchery of their opponents, great 
 numbers are now organized as workmen and artisans ; the 
 struggle for supremacy has taken a commercial and an in- 
 dustrial form. Each nation, if it could, would at once ob- 
 tain the ascendency and reduce others to commercial vas- 
 salage. Between different parties, families, and individuals, 
 a contest for mastery is always in progress. A constant 
 struggle is made to secure the necessaries and luxuries of 
 life, and in this race each one strives for his own personal ad- 
 vantage. There is a fight every day going on in our social 
 and commercial life which is just as earnest as the feuds 
 of past centuries when opposing families, and individual 
 enemies sallied forth with ax and club to despoil and con- 
 quer one another. 
 
 HUMAN NATURE IS UNCHANGED. 
 
 Each century sees mankind more fully adopting better 
 and higher standards of individual and national conduct. 
 But the savagery of five thousand years ago continually 
 crops out. Every baby is more or less a little barbarian. 
 
 * During the last thirty years, a subtle and far-reaching influence has been 
 silently interwoven with the policy of many of our richest and most prom- 
 inent colleges. A desire to please both the actual and possible donors of 
 those institutions, and the rich men who send their sons for education, has 
 had a powerful influence on the college faculties, none the less because 
 exerted so quietly as to render them often unconscious of its force. In- 
 sidiously, those institutions have thus been so molded that the tendency 
 of their teachings, the general drift of the social and political ideas they 
 inculcate is to create a bias in the unformed minds of their pupils in favor 
 of an aristocratic organization of society. As a natural accompaniment 
 of such policy, a prejudice has been fostered against all doctrines and laws 
 which favor an equitable distribution of wealth, and a social system based 
 on democratic principles. The college atmosphere is permeated with the 
 notion that the laws should be made and administered in the interest of 
 the rich, and that all dissent from and criticism of the financial and social 
 policy of England is evidence of ignorance and ill breeding. 
 
SELFISHiVESS NEEDS RESTRAINT. 
 
 373 
 
 Human nature is unchanged. When we read about the 
 political manceuvers of Cicero two thousand years ago, we 
 are forced to smile at their resemblance to the last presi- 
 dential campaign. At present, powerful men in search of 
 plunder instead of collecting a troop of savage horsemen, 
 as they would have done 600 years ago, send a lobby to a 
 State Legislature, or to Congress, to buy votes either di- 
 rectly or indirectly. Instead of providing a lot of mail and 
 spears, they hire writers and lawyers. They control the 
 channels of public information in their interest. By rais- 
 ing delusive cries and making false pretenses, they rob the 
 people of valuable franchises, procure the change of con- 
 tracts by cunning legislation, and plunder millions of peo- 
 ple by monopolies. 
 
 The change is merely in the kind of weapons, — we now 
 use the weapons of sophistry, trade and law — but the inten- 
 tion to beat, to outwit, and to rise above one another, re- 
 mains. Man's natural inclinations are unchanged — he is 
 selfish and he seeks to gratify his passions in whatever mode 
 is most feasible. 
 
 CAPITAL IS NECESSARY TO EXISTENCE. 
 
 In this struggle for existence every self-supporting man 
 is forced to engage. He may vary the fierceness and in- 
 tensity of the purpose which animates him ; but, if he 
 would, he cannot entirely avoid the contest, — to some de- 
 gree he must enter it. He can do but little with naked 
 hands. He needs tools, means and weapons to carry on this 
 unavoidable struggle. These helps are capital. Thus we 
 see that every man, not already the owner of what capital he 
 needs, must borrow it either directly or indirectly. This ne- 
 cessitates either the direct or the indirect payment of inter- 
 est. Bodily necessity is thus the ultimate force which com- 
 pels a man without capital to pay interest. He must lodge 
 on some one's property, and for this privilege he must pay 
 interest either directly, by borrowing the money which is 
 the price of his lodging-place, or indirectly, in form of rent. 
 Even if land could be had for nothing, capital would be re- 
 
374 
 
 SOCIAL STRUGGLES. 
 
 quisite to make it available. It is immaterial what the form 
 of wealth is which is hired, or in what form payment of the 
 hire is made. The essential thing which constitutes inter- 
 est is the payment of value in consideration of the use of a 
 certain amount of property for a given time. Capital is a 
 tool for creating other capital, and for 'supplying ourselves 
 with the comforts of civilization. Owing to the limited 
 amount of capital in the market for hire, and the imperious 
 demand which is created by the sharp conflict for the nec- 
 essaries and luxuries of life, there is an eager desire to se- 
 cure it. In this struggle, the strong naturally use their 
 power to take advantage of the weak, and to force them to 
 pay the highest possible tribute for the use of the means to 
 
 obtain a living. 
 
 J-REE INTEREST. 
 
 Many persons imagine true, the statement so frequently 
 made, that " in the absence of laws the rate of interest is 
 free." A man is " free " to go without the comforts and 
 luxuries of life. In such a sense of " freedom," the interest 
 of money without legal regulation is " free." In fact, men 
 are obliged to pay interest, and a bargain, when one party 
 thereto is under strong compulsion of some kind, is apt to 
 be most in favor of the party not under an imperative ne- 
 cessity. 
 
 Under ordinary circumstances, with the help of money all 
 other kinds of capital can be obtained. Hence, money is 
 the form of capital which those who wish to supply them- 
 selves with various tools to aid their labor in creating 
 wealth usually wish to borrow. When money is to loan, 
 this form of capital is virtually offered for lease, and the 
 capitalist, knowing that the amount of capital for rent is 
 limited, and that there will always be a brisk competition 
 for it, hires it only to the man who will pay most for its use, 
 and be most likely to return it at the expiration of the 
 time for which it is let. There are instances of capitalists 
 preferring to loan money to the persons most in need of it. 
 But such persons are exceptional and rare. 
 
COMMERCIAL WAR. 
 
 375 
 
 Persons who are capable, sagacious, industrious and eco- 
 nomical can use capital to much greater profit and advan- 
 tage than those who are weak, ignorant, unskillful, lazy 
 and wasteful. Consequently, capital is worth more to the 
 strong than it is to the weak, and therefore the strong can 
 afford to bid a higher price for capital than the weak can 
 really afford to pay. An intelligent, resolute man can often 
 make a large amount of money by hiring capital at the av- 
 erage, or even the highest rate, of interest. The result of 
 these things is this : the capitalist wants the highest attain- 
 able rate of interest, and the supply is so limited that the 
 superior men would sometimes hire all the money if the in- 
 ferior men did not offer the capitalist as much for it as their 
 superiors stand ready to pay. 
 
 A single individual, a Vanderbilt or a Stewart, may be 
 capable of devising such ingenious, comprehensive and far- 
 sighted plans for making money that he can successfully 
 employ all the capital he can obtain. Borrowers bid 
 against each other. The average rate of interest is not 
 what capital is really worth to the average man, but it in- 
 dicates what capital is worth to the few superior men, and 
 what rate the average man has been compelled to pay by 
 his necessities. The rate of interest is not what the bor- 
 ■ rower can " afford " to pay, but what the lender can compel 
 him to pay in hopes of averting still greater losses or evils. 
 
 In other words, tJic average rate of interest is the amount 
 zvJiicJi the strong can compel the zveak, on the average, to pay 
 for the use of money. 
 
 The fact that capitalists prefer to loan money to those 
 who apparently have great financial ability, tends to compel 
 the payment of a high rate of interest. If a rnan in moder- 
 ate circumstances offer a savings bank good security for a 
 loan of three hundred dollars, the chances are that he will 
 be unsuccessful. The bank officials think that his loan 
 would make as much trouble as a larger loan. They gener- 
 ally j^y.- " Money is tight ; we have none for you." The 
 borrower is consequently often obliged to pay a bonus to 
 an individual in order to obtain a loan. But suppose an 
 
17^ 
 
 SOCIAL STRUGGLES. 
 
 able, wealthy financier should enter the same bank, immedi- 
 ately afterward, and should ask for a loan of $25,000. The 
 reply would probably be : " Yes, sir, we are always happy to 
 accommodate you." 
 
 THE DIFFERENCE BETWEEN THE RICH AND POOR. 
 
 Many persons suppose that the difference between the 
 rich and the poor is due solely to the superior industry and 
 economy of the rich. This is sometimes a partial explana- 
 tion, but in a vast number of cases it has no application 
 whatever. The fact is that those who are rich by their 
 own acts, are in a variety of ways stronger and more cunning 
 than the poor, and this gives them far greater power both 
 of combining with one another and of controlling natural 
 things for their own advantage. Moreover the rich, espe- 
 cially the- very rich, are usually not only more avaricious 
 than the poor, and persons in moderate circumstances, but 
 they are also more unscrupulous and remorseless. They 
 are generally shrewd enough to avoid legal penalties, but, 
 tested by the Sermon on the Mount, there is no more dis- 
 honest and mean class of persons than the very rich men. 
 Men like Peter Cooper are very rare. To-day, the expres- 
 sion, " Woe unto you rich men," has the same profound sig- 
 nificance it had when Christ uttered it over 1800 years ago. 
 
 The charitable gifts of the rich are often cited as evi- 
 dence of their goodness. But the merit of a gift is deter- 
 mined only by the sacrifice thereby occasioned the donor. 
 He who defrauds society of five hundred thousand makes 
 a poor atonement and restitution by giving one hundred 
 thousand to a hospital or church. More justice and less 
 charity would benefit the working classes. It is a common, 
 but grievous, error for voters to imagine the political de- 
 sires of the rich, priina facie, best for the welfare of the 
 public. 
 
 DIFFERENT RATES OF INTEREST. 
 
 Whether a lender of money can oblige a borrower to pay 
 more for its use than equity require he should, and, if so, 
 
HIGH RA TES OF INTERES7\ 
 
 Z77 
 
 to what extent this injustice can be carried, depends on at- 
 tendant circumstances. The scarcity of capital, the urgent 
 necessity of legal tender wherewith to avoid still greater 
 impending losses, the borrower's lack of pecuniarily strong 
 friends, the number of persons competing for loans relative 
 to the amount to be loaned, usury laws, and many other 
 conditions determine these questions. 
 
 Thirty-five years ago, money in Iowa commanded 40 per 
 cent, per annum interest. This was chiefly because the 
 majority of emigrants to that State needed plows, wagons, 
 axes, saws and kindred forms of capital wherewith to build 
 their homes and improve their farms. Capital was scarce 
 and the need of it, imperative. Money, the kind of capital 
 with which all other kinds can be obtained, was scarce and 
 in comparatively few hands. These few persons naturally 
 took advantage of the situation, and demanded as high 
 rates of interest as the borrowers could be made to pa}'. 
 Interest in Iowa is now about one-fifth what it then was, 
 because capital has become plentier, money is in a greater 
 number of hands, and consequently the necessities of the 
 people cannot be taken advantage of to the same extent as 
 formerly. But the same principle exists now that did when 
 interest was much higher. The rate of interest is still too 
 high, because the lenders can still take advantage of the 
 borrowers' necessities. 
 
 NOTE. 
 
 Alexander Del Mar, in his "Science of Money," tells us that the 
 rate of interest depends on " the rate at which the means of human sub- 
 sistence increase. Other things being equal, were this rate to double, the 
 net rate of interest would double ; and were the rate of the increase of 
 subsistence to diminish one-half, the net rate of interest would diminish 
 one-half." 
 
 The above cause, he tells us, " is the ultimate cause of a rate of inter- 
 est." He next says " that the market rate of interest differs from the 
 rate at which the means of subsistence increase, because the lender must 
 charge an additional percentage to insure himself against the risk of 
 losing the money, for taxes, and for labor of superintending the loan." 
 
 He then illustrates his propositions by stating that "in the United 
 
378 
 
 SOCIAL STRUGGLES. 
 
 States the increase of the means of subsistence is probably about 3I per 
 cent., while risk, taxes on loans of money, and cost of superintendence 
 combined, probably amount to if per cent, more, making the average 
 market rate about 5 per cent. 
 
 The essence of this learned gentleman's essay on interest is that " the 
 rate at which subsistence increases " is the net rate of interest which the 
 lender of money should equitably receive for its use , and that, in fact, 
 such is the rate which he actually does receive. 
 
 In the first place, Mr, Del Mar errs in stating 5 per cent, as the average 
 market rate of interest in the United States. In fact, it is nearer six per 
 cent. Mr. Del Mar probably reaches his conclusion by computing the 
 money loaned in New York and a few other large cities " on call " as 
 money loaned at the market rate of interest. But this is not strictly 
 proper. Money, which the borrower is expected to return any day when 
 requested by the lender to do so, is not completely loaned. It is not as 
 fully under the control, and cannot be used with the same freedom as it 
 could if the borrower had ample and secure time for its employment. 
 There is a reservation of possession made by the lender when he loans 
 it on call. That is, he reserves the right to take possession of his money 
 any day he may elect. In fact, his control of money loaned "on call," 
 with ample pledges given for its payment as specified, is virtually as 
 absolute as if he had deposited the money in a bank ready to be taken 
 out on any day by his check. In the latter case he trusts the bank will 
 always honor his check and pay "on call." But when he loans on call, 
 with pledges received for security, he does not trust any one ; he relies 
 on the pledges in his possession, confident that if payment be not made 
 their sale will yield ample means of payment. 
 
 This is a far different condition from what exists when money is 
 loaned for a considerable period of time. In that case, no matter how 
 advantageous arising circumstances might make it for the lender to 
 recall his loan on a certain day, he cannot do so. The money is 
 beyond his control until the expiration of the time for which it was 
 loaned. This latter condition is the only one which is a fair test 
 of the interest of money, because it is the only way in which a loan of 
 money can be fully and unreservedly made. 
 
 Mr. Del Mar's idea that the rate of interest is partially formed of a 
 sufficient sum to pay the taxes on the money and the legal expenses of 
 making the loan is disposed of by the fact that taxes and attorney's fees 
 attendant on loans are almost invariably paid by the borrower. 
 
 One other claim of Mr. Del Mar remains ; to wit, that an addition of 
 at least one per cent, should be made to what he calls the " net rate of 
 interest" ; i.e., the rate at which the means of subsistence increase, as 
 insurance for repayment of the loan. 
 
 Suppose a farmer borrow $1000 for five years, for the purpose of 
 
TFI/r INTEREST IS TOO HIGH. 
 
 m 
 
 purchasing additional capital to cultivate his farm, and thereupon 
 mortgages his farm, worth $5000, to secure its payment. Mr. Del 
 Mar's idea appears to be, that inasmuch as the increase of the farmer's 
 products is about 3 1-3 per cent., that is the rate of interest he is equit- 
 ably called on to pay for the use of the money ; and he should also pay 
 nearly two per cent, more to insure the borrower that the money will 
 be repaid. But the farmer has already insured payment of the loan by 
 giving a mortgage on his farm. This is ample insurance of itself. In 
 equity, why should the farmer insure the lender further ? The farmer 
 incurs all the risk of losing the |iooo by bad crops, tire, death of cattle, 
 etc. The lender does not insure him against loss. Why then should 
 the farmer pay additional interest to insure the lender further than the 
 mortgage has insured him ? 
 
 There is a comparatively small class of loans which are specially haz- 
 'ardous to the lender. In such cases a high rate of interest, or, in other 
 words, an extra percentage as an insurance premium, is just. Loans on 
 ships are an illustration of this. But the great mass of loans are made 
 by giving mortgages on land or other good security for payment. 
 
 If we admit that the borrower should pay an addition to the net rate of 
 interest, as an insurance, sufficient to cover the risk of non-payment, it 
 by no means follows that this insurance should equitably be nearly two 
 per cent. If one per cent, per annum could be generally received for in- 
 suring payment of loans, an enormously profitable business could be 
 done by such an insurance company, in all of our large cities. One-half 
 of one per cent, would be sufficient to amply insure payment of mortgage 
 loans, and municipal bonds, in the greater portion of this country. 
 
 The fact assigned by Mr. Del Mar as " the ultimate cause of a rate of 
 interest " has unquestionably a powerful tendency to produce a market 
 rate of interest. But it is only 07ie of several other facts which operate 
 to determine the actual interest rate. The dominant factor is that above 
 stated in the text ; viz., the industrial and social war constantly carried on 
 by each member of the community against all other members, and the 
 necessity of capital wherewith to supply human wants and desires. 
 
 A very prominent cause of a higher rate of interest being paid than 
 is earned by the money borrowed, is the fact that such interest is usually 
 paid on only a portion of the debtor's total capital, Circumstances are 
 such that it is supposed the loan will add largely to the productiveness 
 of the capital previously possessed. 
 
 For example, a farmer has 150 acres of fertile land, well supplied with 
 buildings, stock and farming implements of all kinds, except plows and 
 wagons. Without these essential tools, it is impossible to advanta- 
 geously cultivate the farm. Under such conditions, the farmer can pay a 
 higher rate of interest than the creditor is equitably entitled to, and still 
 
38o 
 
 SOCIAL STRUGGLES. 
 
 be far better off than he would have been without the means of buying 
 needed tools. 
 
 The doctrine is usually taught that legal limitations on the rate of 
 interest make the actual rate higher and thus increase the burdens of 
 debtors. The repeal of usury laws is frequently asked for on the ground 
 that It would help debtors by lowering the rate of interest. 
 
 But what class of persons is it that ask for the repeal of usury laws } 
 If such laws resulted in greater profits to the money-lenders, would those 
 persons want them repealed .'' 
 
 The repeal of usury laws is always asked for by the money-lenders 
 under the hypocritical pretense that such a measure would lower the rate 
 of interest. When the legal rate of interest is placed at six per cent, no 
 legal obstacle is thereby presented to lending money at a lower rate. 
 
 A few years ago, the Connecticut Legislature was persuaded by charla- 
 tans that a repeal of the usury law would at once prevent the flow of cap- 
 ital from the State, make money plentier and thus lower the rate of inter- 
 est. The experiment was tried. The result was an immediate attempt 
 by the money-lenders to compel payment of higher rates. In the major- 
 ity of cases they were more or less successful. Instead of six per cent., 
 money loaned at seven, eight, nine, and sometimes twelve per cent, per 
 annum. A re-enactment of the usury law restored the former conditions. 
 
 Capital, unless dishonestly got, represents savings. Savings represents 
 industry and economy. A fair rate of interest to capital is an encour- 
 agement to industry and frugality, and therefore conducive to the public 
 welfare. 
 
 But in order to be equitable, the rate of interest should not be greater 
 than the relative earnings of the capital thus combined with labor. In 
 fact, the lender receives more than such an equitable proportion, in a mul- 
 titude, if not in the majority of instances. The borrower often becomes 
 bankrupt in consequence. Thus the goose that laid golden eggs is sacri- 
 ficed to greed. A portion of the principal is lost by trying to get an unfair 
 rate of interest. 
 
 The actual difference, in the burden upon the debtor, between three, 
 four, five and higher rates of interest is not usually recognized. If three 
 per cent, be the average net earnings of labor and capital, the average 
 borrower is not injured at all by payment of three per cent, interest. 
 He derives the same benefit from the use of the money that he pays for 
 it. But if he pay four per cent., the benefit received from the loan is 
 paid and one third more. But five per cent, interest takes two thirds 
 more than the advantage of the loan from the debtor. The actual ex- 
 pense to a debtor of a five per cent, rate of interest is therefore twice 
 as great as a four per cent. rate. 
 
 The aforesaid principle is true of the payment of all rates of interest 
 above the earnings of the money on which it is paid. The burden of in- 
 
WHEN DEBT IS PROFITABLE. 
 
 381 
 
 terest is measured by its excess over ihe profit derived from the loan 
 and not by the total rate. 
 
 A debt is not necessarily a burden ; it may be a source of profit. Per- 
 sons have grown rich from the income of their debts. If the income 
 from what constitutes a debt exceed the interest paid thereon, the debtor 
 reaps an advantage from being in debt. 
 
 When a banker owes his depositors five hundred thousand dollars, on 
 which the total expenses are one half of one per cent, per annum, and 
 keeps four hundred thousand of this money loaned at six per cent., he 
 is getting a net income of twenty-one thousand five hundred dollars an- 
 nually from his debts. When a national bank borrows five millions 
 from the government at one per cent, per annum, and keeps four millions 
 loaned at five per cent., it derives an annual profit from its debt of one 
 hundred and fifty thousand dollars. 
 
 irsury laws should discriminate between loans amply secured by mort- 
 gage on real estate, or by pledge of bonds or similar ample security, 
 and loans resting entirely on personal promises. The rate of interest on 
 good mortgage, or similar security, ought not to exceed four per 
 cent, per annum ; and loans on personal security, not over five per cent, 
 per annum. Such measures would increase the probabilities of the 
 borrower's success in business enterprises, and would therefore diminish 
 the aggregate of loaned money lost by bankruptcy of debtors. The 
 whole community would thus be benefited by fair dealing. 
 
CHAPTER XVII. 
 
 The Relations of Capital and Labor. — Need of more Capital than before 
 Expensive Machines were used. — Mistaken Ideas about Freedom of 
 Trade. — Patent Laws cause an Inequitable Distribution of Wealth. — 
 Nature of the Antagonism between Capital and Labor.— Different 
 Interests produce Different Conduct. — Why Laws were Created. — 
 Why Laws should Continually Change. — Contention between Labor 
 and Capital should be settled by Law. — Origin of Law. — Further 
 progress is Necessary. — Ought every Man be Allowed to Do as 
 He pleases. — A Dangerous Doctrine for the Rich to Preach. — What 
 should be. — Rise of Rents. — Hours of Labor. — Comparison with a 
 Hundred Years ago. — Is Equity being done .'' — Free Trade is Pos- 
 sible only when Both Parties have Liberty of Choice. — How Work- 
 men may Rob Employers. — When Free Trade occurs. — What a 
 Good Bargain is. — Laws are Outgrowths of Human Necessity. — 
 Siege of Paris. — When Laws need Revision. — Test of the Wisdom 
 of a Law. 
 
 With what tranquillity and calm resignation we all bear 
 the losses and sufferings of others. 
 
 To a large extent, capital represents the labor of past 
 generations. It may be called dead men's labor, because a 
 large portion of it was created by men now dead. This 
 fact, in the continual struggle between capital and labor, 
 gives an advantage to capital. Capital represents the dead 
 laborer. Labor is represented by the living workman. 
 Capital needs protection from rust, fire and decay; but, un- 
 less in form of living things, it does not need food, warmth 
 and clothing. Labor must have food, shelter, warmth, and 
 clothing ; it cannot wait a year, a month, or a week ; it 
 must have them constantly or perish from cold and starva- 
 tion. Capital is not in need of daily sustenance. Dead 
 muscles need neither food, drink, or shelter ; and therefore 
 capital, their representative, can lay its plans for the future 
 and wait. It knows the living muscles must be fed and 
 that imperious necessity will forbid their waiting in idleness. 
 The labor of the dead thus often gains a victory over 
 
 382 
 
POWER OF CAPITAL. 383 
 
 the labor of the Hving; — the lifeless hand is most potent, 
 — it places fetters on the one throbbing with warm blood. 
 
 The man who keeps his capital secure, but idle, loses only 
 the profits he might have made from its use. The poor, idle 
 workman loses his entire capital every day of his idleness. 
 Capitalists often lose large sums as the result of strikes ; 
 but the damage to the idle workmen is usually relatively 
 larger. 
 
 NEED OF MORE CAPITAL THAN BEFORE EXPENSIVE MA- 
 CHINES WERE USED. 
 
 Comparatively little labor can be done with naked hands. 
 A tool of some kind is usually needed, and this tool is capi- 
 tal. A man who cuts grass or grain with his own tool needs 
 a little capital if he use a common scythe to perform the 
 work. He needs much more capital if he use a team of 
 horses and a mower or reaper. This is why labor-saving 
 machines tend to give capital an advantage over labor. 
 Some of *them are very expensive, and so efficient that a 
 workman who should undertake to compete therewith, by 
 hand labor, with a few simple tools, could only earn from 
 one to five cents a day. This puts the man with nothing 
 but his bare hands at a greater disadvantage to the capital- 
 ist than he was two hundred years ago. Labor has always 
 needed capital ; the changes wrought by new inventions 
 simply make it imperatively necessary for labor to use a 
 larger amount of capital in the performance of a certain ser- 
 vice, in order to successfully compete with those who are 
 supplied with improved tools. In the end, new inventions 
 benefit the laborer, but there is a stage in their history when 
 they can be used as instruments to increase the profits of 
 the rich, and to unfairly lower the wages of the poor. 
 
 The enormous advantage given to capitalists by the in- 
 vention of expensive machinery which renders hand com- 
 petition utterly impossible is increased by our patent law sys- 
 tem. In the majority of instances, inventors lack the requi- 
 site capital to utilize their patent after it is obtained. In 
 most cases the result is the sale of the patent, at a nomi- 
 
;84 
 
 SOCIAL STRUGGLES. 
 
 nal sum, to a capitalist, who is thereby enabled to monopo- 
 lize the manufacture of a particular thing. No matter 
 how large his profits, nor how necessary to the progress of 
 society his goods may be, the whole power of the Govern- 
 ment is marshaled to prevent any one from interfering with 
 his exclusive privilege. The owners of patents are thus 
 often enabled to levy an enormous tax on the nation. At 
 the same time the wages of their operatives may be low, and 
 many persons who formerly earned fair wages in the same 
 kind of industry with the old and inferior tools are thrown 
 out of employment. 
 
 MISTAKEN IDEAS ABOUT FREEDOM OF TRADE. 
 
 It has been said that every one is " free " to buy patented 
 goods or not, as they choose. But, in fact, the majority are 
 compelled to buy, either the patented machine which per- 
 forms a certain service at a diminished cost, or the cheap- 
 ened article manufactured therewith. 
 
 Suppose there are ten dealers in tin-ware in a ceftain city, 
 and a machine be invented wherewith one man can perform 
 the labor in making tin-ware which previously required the 
 work of six men. When one dealer buys one of these ma- 
 chines and puts it at work, all others in competition with him 
 are forced either to buy a machine, to buy the goods made 
 by the one in operation, or be made bankrupt. 
 
 PATENT LAWS CAUSE AN INEQUITABLE DISTRIBUTION OF 
 
 WEALTH. 
 
 The great wealth created in England as a result of im- 
 proved machinery for working iron and making cotton and 
 Avoolen goods was not equitably distributed among the 
 workmen whose toil created said wealth. On the contrary, 
 an English historian tells us that from 1780 to 1820, the pe- 
 riod when some of the greatest inventions were cheapening 
 the manufacture of goods, the English laborer fared rela- 
 tively worse than at any time for six hundred years. 
 
 An inventor is a benefactor of society. He should be 
 well and liberally paid for his mental and physical labors, 
 
DIFFERENT VIEWS. 
 
 385 
 
 and for the expenses incurred in perfecting his invention. 
 But this compensation should not be made in such form as 
 to prevent the benefits of the invention from being at 
 once shared by the whole community. 
 
 NATURE OF THE ANTAGONISM BETWEEN CAPITAL AND 
 
 LABOR. 
 
 What has been heretofore said about the interest of 
 money applies to the general relations of capital and labor. 
 It is undeniably true that to a certain extent they are mut- 
 ually dependent on each other, and that there should be an 
 equitable and a harmonious union between them. But, as 
 a matter of fact, this condition generally exists only in the 
 imagination ; each seeks its own welfare with little regard 
 for the interest of the other. 
 
 Much has been said about the identity of interest exist- 
 ing between labor and capital. But in fact their interests 
 are very far from being identical. 
 
 It is true that it is not to the selfish interest of either to 
 force their opponents into so hard a bargain as to utterly 
 destroy all power or desire to fulfill any part of it. It is 
 not to the interest of capital to force labor into starvation 
 or insurrection. It is not to the interest of labor either to 
 destroy capital, or to prevent it from receiving any share 
 of the profits of industrial enterprises. 
 
 Perhaps it would be more accurate to say that there is an 
 imaginary point at which the just dues of labor and the 
 profits of capital would be both satisfied in a manner at 
 once equitable and expedient. But, while such an ideal 
 harmony may exist, the interests of capital and labor are 
 far from being identical as the opposing parties understand 
 them. 
 
 The average capitalist will tell you that his interests and 
 those of his employees are the same ; but when called on to 
 state those interests, he will define them differently from 
 his workmen. The laborer will perhaps tell you the same 
 thing. But he too, if asked what those interests are, will 
 state them differently from what his employer would. The 
 25 
 
386 
 
 SOCIAL STRUGGLES. 
 
 slave-holder never had any doubts about the harmony 
 between his interests and those of his slaves; but the slave 
 had a different view of the matter. To-day, the rich and 
 privileged classes of England regard their interests as 
 identical with those of the multitude of poorly paid and 
 poorly fed laborers ; but the toilers look on those interests in 
 a far different light from those who are not making a painful 
 struggle for the bare necessaries of life. The privileged 
 classes suppose there is harmony when matters are arranged 
 to suit themselves, without consulting others whose rights 
 may be sacrificed thereby. 
 
 The rapidly growing army of young men and women in 
 the United States who have never earned in their whole 
 lives the bread they consume in one day, will talk about 
 their interests being identical with that of the farmers and 
 mechanics. But this identity, they usually imagine, consists 
 in living a life of ease and consuming the products of 
 others' toil. They fail to see that labor is not always an 
 amusement. 
 
 Capital and labor have always been at war with each other. 
 They are natural antagonists in the sense that buyers and 
 sellers are. A seller naturally tries to obtain the highest 
 attainable price ; a buyer seeks to get what he wants at the 
 lowest possible price. Comparatively few persons are 
 governed by considerations of equity ; the majority are 
 guided by selfishness, and this is often so blind as to 
 overreach itself and defeat its own objects. This is true of 
 multitudes who imagine themselves governed only by the 
 highest principles of religion and morality. In fact, some 
 of the hardest, meanest and most grasping persons in the 
 world are found among those who pride themselves on their 
 strict rectitude. 
 
 An employer is a buyer of labor and a seller of money. 
 He does not usually ask: What is just? His selfishness 
 prompts him simply to inquire how low wages he can name 
 and get the required services. A workman is a seller of 
 labor and a buyer of money. He naturally tries to sell his 
 labor as dearly as possible and to buy money as cheaply as 
 
NEED OF JUST LAWS. ^S/ 
 
 he can ; his conduct is usually controlled by the same mo- 
 tives that influence his employer. There is not one kind of 
 human nature for one class, and another kind of human na- 
 ture for another class. Legal regulations are necessary to 
 prevent opportunities to commit wrong from being trans- 
 lated into actual injustice by all classes. 
 
 We have heard much about the wickedness of arraying 
 labor against capital. They are already arrayed — their war- 
 fare is merely one phase of the struggle for existence which 
 has always taken place between one animal and another. 
 Nothing is gained either by ignoring or misrepresenting 
 existing facts. In several ways, during recent years, mon- 
 eyed capital has carried on an organized, aggressive and 
 successful campaign against labor and other kinds of capi- 
 tal. Many think that right, who are horrified at the idea of 
 labor combining against capital ; their notions of morality 
 depend on whose ox is getting gored. 
 
 If money-lenders have a right to advance their interests 
 by organizing a trade union under the name of a "■ Bankers* 
 Convention," have not brick-layers a right to form a Union 
 for the protection of their interests? If stove dealers have 
 a right to combine and fix the price of stoves, have not 
 those whose labor creates those stoves an equal right to 
 combine for the purpose of fixing the price of their labor? 
 But a little reflection shows that the organization of differ- 
 ent interests and trades for mutual help, and for protection 
 against the aggressions of other persons and organizations, is 
 founded on a radically false principle. One class, one trade 
 and one interest can undoubtedly, in the outset, promote 
 its individual prosperity by "organizing." But other and 
 opposing organizations will soon be formed; and this pro- 
 cess may continue until every separate trade, class and 
 interest in the entire nation has what is called "an organ- 
 ization." Society, as a whole, will then be back to the 
 point from which the first combination started, with, how- 
 ever, an essential difference ; viz., the great expense of 
 maintaining a multitude of organizations which are of no 
 benefit whatever, except to those who draw salaries. 
 
388 
 
 SOCIAL STRUGGLES. 
 
 The true way is to make the laws and their execution 
 broad and just, and dissolve all combinations of particular 
 trades or persons. Every citizen should have equal rights 
 and protection, not from a class organization, but from the 
 justice of laws covering every person and place. 
 
 DIFFERENT INTERESTS PRODUCE DIFFERENT CONDUCT. 
 
 Many well-meaning efforts to equitably adjust the relations 
 of labor and capital have failed because made from the wrong 
 standpoint, viz.: On the theory of their natural harmony. 
 Persons with similar interests naturally fraternize with 
 each other. There is no need to effect harmony, if it nat- 
 urally exist. 
 
 Animals with similar interests live together peacefully. 
 Quail do not quarrel. But the interests of some animals 
 conflict with the interests of other animals, and even with 
 those of their own race. How would a man succeed who 
 attempted to persuade a fox and a flock of quail that their 
 interests were harmonious? The interests of different 
 classes of persons are often nearly as diverse as the inter- 
 ests of a fox and a quail. The only difference is this : The 
 fox wishes to live by eating the quail. One class of men 
 wish to live by eating the fruit of other men's labor. In 
 both cases, one animal has a view of his interests different 
 from the opinion of the other animal. 
 
 No progress can be made in the settlement of any ques- 
 tion until the fundamental facts and principles are recog- 
 nized, just as they are. Nothing is gained by assuming a 
 state of things which has no existence. We must recog- 
 nize that a hog and a man have many traits in common, 
 before we can make substantial progress in adjusting the 
 relations of capital and labor. Moreover we must remem- 
 ber that the selfishness of all classes needs restraint. 
 Whether a person be a capitalist or a poor day laborer, he is 
 always simply a man. 
 
 WHY LAWS WERE CREATED. 
 In an open fight between persons or parties of unequal 
 strength and power of endurance, the probabilities are that 
 
NECESSITY OE LA W. 
 
 389 
 
 the weaker must inevitably succumb to the stronger, no 
 matter what form of contest may take place. It therefore 
 necessarily follows, that in all forms of war the few strong 
 will become masters of the many weak, by beating them 
 one by one. But by combining together, the numerous 
 weak can create a force capable of controlling, and if need 
 be, subduing the small number whose individual strength is 
 above the average; and who, if left "free" to follow their 
 own inclinations, will surely, encroach upon the rights of 
 others, weaker or less cunning than themselves. Such a 
 combination states what it deems equitable between man 
 and man, and most conducive to the best interests of the 
 whole community. These statements are called " laws," 
 and are made in a negative form. Instead of defining the 
 conduct that centuries of experience have pronounced the 
 best, laws are enumerations of acts which the aggregate 
 wisdom of mankind have found adverse to the well-being of 
 society. All conduct and acts not thus designated and pro- 
 hibited by various penalties being attached to their commis- 
 sion, are presumed proper to pursue and commit. 
 
 WHY LAWS SHOULD CONTINUALLY CHANGE. 
 
 The enormous amount of legal literature in the world has 
 grown from the action of two forces. First. The necessity 
 of devising some means to prevent individuals with unusual 
 strength, cunning and selfishness, from preying upon the 
 rest of society. Legislation has been enacted for the pur- 
 pose of encouraging such persons to devote their energies 
 to harnessing the forces of nature in the service of man- 
 kind, and thus creating new wealth ; and discouraging them 
 from acting the part of beasts of prey, and, in a great va- 
 riety of ways, living on the wealth created by and justly 
 belonging to other persons. 
 
 Second. The continual changes in the conditions sur- 
 rounding mankind incident to their increase in numbers, and 
 growth in knowledge of morals, science and art, have inces- 
 santly created new and different opportunities for men to 
 plunder and oppress each other. Many laws well adapted 
 
-QQ SOCIAL STRUGGLES. 
 
 to restrain and regulate the conduct of mankind a thousand 
 years ago, would be of no service now. We have outgrown 
 them. New conditions have arisen which those who en- 
 acted the ancient laws did not have before them ; and, 
 therefore, by no possibility could frame laws suitable for the 
 development of a human intelligence, and a state of society 
 of which they had not- the faintest conception. 
 
 The principle underlying all laws fit to be made, is pre- 
 cisely the same in all ages of the world ; viz., the encourage- 
 ment of virtue; the discouragement of vice. But the means 
 best fitted to carry out this principle must be adapted to 
 the conditions under which a society governed by law ex- 
 ists. As these conditions are constantly changing, unless 
 the laws change with them, they become more or less inop- 
 erative, and often become instruments of oppression ; thus 
 reversing the result for the attainment of which they were 
 originally enacted. TJie development of laiv should therefore 
 keep pace zvitJi the development of man. Those who resist 
 changes in laws, no matter to what subject those laws relate^ 
 are resisting human progress. They are endeavoring to 
 keep a growing and developing world clad in the garments 
 which it has outgrown. 
 
 CONTENTION BETWEEN LABOR AND CAPITAL SHOULD 
 BE SETTLED BY LAW. 
 
 Therefore the best way to adjust the contention of cap- 
 ital and labor is a resort to what centuries of experience 
 have shown is the best mode of settling all other kinds of 
 strife which grow out of the tendencies of human nature; 
 viz., legislation adapted to the existing conditions. A con- 
 siderable portion of our laws relative to finance, labor and 
 capital are unfited to our present stage of development. 
 The discoveries in science and inventions in art which have 
 recently occurred, have wrought great changes in our modes 
 of creating and distributing wealth. As an inevitable re- 
 sult, the laws created with reference to former conditions 
 are unsuitable, do not conform to the facts, and are inade- 
 quate to meet the requirements of the present state of affairs. 
 
WHA T LA W DOES. 
 
 ORIGIN OF LAW. 
 
 391 
 
 In past ages there was little law. The strong could, and 
 did abuse, rob and enslave the weak with impunity. Law 
 began when two or three comparatively weak men combined 
 to resist the injustice and wrong of one stronger man. The 
 slowly growing reign of law has displaced anarchy with 
 order. Man's tendency to use superior physical strength for 
 the purpose of plundering physical inferiors has been curbed 
 to a great degree by laws directed against such practices. 
 It has also partially protected the mentally weak from the 
 selfishness of the mentally strong. The pecuniarily weak 
 are likewise partially protected from the rapacity of the 
 pecuniarily strong. Schemes to commit robbery without 
 overt violence, to a considerable extent are placed under 
 the ban of the law. 
 
 FURTHER PROGRESS IS NECESSARY. 
 
 But we need to take further steps in the direction we have 
 been traveling for thousands of years. Our laws must be 
 altered to conform to our altered conditions. True conserv- 
 atism consists in constantly maintaining and preserving the 
 proper equilibrium of the various portions and forces of 
 society. This can only be accomplished by so changing our 
 social and legal machinery as to keep them constantly 
 adapted to our industrial, intellectual and moral develop- 
 ment. If we would, we cannot arrest the progress of man- 
 kind. We must recognize it as a fixed fact and conform 
 our institutions to supply its steadily changing needs and 
 demands. Therefore, before we can intelligently devise 
 means for curing the present contention between capital 
 and labor, we must first study the changes which have oc- 
 curred in the conditions under which those two forces are 
 placed. Meanwhile, we should repress all conduct which, 
 although apparently peaceable, savors of violence, because of 
 its being a summary disturbance of existing conditions. 
 We should hasten slowly. The natural and safe method of 
 social development is to cautiously take only one forward 
 
2Q2 SOCIAL STRUGGLES. 
 
 step at a time. A law should prevail in every State which 
 would prevent an employer from discharging or reducing the 
 wages of a regular employee, without first giving thirty days' 
 explicit notice thereof. The same law should prevent an 
 employee from demanding a higher rate of wages, or quitting 
 work without first giving his employer thirty days' notice of 
 such intention. Such a measure would prevent either party 
 from being taken by surprise, as often now happens. By 
 affording time for reflection and discussion, it would avoid 
 much ill feeling, as well as pecuniary losses to both sides. 
 
 OUGHT EVERY MAN BE ALLOWED TO DO AS HE 
 PLEASE ? 
 
 In the outset of considering what measures to adopt in 
 order to create and preserve the proper relations between 
 capital and labor, the question arises : What end should 
 be sought by legislation ? 
 
 Much affectation of " science " is made by the advocates 
 of "free trade " and " let alone." It is claimed that these 
 doctrines are right because they are in harmony with the 
 great natural law of the " survival of the fittest" ; and, if all 
 legal restraints were removed, each man and each nation 
 would naturally take the place designed for him or it. 
 These persons think all usury laws should be repealed, the 
 lender allowed to charge whatever interest he can get, and 
 that no tariffs should exist to protect weak manufacturers 
 from established and powerful monopolies. 
 
 Volumes of so-called political economy have been written, 
 based on the idea that there should be " unrestricted free- 
 dom of action " between men to make whatever bargains 
 could be made, and that such contracts when made should 
 be enforced by the whole civil and military power of the 
 nation. 
 
 The principle underlying these doctrines ignores all moral 
 obligations of one man, or one nation, to another. It is the 
 brute idea that the fact of one man, or body of men, having 
 superior mental, physical or pecuniary power confers on 
 that man, or that body of men, the natural right to use that 
 
THE GOSPEL OF ANARCHY. 
 
 393 
 
 power for his, or their selfish purposes, regardless of the suf- 
 ferings thereby inflicted on weaker men or weaker nations. 
 If this principle be correct, the slave-holders were right. For 
 if one race have superior power to another, why not allow 
 them to use that power as to them appear best for their 
 own interests ? " The interests of the weak and the strong, 
 of labor and capital are identical. Why then not trust the 
 strong to do as they tliink best ivith the iveak? Why not let 
 nature take her course ? " 
 
 A shark wants " unrestricted freedom," as he under- 
 stands it. The same is true of tigers and all other beasts and 
 birds of prey. A wolf does not want to be " limited " to 
 the amount of mutton necessary to a meal — he wants " un- 
 restricted freedom " to slaughter and suck the blood of a 
 score of sheep at once. Men whose superior physical, in- 
 tellectual or pecuniary strength, give them advantages over 
 their fellows are prone to desire "unrestricted freedom," 
 and often to unconsciously persuade themselves that the 
 doctrines of the fishes of the sea are true political economy- 
 Carried to its logical conclusion, the doctrine of " unre- 
 stricted freedom " is the gospel of anarchy. Its advocates 
 stop at what they call the " police line." But if such ideas 
 be true, why should we have police ? Why not let every 
 one take care of himself and enforce his own rights without 
 calling on others for help ? Why should a person holding 
 such views call on the civil authorities to enforce the con- 
 tracts he may have made with others ? Furthermore, if a 
 person have a natural right to "unrestricted freedom" has 
 he not the right to cancel a contract whenever he thinks his 
 interest would be promoted by so doing ? 
 
 If we admit these notions, it follows that universal suf- 
 frage is wrong. A few men should be allowed to seize and 
 hold the reins of power. It also follows that a strong na- 
 tion has a perfect right [as England has repeatedly done] 
 to reduce weaker nations to industrial, commercial and pe- 
 cuniary servitude. It further follows that the weaker men 
 and nations have no natural right to use such defense as 
 may be had by legal organization or by combination with 
 
394 
 
 SOCIAL STRUGGLES. 
 
 each other. They should quietly submit. " Why were some 
 men made stronger in body or mind than others, if they 
 have no right to use their strength as they see fit?" 
 
 These ideas, incorporated into deeds are, in fact, a return 
 to barbarism — to the selfish principle of " every man for 
 himself." It is none the less so, because the proposition is 
 to spoliate by the weapons of trade and law instead of the 
 old method of open robbery by physical force. Wealth 
 got by usury ; by legislative changes of contracts, such as 
 the Coin Act and the demonetization of silver; by oppres- 
 sive uses of capital in form of monopolies ; or, by hard bar- 
 gains of any kind wrung out of the necessities of those 
 whose circumstances force them to submit, is obtained by 
 the same spirit which actuated the petty chiefs of the Mid- 
 dle Ages when they sallied forth with armed retainers to 
 plunder a fertile valley. Robbery by the means " respect- 
 able " in the nineteenth century, is as criminal as robbery 
 by the modes which were " respectable " in the ninth cent- 
 ury. 
 
 A DANGEROUS DOCTRINE FOR THE RICH TO PREACH. 
 
 At first sight, it seems to the interest of the rich, the cun- 
 ning, the strong and the skillful to have all restraints upon 
 their conduct removed. But there is another side to the 
 doctrine that " the strong should be free to follow their own 
 instincts," and that it is best to "let every one follow and 
 gratify his ambition in his own way." The moment the 
 doctrine is fully established and understood that superior 
 power to do or carry out a particular thing or policy con- 
 fers a just and natural right on such person or persons to so 
 act, the capitalists of the country are in immediate danger 
 of having their property taken from them by laws backed 
 by physical force. The number of the rich capitalists is 
 small corripared with the rest of the population. Suppose 
 the laboring classes should say to them: "You say that 
 might gives right ; we accept your doctrine and challenge. 
 Although a hundred of your number have greater resources, 
 and therefore are stronger than a hundred of us, yet we can 
 
THE TRUE DOCTRINE. 
 
 395 
 
 exceed your strength by a combination of our superior num- 
 bers. We will combine at the polls and make laws which 
 will show you that if superior strength give privilege, 
 we have the right to control your property, just as you 
 have heretofore controlled our labor." 
 
 The danger of the doctrine of " freedom of contract " 
 between man and man, is not an imaginary one. It is true 
 there is no danger to the few capitalists who act on such a 
 doctrine so long as the masses of voters can be hoodwinked 
 by false cries, as they have often been heretofore. But 
 that this cannot be repeated indefinitely is perfectly certain. 
 Sooner or later the laboring classes will more fully under- 
 stand their power, and will mostly vote as a class, and then 
 the evil of the aforesaid false doctrines will appear to those 
 who now exalt them into high moral principles. 
 
 The true doctrine is that neither power of wealth nor 
 power of numbers should be used to perpetrate wrong or 
 injustice toward any person or class whatsoever. 
 
 " These things I conmiand yoii, that ye love one another ^ 
 
 WHAT SHOULD BE. 
 
 Statistics have been adduced to show that the masses 
 ought not to complain of the present hard times because a 
 laborer can now obtain more of the comforts of life for a 
 week's wages than he could fifty years ago. But why stop 
 at fifty years? Compared with five hundred years ago the 
 people are highly prosperous and get high wages to-day. 
 Compared with the dark ages, the common laborer can now 
 live like a prince ; — he can have glass in his windows; — can 
 have books, newspapers, and a hundred other things which 
 were then almost unknown. A thrifty mechanic who owns 
 his homestead can now live in a style far superior in many 
 respects to that of Henry VIII. of England. 
 
 We can now raise wheat, corn and other farm products 
 with less labor than before the invention of the present 
 perfected farming implements ; but that constitutes no rea- 
 son why the profit and advantage of this increase of knowl- 
 edge should go to a few rich persons instead of benefiting 
 
396 
 
 SOCIAL STRUGGLES. 
 
 the farmers themselves. We can manufacture cloth and a 
 great number of other necessaries and comforts of life with 
 more ease and less labor than was formerly required to make 
 a poorer quality ; but that forms no reason why the ma- 
 chinery of to-day should benefit only a few. If the doc- 
 trine that the masses should now be content to work as hard 
 and fare as rudely and poorly as their ancestors did fifty or 
 a hundred years ago, be true, then it logically follows that 
 they should be willing to go still further back; to return to 
 the barbarism when mankind lived in rude huts, were clad in 
 the skins of beasts, had none of the comforts of civilization 
 and were almost destitute of education. This they should 
 be contented to do, in order that a favored few should mo- 
 nopolize all the results of the toil and thought of a hundred 
 generations. 
 
 RISE OF RENTS. 
 
 More of many of the various necessaries and comforts of 
 life can be bought with a week's wages now than could be 
 had for the same labor two hundred years ago. But it 
 is also true that as a general rule rent costs enormously 
 more now than then. In fact, a large portion of the aver- 
 age workman's wages is absorbed in payment of rent, and 
 this goes on accumulating against him when he is idle. The 
 great rise in the value of land in cities is the chief cause of 
 crowded tenements, insufficient light and air, and other 
 evils. Large numbers of workmen live upon land for which 
 a rent must be paid out of all proportion to their wages. 
 
 The question is often asked : Why do not the workmen 
 in cities live in the suburbs where rent is cheaper? Partly 
 because they cannot afford to. Most workmen cannot begin 
 work at nine o'clock, as some other classes do. They must 
 be at their place at seven o'clock in the morning, and remain 
 until six in the afternoon. The cost of fare and time would 
 be usually greater than the increased rent of a tenement 
 nearer the workshop. 
 
 The problem of supplying workmen with comfortable 
 homes at a moderate cost, from which their work can easily 
 
NEED OF CHEAPER RENT. 
 
 397 
 
 be reached, chiefly involves four things. First : the spread 
 of our cities over larger areas of land ; thus moving shops 
 to open spaces where land .is cheap. An obstacle to this, 
 and a very serious hinderance to better social and sanitary 
 conditions among mechanics and factory operatives, is the 
 fondness of many of them for living in the most central 
 and densely populated section they can find. Measures 
 should be taken to discourage the herding of great numbers 
 within narrow areas, and to encourage the supply of each 
 family with abundance of air and sunshine. These agents 
 disinfect the moral as well as the" physical atmosphere. 
 
 Second. Greater facilities for cheap and rapid transporta- 
 tion of goods and passengers from one portion of a city to 
 another. This can be furthered by the municipalities mak- 
 ing a wiser use of the street franchises. 
 
 Third. A reduction of the price of rent. This depends 
 largely upon a reduction of the rate of interest paid for the 
 use of money. Another important fact is that the rent of 
 the cheapest grade of tenements would be from ten to twenty 
 per cent, lower, if their occupants would learn, as far as 
 possible, to do precisely as they agree, and take good care 
 of their landlord's property. 
 
 HOURS OF LABOR. 
 
 Fourth. Reduction of the time of labor to nine hours a 
 day. This would be allowing a half hour in the morning 
 and evening for the workman to go to and from his work. 
 But it should be borne in mind that the number of hours a 
 man should work in a day depends somewhat on the num- 
 ber of such days' labor in a year. Those whose labor is 
 uninterrupted, month after month, cannot advantageously 
 work as many hours in one day as those who have frequent 
 periods of idleness. 
 
 The total amount of work which a man shall perform in a 
 day and the number of hours he shall be engaged in labor 
 are two distinct things. By incessant and rapid labor for 
 eight hours more work may be accomplished than by more 
 leisurely labor for ten hours ; and the strain upon the phys- 
 
398 
 
 SOCIAL STRUGGLES. 
 
 ical strength, of the laborer occupied for ten hours may be 
 much less than that upon him compelled to severe exertion 
 for eight hours. Therefore, the most we can say about the 
 relative tax on a laborer's energies from working eight or 
 ten hours per day, is that, other things being equal, ten hours' 
 labor are a severer tax than eight hours' labor. Such prob- 
 lems, like many others, depend on circumstances and facts 
 for their proper solution. 
 
 If a man must do a certain amount of work in a day, what 
 number of hours can most advantageously be devoted to its 
 performance? It is certain that the total amount of labor 
 exacted of a workman daily should not be so great as to in- 
 jure his health, or his reasonable enjoyment of life. This 
 implies moderate labor for such portion of time as will leave 
 him ample time for sleep and a reasonable opportunity for 
 recreation and self-improvement. 
 
 A reasonable division of the twenty-four hours is nine 
 hours' labor, nine hours' sleep,* three hours for meals and 
 incidental time, and three hours for recreation and improve- 
 ment. If such a system be followed continuously a large 
 amount of work can be performed in a year. It is the' 
 uninterrupted labor which shows the greatest results. 
 Spasmodic industry produces comparatively little. Of 
 course, such a division of time is entirely impracticable for 
 farmers, sailors, and many other classes of workmen whose 
 hours of labor are largely dependent on the vicissitudes of 
 the weather and upon the peculiarities of the work to be 
 performed. 
 
 COMPARISON WITH A HUNDRED YEARS AGO. 
 
 It is undoubtedly true, that if a mechanic earning the 
 average wages now paid were to live in the style mechanics 
 lived two hundred, or one hundred years ago, he could, in a 
 few years, save money enough to buy a building lot and 
 
 * An enormous amount of insanity and various other forms of nervous 
 disease are due to insufficient sleep. As a general rule, each person 
 should have all the time for sleep that he is able to sleep, without spe- 
 cial reference to the number of hours so occupied. 
 
CAUSE OF DISCONTENT. 
 
 399 
 
 erect a cottage of his own. But those who point this out 
 forget that the man of to-day is surrounded by circum- 
 stances entirely different from those which environed his 
 ancestors. An ox is contented when he has plenty of food, 
 drink and a comfortable shelter from the cold. What other 
 oxen may or may not have makes no difference with his 
 contentment. 
 
 A man's nature differs from that of an ox. His content- 
 ment depends as much upon what his associates have as 
 upon what he has himself. Those who served in the 
 civil war can remember the many times when thousands of 
 men, accustomed when at home to comfortable and luxu- 
 rious quarters, lay down to sleep in the mud, or on the 
 frozen ground, without complaining or murmuring. This 
 was largely so because all fared alike. If part of the army 
 had been supplied with hair mattresses, resting on springs 
 and placed in warm dry rooms, while the rest lay out in the 
 snow or mud, there would not have been the cheerful resig- 
 nation to the situation that there was. 
 
 If a mechanic should now live as plainly and poorly as 
 his ancestors did two hundred years ago, he would find him- 
 self in a very uncomfortable position. His house, furniture, 
 food and clothing, and his wife's and children's clothing, 
 would be the subject of constant and annoying remarks. 
 They would be socially ostracized and made a subject of 
 jeers and ridicule; and unless constituted differently from 
 the majority of persons, life would be a constant round of 
 vexation and annoyance to them. 
 
 It does not allay the discontent of a man who feels that 
 he has not his fair share of the growing wealth of the world, 
 to recite to him the different ways in which he is better off 
 than his ancestors were. He has a feeling that his ances- 
 tors, in one important respect, were far better off than he 
 is : viz., a greater equality, in style of living, with employers. 
 Everything in this world is compared with something else. 
 Therefore it is futile to attempt to convince mechanics or 
 laborers that they are fairly dealt with, by simply pointing 
 out how such persons formerly fared. Their present posi- 
 
400 
 
 SOCIAL STRUGGLES. 
 
 tion, compared with that of men who hved one or two 
 hundred years ago, is of no account to their minds, because 
 it is live vicu, and not dead ones, with whom they wish to 
 be on a footing of greater equahty. 
 
 IS EQUITY BEING DONE? 
 
 The question, therefore, is not whether labor gets a 
 greater reward now than it formerly did. After that is 
 conceded, the difficulty is as great as ever. Labor insists 
 that capital gets more than its relative share of the wealth 
 created by combining labor and capital with the discoveries 
 and inventions of science and art. If this be true, then it 
 follows that labor is being defrauded of its just share in 
 the glorious progress of the human race. 
 
 It must be remembered that our social and legal policy 
 should be framed on the maxim that justice is always ex- 
 pedient. The permanent interests of capital are safe, just 
 in proportion as labor is equitably rewarded. 
 
 We should seek the advancement of HUMANITY ; — not 
 simply that of a few, but of the HUMAN RACE. The enor- 
 mous progress we have made in science, invention, and me- 
 chanical art and skill, is rightfully the heritage of the WHOLE 
 PEOPLE; it should be used for elevating the masses by light- 
 ening the burden of drudgery — providing more physical 
 comforts and better sanitary conditions ; and by affording 
 more leisure, opportunity and means for intellectual im- 
 provement. 
 
 It is sound public policy to encourage industry and the 
 accumulation of wealth. Those who are lazy, improvident 
 and wasteful should suffer the natural result of bad con- 
 duct. But at the same time, we should create the same 
 checks to prevent an unscrupulous and inordinate use of the 
 money-making power that we have already placed on the 
 misuse of physical power. 
 
FREE CONTRACTS. 
 
 401 
 
 FREE TRADE IS POSSIBLE ONLY WHEN BOTH PARTIES 
 HAVE LIBERTY OF CHOICE. 
 
 Many persons suppose that a bargain is voluntary, when 
 made without either party thereto being under compulsion 
 from some threatened legal penalty or some form of phys- 
 ical violence. Such a contract is presumed to be a " free 
 trade," mutually advantageous to both parties, with which 
 it is both impolitic and wrong for Government to interfere. 
 
 But very little investigation is required to discover that 
 one man may compel another to make a grossly unjust bar- 
 gain, without exercising, or threatening either legal or phys- 
 ical force. And this may be done either when commodities 
 are bartered, when goods are bought and sold for money, 
 or when labor is hired. A makes an unfair bargain when- 
 ever he uses the peculiar relations which he bears to B, for 
 the purpose of getting the money, the goods, or the labor 
 of B for a much smaller equivalent than would have had to 
 be given if B were not crippled by circumstances which 
 placed him at a great disadvantage. It may be more ad- 
 vantageous to B, to make such a bargain, than to bear the 
 losses and suffering unavoidable in case no such bargain 
 were made ; but this fact may exist and still the bargain 
 be grossly unfair and oppressive to B. 
 
 The manufacturers of a city are making fair profits at the 
 existing scale of prices and wages. Suppose under those 
 circumstances they combine and suddenly reduce the wages 
 of operatives five per cent. Such a reduction may appear 
 insignificant, but, in the aggregate, where thousands of hands 
 are employed, it makes a great difference in the manner the 
 wealth created by them shall be distributed. In such case, 
 it may be said that if the workmen are not satisfied they 
 are " free " to get employment elsewhere. But although 
 nominally such freedom exists, the workmen have not a per- 
 fect liberty of choice. A large number of them have no 
 alternative employment and lack the means to remove them- 
 selves and families to another place. Even those who are 
 able to emigrate cannot do so without leaving associates 
 26 
 
402 
 
 SOCIAL STRUGGLES. 
 
 and friends. Furthermore, the expense of traveling in 
 quest of employment, and of removal after it is found may- 
 be a greater loss than the reduction of wages. 
 
 HOW WORKMEN MAY ROB EMPLOYERS. 
 
 On the other hand, circumstances may and often do exist 
 in which workmen, already in receipt of fair wages, may 
 combine, and, without an hour's notice, demand an increase 
 of ten per cent, or more in their wages. The manufactur- 
 ers have then two alternatives presented to them, either one 
 of which involves not merely a loss of possible profits but 
 an actual loss of accumulated capital. If the workmen's 
 demands are not acceeded to, and the factory consequently 
 closed,, there is a loss of the interest of the capital invested in 
 buildings and machinery, and a serious damage to business 
 from its interruption. When the manufacturer is heavily 
 in debt, as is often the case, these losses are very hard to 
 bear. If the manufacturer conclude that the additional 
 wages demanded will damage him less than to stop work, 
 he is then also certain to lose from two causes : the addi- 
 tional wages and the inability to fully compete with other 
 firms, situated in places at a distance where wages have not 
 been raised. 
 
 Suppose the hired farm laborers in a wheat-raising sec- 
 tion of the country should quietly keep at work until the 
 wheat was fully ripe and then demand double the usual har- 
 vest wages. The farmers would pay it because they would 
 otherwise lose still more than the extorted wages. But 
 would this be a free contract ? Would any bargain or trade 
 made under similar circumstances be " voluntary " in the 
 proper sense of the term ? 
 
 WHEN FREE TRADE OCCURS. 
 
 Freedom of contract and trade, alike between individuals 
 and nations, is only possible, as a general rule, when both 
 parties occupy ground and positions which give them a 
 reasonable equality of strength, and power of self-protec- 
 tion. Neither an individual nor a nation has much chance 
 
SOURCE OF LAW. 
 
 403 
 
 to make an equitable bargain when in urgent necessity of 
 making one on some terms. The proverb, " Necessity 
 never makes a good bargain," is a condensed statement of 
 human experience in regard to trades and contracts made 
 when one of the parties has a great advantage in some way- 
 over the other. 
 
 When both parties to a bargain of any kind, are benefited 
 thereby to nearly an equal extent, the exchange is both free 
 and fair. But where one side gets nine-tenths of the profit 
 of the transaction, and the one-tenth profit to the other side 
 is profit only in the sense that it is a means of averting a 
 portion of an expected loss, neither a free trade nor a fair 
 trade has been accomplished. Such a bargain is evidence 
 that one of the parties thereto had " liberty t)f -choice and 
 action " only in the narrow sense that he could choose be- 
 tween one sacrifice and another and a still greater one. 
 
 WHAT A GOOD BARGAIN IS. 
 
 As a general rule, both individuals and nations in their 
 dealings are constantly endeavoring to gain an unfair advan- 
 tage over each other. What is commonly called " a good 
 bargain " is usually an exchange wherein the advantage 
 thereof is nearly all on one side. Trade and commerce are 
 not carried on from benevolent motives. 
 
 LAWS ARE OUTGROWTHS OF HUMAN NECESSITY. 
 
 Law originated because human experience saw the abso- 
 lute necessity of some orderly means of restraining the cu- 
 pidity and selfishness of mankind. Laws are therefore sim- 
 ply an expression and outgrowth of public necessity. It is 
 practically impossible for a government to inquire into the 
 right and wrong of every transaction which occurs between 
 the different individuals under its jurisdiction. It is like- 
 wise impracticable for it to take cognizance of all the bar- 
 gains made between its own citizens and the citizens of for- 
 eign nations. But, at a very early period in the history of 
 our race, the need became apparent of adopting some gen- 
 eral measures the tendency of which would be to prevent 
 
404 
 
 SOCIAL STRUGGLES. 
 
 one man from taking advantage of the necessities of another 
 to make with him a grossly unfair bargain. Out of this 
 belief grew the first laws. It was next observed that simi- 
 lar measures were necessary to prevent foreigners from un- 
 fair dealings with citizens. This was the germ, at once, of 
 the first international law and the first tariff. For century 
 after century, these rudimentary ideas have slowly developed 
 into systems of jurisprudence, and have found expression in 
 a great variety of ever changing laws. The wisdom and 
 expediency of the form of many of these laws are still under 
 active debate. But, that it is as legitimate a function of 
 government to prevent unfair bargains as to prevent robbery 
 or burglary, is a principle fully established. The only ques- 
 tion is : What are the best practical means of accomplishing 
 such a purpose? What measures should be adopted, at a 
 given time and place, to promote and secure freedom of 
 contract and fair dealing between citizen and citizen and be- 
 tween citizen and foreigner, depends entirely on the at- 
 tendant circumstances and conditions. Laws wise, suitable, 
 and effectual in one age and country, and under one combi- 
 nation of facts, may be at once foolish and futile at another 
 time or place and under different circumstances. Laws 
 made without reference to existing conditions are always 
 acts of folly, and usually acts of injustice ; simply because 
 the paramount end of legislation can never be reached un- 
 less the law fits the facts. Facts cannot usually be made 
 to fit either newly-made laws, or laws made long before and 
 under a different state of affairs. 
 
 SIEGE OF PARIS. 
 
 A striking illustration of the foregoing principles was fur- 
 nished a few years ago by the siege of Paris. The prices of 
 fuel, flour, and other necessaries of life in that city are usu- 
 ally left to the action of competition in open market between 
 the owners of those things. But, when the German armies 
 encircled the city, it was at once evident that the different 
 conditions necessitated a different means of regulating prices. 
 The Government fixed prices by law. Otherwise, those who 
 
77?^^ TEST OF LA IVS. 
 
 405 
 
 chanced to have in possession a large stock of imperatively 
 needed articles could have taken advantage of the situation 
 to obtain unfair prices. The laws adapted to the ordinary- 
 times of peace were not suitable when the city was placed 
 under different circumstances. 
 
 WHEN LAWS NEED REVISION. ' 
 
 It may be said that a siege is an exceptional thing. But, 
 in fact, the principles involved when a change of circum- 
 stances occurs in a sharp, vivid manner do not differ from the 
 principles which should guide us when circumstances change 
 so slowly as to attract little attention from ordinary observers. 
 It is the fact of a change of conditions which is the just basis 
 of a corresponding change of measures to secure fair bar- 
 gains. Whether this change has been rapid or gradual in 
 itself, is immaterial. The vital point, which justifies legal 
 interference, is that events have caused such a divergence 
 between existing laws and facts that the object of law is no 
 longer attained. 
 
 TEST OF THE WISDOM OF A LAW. 
 
 The wisdom and justification of a law intended to prevent 
 one man from taking advantage of his position to make a 
 nominally " free," but really compulsory bargain with an- 
 other man depends on its fulfillment of such a purpose. If 
 it does not tend to do so, no further evidence of its want of 
 adaptation to existing facts is needed. If it have such a tend- 
 ency, its value is not impaired because adverse to the theory 
 that " every man has a right to make such bargains as he 
 pleases." Such an inherent right does not exist. Individ- 
 ual liberty must always be subordinated so the general good 
 of society, and, consequently, one man has no right to com- 
 mit acts, even with his own property, which are contrary to 
 public policy. 
 
 What is true in regard to the regulation of trade between 
 citizens of the same country, is equally true in regard to 
 trade with foreigners. Tariffs and similar measures are jus- 
 tifiable when they prevent citizens of one nation from tak- 
 
406 SOCIAL STRUGGLES. 
 
 ing advantage of their position to make unfair trades with 
 the citizens of another nation. Such trades may be nomi- 
 nally " free " ; yet, Hke many bargains between citizens of 
 the same nation, they maybe in reality compulsory and con- 
 trary to the interests of one of the nations. 
 
 Whether a nation needs a tariff, and, if so, upon what arti- 
 cles and at what rate, depends, like the enactment of other 
 laws, upon the existing circumstances. It may be to the 
 interest of one nation to have no tariff whatever upon certain 
 articles. At the same time, another nation may find great 
 advantage from placing a tariff on the very thing which 
 elsewhere is admitted free of duty. The wisdom and justice 
 of an act always depend upon the circumstances and condi- 
 tions under which it is committed. Tariffs are not excepted 
 from this universal law. The imagined " profound and 
 complex economic laws" underlying foreign trade vanish 
 into idle vagaries whenever we clearly remember that bar- 
 gains between nation and nation need regulation for the 
 same reasons that bargains between one man and another 
 need legal supervision ; and, therefore, the same principles 
 apply to one that apply to the other : to wit, A should 
 be hindered from using his peculiar position to make an 
 unjust trade with B which could not be made if B were not 
 forced by circumstances to make one sacrifice to avert a still 
 greater one. 
 
CHAPTER XVIII. 
 
 Remedies for Social Conflicts. — Legislation should Foster Equality of 
 Wealth. — Measures should be General, in Preference to Special. — 
 Potency of Money. — Evils of Waste. — Foolish and Wasteful Brutal- 
 ity. — Bad Modes of Building. — Many kinds of Waste. — Taxation. — - 
 How Taxes should be Levied. — What a Tariff is. — Taxation should 
 always be Laid with a Twofold Purpose. — Advantages of Indirect 
 Taxation. — Corporations. — One of the main Roots of the Labor Ques- 
 tion. — Ownership of whatever performs Labor is Ownership of La- 
 bor. — A Fish-hook Machine. — A Man should Control his Means of 
 Subsistence. — Need of a large Amount of Capital. — Inventions 
 should not be made Means of Oppression. — How Inventions are 
 Made. — All should be Benefited by Discoveries and Inventions. — ■ 
 Growth of Inequality. — What should be Done. 
 
 Nothing is more fallacious than the assumption that the 
 mutual interests of a landlord and a tenant, a lender and a 
 borrozver, a seller and a buyer, and an employer and a servant, 
 are coincident and identical. 
 
 The details of measures to adjust the business relations 
 of one person with another, and to equitably settle the 
 diverse claims of capital and labor, do not lie within the 
 scope of our present inquiries. But the general principles 
 which should direct their formation may be briefly dis- 
 cussed. 
 
 " Give me neither poverty nor riches ; feed me with food convenient 
 for me : Lest I be full and deny thee, and say, who is the Lord ? or lest 
 I be poor and steal, and take the name of my God in vain." 
 
 This ancient prayer regarding the distribution of wealth 
 should underlie our legislation. And we must remember 
 that the laws of a nation, more than any other one agency, 
 determine into whose hands, and in what proportion, the 
 wealth of that nation shall be placed. 
 
 407 
 
4o8 
 
 SOCIAL STRUGGLES. 
 
 LEGISLATION SHOULD FOSTER EQUALITY OF WEALTH. 
 
 The chances of national security, prosperity, and happi- 
 ness are much greater for a country where the vast majority 
 are in comfortable circumstances, than for a nation with 
 great wealth in few hands and a large population of paupers 
 and other persons deprived of many comforts of life and on 
 the verge of abject want. 
 
 In order to produce this desirable condition of equality 
 in enjoyment of the necessaries of life, the social forces and 
 national policy should be so organized and directed as to 
 restrain the avarice of those who, in the absence of law, 
 would appropriate to themselves a greater amount of wealth 
 than either justice or expediency sanction. 
 
 Laziness and Avastefulness should be discouraged and 
 incentives given to economy and thrift. Every citizen, no 
 matter how weak, ignorant, poor or humble he may be, 
 should be made to feel that, although individuals may seek 
 to oppress and wrong him, yet society, as a whole, the State, 
 expressed by the strong arm of legislation, is ever his kind 
 and sympathizing friend. Under such conditions social 
 order rests on the broad foundation of the affection and 
 loyalty of the masses of the population and cannot be 
 shaken. 
 
 MEASURES SHOULD BE GENERAL, IN PREFERENCE TO 
 
 SPECIAL. 
 
 In devising means to accomplish the aforesaid desired 
 results, we should draw a lesson from Nature and imitate 
 her mode of law-making. Her laws are neither petty, spe- 
 cial nor complex. They are broad, general and simple. 
 Our limited capacity prevents us from ever equaling their 
 wisdom ; the best we can do is to be guided by the general 
 ideas upon which natural laws appear to rest; viz., funda- 
 mental facts and principles should be so conformed to, that 
 a few laws will enable multitudes of living things to success- 
 fully accommodate themselves to an infinite variety of 
 
A FEW THINGS GOVERN MANY. 4O9 
 
 changing conditions. The Creator of natural laws has 
 solved this problem completely. 
 
 Whoever inspects a large workshop may see a great 
 number and variety of machines performing different acts 
 and services. Suddenly the hum ceases, and in a few mo- 
 ments all the complex mechanism is at rest. A slight pres- 
 sure by a single hand has detached the power which turned 
 the shaft whose motion set a hundred machines at work. 
 
 The social fabric is like a workshop. A great variety of 
 results flow from the action and influence of a few elemen- 
 tary forces. The whole social system may thus be swayed, 
 so silently and quietly, either for good or for evil, that the 
 source of the power which has such a controlling influence 
 is unnoticed. The relations of capital and labor are so com- 
 plex and numerous that most persons imagine a multitude 
 of regulations necessary to secure their proper adjustment. 
 But many things depend largely upon the influence exerted 
 by a few. Therefore, we should devote our studies to the 
 regulation of those few things which give a controlling bias 
 and tendency to the many things. Some of these rudimen- 
 tary forces we will indicate in the order of their relative 
 importance. 
 
 POTENCY OF MONEY. 
 
 First. In the absence of barter, money is the link by 
 which capital and labor are associated. As the growth of 
 commerce and commercial habits have rendered barter to a 
 large ex-tent impracticable, the relations of labor and capital 
 are dependent more upon money than upon any other one 
 thing, A currency convenient to use, difficult to counter- 
 feit, and of uniform value, therefore, lies at the very foun- 
 dation of commercial and industrial activity. The ideal 
 "dollar" never changes in value. The class that controls 
 the money of a nation can control and order, to a large ex- 
 tent, how the wealth created by the association of capital 
 and labor in that nation shall be divided and apportioned. 
 This silent and generally unnoticed influence can be used in 
 two different ways, or, by both those means simultaneously. 
 
^lO SOCIAL STRUGGLES. 
 
 First. It may be done by raising or lowering prices. Sec- 
 ond. It may be accomplished by changes in the rate of in- 
 terest. The rate of interest paid for the use of money is 
 therefore closely interwoven in importance with stability of 
 the purchasing power of money. These topics are else- 
 where considered and need not be here further dwelt on. 
 
 EVILS OP"" WASTE. 
 
 Second. A cow that gives a pailful of milk and immedi- 
 ately kicks it over is not a desirable member of a dairy. 
 Wealth squandered as soon as created differs widely in effect 
 upon the community from wealth put to good and produc- 
 tive use. If a political party squander a comparatively 
 small sum the whole country is aroused. But the millions 
 of individuals who compose this nation are constantly en- 
 gaged in wasting, in a great variety of ways, more wealth 
 annually than is required to defray the entire expenses of the 
 national government. And yet this colossal waste attracts 
 less public attention than would be given to a political party 
 which should be convicted of wasting two millions of dollars. 
 
 The manufacture and sale of intoxicating liquors involves 
 an annual waste of hundreds of millions of dollars' worth of 
 property. The loss inflicted by converting valuable grain 
 into maddening drinks is alone very great : but that is only 
 the first of a series of acts each one of which has a terrible 
 tendency to make more inmates for the almshouse, the luna- 
 tic asylum, the police station, and the penitentiary. A large 
 portion of the expense of maintaining order, especially in 
 cities, is due to the almost incredible amount of wealth 
 wasted in various ways by drinking habits. 
 
 FOOLISH AND WASTEFUL BRUTALITY. 
 
 Tens of millions of dollars' worth of grain, fruit, and veg- 
 etables are yearly destroyed by insects and worms. This is 
 chiefly due to the fact that every village and city in the 
 land has one or more workshops devoted to the manufact- 
 ure, repair, and sale of guns, chiefly used for the purpose of 
 murdering the farmer's and gardener's friends, the insect- 
 
WASTEFULNESS. 
 
 411 
 
 eating birds. An undeveloped, crude boy, without proper 
 instruction, cannot be expected to know any better than 
 to commit acts both brutal and wasteful. But it is humil- 
 iating to read that persons of mature age and occupying 
 prominent positions in society are " spending their vaca- 
 tions in the sport of hunting." This means that such per- 
 sons are so low in the scale of moral development and sensi- 
 bility that they take a savage pleasure in witnessing the 
 death agonies and struggles of innocent birds and animals. 
 Large sums are yearly squandered for equipments to 
 carry on this barbaric " sport." 
 
 BAD MODES OF BUILDING. 
 
 Every day in the year witnesses the destruction, by fire, 
 of from one, to three hundred thousand dollars' worth of 
 property. A large portion of this is needless waste, caused 
 by ignorant and careless modes of constructing buildings. 
 Since the termination of the Civil War, the value of the 
 property destroyed by fire exceeds the present amount of 
 national debt, and three-fourths of this vast waste could 
 have been averted by reasonable precautions. 
 
 We have wasted and are still wasting our wood and timber 
 supply with utter recklessness. The direct loss thereby oc- 
 casioned is very large, but it is equaled if not exceeded by 
 the enormous losses from disastrous floods and protracted 
 droughts directly traceable to a diminution of the proper 
 amount of forests. We not only squander our wealth of 
 forests already mature, but thus far have neglected to ade- 
 quately protect young growing woodland from devasta- 
 tion by fire. 
 
 MANY KINDS OF WASTE. 
 
 A score of other forms of wastefulness could readily be 
 named, each one of which places a heavy and needless burden 
 upon society. On the average, they make life just as much 
 harder as they destroy wealth. Any cause which checks or 
 diminishes the production of wealth is a waste of potential 
 energy : it is just as truly wasted wealth as if it were a means 
 
^12 SOCIAL STRUGGLES. 
 
 whereby wealth already in hand was destroyed.'^ Consider 
 the enormous losses inflicted on society by ill-advised strikes, 
 whereby both employer and employed are injured, and which 
 a little consideration on one or both sides would have avoid- 
 ed: arbitrary and unnecessary discharges of workmen, or 
 some similar evidence that our social machinery is defective. 
 For it should be remembered that whenever, from any osten- 
 sible and apparent cause whatsoever, men, willing and able 
 to work, are idle, it necessarily implies grave mistakes some- 
 where. Wasteful ignorance on the part of some one, some 
 class, or the whole community, must always exist, in some 
 form or place, whenever hands are idle which should be 
 employed in the creation of wealth. Something is wrong 
 whenever the association of capital and labor is not both 
 equitable and uninterrupted. 
 
 After strenuous opposition and exhaustive debate, it is now 
 generally considered a legitimate function of Government to 
 
 * While this is being revised, wastefulness has assumed a phase to 
 which the term " boycott " has been applied. It is essentially an agreement 
 by a considerable number of persons to injure the business and property of 
 one person by refusing to trade with or work for him. The effectual ac- 
 complishment of this purpose requires that the persons entering into such 
 agreement should also refuse to hold any business relations with any one 
 Vho has commercial intercourse with the person whose injury has been 
 agreed upon. Centuries of human experience have demonstrated the in- 
 estimable benefit of a provision in the fundamental law that " no one 
 shall be deprived of life, Hberty or property without due process of law." 
 Boycotting is in direct contravention of the long-tried principle that every 
 one is entitled to an opportunity to make a full defense in a fair, legal and 
 public trial, in presence of his accusers, before being sentenced to depriva- 
 tion of life, liberty or property. It is a species of lynch law, by which a 
 person's property is taken from him through the indirect method of in- 
 juring his business. The rule of conduct is essentially the same, whether 
 a number of persons agree to take a man's property by mob violence, or 
 whether they agree to take his property from him through indirect 
 methods. Lawlessness is the characteristic feature of all such acts. 
 Boycotting may, therefore, be dismissed as an effort to improve the 
 condition of the laboring classes by means at once so inexpedient and 
 wrongful as to infiict swift and certain injury upon both those who make 
 it and those against whom it is directed. The common sense of the 
 whole community will soon revolt against it. 
 
NEED OF GREATER ECONOMY. 413 
 
 foster and promote the diffusion of the knowledge and skill 
 which will increase the productive capacity of the various 
 wealth-creators of the nation. Does it not then logically 
 follow, that Government should also take measures to instruct 
 the people how to preserve and utilize wealth after it is cre- 
 ated ? Ought we not to take another step in the path we 
 have been traveling ? Our educational system would be im- 
 proved, if in every high-school, academy and college one of 
 the " professors" of some comparatively useless department 
 were dismissed and his place filled by a teacher with common 
 s^nse and attainments sufficient to instruct the pupils in the 
 principles and art of economy. 
 
 TAXATION. 
 
 In the aggregate, an enormous sum of money is annually 
 drawn from the pockets of the people in form of taxes. 
 Within the lifetime of a man who attains three score and 
 ten, the major portion, and in many cases his entire estate, 
 passes through the hands of the tax-collector. That is, the 
 total amount of taxation levied upon one thousand dollars' 
 worth of property during his life equals that sum. It is 
 certainly a moderate statement to say that the total of direct 
 and indirect taxes levied on a nation during-a hundred years 
 equals the value of all the property in that countr}^ Taxa- 
 tion, therefore, is a force of perpetual and enormous power. 
 Its effect for a single year is not perceptible ; but, when 
 levied in a particular direction, with a view to carrying out a 
 certain policy, the tendency it exerts during a series of years 
 is tremendous. It was the mode of taxation in France for 
 a long time before the Revolution of 1789 which finally 
 drove the masses of the people to desperation. 
 
 HOW TAXES SHOULD BE LEVIED. 
 
 The ancient idea of levying taxes was " for revenue 
 only, " without reference to the incidental effect of such taxa- 
 tion. This is the barbaric idea. But it is yearly more fully 
 seen that taxation should have a twofold object ; viz., the 
 collection of revenue and the encouragement, or discourage- 
 
414 
 
 SOCIAL STRUGGLES. 
 
 ment, of certain conduct. Taxation is thus made a legisla- 
 tive force ; the tax-office, a branch of Government.* 
 
 All laws are attempts to promote a particular kind of con- 
 duct and to discourage the commission of certain specified 
 acts. These laws are always more or less evaded. For in- 
 stance, we have laws against theft ; but it is continually oc- 
 curring. 
 
 The wisest laws cannot prevent crimes. But their tendency 
 is to make such offenses more rare than they otherwise 
 would be. Petty theft was formerly punished by hanging. 
 But because experience has shown said policy unwise, it does 
 not therefore follow that all penalties against theft should be 
 abolished. 
 
 In order to discourage men from committing certain acts 
 called " crimes " we affix a penalty to their commission. 
 This, for nearly all crimes, is imprisonment. But, in many 
 
 * False and misleading issues are raised by constant reiteration and 
 amplification of the proposition : " Taxation should be no greater than 
 requisite for payment of the necessary expenses of government." But 
 concession of the absolute truth of said proposition leaves untouched the 
 actual questions before legislators ; to wit, what conduct, what interests 
 shall we restrict and hamper by placing thereon the burden of paying the 
 large amount of money " necessary " to defray the expenses of Govern- 
 ment ? Some one must pay it. Whom shall it be ? 
 
 A careful exploration of its ultimate results is a requisite, preliminary 
 of all wise taxation. Whether the tax is proposed on imported goods, 
 in form of what is called a tariff, or by any other mode of taxation is 
 immaterial. The essential thing is that the effect of such taxation should 
 be both to afford a revenue and at the same time place taxation on con- 
 duct and interests which ptiblic policy requires should be discouraged 
 ajid burdened. 
 
 Hence a tariff laid on a commodity, simply because it is imported and 
 comes in competition with the domestic product, is not based on sound 
 principles. For example, we now have a tariff on imported lumber. 
 The effect of such tariff is to discourage the importation of lumber and 
 to increase the destruction of our own forests, a procedure fruitful of evil. 
 
 We shall start on the right method toward a proper system of taxa- 
 tion, when it is fully recognized that all taxes, of every kind and nature, 
 should be levied for the purpose of discouraging acts apparently benefi- 
 cial to the individual who commits them, but, in abroad sense, detrimen- 
 tal to the public welfare. 
 
HOW TAXES SHOULD BE LAID. 
 
 415 
 
 cases, in order to make it still further unpleasant to commit 
 crimes, a pecuniary penalty called a " fine " is attached to 
 them, in addition to a term of imprisonment. To the com- 
 mission of many petty crimes and misdemeanors a fine alone 
 is practically attached ; that is, on payment of the fine, 
 further penalties are waived. 
 
 In essence, a " fine " is a tax levied on persons proven 
 guilty of certain acts, for the purpose of discouraging them 
 from repeating the offense. Thus the principle of govern- 
 ing by taxation, — of attempting to prevent certain conduct 
 by levying a tax on all who commit it, — is established by 
 long usage. 
 
 WHAT A TARIFF IS. 
 
 This principle has been fully adopted, not only as a means 
 of preventing criminal acts, but also for the prevention of 
 certain things deemed adverse to the public interests. Thus 
 from the beginning of the United States Government to the 
 present time we have always levied a greater or less tax on 
 many of the goods imported into this country from foreign 
 nations. This tax is called a tariff. Its object has been, for 
 most of the tim.e, twofold. First. Raising a revenue for 
 support of the Government. Second. Preventing foreigners 
 from combining their superior capital with labor degraded 
 by centuries of oppression, and thus taking an unfair advan- 
 tage of the workmen of this country. 
 
 The tariff, then, is essentially a mode of taxation imposed 
 for raising revenue ; for preventing the industries of this 
 country being injured by competition with those of nations 
 whose civilization is inferior to ours ; and for encourag-insr 
 the development of a greater variety of manufactures in 
 this country. 
 
 TAXATION SHOULD ALWAYS BE LAID WITH A TWOFOLD 
 
 PURPOSE. 
 
 What we now need is an extension of the principle of 
 government by taxation. The entire revenue needed for 
 the support of National, State, and Municipal Government 
 
4i6 
 
 SOCIAL STRUGGLES. 
 
 should be raised by taxes laid on conduct, the repression of 
 which experience has shown best for the public welfare. 
 The virtues of mankind should not be taxed. The burden 
 of taxation should be laid on crime, idleness, celibacy, vain 
 luxuries, avarice, and kindred vices and follies of our race. 
 For example, a tax of ten dollars yearly laid on every dog 
 would persuade many persons not to keep dogs. Taxation, 
 in form of licenses, should be used to keep the number of 
 middlemen down to the minimum required to transact the 
 business of the country at the lowest possible charges. Every 
 superfluous middleman and every unnecessary railroad is a 
 waste of the productive energies of the nation. The silent 
 but powerful influence of taxation should be brought to bear 
 as preventives of all misdirection of industry,* As the 
 frogs once swarmed over Egypt, so doctors and lawyers now 
 abound in this country, A high license fee for practicing 
 law or medicine would have a salutary effect. 
 
 If taxation were laid for the purpose of repressing, limit- 
 ing and discouraging certain things whose suppression or 
 limitation is best for the public good, a correlative result 
 would follow. Conduct which long trial has shown best for 
 the interests of society would be encouraged by freeing it 
 more or less completely from taxation. For example, it is 
 greatly to the interest of society that every man should have 
 a home of his own. In order to encourage the sobriety, in- 
 dustry and economy requisite to obtain one, the Government 
 should so collect its revenues that homesteads would be en- 
 tirely free from taxation. 
 
 * The following item of news clipped May i, 1886, shows the effect of 
 taxation on business : " The number of brewers in England is decreasing 
 rapidly. In 1870 there were 32,000 brewers in the United Kingdom. 
 During the next decade, or up to 1880, the number lessened at a rate of a 
 thousand a year, there being in 1880 only 22,000. Then in one year appears 
 the surprising decrease of 7000, there being in 1881 only 15,000. Since 
 then they have declined less rapidly, but are nevertheless losing ground 
 none the less surely. They number now but 1 3,000 in contrast to the 
 32,000 of sixteen years ago. The temperance movement has not made 
 this change, but the levying of a duty upon beer instead of upon malt, 
 which has concentrated the business in a less number of hands." 
 
SELF-ADJUSTING TAXES. 417 
 
 ADVANTAGES OF INDIRECT TAXATION. 
 
 Every foot knows best where the shoe pinches. Every 
 one knows his ability to pay taxes better than it is possible 
 for a Government to know. Indirect taxes give a man con- 
 sidferable latitude in determining how much taxation he will 
 bear. When taxes are laid on things with w^hich he can dis- 
 pense, he can more easily adjust his taxes to his income 
 than when they are laid on his home, and on other things 
 which he must have. For these, and kindred reasons, a large 
 revenue can be drawn from a nation by indirect taxes with 
 less oppression to industry than if it were paid in form of 
 direct taxation. Furthermore, the burden of taxation on 
 a community in reality is greatly lightened when conduct 
 hurtful to society is partially repressed by such taxation. 
 For example, a tax of fifty thousand dollars laid on the liquor 
 dealers in a city is no burden whatever to that city, if fifty 
 thousand dollars' worth of additional wealth be created as a 
 result of greater sobriety, produced by lessening the number 
 of rum shops by a high license. 
 
 CORPORATIONS. 
 
 Fourth. The steadily growing numbers and wealth of 
 artificial persons, called corporations, constitute a condition 
 never before known in the world's history. Private individ- 
 uals are constantly dying. In many cases their estates are 
 so divided as to lose the power they exerted when used as a 
 single mass by one person. But beings created by legisla- 
 tion are comparatively immortal. The component members 
 of the corporation are constantly growing old and dying ; 
 but nev/ mem.bers steadily fill their places. Meantime, the 
 " being without a soul " often grows, and grows in wealth 
 and power untilits surplus revenue is alone sufficient to sway 
 the legislation of a State by political chicanery. Such a cor- 
 poration is an organization of such vast power that there are 
 practically only two things capable of keeping it from using 
 its strength for its own aggrandizement, regardless of the 
 public welfare. 
 27 
 
4i8 
 
 SOCIAL STRUGGLES. 
 
 First. Its own self-interest. This often does keep a cor- 
 poration from unjust and oppressive conduct toward the in- 
 dividuals with which it comes in contact. But all history 
 and experience tell us that liberty, justice and fair dealing 
 hang on a slender thread, and are in peril whenever power is 
 restrained only by what its possessor may deem expedient 
 and best for himself. 
 
 Second. Legislative control. This is most effectively 
 secured by measures which necessitate the widest possible 
 publicity of the corporation's affairs and the fewest opportu- 
 nities for bribery of public agents and officers. It is gener- 
 ally believed that our large corporations constantly use cor- 
 rupt means to influence legislation. This belief is undoubt- 
 edly based on humiliating facts. Numerous instances are 
 constantly occurring in which the wealth of corporations is 
 used to corrupt elections. We therefore need stringent laws 
 to prevent money being directly or indirectly used to buy 
 votes. The State should furnish tickets to voters so that the 
 pretext of raising money for printing tickets would no longer 
 exist. We are rapidly drifting into a condition in which it 
 will be utterly impossible for any one to obtain nomination 
 .for important office unless he be both able and willing to 
 furnish a large sum for illegitimate use during the campaign. 
 Candidates should be prevented from using a single dollar 
 in any way whatsoever to promote their own election. 
 
 ONE OF THE MAIN ROOTS OF THE LABOR QUESTION. 
 
 WJiat a long period of suffering and privation has intervened 
 between the present and the time zvhen man first stood on earth 
 with no tools but his naked hands. And how much easier the 
 lives of your ancestors might have been if tJiey Jiad possessed the 
 iinplements we noiv have. 
 
 To those who were actors in that drama, it seems but as 
 yesterday since this country emerged from a civil war terribly 
 destructive of life and property. The initial point of this 
 awful struggle arose from discussion of a question which irre- 
 sistibly thrust itself upon public attention : " Has one man 
 
OWNERSHIP OF LABOR. 
 
 419 
 
 a right to own another man ? " In other words : Has capi- 
 tal a right to own labor ? 
 
 One phase of this contest was settled by the war. One form 
 of slavery was abolished. One method, which capital em- 
 ployed to own labor, has been made impossible. But other 
 means and devices employed by capitalists to own laborers 
 are still under legal protection, and in the majority of in- 
 stances are sanctioned and defended by the same persons 
 who bitterly denounced the form of labor ownership extin- 
 guished by the logic of human butchery. Since the war, the 
 majority of persons imagine that capital cannot own labor. 
 But a little examination shows, that the emancipation 
 measures only partially destroyed the control of the capital- 
 ist over the laborer. 
 
 For example, let us suppose an industrial arena of some 
 kind ; no matter whether it be a factory, a forge, a mine, a 
 plantation, or a ship-yard, wherein one thousand laborers 
 are employed. Comparatively few, and those inexpensive, 
 tools are required. Each workman furnishes his own tools 
 and is paid a certain amount of wages per day. Under such 
 conditions, the laborer is comparatively independent. If any 
 disagreement arise between the employer and himself, he 
 can pack up his tools in a few minutes and, with his tools 
 on his back, seek employment elsewhere. 
 
 OWNERSHIP OF WHATEVER PERFORMS LABOR IS OWNER- 
 SHIP OF LABOR. 
 
 Let US reverse the aforesaid conditions and see what the 
 result will be. Suppose some inventor should create an 
 automaton of steel, wood and leather which will perform 
 exactly one man's labor in a day's time. The cost of this 
 automaton to be $500. Under such a condition of facts, 
 is it not clear that if the capitalist should buy one thousand 
 of these bloodless laborers he would own his labor ? He 
 could turn the men made of flesh and blood adrift. He 
 could carry on his works by the labor of his own chattels 
 just as truly as if those chattels consisted of one thousand 
 
420 
 
 SOCIAL STRUGGLES. 
 
 Africans, just landed from a slave ship, for which he had 
 paid $500 a piece. 
 
 Let us now perfectly retain the principle involved in the 
 last aforesaid example and state another condition of affairs. 
 Suppose the aforesaid capitalist, instead of buying a thou- 
 sand automatons, should buy a steam-engine and some 
 machinery, which would enable one hundred laborers to per- 
 form as much labor in a day as a thousand laborers could 
 with the old-fashioned tools owned by themselves. The 
 machinery is so expensive that the laborers are too poor to 
 buy it. Even if they combined, and saved money enough 
 to start a rival industry, they could not make and use ma- 
 chinery similar to that owned by the capitalist. He has his 
 machinery protected by a law called " a patent," and as 
 this law is backed by the entire judicial and military power 
 of the nation, he has the exclusive right, for a long term 
 of years, to use the machinery covered by that patent. It 
 is. utterly in vain for the nine hundred workmen to think of 
 competition with machinery by using their own tools. 
 Now, in this case, is it not just as clearly true that 
 the capitalist owns the labor of nine hundred men, as it is 
 in the aforesaid hypothetical case in which he owned the 
 labor of a thousand bloodless workmen ? 
 
 A FISH-HOOK MACHINE. 
 
 In this city, at the present time, several automatic labor- 
 ers are at work making fish-hooks. The wire is automatic- 
 ally fed into one end of a machine, and, without the touch 
 or guidance of a single human finger, it emerges from the 
 other end of the machine a perfectly finished fish-hook. 
 The hooks are made by one of these machines many times 
 faster than they could be made by a machine of flesh and 
 blood. A pail is hung on a spout at the end of the machine 
 where the hooks emerge, and into this the completed hooks 
 rapidly fall. Whoever will take the pains to examine the 
 construction of a fish-hook cannot fail to see that the afore- 
 said machine is a great stride toward the creation of autom- 
 atons which will accurately and uncomplainingly perform 
 
WHEN LABOR IS OWNED. .21 
 
 the labor of living machines. It will also clearly appear to 
 him, that the capitalist who owns one of these expensive 
 machines, protected from competition by a patent, and by 
 successive patents on improvements in that machine, virtu- 
 ally owns several fish-hook makers. He owns the fish-hook 
 makers, because he owns and has absolute control over the 
 tools without which those fish-hook makers cannot earn five 
 cents a day. 
 
 Hundreds of illustrations similar to the fish-hook machine 
 could be cited. But that is sufficient to exemplify the prin- 
 ciple involved in all such cases, viz. : Whoever owns the 
 tools, zvithout wJiicJi a workman cannot earn a living, owns 
 the labor of that workman, and, to that extent, owns the work- 
 man himself. Whenever this occurs, capital virtually owns 
 labor. 
 
 A MAN SHOULD CONTROL HIS MEANS OF SUBSISTENCE. 
 
 In one sense, a laborer without tools has perfect free-' 
 dom. But, if deprivation of tools imply deprivation of the 
 means of supplying himself with the necessaries of life, 
 whoever controls his tools controls the workman's very ex- 
 istence. Just to the extent the capitalist can control the la- 
 borer's food, the capitalist has control of the laborer's lib- 
 erty and person. It is possible that the workman's liberty 
 may thus be restricted to that amount of which it has al- 
 ways been impossible to deprive a slave ; — viz., the liberty 
 of dying. 
 
 What occurs in the aforesaid example, in case a disagree- 
 ment arise between the owner of the nine hundred metal- 
 lic workmen and the one hundred living workmen ? Sup- 
 pose the one hundred, thinking they are not receiving a 
 just proportion of the wealth created jointly by themselves 
 and the nine hundred automatic workmen, should strike 
 for higher wages ? Their demands are not acceded to and 
 the entire thousand laborers are thrown out of employment. 
 What then happens? It is certain that the owner of the 
 nine hundred workmen, or what is essentially the same 
 thing, the machines which perform a labor equivalent to 
 
.22 SOCIAL STRUGGLES. 
 
 the labor of nine hundred men, is at comparatively little 
 expense for the maintenance of his chattels. While they 
 are idle, he loses the interest on their value and is at the 
 expense of protecting them from rust and other injury. 
 Derangement of his business also causes him, to a consider- 
 able extent, loss of the value of his own services in manag- 
 ing it. But the hundred living workmen are subjected to 
 nearly the same daily expenses when idle as when at work. 
 The idle machines, the automatic laborers do not eat. But 
 the idle workmen must eat or die. 
 
 In such an event, is it not apparent that the power of the 
 one man who owns nine hundred laborers is far greater to 
 coerce the hundred, than the power of the hundred is to co- 
 erce the owner of the nine hundred workmen ? 
 
 One of the chief characteristics of the last century is the 
 enormous progress therein made in mechanical art and 
 skill. The principles discovered by scientific men in the 
 laboratory and study have been converted to practical use 
 in the workshop by the inventor and artisan. The vast 
 majority of the tools used by labor, wherewith to create 
 wealth, one hundred years ago, have been made worthless 
 by the invention of better ones, and the few in existence 
 are found only as curiosities in museums and similar 
 places. 
 
 Every year a large addition is made to the great number 
 of labor-saving machines already in use. In all probability, 
 the future will witness as great an increase in the invention 
 of machinery as has occurred in the past. Many minds are 
 constantly at work devising plans for introducing machin- 
 ery into departments of industry where manual labor still 
 holds sway. It is likely these persons will, to a greater or 
 less extent, succeed in their purpose. 
 
 N-EED OF A LARGE AMOUNT OF CAPITAL. 
 
 When the whole field of invention and mechanical skill is 
 surveyed at a glance, another startling fact appears, viz. : 
 the steadily growing expensiveness of machinery. It is 
 steadily growing more effective and performs more and 
 
OWNERSHIP OF TOOLS. 
 
 423 
 
 more of the Avork formerly done by human hands. This 
 necessitates and implies machines more ponderous, more 
 complicated, more accurately constructed, and more costly 
 than those of inferior power of execution and less adapta- 
 tion to the peculiar purpose required. Every year more 
 and more capital is required to equip a mechanic with tools 
 which will enable him to successfully compete with others 
 engaged in producing the same forms of wealth that he is. 
 
 The inevitable result of the foregoing facts is that the tools 
 of labor are steadily passing into the ownership of capital- 
 ists and beyond the control of the artisans, the successful 
 prosecution of whose calling depends on the use of those 
 tools. Some one must be the owner of these tools, and 
 such ownership makes a capitalist. In an indirect, but 
 nevertheless very effective manner, capital yearly owns more 
 and more labor. It is constantly growing more difficult for 
 a mechanic, beginning life with nothing but his bare hands, 
 to obtain the independence which naturally flows from the 
 combined ownership of tools and possession of the requisite 
 skill to use them in creating some form of wealth. What 
 chance has a poor mechanic, of average business ability, to 
 ever become the owner of a tool so expensive that the an- 
 nual interest on its cost is greater than his entire wages for a 
 year? Such a person has not a fair chance in the ever pres- 
 ent industrial struggle, compared with the inheritors of 
 wealth, the born owners of the mechanics' tools in use at 
 present. If he undertake to own his own tools, he has the 
 terrible disadvantage of working in competition Avith men 
 already the owners of many workmen with iron bones and 
 steel fingers. What wonder is it that he should either 
 despair or be filled with hatred of a social system under 
 which such inequalities of position are possible ? 
 
 This then is one of the problems which, whether we de- 
 sire to or not, we must face and solve. Cowardly evasion 
 will not avail. Wisdom and humanity unite in bidding 
 us candidly recognize the facts, and, by interchange of 
 thoughts, arrive at just conclusions. 
 
^24 SOCIAL STRUGGLES. 
 
 INVENTIONS SHOULD NOT BE MADE MEANS OF OPPRES- 
 SION. 
 
 What remedies shall we employ to cure the aforesaid evil 
 before it develops into a more alarming condition? 
 
 Obviously, it is neither the destruction of labor-saving 
 machines nor the repression of invention. Every automaton 
 which performs human labor should be recognized as a means 
 of relieving mankind from drudgery. If it do not, it is not 
 the machine which is to blame. It is the conditions under 
 which it is employed that are at fault. Every inventor who 
 facilitates the creation of wealth should be crowned as a 
 general in the field of industry whose victories over matter 
 have been won by patient thought and labor. If his crea- 
 tions, after being set at work, leave behind them a trail of 
 oppression, distress, and bitterness, it is not his fault. They 
 should bring additional wealth, comfort, and happiness to 
 every member of the human family. When they fail to do 
 so, the social system under which they are employed must 
 be defective in some way. 
 
 The annual production of wealth in this country is esti- 
 mated at about twenty per cent, of the total wealth of the 
 country. A considerable portion of this wealth is the pro- 
 duct of automatons,— of various kinds of machinery. It fol- 
 lows that, to the extent that a class controls such machinery 
 and receives the profits therefrom, just to that extent such 
 a class controls and absorbs the annual production of wealth. 
 But this is not the fault either of the machines or of the in- 
 ventors who devised them. The defect is in the manner in 
 which the ownership of those machines and the profit aris- 
 ing- from their use are distributed. 
 
 HOW INVENTIONS ARE MADE. 
 
 All scientific discoveries and all devices whereby a 
 discovery is practically applied to the improvement of the 
 condition of mankind are not due solely to the labors of 
 the immediate discoverer and inventor. They are the 
 culmination of the thoughts and labors of generations. As 
 
INJUSTICE SOMEWHERE. 425 
 
 such, in the widest sense, they are the heritage of the whole 
 human family. What would be thought of a man who 
 should propound the idea that the discovery of ansesthetics 
 should inure only to the benefit of those worth over ten 
 thousand dollars ; and, that all worth less than that sum 
 should bear severe surgical operations without relief from 
 suffering? Would he not be denounced either as an idiot, 
 or as a monster of cruelty. 
 
 ALL SHOULD BE BENEFITED BY DISCOVERIES AND 
 INVENTIONS. 
 
 It is self-evident that progress in science and art ought 
 not, in any respect whatsoever, place a child born in pov- 
 erty in a position of greater disadvantage than it would have 
 been if such progress had not been made. A. little reflec- 
 tion makes it also evident that such a child should not 
 simply have its condition ameliorated by such progress. 
 The same relative advantage should accrue to it as accrues 
 to the children of the rich. In many important respects, 
 the child of a poor mechanic, born in 1885, has greater 
 advantages in carrying on the struggle of life than were 
 possessed by such a child born in 1685 or 1785. But this 
 undoubted fact does not satisfy the desires of the laboring 
 classes. It ought not to satisfy them, because simple 
 justice requires that every forward step in human knowl- 
 edge and progress should impartially benefit the whole 
 people. Unless the poor child in 1885 has the same rela- 
 tive advantages over the poor child born in 1785 that the 
 rich child in 1885 has over the rich child born in 1785, there 
 is an injustice somewhere ; there is a defect in the distribu- 
 tion of the benefits of means whereby mankind can supply 
 their necessities and march onward toward a higher plane of 
 development. 
 
 GROWTH OF INEQUALITY. 
 
 While the condition of the laboring classes to-day is far 
 better than it was in 1785, the ineqiiality between different 
 classes is o-reater now than then. There is a greater dis- 
 
426 SOCIAL STRUGGLES. 
 
 parity of income, of wealth, and of social position. The root 
 of this matter largely lies in the fact that the means of 
 creating wealth, the tools without which labor is compara- 
 tively helpless, have, to a large extent, silently passed into 
 the ownership and control of the capitalists, and especially 
 of those who own a large amount of capital. 
 
 WHAT SHOULD BE DONE. 
 
 When a person is in difficulty or danger by reason of 
 a change in his condition the obvious remedy is to restore 
 him to the circumstances he was in prior to his distress. 
 Thus when a man is in danger of drowning, the first thing 
 to do is to pull him out of the water. 
 
 The artisans have been placed at a disadvantage by 
 taking away the ownership of their tools. The obvious 
 remedy is to restore these men, as far as practicable, to 
 their former position of tool-owners. Measures must be 
 adopted which will enable a mechanic to directly or indi- 
 rectly become a joint owner of the expensive tools required 
 in modern industry. This can be done either by enabling 
 him to buy a share in ownership of the machines with which 
 he works ; or by making his compensation consist, in part, 
 of the profit derived from combining his personal labor with 
 the automatic labor of the machine. Such methods, how- 
 ever, are practicable only when the workmen have a consid- 
 erable degree of character and intelligence. The province 
 of this work is not to discuss the details of such measures. 
 Its only object is to indicate the principles involved and to 
 show the justice of such procedures. When that point is 
 conceded, the mode of their execution will soon be arranged. 
 When we adopt a mode of recompensing inventors radi- 
 cally different from that now in vogue, and abolish our 
 present patent laws, we shall have taken a great step toward 
 making the artisan, at least, a part owner of the tool with 
 which he creates wealth. 
 
 In opposition to such a plan, the first thing which will be 
 urged is the well known fact that an attempt to aid a lazy, 
 dissolute, intemperate mechanic to become the owner of 
 
JUSTICE INJURES NO ONE. 427 
 
 capital is as futile as to hold up a coarse sieve and try to fill 
 it with fine sand. We concede that no one can be helped 
 who will not try to help himself. But if the follies and 
 misdeeds of a few artisans constitute good reason for depriv- 
 ing all artisans of a fair and equitable opportunity to im- 
 prove their condition, does it not inevitably follow that the 
 follies and wrongful acts of a few capitalists form a valid 
 reason for depriving all capitalists of their just rights ? Such 
 an argument could be applied to many different facts and 
 conditions and would always lead to a conclusion as pre- 
 posterous as the one aforesaid. No sound argument can 
 be framed in support of any policy or system which is not 
 based on the self-evident fact that every man is equal to 
 every other man, so far as his natural equitable rights are 
 concerned ; and, furthermore, that the rights of one citizen 
 should be as fully protected as those of another. 
 
 The question may be asked : Would not the above sug- 
 gested measures injure capitalists? No. In the proper 
 sense of the word, no one is " injured " by taking away 
 from him some unfair advantage which he is using to the 
 detriment of ot*hers. The aforesaid suggested measures 
 would doubtless powerfully tend to diminish the present 
 disparity of wealth. They would tend to prevent some 
 persons from growing as rich as they would if allowed to 
 retain wrongful advantages and absorb the wealth created 
 by, and justly belonging to others. They would also lessen 
 the number of idle young men and women, the children of 
 rich parents, who consume wealth to the creation of which 
 they have never given an hour's labor. 
 
 Such things are not necessarily " injuries." They may 
 become the greatest blessings. A person who cannot grow 
 rich without some unjust advantage being first given him 
 ought to live without riches. Riches properly belong only 
 to those who, on a footing of equality, exert superior ef- 
 forts and ability in creating and saving wealth without prej- 
 udice to any person whatsoever. 
 
CHAPTER XIX. 
 
 Socialism. — Horror of Socialism. — What Socialism is.' — A Socialistic 
 Pqst-office. — Socialistic Schools. — Socialistic Libraries and Parks.-— 
 Socialistic Water and Fire-engines. — Socialistic Money. — Socialism 
 at West Point.— Socialistic Enterprises. — Advantages of Socialism. 
 — Should Socialism be Extended ? — Socialism does not Favor Lazi- 
 ness and Unthrift. — How to Help the Poor. — Ungrateful Snobs. — 
 Future Probabilities. — Causes of Discontent.— Why Some are 
 Richer than Others. — What shall We do.? — Lessons of Expe- 
 rience. — ■" With what Measure ye Mete, it shall be Measured to 
 you again." — Need of Hastening Slowly. — Need of Changing our 
 Patent Laws. — Defects in our Social System. — Folly of Violence. — 
 The true Course. 
 
 // is never safe to allow one class to enact laws in regard to 
 their ozvn interests. 
 
 Napoleon is reported to have said: "The world is gov- 
 erned by epithets." Certain it is, that in all periods of his- 
 tory, words have been used as the equivalent, or synonym, 
 of elaborate and presumably conclusive arguments. Thus, 
 for a considerable time in the history of this country, the 
 term "Abolitionism" was employed to define particular 
 ideas, so revolting to the majority that a mention of their 
 name rendered useless any further statement or examina- 
 tion in regard to them. For a long period, the term 
 " Christian " applied to a person was all that was necessary 
 to brand him as an enemy of the human race, to whose 
 words none but a knave or a fool should listen. A thou- 
 sand years were not sufificient to destroy the argument once 
 conveyed by the word " Jew." Once having established 
 the fact that a person was a Jew, no further consideration 
 of his merits was deemed necessary. That name barred all 
 argument and overpowered all facts. For many centuries, 
 the term " heretic " was all the description needed of a 
 person to show that his ideas and character were so utterly 
 bad that society should treat him as an outlaw and regard 
 
 428 
 
GROUNDLESS FEARS. 
 
 429 
 
 it a crime to listen to his speech or read his writings. Mul- 
 titudes have been put to death for reading the works of 
 authors to whom the epithet " heretic " had been applied. 
 Hundreds of cases similar to the foregoing could be cited, 
 all showing that a word, an epithet, has swayed the policy 
 of nations, time and again. 
 
 Slowly and painfully, the world has outgrown a fear of 
 many terms which once sent a thrill of horror through what 
 was then the most respectable and intelligent portion of 
 society. But human nature is unchanged. The difference 
 between generations and ages is simply in the kind of 
 words and epithets used, instead of arguments, to prove 
 that certain ideas or modes of conduct are reprehensible. 
 At first, epithets overpower all argument , but finally they 
 lose their spell, — the real argument is listened to, and theji 
 the senseless nature of the epithets appears. But a new oc- 
 casion at once arises; a new epithet is coined, which goes 
 through the same stages as its predecessors. 
 
 HORROR OF SOCIALISM. 
 
 Recently, the term "Socialism " has been used to sum 
 up and define certain ideas and principles so utterly absurd 
 and wrong, in the estimation of the majority, that an ex- 
 amination of them is thought useless. It is presumed that 
 nothing is requisite to condemn any' proposition, but to es- 
 tablish the fact that it is " Socialistic." 
 
 Very learned essays and books have been written to 
 show that socialism is utterly impracticable and visionary. 
 But these wise men ignore the simple fact that, to a consid- 
 erable extent, socialism is in actual and successful operation 
 in this country, and is so intrenched in the good opinion of 
 the masses of our population that nothing can dislodge 
 it. The " impracticable notion " has arrived and has evi- 
 dently come to stay. 
 
 WHAT SOCIALISM IS. 
 
 The essence of socialism is the ownership, management, 
 and use of property, by numbers of persons in common, 
 
.^o • SOCIAL STRUGGLES. 
 
 enforced by law. Socialistic property is bought with means 
 contributed in common ; it is managed by agents whose 
 wages are paid in common ; and its use and objects are for 
 the common welfare without reference to the amount con- 
 tributed for its purchase and support by each individual. 
 Those who contribute a large amount toward the purchase 
 or support of socialistic property have no greater share in 
 the benefits of its ownership than those who contribute 
 very little, or nothing. It is state, colonial, or municipal 
 ownership and control of property and business. 
 
 A SOCIALISTIC POST-OFFICE. 
 
 Our postal system is pure socialism. A vast amount of 
 real estate has been bought with taxes paid in common. 
 Buildings, many of them very costly, have been constructed 
 with money paid in common. The carriers of the mails are 
 paid from the common purse, and the same is true of all 
 the agents employed to receive and deliver the mails. 
 
 To partially support this enterprise, a tax is laid on the 
 people in accordance with the principles on which the pos- 
 tal property is bought and managed in other respects. The 
 man who mails a thousand letters at once does not get them 
 carried at wholesale price. Unlike ordinary commercial 
 transactions, there is no such thing as charging a person 
 more because he buys at retail. The price for one letter is 
 one-thousandth part the price for carrying one thousand 
 letters. 
 
 Whether a letter is carried two miles or two thousand 
 miles makes no difference in the tax laid upon the sender. 
 Neither does it make any difference whether the place to 
 which a letter is to be carried is easily and cheaply reached 
 by steamboat or railroad ; or whether it can only be 
 reached by a long and expensive journey by stage or horse- 
 back. 
 
 In conducting the postal system, an army of agents and 
 many millions of capital are employed. In fact, the recep- 
 tion, carriage, and delivery of the mails for fifty millions of 
 people is a business of enormous magnitude. Considering 
 
SUCCESS OF COMMON SCHOOLS. 43 1 
 
 the immense territory over which this business extends ; 
 the difficulties of its accurate transaction ; the great num- 
 ber of requisite employees ; and the large amounts of 
 money transmitted, the postal system can challenge a 
 comparison of its management with that of any private 
 enterprise. 
 
 It is not simply in this country that this socialistic enter- 
 prise is in successful operation. The civilized globe is now 
 encircled with a chain of post-offices. And the experience 
 of the whole world has recorded so much in favor of a post- 
 office owned by the whole people, managed by the peo- 
 ple's servants, and supported by taxes laid on a socialistic 
 principle, that there is not the slightest probability of its 
 ever being abandoned. Instead of that, the tendency is 
 steadily toward widening the duties of the post-office. In 
 England, postal savings-banks have been in successful oper- 
 ation for a considerable time. In this country, the cost of 
 sending matter has been so much reduced that, for many 
 purposes, the mails are now used instead of express compa- 
 nies. And it is quite probable that the functions of our 
 postal department could be further increased with advan- 
 tage by reducing the cost of sending packages under five 
 pounds in weight, and by the establishment of a system of 
 postal savings-banks. 
 
 SOCIALISTIC SCHOOLS. 
 
 Our common-school system is another example of pure 
 socialism. School buildings, books and apparatus, to the 
 extent of many millions of dollars, are owned in common. 
 The wages of the teachers, the fuel, and all otherattendant 
 expenses of these schools are defrayed by laying a socialis- 
 tic tax. The number of children a tax-payer sends to 
 school makes no difference whatever with the amount of 
 tax levied on him to support the common school. 
 
 Some persons have justly found fault that comparatively 
 useless studies, such as Latin and Greek, are taught in our 
 public schools. But, most such persons have advanced 
 that such teaching was "socialistic." This is no reason at 
 
432 SOCIAL STRUGGLES. 
 
 all. If valid, the entire common-school system would be 
 abolished as well as the study of Latin and Greek. Such 
 studies are merely an abuse of our thoroughly socialistic 
 common schools. Substantially, their defects are similar to 
 those of the majority of private schools. They attempt to 
 teach too many things ; neglect instruction in the cardinal 
 doctrines of honor and morality and burden the pupils' 
 memory, instead of making plain the few simple principles 
 upon which rest self-direction and independent thought. 
 
 SOCIALISTIC LIBRARIES AND PARKS 
 
 Public libraries are an example of socialism. The build- 
 ings and books are paid for and owned in common. A 
 man worth only ten dollars has the same right in a free 
 public library as a man has who is Avorth ten million dollars. 
 Whether a person use the library himself or not makes no 
 difference in the tax assessed upon him for its support. 
 
 Public parks are also forms of socialism. Such parks are 
 owned, supported, managed and enjoyed by the public in 
 common. He who never visits one of these parks is not 
 thereby exempt from taxation for their support. The ex- 
 perience of cities which have established public libraries 
 and parks is in favor of their continuance and extension. 
 
 SOCIALISTIC WATER AND FIRE-ENGINES. 
 
 The introduction of water in a city, by a city, is a purely 
 socialistic enterprise. In such case, the expense of water 
 for private use is defrayed by a tax laid in proportion to 
 the water consumed. But the great expense of water for 
 extinguishing fires and for other public purposes is de- 
 frayed by taxes laid on the community in common. The 
 experience of cities is in favor of this form of socialism. 
 As examples on an immense scale, we may look at New 
 York, Boston, Chicago, Philadelphia and other large cities 
 that have expended millions from the common purse to 
 supply water in common. What would induce New 
 York, for instance, to put the Croton water into the hands 
 of a private company ? 
 
ISSUING OF MONEY. 433 
 
 All the large cities have supplemented socialistic water 
 with an expensive fire department. The tax-payer whose 
 property does not need fire-engines for its protection pays 
 the same tax as if it did. The engine-houses, the engines 
 and all the other means for putting out fires are owned in 
 common, and the wages of the firemen are paid from the 
 common purse. Thus the interests of the fire department 
 are made completely identical with the interests of the 
 people. 
 
 SOCIALISTIC MONEY. 
 
 The mints are another illustration of pure Socialism. 
 The mints and their machinery are owned in common and 
 the expenses of their maintenance are defrayed by a common 
 tax. Although a considerable sum of public money is 
 yearly appropriated for the support of the mints there is no 
 probability that any civilized nation on the globe will re- 
 turn to the old system of private coinage. Coinage by the 
 State, for the benefit of the State, has been found better 
 than to have coinage in the hands of those whose self-inter- 
 est continually tempt them to act contrary to the common 
 interest. 
 
 The greenbacks are socialistic. They are printed at the 
 common expense and for the common benefit. The only 
 kind of money now in circulation in the United States that 
 is not socialistic is the national bank-notes and they are 
 partially so. These notes are printed at the common ex- 
 pense, but they are made for the benefit of the national 
 bankers, who loan them at interest to the people. In all 
 probability, these notes will soon be replaced by national 
 paper money, and then our entire currency will be composed 
 of money made and used by the people, for the benefit of 
 the people. No special class of persons will then have spe- 
 cial rights to issue money for their own special benefit. 
 
 SOCIALISM AT WEST POINT. 
 
 West Point is a purely socialistic institution. Young 
 men are fed, clothed, lodged and educated at the public 
 28 
 
434 
 
 SOCIAL STRUGGLES. 
 
 expense. Furthermore, as soon as their studies are com- 
 pleted, they are furnished permanent employment in the 
 public service and paid out of the common money. When 
 incapacitated in the public service, by any cause, from 
 performing further duty they are paid a pension for the re- 
 mainder of their lives. Thus, a graduate of West Point, 
 who faithfully performs his duty, is an adopted child of the 
 nation, certain of a maintenance through life. What re- 
 cord have the offspring of this socialistic mother made? 
 There is but one voice on that subject. On the average, no 
 class of public servants have rendered greater services to 
 the nation ; and none have shown greater fidelity and hon- 
 esty when placed in positions where public interests and 
 public money were in their keeping. If such good results 
 flow from a socialistic school devoted to giving special in- 
 struction in the arts of war, why may not similar benefits 
 flow from a kindred school devoted to giving special in- 
 struction in the arts of peace? 
 
 If a high sense of honor can be instilled into the pupils of 
 one public school, why cannot other public schools be made 
 teachers of personal honor ? 
 
 SOCIALISTIC ENTERPRISES. 
 
 The attention of the whole civilized world has recently 
 been directed to that wonderful achievement of science, the 
 tremendous explosion which shattered acres of rock in Hell 
 Gate Channel. But many persons do not reflect that it was 
 a socialistic enterprise. It was directed by pupils of West 
 Point ; paid for out of the common purse ; and performed 
 for the common benefit, without the slightest reference to 
 any other consideration. 
 
 Whoever visits New York or Brooklyn may see, hanging 
 high in the air, a bridge connecting those cities which is 
 one of the most daring and marvelous triumphs of engineer- 
 ing skill this world has ever seen. And yet this wonder- 
 ful structure is the product of what self-styled "scientists" 
 have told us was " utterly impracticable," municipal social- 
 ism. The Brooklyn Bridge has been built with common 
 
HOW SOCIALISM BENEFITS. 
 
 435 
 
 money for the common benefit. Its benefits are compara- 
 tively untried. But enough is known to render it certain 
 that, if by magic the bridge could be obliterated and its cost 
 refunded to the people of the great cities whose common 
 money built it, an overwhelming majority would refuse 
 such a proposition. 
 
 Those past middle life can remember when nearly all the 
 important bridges in this country were private property, for 
 the use of which toll was charged. At the same time, our 
 principal roads were managed by private companies who 
 levied toll on travelers. Roads and bridges are now nearly 
 all owned and kept in repair by the public and are free to 
 the use of all. A community which has once abolished the 
 inconvenience of toll-gates is not likely to permit their re- 
 establishment. 
 
 ADVANTAGES OF SOCIALISM. 
 
 Many other examples of the actual and triumphant oper- 
 ation of socialism could readily be cited. The advantages 
 of a successful public co-operation are enormous. They 
 arise largely from the fact that when the whole people con- 
 duct a business the persons in charge of that business are 
 public servants whose interests lie chiefly in serving the 
 people to the best of their ability. For example, the people 
 of the city of New York own the Croton water and hire 
 those in charge of it. Therefore, these agents have few in- 
 terests adverse to the interests of the people of New York. 
 
 But if a private company owned the Croton, the domi- 
 nant question before its agents would be : How large prof- 
 its can we make from the sale of this water ? The larger 
 the profits made under their management, the greater the 
 probability of their continuance in office, at, perhaps, in- 
 creased pay. The quality of the water and its abundant 
 supply would be subordinated to a question which would 
 arise whenever any improvement in the mode of obtaining 
 or supplying the water was suggested; viz.. Will it pay.'' 
 And by this question would not be meant : Will it pay the 
 
436 
 
 SOCIAL STRUGGLES. 
 
 people of New York? It would mean: Will it increase 
 the profits of this water company? 
 
 What is true of a water company is true of a public 
 mint, or any other form of established and successful public 
 co-operation. Such a mode of conducting a business puts 
 it out of the power of a few persons to conduct that partic- 
 ular business, solely to make it just as profitable to them- 
 selves, and just as great a burden on the rest of society as 
 can safely be done. 
 
 Wealth may be, and often is, obtained by legal means 
 which are superficially just but essentially unjust. Such 
 means of getting wealth are more dangerous to the com- 
 munity than robbery by open violence, simply because they 
 are so insidious as not to be immediately recognized and re- 
 sisted. Those who have both the ability and the disposition 
 to grow rich by stealthily preying upon the fruits of others' 
 labor, are largely prevented from doing so, in whatever di- 
 rection the general public assume control of a particular 
 business. In other words, opportunities for getting more 
 out of the public than is fairly given in return are limited 
 by the extent to which business is carried on by the public 
 themselves. For example, if the mails were not carried 
 and distributed by the public, what a field for extortion and 
 plunder that business would be ! This might be done so as 
 to appear at first sight equitable, and the superficial ques- 
 tion continually asked in regard to that, as it now is with 
 reference to existing extortion : " If the price be too high, 
 why do you buy it ? " 
 
 The public may, and sometimes do, suffer losses from dis- 
 honest officials. But such losses are usually trifling com- 
 pared with the enormous robberies inflicted on society by 
 the greed and rapacity of private owners who control some- 
 thing the public are obliged to buy of them. For instance, 
 the public loses comparatively nothing by dishonest mint 
 officials, although many millions of gold and silver yearly 
 pass through their hands. On the side of private owner- 
 ship, look at the vast sums continually stolen from the 
 public by dishonest manipulation of railroads, telegraphs, 
 
IS OUR KNOWLEDGE PERFECT? 
 
 437 
 
 Stocks, money and other forms of wealth under private con- 
 trol ! Look at the colossal fortunes drawn from the people 
 by placing extortionate prices on patented articles ! And 
 look at the great and sudden wealth obtained by artificially 
 raising and lowering the prices of grain and other prod- 
 ucts ! 
 
 SHOULD SOCIALISM BE EXTENDED? 
 
 The aforesaid facts, and kindred ones which could be 
 readily cited, lead us to ask : Have we reached the limits 
 to which socialism can be employed with benefit to society? 
 That there is a point at which public co-operation must 
 give way to individual and private liberty and freedom of 
 action is undoubtedly true. The question is, what, and 
 where that point is ? How much further can the affairs of 
 mankind be advantageously conducted by a system of co- 
 operation so extended that every citizen is made one of the 
 partners ? 
 
 Those small persons who fancy themselves on the highest 
 attainable peak of wisdom make an outcry at the least sug- 
 gestion of a greater extension of municipal and national co- 
 operation. But as such wails, and the doleful prophecies 
 which always accompany them, have always occurred at 
 every step of human advancement, little attention should 
 be paid them. 
 
 However, because many things can advantageously be 
 done in common, it by no means necessarily follows that 
 therefore all business should be so conducted. It is clear 
 that nothing should be done the tendency of which would 
 be to encourage laziness and wastefulness, neither should 
 anything be done that would weaken incentives to acquire 
 an individual home and support an individual family. 
 
 SOCIALISM DOES NOT FAVOR LAZINESS AND UNTHRIFT. 
 
 It is commonly supposed that all forms of socialism foster 
 the vices of idleness and improvidence. But the present 
 generation, living under the influence of a large number of 
 socialistic institutions, are more industrious and provident 
 
438 
 
 SOCIAL STRUGGLES. 
 
 than their forefathers were who Hved before public owner- 
 ship and management of property were dreamed of to the 
 extent now in actual existence and operation. There is no 
 evidence that the postal department, public schools, public 
 libraries, and public parks make those who enjoy their 
 advantages either lazy or shiftless. On the contrary, those 
 institutions, and kindred ones, are potent generators of 
 industry and thrift. Their demonstrated tendency is to 
 elevate the self-respect of the masses ; to widen the horizon 
 of their thoughts and ideas ; to give them a fuller and more 
 comprehensive knowledge of the advantages derived from 
 ownership of capital ; and, above all, to inspire them with 
 hope that there is a possibility of their condition growing 
 steadily better, if they will only make a little more effort to 
 help themselves. 
 
 HOW TO HELP THE POOR. 
 
 The history of all attempts to improve the condition of a 
 degraded class tells one story with painful monotony. No 
 idleness and improvidence are so difficult to remedy as that 
 of persons in poverty and misery, hopeless of ever being 
 able to reach a condition of greater comfort and independ- 
 ence. Despair is the most dangerous of all social diseases. 
 Whatever makes it a little easier for such persons to escape 
 from the bondage of abject poverty and humiliating social 
 inequality, and whatever throws light upon a path leading 
 from the morass in which they are mired to higher and 
 pleasanter grounds, has a powerful tendency to make them 
 more industrious and frugal. Little can be done to amelio- 
 rate the condition of a community, or an individual, by 
 direct alms. But means which show the easy possibilities 
 of self-help are permanently fruitful of good results. 
 
 UNGRATEFUL SNOBS. 
 
 We frequently witness events which make us ashamed 
 of our kind. We see persons who in childhood occupied 
 a position verging on pauperism. By the kindly help of 
 socialistic institutions they have emerged from want and a 
 
FURTHER STEPS TO BE TAKEN. 
 
 439 
 
 precarious existence to a state of comparative affluence and 
 wealth. They now snarl at the hand that lifted them out of 
 the mud, and clothed and fed them. They denounce the 
 Sermon on the Mount as an ancient humbug and proclaim 
 the gospel that every man should solely take care of him- 
 self. This shallow selfishness is styled " Economic Science." 
 
 FUTURE PROBABILITIES. 
 
 Our ancestors, five hundred years ago, imagined their 
 social organization perfect. We are prone to imitate them 
 and to fancy further progress impossible. But history 
 forces us to concede that the tendency of our race, the 
 world over, for the past century, has steadily been toward 
 the principle of socialism. Where we shall ultimately land 
 no one can tell. The certain thing is, that many kinds of 
 business are now conducted with great advantage by the 
 whole people which, one hundred, and, in many cases, fifty 
 years ago, it was supposed could only be fitly carried on by 
 private enterprise. Reasoning from the past, it seems prob- 
 able that the results of human selfishness can be mitigated, 
 and a remedy found for many social evils, by placing still 
 more kinds of business under public ownership and control. 
 
 CAUSES OF DISCONTENT. 
 
 It is commonly imagined, that multitudes are discon- 
 tented simply and solely because some men have more 
 wealth than others. But in fact such is not generally the 
 case. Very few persons are so utterly foolish and unreason- 
 able as to deny that a man is entitled to the fruit of his own 
 labors. By reason either of inherited ability, better oppor- 
 tunities, or superior diligence in self-improvement, one man 
 may possess more than average skillfulness in carrying on 
 some particular industry. If he diligently employ his attain- 
 ments and strength in thus creating wealth, it is perfectly 
 clear that the amount of wealth so created belongs to him 
 just as rightfully as it would if, by reason of less skill and 
 less industry, said amount were smaller. It is also evident, 
 that if one man, by practicing superior economy, save 
 
440 
 
 SOCIAL STRUGGLES. 
 
 and accumulate more of the product of his labor than 
 another, he is the owner of the amount so saved, just as 
 rightfully as if, by less carefulness, or less self-denial, its 
 amount were smaller. The portion of the community 
 which will deny the foregoing propositions is insignificant 
 in numbers and influence, and always must be. 
 
 The Creator gave us equality of rights but did not give 
 us equality eit4ier of physical or mental strength. As man's 
 powers, to a considerable extent, are devoted to the creation 
 of wealth it necessarily follows that inequality of power to 
 create wealth, must naturally result in an inequality in the 
 amount of wealth created by different individuals. Further- 
 more, as men's judgments of the relative importance of 
 things differ ; and as some men are willing to undergo more 
 self-denial for the purpose of saving wealth than others ; it 
 necessarily follows that, by virtue of superior self-denial and 
 economy, some men will naturally have, and justly possess, 
 more wealth than others. But, after conceding the fore- 
 going self-evident truths, the root of the matter we are con- 
 sidering remains untouched : viz., Except to a very- limited 
 extent, the great and increasing inequality of wealth, is not 
 due to the superior skill, industry and economy in creating and 
 saving wealth, of one vtait over another. 
 
 WHY SOME ARE RICHER THAN OTHERS. 
 
 Great inequality of wealth chiefly arises from the ability 
 of one man being so dextrously and cunningly employed in 
 manipulating and managing commercial and legal machinery 
 as to result in his absorbing a considerable portion of the 
 wealth created by a large number of other men. A small 
 portion of wealth thus taken from each one of a large num- 
 ber of persons amounts to a great sum when collected in 
 one man's hands. 
 
 Great wealth is usually not acquired by great skill and 
 labor in its creation, because life is too short and man's pow- 
 ers are too limited to render such a thing ordinarily possi- 
 ble. Skill in obtaining legal possession of wealth created 
 by the labor of others is the secret of most large fortunes. 
 
THE EVIL TO BE ABATED. 
 
 441 
 
 There are exceptions to the foregoing rule, but they are 
 rare. Whoever doubts it is invited to trace the history of 
 the large estates within his knowledge. Donations to hos 
 pitals, schools and kindred objects are frequently merely at- 
 tempts to divert public attention from the fact that consid- 
 erable property has been gathered in one mass by indefen- 
 sible methods. Vanity thus incites the donor to give prop- 
 erty, which justly belongs to others, in a public manner. 
 
 The evil we are called on to diminish is one man so using 
 his abilities, his position, and his capital, as not to violate 
 law and to appear fair : but, nevertheless to take advantage 
 of others and thus acquire more wealth than in equity be- 
 longs to him.'^ 
 
 * As an indication of growth toward a public recognition of hitherto 
 largely unsuspected evils, the following letter, written by a distinguished 
 clergyman to the New York Sun, January 4, 1886, is republished : 
 
 To THE Editor of The Sun — Sir .• You quoted lately a passage 
 from an article of mine on overvvealth, and invited me to explain my 
 views. They are simply these ; 
 
 1. Dangers to the peace and prosperity of the country must be guarded 
 against by the Government and laws. 
 
 2. Men and corporations, so large pecuniarily as to be able to buy up 
 Legislatures, are a danger to the peace and prosperity of the country. 
 
 3. The acquisition and holding of such wealth should be carefully 
 hedged about by wise legislation. 
 
 There is my syllogism. Now let me add a few notes : 
 
 1. A large part of the enormous wealth of individuals and corporations 
 is made by lying, stealing, and oppression. The running up and down 
 of stocks, what is known as " bulling and bearing," is practical lying, 
 and has nothing to do with real values. Stock watering is nothing but 
 stealing. Credit Mobilier schemes, by which directors rob stockholders 
 to enrich themselves, are common methods of oppressing the poor, who 
 have been fooled into putting their Httle all into stock. 
 
 2. The rich man is protected by law, and what with preferred creditors 
 and property held in his wife's name and a hundred other devices, he fails 
 and is as rich as ever. The poor man is thrown out of employment, and 
 has nothing to fall back on. He can be turned out at a moment's notice, 
 and has no redress. 
 
 3. We need legislation that will defend the poor, e. g., making a month's 
 notice necessary before discharging a hand, paying him by the year as a 
 salaried man, and giving him a proportional interest in the concern. 
 
442 
 
 SOCIAL STRUGGLES. 
 
 WHAT SHALL WE DO? 
 
 If we would, we cannot evade the questions which this 
 perverted use of the mechanism of our social organization 
 forces upon us. When every man has a vote, unless the 
 great majority are satisfied, they will certainly make changes 
 of some kind in the national policy. With the present grow- 
 ing discontent, it is not simply a question of standing still 
 or not. The problem is narrowed down to this : In what 
 direction shall we move ? Shall we make our social system 
 still more democratic by adopting measures whose tendency 
 will be to create a more equal distribution of wealth ? Or 
 shall we make our social system more aristocratic and more 
 plutocratic by adopting measures whose tendency will be 
 
 4. We need legislation that will make the man, as he grows richer, to 
 bear more of the public burdens. The graduated income tax would be 
 the most equitable. If that be impracticable, as many hold, then let the 
 nearest practicable plan be adopted, so that with us, as in ancient Athens, 
 the rich shall bear the chief burdens of the State. 
 
 5. We need legislation to restrict the power of corporations, forbidding 
 and preventing gifts, direct or indirect, all watering, all use of franchises 
 without full payment of value to the State, all interest of directors in side 
 schemes of a parasitic nature, all secrecy of operation, all combination 
 with other corporations, and all exorbitant dividends at the cost of the 
 public. 
 
 6. With such legislation there need be no hmitation of property. Jus- 
 tice, equal to all, will give trade and acquisition a natural health, which is 
 now denied by a partial legislation in favor of the rich and of great cor- 
 porations. With such legislation property will be naturally limited, and 
 there will be no place for discontent or socialism. 
 
 7. If we saw a man a mile high stalking over this way from the West, 
 and discovered that he had already trampled eight or ten towns into 
 nothingness, we should feel called upon to take measures to suppress him 
 before he could put his big foot on the Sun Building and blot out its 
 light forever. He would be a danger which we should be justified in pre- 
 paring against. Our great corporations are very much like this giant. 
 They crush thousands where they tread. They hire journals, courts, and 
 Legislatures, and have everything their own way. It is for the people of 
 our land so to curb this power that it may be only useful and not harm- 
 ful. If this be socialism, I am a Socialist. 
 
 Howard Crosby, 
 
WHAT HISTORY TELLS US. 
 
 443 
 
 to widen the distinction between classes, to Increase the 
 number living in luxurious idleness, and to' place the wealth 
 and power of the country in fewer and fewer hands? 
 
 By gross deception the people, in recent years, have been 
 misled into sanctioning measures whose tendency is pluto- 
 cratic. This has been effected partially by raising the cry : 
 " Socialism ! Socialism ! " and pretending that socialism was 
 the essence of evil. But all experience tells us not to be 
 alarmed by cries raised by those who think progress consists 
 in sitting still ; and by others fearful that their unjust priv- 
 ileges will be taken from them. Suggestions for further 
 practical application of the principle of public co-operation 
 are legitimate, and worthy of the most earnest and careful 
 consideration. Should such an inquiry reveal that a profita- 
 ble extension of socialism could be made, if honest public 
 agents were more easily obtained, let us improve our com- 
 mon schools by teaching therein a keener sense of personal 
 honor. 
 
 Theorists have advanced doctrines adverse to such benefi- 
 cent common works as the improvement of Hell Gate, pub- 
 lic schools, public money, and kindred things. But these 
 persons are insignificant in numbers and everything else 
 except in the assurance with which they make, pretense of 
 superior wisdom. 
 
 LESSONS OF EXPERIENCE. 
 
 In England, where government by the few has had the 
 fullest and fairest trial, such government is pronounced 
 against by a steadily increasing minority composed of the 
 foremost thinkers of that nation. The bulwark for centu- 
 ries of aristocratic ideas bids fair, by the magic of discussion 
 and thought, to soon be converted into a democracy. Those 
 who admire the medieval barbarism which now lingers in 
 England will then be forced to transfer their affections to 
 Russia, or some other despotism. 
 
 Not only England, but the whole world is demonstrating 
 the failure of all forms of government, animated by the prin- 
 ciple that a few — the privileged, the rich, the cunning, and 
 
444 
 
 SOCIAL STRUGGLES. 
 
 the strong — should rightfully be permitted to prey upon the 
 many, the simple, the poor, and the weak. 
 
 "WITH WHAT MEASURE YE METE, IT SHALL BE MEAS- 
 URED TO YOU AGAIN." 
 
 Despotisms are trying to build dams wherewith to stay, 
 among the masses, the slowly but steadily rising tide of 
 broader thought and wiser appreciation of their own rights. 
 But the higher the dams are raised the higher the water 
 will surely rise behind them. When the inevitable break 
 comes, these builders will be lucky if the shattered ruins 
 be not stained with blood. There is only one question 
 concerning retribution being visited on privileged classes 
 which oppress a nation, viz.: How long will it be delayed } 
 
 Let us then go forward without fear toward a fuller, a 
 more humane, and therefore a wiser democracy. The path 
 which leads to equal justice to all and to national adoption 
 of the principle that the strong should help, instead of tak- 
 ing advantage of the weak, is the only path of safety. All 
 others are lined with pitfalls. Let us be bold in search of 
 Truth. Let us trust the conclusions to which it leads, 
 and, at the same time, be cautious in devising and adopting 
 measures to put them in practical operation and effect. 
 
 NEED OF HASTENING SLOWLY. 
 
 " In a multitude of counsellors there is safety." There 
 is little danger that any pernicious measure will be adopted 
 which is first fully subjected to public criticism. But 
 where principles are framed into law, without such public- 
 ity, serious mistakes are likely to be committed. 
 
 No important law should be enacted by the legislature 
 or congress to which it is first submitted. All such laws 
 should be first carefully sifted. Those deemed worthy of 
 possible enactment should be published as " Proposed 
 Laws," and their final passage deferred to the next legisla- 
 ture, enlightened by at least one year's public consideration 
 of them. 
 
 Two important results would flow from a procedure like 
 
ONE, OF MANY STEPS. 445 
 
 that aforesaid. First. A much needed check would be 
 placed on hasty and ill considered legislation. Progress 
 would be more rapid because less time would be lost in 
 retracing false steps. Second. The practical application 
 and workings of democracy and socialism would be ex- 
 tended. The whole people would have a greater voice 
 than they now have in the enactment of laws and in shap- 
 ing and directing the course and policy of our social organ- 
 ization. More fully than at present every man would be a 
 legislator. 
 
 NEED OF CHANGING OUR PATENT LAWS. 
 
 Of several ways which could readily be named whereby 
 the principle of socialism could advantageously be given 
 a wider practical application, let us briefly examine one, 
 viz.: the public ownership of all inventions. 
 
 Suppose a physician or a surgeon should make a dis- 
 covery of great importance to mankind and claim the right 
 to sell said discovery to a capitalist, who, for 17 years, 
 would deprive the people of its benefits unless extortionate 
 prices were paid for them. Such a medical man would be 
 justly denounced as a traitor to the profession whose mis- 
 sion is to allay human misery. Yet this is similar to what 
 is done by inventors who sell important patents. 
 
 In the aggregate, the public pay an enormous tax in 
 form of high prices on patented articles. In the vast ma- 
 jority of instances this tax is not paid to the inventors of 
 those articles or of the machines which create them, but to 
 the capitalists who directly or indirectly control the patents. 
 Inventors generally lack the requisite capital to manufacture 
 and distribute what is covered by their patents ; hence 
 necessity compels a bargain with some one who has. In 
 a majority of cases the proverb is then exemplified, that 
 " necessity never makes a good bargain." 
 
 As competition with a manufacturer whose wares are pro- 
 tected by the patent law is out of the question, the whole 
 community are constantly paying a large, and often a 
 wrongful, tribute to those who control patents. Capital 
 
446 
 
 SOCIAL STRUGGLES. 
 
 thus quietly obtains and seizes an opportunity to levy an 
 unfair tax on labor. When one patent expires, an improve- 
 ment on the old one, or some entirely new patent, is secured ; 
 thereby enabling capital to silently maintain an unnoticed 
 and powerful advantage.* 
 
 What will future ages think of a matter of then almost 
 forgotten history, a system of law whereby the public bene- 
 fit of inventions is postponed for half a generation after 
 their practical application to some useful purpose? 
 
 Every useful invention tends to remove the human race 
 one step further from their primitive poverty and its ac- 
 companying privation and toil. It is therefore sound public 
 policy to foster invention. But we must remember that 
 each individual inventor adds only one stone to the monu- 
 ment of human knowledge which countless numbers of his 
 predecessors have reared. Without the knowledge which 
 has thus become common property, his invention would not 
 have been possible. Therefore, the owners of this common 
 
 * The following news item, from the St. Lotas Republican, illustrates 
 how our present patent law postpones the full benefit of inventions. 
 Many similar facts could be adduced. 
 
 NO CHEAP TELEPHONES BEFORE THE YEAR I900. 
 
 It will be a long time before telephoning becomes cheap. Bell's first 
 patent, the one upon which all the others are founded, is dated March 7, 
 1876. Patents are seventeen years in duration, and this first patent will 
 thus run out in 1893. But there are other patents of more recent date 
 upon parts essential to the operation of the instruments. For instance, 
 the Blake transmitter was not patented until 1881, and it is so broad that 
 it may be said to cover almost any transmitter which might be con- 
 structed. This will practically secure the monopoly until 1898. Then 
 there have been many other patents of date up to a very recent time, 
 which, while not absolutely essential to telephoning, would defeat com- 
 petition even if every patent on essential parts were out of the way. 
 Thus the Bell Company controls patents upon switchboards and other 
 apparatus used in making connections which would put competition by 
 those who have not the right to'use them at a great disadvantage. The 
 nineteenth century will see no change from the present conditions, and it 
 is impossible to foresee what other improvements will be patented which 
 will in the future be considered necessities. 
 
WHA T SIMPLE JUSTICE DEMANDS. 447 
 
 knowledge have a paramount right to every new invention. 
 For his addition to the common stock of knowledge, the 
 inventor should be treated as a citizen who has made a 
 notable contribution to the commonwealth. He should be 
 pensioned, or, in some other way, paid from the common 
 purse, and paid very liberally. But neither he, nor his 
 assigns, should be allowed, as at present, to make a step of 
 human progress, for a considerable period of time, an instru- 
 ment of human oppression. 
 
 Public ownership of inventions would not in the least 
 check the development- of scientific and mechanical knowl- 
 edge and skill. On the contrary, it would stimulate them, 
 by rendering their rewards more equitable and certain. 
 
 But it would have a powerful tendency to check the 
 growth of huge monopolies which virtually force the public 
 to pay them extortionate profits on their goods, while the 
 operatives whose labor created them are paid low wages. 
 It would then be generally seen, that much of what is now 
 ascribed to our tariff is really due to the evil influence of 
 private ownership of inventions which should be free to 
 every man who wishes thereby to render his labor easier, or 
 more productive. 
 
 DEFECTS IN OUR SCJtIAL SYSTEM. 
 
 What course should be pursued by those who believe the 
 evils of monopoly and concentration of wealth in few hands 
 could be diminished by enlarging the field of national co- 
 operation ? 
 
 Wherever wrong exists there is always one proper way 
 to attack it, and that is the manner by which it can most 
 effectually and speedily be destroyed. The choice of means 
 depends entirely on circumstances. Revolutionary violence 
 is not only admissible, but commendable, whenever despot- 
 ism has shut off other means of redress. 
 
 But in a nation where suffrage is universal and unobstruct- 
 ed, no reasonable question can arise relative to the proper 
 method of righting a public wrong. Where every man is 
 armed with a ballot ; where the mails are open for the dis- 
 
443 
 
 SOCIAL STRUGGLES. 
 
 semination of ideas ; and where freedom of speech and as- 
 sembly for discussion are unfettered, poHtical agitation is by 
 far the most potent means of abating any evils which may 
 exist in the social organization. Where all power is lodged 
 in the hands of the people they have no one but themselves 
 to blame if the laws, or their administration, be not what 
 they desire, 
 
 FOLLY OF VIOLENCE. 
 
 Lately, it has been said : " We wish changes in our na- 
 tional policy but cannot get them, because the great ma- 
 jority oppose us and could beat us in a political contest. 
 Therefore, armed resistance is the only way to obtain our 
 wishes." To such persons it may be said : If you are in 
 such a small minority that a political contest is hopeless, 
 would not a struggle with arms be equally hopeless ? 
 
 Many who desire political changes overlook the readiness 
 with which these changes can be obtained. Legislators and 
 politicians are continually watching the drift of public sen- 
 timent. Eacli party constantly tries to act in accordance 
 with the wishes of the supposed majority of voters. Con- 
 sequently, the policy of each party is based on the judg- 
 ment of their political leaders as to what laws the people 
 will ratify at the next election. As these leaders have sub- 
 stantially equal sources of information, the result is the very 
 nearly equal balancing of the two great political parties. 
 
 The result of the aforesaid facts is that a resolute minor- 
 ity of one voter in every hundred can often hold the bal- 
 ance of power. And in the great majority of cases, a 
 minority of one voter out of every twenty, who will un- 
 flinchingly adhere to their principles, are absolutely certain 
 of inducing one of the great parties to adopt their ideas. 
 
 THE TRUE COURSE. 
 
 The lesson of these facts is obvious. Whenever a few 
 persons imagine themselves possessed of ideas which would 
 benefit the public to incorporate into law, it is their duty to 
 organize themselves into a political party for the express 
 
THE BEST WEAPON. A*g 
 
 purpose of disseminating such ideas. If those sentiments 
 will not bear the ordeal of public scrutiny and debate, 
 they will deservedly soon become ridiculous and drop out 
 of sight. But if they are founded in justice, means for 
 putting them in practical operation will soon be devised, 
 and their triumph will only be a question of time. 
 
 Away, then, with all foolish talk about violence, blood- 
 shed and arson being necessary to redress existing wrongs. 
 Such criminal folly only aggravates present evils and post- 
 pones their destruction. Let all socialists fully state their 
 demands and the arguments therefor before that socialistic 
 tribunal, gatherings of voters during political campaigns. 
 The ballot is the most effective weapon which can be 
 wielded against wrongful methods of government. There- 
 fore, organizations and assemblages for the purpose of polit- 
 ical education are essential, alike to the preservation of 
 
 regulated liberty and to further social development. 
 29 
 
CHAPTER XX. 
 
 How shall we Create a Stable Currency? — Stability of Value possible 
 only when Conditions are Stable. — Money is not strictly a Measure 
 of Value. — Difference between Money and other Standards. — Some 
 Relative Facts. — Effect of Paper Money. — Effect of Hoarding Gold. 
 — Why Prices change. — Changes in the Number of Standards. — 
 Silver and Gold are governed by the same Natural Law. — Duty of 
 Congress. — Importance of the Dollar having a Uniform Value.— 
 The Central Question. — Fruit of a False Premise. — Money must be 
 Adapted to Public Intelligence. — Financial Measures suggested for 
 Consideration and Amendment. — The Proper Inscription. — A Per- 
 fect Currency. — Successful Use of Paper Money requires Intelligence. 
 — What will Ultimately Occur. 
 
 A fliictuating currency is the perennial fountain from 
 wliicJi floivs many evils and wrongs generally ascribed to 
 other causes. 
 
 We have heretofore found that the natural laws which 
 create value apply universally, perpetually, and impartially 
 to all things given and received in exchange. We have 
 also found that all things contain certain inherent, intrinsic, 
 qualities peculiar to themselves ; but that value is not a 
 quality but the RESULT of a condition in which a thing 
 possessing the intrinsic qualities fitted to supply a want is 
 so placed as to meet and fill such a want. 
 
 We have found that when a thing possessing the intrin- 
 sic qualities fitted to supply a certain want is placed under 
 conditions which enable it to meet such a want, a value is 
 always created ; and that the uniformity and stability of 
 such value depend entirely on the uniformity and stability 
 of the conditions which created it. 
 
 We have also found that the value of a dollar, or any 
 other monetary unit, depends on the same facts which give 
 a value to a bushel of corn. The value of the " bushel " 
 depends on the number of those bushels offered for sale 
 
 450 
 
 I 
 
STABLE CONDITIONS, STABLE VALUE. 451 
 
 relative to the need of, and therefore the demand for such 
 bushels. The value of the " dollar " depends on the num- 
 ber of those dollars ofTered for sale relative to the need of, 
 and therefore the demand for such dollars. When dollars 
 are put in circulation it is always effected by selling them ; 
 i. i\, giving them in exchange for some other thing. Un- 
 less they are so sold, they do not enter into circulation and 
 therefore do not affect the value of other dollars already in 
 circulation any more than " bushels" of corn permanently 
 withheld from market affect the market price of corn. The 
 desire to have the United States Treasury contain an im- 
 mense hoard of gold is the natural child of a wish to depress 
 the prices of commodities and the wages of labor, thereby 
 raising the value of bonds and kindred evidences of indebt- 
 edness. 
 
 STABILITY OF VALUE POSSIBLE ONLY WHEN CONDITIONS 
 
 ARE STABLE. 
 
 The aforesaid considerations force us to conclude that if 
 we wish a " dollar " to have a uniform and stable value, we 
 must frame conditions under which the miviber of those 
 dollars offered for sale, i. c, put in daily constant circula- 
 tion, will have a uniform relation to the need of such dol- 
 lars to carry on the varied exchanges of society. The num- 
 ber of dollars in circulation must not be subjected to either 
 an increase or a diminution relative to the demand for such 
 dollars. Their relative iminbcr should always be the same, 
 no matter what changes occur in their absolute number. 
 
 To more fully show that uniformity in the relative num- 
 bers of dollars is absolutely requisite to insure and produce 
 uniformity in the value of each one of those dollars, let us 
 illustrate this topic again in a manner different from that 
 heretofore employed. 
 
 MONEY IS NOT STRICTLY A MEASURE OF VALUE. 
 
 In order to understand this subject, we must observe the 
 wide difference which exists between what is commonly 
 called the " measure of value " and other kinds of measures. 
 
452 
 
 SOCIAL STRUGGLES. 
 
 The United States have arbitrarily adopted a piece of 
 metal, of a. certain weight, as the unit to be used in determin- 
 ing weights. This is kept in the Government buildings 
 and is known as the standard pound weight and duplicates 
 of it are made when required. The weight of this standard 
 pound is not in the slightest extent affected by the number 
 of other " pound " standards which may be made in exact 
 resemblance to it. 
 
 This country has always, as at present, had several coins 
 called " measures of value." But for convenience and 
 brevity we shall select one, and that the coin which is com- 
 monly supposed to have the most invariable value ; viz., 
 the gold dollar. Our law makers have enacted that a gold 
 dollar shall contain 23 22-100 grains of pure gold and shall 
 be the unit of value. Substantially, every one -of these 
 dollars is precisely like every other one of these so-called 
 " measures of value." That is, they are composed of the 
 same materials, have the same weight and the same size 
 and shape. An agreement to pay or receive at a future 
 time, no matter how distant, a certain number of gold dol- 
 lars of the present standard of weight and fineness, is con- 
 sequently an agreement to pay or receive a certain number 
 of things each one of which possesses certain intrinsic and 
 invariable qualities. 
 
 From the aforesaid undoubted fact has been assumed an- 
 other statement which has no truthful foundation ; to wit, 
 that because the size, weight and constituent materials of 
 these gold dollars are substantially " invariable," that there- 
 fore their value is also invariable.* If this were true, it 
 would then inevitably follow that dollars made of lead, so 
 long as they were always of the same shape and weight, 
 would also have an " invariable " value. It is true that the 
 weight and size of these lead dollars would be substantially 
 
 * Curiously enough many of those who assert that " legislation can 
 have no effect on value " unhesitatingly accept the absurd notion that 
 because the State stamps a piece of metal " one dollar," therefore the 
 value of that dollar is fixed by such an act, without any reference to other 
 facts and conditions. 
 
THE ACTUAL FACT. 453 
 
 " invariable " ; but the value of a thing is not identical 
 either with its weight, its size, or the materials of which it 
 is composed. If it luere, identical things ivould akvays pos- 
 sess identical value. For instance, a bushel of corn at one 
 time and place has the same weight and other qualities 
 which it has at another time and place. But the identical 
 bushel of corn has one value in Iowa and another value in 
 Connecticut ; thus showing that identity of intrinsic qual- 
 ities, size and weight, do not prove an identity of value. 
 The opponents of the silver dollar are constantly saying 
 that its value has " depreciated " since 1873. But the sil- 
 ver dollar of to-day is composed of the same materials, has 
 the same weight and size, and, in fact, is precisely the same 
 " invariable " dollar that it was prior to 1873. Its identity is 
 unchanged. In 1859 the silver dollar of 412)^ grs. was 
 worth 5 22-100 per cent, more than the gold dollar of 
 25 8-10 grs. At present the bullion value of the gold 
 dollar is worth about 20 per cent, more than the bullion 
 value of the silver dollar. While this change of about 25 
 per cent, in the relative value of the gold dollar and the 
 silver dollar has occurred, not the slightest change has taken 
 place in the relative size, weight, color, and other intrinsic, 
 inherent qualities of these two different dollars. 
 
 The aforesaid plain fact is inexplicable and bewilder 
 ing, so long as we embrace the false theory that value is 
 an " intrinsic " quality of gold and silver. If silver had 
 an " intrinsic " value, circumstances could not affect its 
 value any more than circumstances can change its color. 
 If every nation in the world should simultaneously 
 enact that silver should henceforth be yellow, it would not 
 have the least effect on the color of silver. Neither could 
 any number of laws have the faintest tendency to make 
 gold less malleable, lighter, or possessed of any intrinsic 
 qualities different from those which are now, and always 
 have been peculiar to that metal. The change which has 
 occurred -since silver was demonetized by Germany in 1872, 
 in the relative value of gold and silver dollars is easily un- 
 derstood when we remember that value is never an intrinsic 
 
454 
 
 SOCIAL STRUGGLES. 
 
 quality of anything ; and that therefore identical things, 
 possessed of identical, intrinsic qualities, may possess widely 
 different values at different times and under the influence 
 of different laws, conditions, and circumstances. 
 
 DIFFERENCE BETWEEN MONEY AND OTHER STANDARDS. 
 
 The difference between our standard of weight and our 
 so-called standard of value is therefore essentially this, viz.: 
 The numbers of the standard of weight have no effect 
 whatever upon the weight of that standard. But the num- 
 bers of the standard of value are the determining fact which 
 regulates the value of this supposed standard of value. 
 
 An increase in the number of gold dollars in use dimin- 
 ishes the value of each one of them. A decrease of the 
 number of gold dollars in circulation increases the value of 
 each one of those in use. Therefore the gold dollar is a 
 standard, the value of which is dependent on the number 
 of those standards in use. It is a condition similar to 
 what would exist if the length of a yard-stick were depen- 
 dent on the number of yard-sticks in use. It follows that 
 the accuracy of what is commonly called a " measure of 
 value " does not depend on the fact that it is always com- 
 posed of the same thing, but on the number of those things 
 in use. 
 
 The value of one of these standards is affected by any- 
 thing which changes the relative amount of gold in human 
 possession ; such as the vicissitudes of mining, the amount 
 of gold consumed in the arts, and the arbitrary demand 
 which may be created for that metal by legislation. But 
 this is by far the lesser portion of the total sum of influ- 
 ences which operate to raise or lower the value of each and 
 every ounce of gold bullion in existence. The value of 
 such bullion, and consequently the value of each "dollar" 
 made from it, is affected just as directly by an increased 
 or a diminished use of silver dollars, or paper dollars, as by 
 an increased or a diminished supply of gold bullion. 
 
 The value of the gold "dollar" therefore rests upon 
 an entirely different foundation from the weight of the 
 
WHY GOLD CHANGES IN VALUE. 
 
 455 
 
 "pound," the size of the "gallon" or the length of the 
 " foot." It is an invariable thing, zvith a variable value. 
 As its value depends upon its numbers, the only way to 
 endow it with a fixed value would be to create a uniformity 
 in its numbers. But the enormous changes constantly 
 occurring in its relative supply and demand render such a 
 thing impossible. The prime difficulty consists in the fact 
 that we cannot control the amount of gold bullion in the 
 world and therefore cannot control the number of dollars 
 which shall be made therefrom. 
 
 If it were feasible to keep a uniform number of gold dol- 
 lars in circulation, the value of each one of those " stand- 
 ards " would still be swayed by an increased or diminished 
 use of silver as money, and still more by an increased or 
 diminished employment of paper money. No fact is bet- 
 ter established than that the value of gold throughout the 
 world is raised just as quickly by a disuse of silver as 
 money as by a diminution of the amount of gold itself. 
 Since 1872, a gigantic experiment has been made by sev- 
 eral nations which has demonstrated this point beyond a 
 doubt. Moreover, it is perfectly certain that an increase 
 or a diminution in the total amount of paper money in use 
 throughout the world has the same tendency to lower or 
 raise the value of money made of gold and silver as an 
 increased or a diminished supply of those metals. When 
 we remember the vast amount of paper money in circula- 
 tion and the changes occurring in its volume, the potency 
 of this cause to raise or lower the value of metallic money 
 is apparent. 
 
 SOME RELATIVE FACTS. 
 
 The aforesaid facts must always remain, because all 
 things are relative, and a diminished or an increased use 
 of one of two things which are both used for a similar pur- 
 pose must inevitably create an increased or a diminished 
 demand for the other. If cotton could no longer be used 
 as a material for clothing, the demand for wool would be 
 immediately increased. If bituminous coal were to cease 
 
456 
 
 SOCIAL STRUGGLES. 
 
 to burn, an increased demand would arise for anthracite 
 coal. The increased supply of petroleum has diminished 
 the value of other illuminating oils. A cheapening of steel 
 rails has induced some railroads to discard iron rails and 
 replace them with steel ones. Numerous other illustra- 
 tions could be cited to show the familiar fact that the 
 amount of a given thing may be but little changed while 
 its value is either raised or lowered by a diminished or an 
 increased use of another thing which performs a similar 
 function or service. 
 
 EFFECT OF PAPER MONEY. 
 
 Every additional means of dispensing with the use of 
 gold has the same tendency to depress its value and keep 
 it from rising as an actual increase in the amount of gold 
 would have. This is so for the same reason that every ad- 
 ditional means of dispensing ^with the use of mahogany 
 lumber has the same effect on its value that an actual in- 
 crease in the amount of such lumber would have. When 
 the volume of paper money throughout the world is in- 
 creased, the effect on prices is the same as if new gold 
 mines had been discovered and an additional amount of 
 gold bullion put on the market. That is, the addition of 
 a considerable amount of paper money to the circulation, 
 no matter what form that paper money assumes, lowers the 
 relative demand for gold and thus lowers its value. When 
 free commerce exists between nations, a large increase in 
 the volume of paper money in one country has an inevita- 
 ble tendency to lower the value of gold in another and dis- 
 tant country. If England were forced into a desperate war 
 she would be again forced to do as she and other nations 
 have generally done under similar circumstances, viz., sus- 
 pend specie payments and issue an additional amount of 
 paper money. This procedure, by liberating the gold now 
 used in England, would tend to lower its value in the 
 United States. In other words, prices in this country 
 would tend upward. More gold would be offered for sale, 
 — part of the stock of England would be thrown on the 
 
EFFECT OF LOCKING UP GOODS. 
 
 457 
 
 market and consequently each ounce would bring a lower 
 price. 
 
 EFFECT OF, HOARDING GOLD. 
 
 Gold had a lower value in the United States in 1870 than 
 it had in 1878. Hoarding gold for the purpose of "resump- 
 tion " diminished the total amount of that metal in open mar- 
 ket for sale. This hoarding was done not only by the gov- 
 ernment but by banks and private individuals. Hence while 
 the premium on gold, compared with greenbacks, was thir- 
 teen per cent, in October, 1870, and nothing in October, 
 1878, the actual value of gold during that time rose. This 
 is unanswerably shown by the fact that the average scale of 
 the prices of commodities and labor steadily fell to such an 
 extent that more labor and commodities were required to 
 buy a given number of ounces of gold in 1878 than in 1870. 
 And yet, so deluded are the majority with the idea that the 
 so-called " par value " of gold is a fixed one, that it was 
 generally imagined that the " resumption process " had 
 cheapened gold. 
 
 In fact, great numbers of newspapers proclaimed that 
 " the Republican party, by its wise policy, had so cheap- 
 ened gold that it had been placed within the reach of every 
 laboring man." The simple fact is that more labor was 
 required to buy 25 8-10 grs. of gold in 1878 than in 1870. 
 Wages were lower in 1878 than in 1870. This was the log- 
 ical result of taking a considerable portion of the world's 
 stock of gold and locking it up. There was less left in 
 open market to be taken by its owners to the mint and be 
 converted into the so-called standard of value, and then 
 offered for sale. A similar result would be produced if a 
 considerable amount of the world's stock of any other com- 
 modity were locked up. Until the equilibrium can be 
 restored by production, the value of a commodity, when 
 a considerable portion of it is withdrawn from market, is in- 
 creased. In case of gold, the exhaustion of the gold mines 
 renders the effect of locking it up far greater than the effect 
 of locking up a commodity, like wheat, which can be pro- 
 
458 
 
 SOCIAL STRUGGLES. 
 
 duced in a year. To a considerable extent, every million 
 of gold locked up is practically destroyed, so far as the im- 
 mediate scale of prices is concerned.* 
 
 Prices are merely a mode of stating the average judg- 
 ment of mankind in regard to the value of the money in 
 which those prices are paid. Fluctuations in prices are 
 therefore a practical reflection of the fluctuations in the 
 value of the so-called standard of value, no matter what 
 that standard may be composed of. 
 
 WHY PRICES CHANGE. 
 
 The foregoing considerations explain why the commercial 
 w^orld is subject to such great and frequent changes in the 
 prices of commodities ; — fluctuations which are evidently 
 not dependent on an increased or diminished supply of 
 those commodities. The size of " bushels " and the weight 
 of " pounds " do not change, because we have adopted in- 
 variable standards for measure and weight. But our stand- 
 ard of value is an elastic one ; it diminishes in value when 
 the number of those standards increase, and it increases in 
 value when the number of those standards diminish. The 
 unfailing mirror of these changes in this pretended " stand- 
 ard " is the average scale of market prices. When flour 
 rose to $400.00 per barrel in Confederate money, it simply 
 denoted that the number of standard dollars in the Confed- 
 eracy had increased. When wheat is sold in New York for 
 ninety cents a bushel, and all other things at correspond- 
 ingly low prices, it shows that the number of " standards " 
 has diminished. The notorious instability of prices and the 
 great losses to which persons are thereby made liable who 
 are obliged to sell their goods before a certain time, has 
 given rise to the proverb : " Out of debt, out of danger." 
 
 * The following statement, made September 11, 1886, shows what a 
 large amount of money was then locked up in New York City alone. 
 
 Reserve in banks, $73,159,400 in specie and 120,901,800 in greenbacks ; 
 a total of $94,061,200. 
 
 Treasury statement : $157,246,358 in gold, $36,106,591 in greenbacks 
 and $95,567,217 in silver. Total in banks and Treasury, $382,981,366. 
 
FLUCTUATIONS OF PRICES. 
 
 459 
 
 The instability of prices has been more or less observed 
 by every intelligent business man. But the fact that these 
 fluctuations are largely caused by changes in the value of 
 what is called the " standard of value," has attracted com- 
 paratively little attention. If it had, this nation would not 
 have tolerated a monetary chaos, a condition in which the 
 value of all property compared with money is subject to 
 constajit and excessive changes. 
 
 CHANGES IN THE NUMBER OF STANDARDS. 
 
 Mr. Alexander Del Mar, in his interesting and valuable 
 book, "The Science of Money," furnishes a table which 
 shows that the number of "units of value," to wit, "dol- 
 lars" in circulation in this country, in proportion to the 
 number of inhabitants, has been subject to great variations. 
 Among other things, it appears from the figures of this 
 careful statistician, that the amount of money in circulation 
 in this country in proportion to the population, has varied 
 from $4.60 per head in 1803, to $13.40 per head in 1839; 
 from $6.90 per head in 1843, to $1 i.io per head in 1848, and 
 to $28.50 per head in 1864. Furthermore it appears that 
 there has been a direct relation between the rise and fall of 
 prices which have marked different periods, and an in- 
 crease or a diminution of the amount of money in circula- 
 tion at those periods. 
 
 That its wealth and commerce are as important factors 
 in determining the amount of money needed by a nation, 
 as its population, no intelligent person will deny. But Mr. 
 Del Mar's figures show great differences in the amount of 
 money per head, at times so close to each other as to pre- 
 clude all probability of any material change having mean- 
 while occurred in the national wealth and commerce. 
 
 There is another very important thing not expressed by 
 the said table, and which it is difficult to state accurately. 
 That is the well-known fact that, whenever the public 
 become alarmed and fear a sudden and intense demand for 
 legal tender, a large amount of money is at once hoarded 
 and the trouble thereby aggravated. For the time being, 
 
460 
 
 SOCIAL STRUGGLES. 
 
 such a proceeding practically diminishes the number of 
 dollars in circulation, nearly as effectually as if they were 
 destroyed. The frightful sacrifices sometimes incurred by 
 debtors forced to sell their property in such times of con- 
 traction give emphatic confirmation to the statement that 
 the numbers of our so-called " standard of value " are in 
 reality the determining condition which regulates their 
 actual value. And as heretofore pointed out, the use of a 
 currency of which only a portion is a full legal-tender 
 money enormously increases the contraction resulting from 
 a panic. In such times, business men do not want fair 
 weather currency ; they want legal-tender money with 
 which debts can be paid either with or without the cred- 
 itor's consent. 
 
 SILVER AND GOLD ARE GOVERNED BY THE SAME NATURAL 
 
 LAW, 
 
 That the value of the silver dollar depends on its numbers 
 and not on its intrinsic qualities is just as true as that the 
 value of the gold dollar is thus determined Many persons 
 imagine the silver dollar was an invariable standard of value 
 up to 1873. This mistake arises chiefly from the fact that, 
 until silver was demonetized, the value of the silver dollar, 
 in effect, was usually measured by comparing it with the 
 bullion contained in a silver dollar ; which, in reality, under 
 free coinage is simply a comparison of one silver dollar with 
 another silver dollar, a mode of comparison heretofore 
 shown fallacious. The silver dollar, for reasons heretofore 
 stated, is less variable in value than the gold dollar. But 
 the essential cause of this superior stability is not due to an 
 intrinsic value in the silver dollar, but to the greater proba- 
 bility of the number of such dollars being uniform. It fol- 
 lows that any condition which renders the number of silver 
 dollars more unstable must necessarily render the value of 
 each one of those dollars more unstable. And it also 
 follows that changes in the amount of paper money must 
 always affect the value of silver dollars in a manner similar 
 to the way that the value of the gold dollar is thus affected. 
 
WISDOM OF THE CONSTITUTION. 461 
 
 DUTY OF CONGRESS, 
 
 The United States Constitution provides that " Congress 
 shall have power to coin money and regulate the value 
 thereof." Heretofore, Congress has coined money but it 
 has neglected its power and duty to " regulate the value 
 thereof." This omission is almost entirely due to the 
 ignorance of monetary principles which has prevailed 
 among our " statesmen." They have been mostly oblivious 
 of the simple fact that to " regulate the value thereof " 
 means that the number of dollars in circulation should be 
 regulated, as there are no other possible means whereby 
 Congress can control the value of one of the national 
 dollars. 
 
 IMPORTANCE OF THE DOLLAR HAVING A UNIFORM VALUE. 
 
 The word ''dollars," in this country, is the term applied 
 to that form of capital through the help and intervention 
 of which one form of capital associates with all other forms 
 of capital, one kind of labor associates with all other kinds 
 of labor, and all forms of capital hold commercial inter- 
 course and association with all kinds of labor. Labor may 
 be compared to one pulley, capital to another pulley, and 
 "dollars" to the belt which connects those pulleys to- 
 gether. Consequently, any material change in the value of 
 each one of those dollars has an inevitable tendency to de- 
 range the industrial machinery whose motion depends on 
 the uniformity of their value. Combinations of laborers 
 may temporarily keep wages from falling ; but, if the cur- 
 rency be steadily contracted, wages must, sooner or later, 
 be reduced to correspond with the diminution of currency, 
 just as certainly as _wages increase when the currency is 
 expanded. 
 
 Of all things produced in this wide land, labor is the 
 most perishable. It must be profitably employed every 
 day or it goes to waste without benefiting any one. Every 
 idle day spent by a man whose health and strength fit him 
 for labor is a waste of national wealth to the extent that 
 
462 
 
 SOCIAL STRUGGLES. 
 
 his labor might have created it. A million idle men, each 
 of whom might, if employed, daily create a dollar's worth of 
 wealth, are a clear loss of a million dollars every day they 
 remain idle. 
 
 It follows from the foregoing premises, that nothing is 
 more expensive, nothing is more wasteful, than for a na- 
 tion to neglect measures which will tend to keep the belt 
 which connects labor and capital of a uniform length and 
 efificiency. And our analysis of the matter shows this can 
 only be done by maintaining the greatest attainable uni- 
 formity in the number of dollars in circulation, relative to 
 the commercial and industrial need of those dollars. If the 
 total number of dollars always bore a uniform relation to 
 the demand for them, there would never be any fluctuation 
 in the value of one of those dollars. If "dollars" were 
 always of the same value, there would be no changes in the 
 general scale of the prices of commodities and labor. In- 
 dividual articles, in consequence of greater scarcity or abun- 
 dance, would fluctuate in value to some extent. Invention 
 and machinery would then, as now, lower the prices of some 
 things. But the average rate of prices would remain uni- 
 form. As the prices of commodities would be more nearly 
 uniform than at present, the rate of wages would also be- 
 come more stable, and the industrial strifes now constantly 
 occurring between employers and laborers would be less in- 
 tense. Real estate would also be far more stable in value 
 than at present. The growth of population and wealth 
 would cause a steady rise in the value of some lands ; but 
 the fluctuations which now characterize the real estate mar- 
 ket would mostly disappear. The amount of business trans- 
 acted by what are now essentially gambling institutions, 
 called "stock exchanges," would be reduced to a small 
 fraction of its present volume. All the above statements 
 are evident when we bear in mind that the average market 
 quotations are the invariable reflection of the value of each 
 one of the dollars in which those quoted prices are stated. 
 The same cause must always produce the same result. 
 
WHA T WILL BE SEEN. 
 
 46- 
 
 THE CENTRAL QUESTION. 
 
 The considerations aforesaid lead us to conclude that the 
 central question which must eventually engross the national 
 attention is not : Of what materials shall we make our dol- 
 lars ? The great problem will be seen to be : WJiat number 
 of dollars shall constitute our currency; and hoiv shall this 
 number be increased or diminished so that its relation to our 
 population, xvealth and commerce zvill remain uniform ? 
 
 Hitherto, the real question before us has attracted com- 
 paratively little attention. If it had the present chaotic 
 condition of our finances w^ould not exist. We have 
 created so-called " standards of value " and then left the 
 essential thing, to wit, the number of those standards, to 
 chance ; to the precarious and fluctuating supply of gold 
 and silver by reason of changes in the amount of those 
 metals produced from the mines, changes in the amount 
 consumed in the arts, and changes in the demand for them 
 by reason of the action of foreign governments and people. 
 We have allowed the most important factor in social and 
 commercial progress, to wit, our money, our means of stat- 
 ing the equities between millions, to be helplessly subject 
 to the caprice of uninstructed legislators and the intrigues 
 and schemes of classes selfishly interested in changing the 
 value of each one of our " standards " so cunningly and 
 silently that the process, except by a few, would be unob- 
 served until accomplished. 
 
 FRUIT OF A FALSE PREMISE. 
 
 This colossal blunder is almost entirely traceable to the 
 false fundamental premise that gold and silver contain an 
 intrinsic value, and that consequently, each standard coin, 
 under all circumstances, is an invariable measure of value. 
 The fact that a large number of persons have recently 
 changed a belief in the fixed intrinsic value of both gold 
 and silver to a belief in the fixed intrinsic value of gold 
 alone, intensifies the practical effect of this blunder without 
 substantially changing its origin and nature. 
 
464 
 
 SOCIAL STRUGGLES. 
 
 Regulation of the mnnbcr of our standards of value is the 
 essential feature of our monetary problem. The materials 
 of which we shall make " dollars " will depend upon the 
 popular intelligence in regard to finance ; upon habit, prej- 
 udice and sentiment, and upon future discoveries and in- 
 ventions. The task before us is clear, but its magnitude is 
 so great that no one man or body of men can at once con- 
 clude it. Its final solution will be reached whenever the 
 attention of a large number of intelligent minds is concen- 
 trated upon it for a considerable time. 
 
 MONEY MUST BE ADAPTED TO PUBLIC INTELLIGENCE. 
 
 Money is both an evidence and a form of human prog- 
 ress and development. Consequently, a particular financial 
 system cannot be arbitrarily created and put in successful 
 operation ; — it must be a natural outgrowth of the society 
 whose commerce it is intended for. The practical question 
 then is not: What is the most perfect financial system? 
 but it is : What monetary system is best adapted to our 
 present stage of national, commercial, and intellectual de- 
 velopment ? 
 
 Human nature in all generations is the same. Therefore, 
 it is inevitable that all propositions to reform our money 
 will be bitterly opposed, for reasons similar to those which 
 have always engendered resistance to all forms of progress. 
 A large amount of legislation in force in England and other 
 European countries, which full experience has shown to be 
 salutary, was enacted in contempt of the opinions and ad- 
 vice of the so-called "political economists." 
 
 When Robert Stephenson was engaged in his long weary 
 struggle to improve facilities for transportation, his chief 
 opponents were men who professed to know all about the 
 subject. No class denounced railroads as impracticable 
 and unscientific with so much confidence and vehemence 
 as the men who called themselves " scientific engineers." 
 
 History will certainly repeat itself. We may safely pre- 
 dict that monetary reform will be most zealously opposed 
 
NEED OF CONFERRING WITH EACH OTHER. 
 
 465 
 
 by those who profess a '' scientific " knowledge of the sub- 
 ject. Their pride and self-interest will instinctively lead 
 them to discredit ideas which, if generally believed, would 
 practically result in damaging their reputation for learning 
 and acumen. By the average man, no task is more reluc- 
 tantly performed than to admit his opinions erroneous. 
 Especially is this so when he has pretended to be an au- 
 thority and has in reality taught falsehood. 
 
 FINANCIAL MEASURES SUGGESTED FOR CONSIDERATION 
 AND AMENDMENT. 
 
 Whoever states his opinion in regard to the financial 
 policy of this nation necessarily subjects himself to the im- 
 putation of being presumptuous. As the opinion of a sin- 
 gle individual on a subject of such importance is of little 
 weight, a criticism of that kind, in one sense, is a just one. 
 But if this consideration deterred every one from express- 
 ing his views, there would be no opportunity for a compar- 
 ison of ideas and the mutual instruction resulting therefrom. 
 Therefore, more fully than heretofore, some financial meas- 
 ures are presented for consideration. 
 
 First. Withdraw from circulation all the national bank- 
 notes and all the existing greenbacks. This withdrawal 
 would necessarily require considerable time for its accom- 
 plishment. 
 
 Second. Issue a new form of greenbacks to the extent 
 of fifteen dollars per head of the population of the United 
 States, and so regulate the amount of those greenbacks as 
 to always keep, as closely as practicable, that amount and 
 ratio of absolute paper money relative to the population, 
 in circulation, and no more. These greenbacks, in order to 
 avoid either a contraction or an inflation of the total 
 volume of paper money, to be issued simultaneously with 
 the cancelation of the present greenbacks and bank-notes. 
 The greenbacks used to replace canceled bank-notes could 
 be put in circulation by buying United States interest-bear- 
 ing bonds in open market and then destroying the bonds. 
 30 
 
466 SOCIAL STRUGGLES. 
 
 THE PROPER INSCRIPTION. 
 
 A one dollar greenback of this new issue to bear an 
 inscription similar to that on all other denominations ; to 
 wit, "UNITED STATES OF AMERICA, ONE DOL- 
 LAR. This is a legal tender at its face value for all debts 
 and dues both public and private, except in case of specific 
 contracts entered into before the passage of an Act of Con- 
 gress, approved authorizing the issue of this dol- 
 lar." 
 
 It may be asked : What foundation would the value of 
 such paper dollars rest upon ? The answer is obvious ; viz., 
 upon the desire of mankind to possess a medium of ex- 
 change ; upon the need of money. 
 
 It furthermore may be asked : Is not a human desire and 
 need a slender foundation upon which to rest a national 
 currency? To this question a moment's reflection furnishes 
 a complete reply. Said foundation is precisely the one 
 upon which all values rest. The value of wool depends on 
 human desire for cloth, — upon the need of woolen cloth- 
 ing. The value of houses rests on human desire for a com- 
 fortable abode, upon the need of a shelter from the inclem- 
 ency of the weather. All values of every kind and nature 
 have no foundation and basis whatsoever but human 
 desire and human need. 
 
 After the aforesaid change was accomplished we should 
 have comparatively but little more paper money than we 
 now have ; but, in several important respects, it would be 
 superior to that now in circulation. It would all be a legal 
 tender for all purposes, with the unimportant exception of 
 previously contracted debts by their terms payable in coin. 
 Lapse of time would soon render this exception unneces- 
 sary. To a large extent our present paper money is fair 
 weather money. The national bank-notes pass current for 
 payment of all private debts so long as business moves 
 along smoothly. But the moment apprehension fills the 
 minds of men owing debts which a failure to pay, at a spe- 
 cified time, will involve them in a loss of credit and possible 
 
NEED OF REMOVING TEMPTATION. 
 
 467 
 
 bankruptcy, such non legal-tender currency is " like a broken 
 tooth and a foot out of joint." It is a false friend. Even 
 the greenbacks, under our present laws, would cease to be 
 a legal tender at the custom house, if specie payments were 
 suspended. Business men would have far greater security 
 than they now have, if the money they handled were all a 
 legal tender. No danger would then exist of being caught 
 with a note to be paid and nominally enough money to 
 pay it with, and then have part of the money rejected 
 because not a full legal tender. 
 
 The amount of paper money in circulation would be far 
 more uniform than at present. We now regulate the 
 amount of bank-notes by the so-called "redemption" proc- 
 ess. National bankers, as a class, have been continually 
 inveighing against the greenbacks ; but whenever an in- 
 creased demand exists for legal-tender money, they at once 
 hoard greenbacks and contract the amount of bank-notes. 
 They do this to place themselves in better position to 
 " redeem " bank-notes in greenbacks. Their conduct is 
 guided by self-interest, without the slightest regard to the 
 best interests of the community from whom they derive 
 their profits. Temptation to act in this manner would be 
 removed by taking away from the national banks the privi- 
 lege of issuing paper money. 
 
 The expensive machinery of redemption of bank-notes, 
 collection of taxes on circulation, examination of amount 
 of greenbacks held by the banks, etc., could all be dis- 
 pensed with by a direct issue from the Treasury of all paper 
 money. This would lessen the number of office-holders. 
 
 A nation which attempts to regulate the amount of its 
 paper money by what is called "specie payments" must 
 subject itself to the great expense of keeping constantly in 
 the Treasury vaults a large amount of idle coin. No one 
 pretends that the United States can safely carry on the 
 specie payment system with less than one hundred millions 
 of idle coin. In fact we have now about two hundred and 
 fifty millions thus lying idle. At the low rate of three per 
 
468 
 
 SOCIAL STRUGGLES. 
 
 cent, per annum, the interest of these large sums is a heavy- 
 national burden. 
 
 If we regulated the amount of our paper money without 
 recourse to the " redemption " method, we should rid our-^ 
 selves of the danger now constantly present, that war, or 
 severe financial disturbance in foreign nations, will drain 
 away a sufficient amount of coin to cause an involuntary 
 suspension of specie payments with its attendant industrial 
 and commercial derangement. 
 
 It would also be a great advantage to the nation to be 
 rid of a class of men whose selfish interests prompt them 
 to continually plot against the welfare of the industrial 
 classes. When the unjust privilege of issuing money is 
 taken from the banks, one such class will disappear. 
 
 Third. Restore the coinage of silver to its ancient and 
 rightful position. Make the coinage of the silver dollar 
 unlimited with no charge for coinage beyond the attendant 
 expense. Those who fear a *' flood of silver dollars " should 
 ask themselves : Where is the silver bullion to come from 
 wherewith to coin the "flood"? By no possibility could 
 silver dollars be worth less than the bullion from which 
 they are coined. To-day (Nov., 1885), the bullion in a sil- 
 ver dollar has a higher value than the gold dollar had in 
 1873. Thus if the "flood " came it would have the effect 
 which a flood of gold dollars would have had in 1873. The 
 absurdity of talking about the wrongs which creditors would 
 suffer if paid in silver dollars worth more than the gold dol- 
 lar was in 1873, is apparent. 
 
 Fourth. Discontinue the coinage of the silver half dol- 
 lar and coin those existing into standard silver dollars. 
 Instead, issue paper money of the denomination of half 
 dollars to such amount as the people wish to pay for in 
 dollars. Such fractional money to be exchangeable, at the 
 pleasure of its holders, for any other kind of national 
 money and to be a legal tender for all purposes to the 
 extent of ten dollars. 
 
 Fifth. Issue coin certificates, payable on demand, at the 
 option of the Government, in either gold or silver, to any 
 
WHAT IS NECESSARY. 
 
 469 
 
 one who chooses to deposit either silver or gold dollars in 
 the United States Treasury. Said certificates to be limited 
 only by the number of dollars thus deposited ; and to be 
 of denominations of two, five, ten, twenty-five, one hun- 
 dred and one thousand dollars. 
 
 A PERFECT CURRENCY. 
 
 The reader may ask : Would a compliance with the 
 aforesaid suggestions create a currency of a perfectly uni- 
 form value? I answer, No. In order to make dollars of 
 uniform value, the Government must make, not a part, but 
 all of them from a material over which it has complete con- 
 trol. It must have intelligence enough to maintain a uni- 
 form relation between the number of those dollars and the 
 amount of exchanges effected therewith. It must have 
 integrity and watchfulness over the welfare of all sufificient 
 to resist class importunities and appeals for either an 
 increase, or a diminution of the relative number of dollars 
 in circulation ; and it must have stability and power 
 enough to prevent counterfeiting and to enforce its decrees 
 in all respects. 
 
 Why then make the foregoing suggestions? Because 
 they would create a currency of far more uniform value 
 than the one we now have, and, in all probability, as stable 
 a currency as the American people are now qualified to or- 
 dain and maintain. At present the total number of dollars 
 in circulation fluctuates from two causes ; to wit, alterations 
 in the number of paper dollars, and changes in the number 
 of metallic dollars. And our financial history shows that 
 greater changes have occurred in the number of paper 
 dollars than in the number of metallic dollars. Under a 
 system similar to that above outlined, the number of paper 
 dollars would be substantially a fixed one. It would not 
 always bear the same relation to the commerce of the 
 country, but it would to the population, and this would 
 give it a far more invariable quality than has ever been pos- 
 sessed by any paper money in the United States. 
 
 The changes in the total number of our dollars, instead 
 
.-Q SOCIAL STRUGGLES. 
 
 of arising from TWO sources as at present, would then arise 
 from only ONE cause ; to wit, alterations in the number of 
 metallic dollars. Financial disturbances in foreign nations, 
 then, as now, could change the number of our metallic dol- 
 lars. But, unlike the present, such events would not have 
 the slightest effect on the number of our paper dollars, 
 which would form the major portion of the total number of 
 dollars. 
 
 SUCCESSFUL USE OF PAPER MONEY REQUIRES INTELLI- 
 GENCE. 
 
 Philosophic and profound writers on Finance have stated 
 that the use of gold and silver as money is a relic of bar- 
 barism which will eventually disappear. This is undoubt- 
 edly true. But, instead of being a conclusive reason 
 against our further employment of those metals, as money, 
 it is an unanswerable argument in favor of their use at pres- 
 ent. For, in fact, we have not yet emerged from barbar- 
 ism ; we are merely emerging from that state. We have 
 only partially rid ourselves of barbaric customs, laws, and 
 ideas. What will the historians of the thirtieth century say 
 of a people among whom the possession of wealth, no mat- 
 ter how obtained, insured distinguished social considera- 
 tion and was a sufficient qualification to enable an ignorant 
 man to become governor of a State, a United States sena- 
 tor, or obtain other high official positions? 
 
 A great moralist has said that " national amusements are 
 an unerring index of national civilization." Judged by this 
 criterion, we are but little removed from the ignorance and 
 brutality of ancient nations whose highest pleasure was found 
 in witnessing savage and bloody combats between man and 
 man and between men and wild beasts. Our newspapers 
 print what is known will please a large portion of their 
 readers. They daily contain accounts of disgusting prize 
 fights between brutes in human form, and of revolting 
 struggles between dogs more refined than those who urge 
 them to mutilate and kill each other. The percentage of 
 our population which does not take pleasure in the " sport " 
 
THE FUTURE MONEY. 
 
 471 
 
 of maiming and murdering inoffensive and defenseless birds 
 and animals is deplorably small. 
 
 A few years ago a man, clearly and palpably insane, 
 wounded the President of the United States. After a con- 
 siderable time, his death ensued. The correctness of the 
 President's medical treatment was questioned by some of 
 the most distinguished practitioners in the world. Not- 
 withstanding these facts, the majority of the American peo- 
 ple, from one end of the land to another, howled like a 
 pack of hungry wolves for the gratification of having a poor 
 helpless wretch barbarously put to death. But enough of 
 such humiliating facts. Why recite a hundred more ? 
 
 WHAT WILL ULTIMATELY OCCUR. 
 
 Whenever the people of the United States become suf- 
 ficiently intelligent to create and maintain a currency com- 
 posed entirely of absolute paper money they will relegate 
 gold and silver to their final and proper position. Both 
 gold and silver will be demonetized. Those metals will 
 then occupy precisely the same relation in the business 
 and commercial world that are now occupied by iron, tin, 
 copper, quicksilver, platinum, zinc and other metals. They 
 will be commodities bought and sold by weight and their 
 price will be stated, not, as at present, by fractions and pieces 
 of themselves, but by the units of an absolute paper money, 
 automatically regulated in amount. An increase or a de- 
 crease of the amount of those metals in the country might 
 then affect the value of a pound of one, or both of them, 
 but would have no influence, as at present, upon the value 
 of all other commodities in the land. The solvency or 
 bankruptcy of large numbers of business men would not 
 then, as now, depend on the occurrence of events in some 
 part of the world which created an increased or a dimin- 
 ished demand for one or two things ; to wit, for silver or 
 gold. The absurdity of placing the vast equities constantly 
 existing between sixty millions of people, in their manifold 
 business and commercial associations, at the mercy and 
 upon the hazard of a rise or fall in the value of one or two 
 
472 
 
 SOCIAL STRUGGLES. 
 
 commodities would then become apparent. Wonder would 
 then arise how such a crude mode of estimating what jus- 
 tice required one person should receive from another, could 
 have been so long in existence. 
 
 A child cannot be made able to walk by placing it in the 
 middle of a room and ordering it to walk. Ability to walk 
 is an attainment made possible only by the infant's gradual 
 development and no arbitrary means can otherwise hasten 
 it. 
 
 The people of the United States are now probably far 
 enough developed to make a portion of their money on cor- 
 rect principles. After that step has been taken and has 
 given the general satisfaction which it inevitably would, a 
 popular demand for an extension of the system of absolute 
 paper money would arise. The first step in the right di- 
 rection is therefore the essential one. All others will nec- 
 essarily follow the progress made in acquiring and practi- 
 cally using a knowledge of true financial principles. What 
 are now called " obscure financial problems " will then be 
 dismissed to the limbo now occupied by many " problems " 
 which puzzled mankind in the year 1300. 
 
CHAPTER XXI. 
 
 Ought the United States maintain the Gold, and. the Silver Dollar at an 
 Equality of Value ? — Folly of Blindly imitating- other Nations. — 
 What We have Actually done. — What We should now do. — How 
 Foreign Commerce is Conducted.— Foreign Trade is a Barter of one 
 Thing for Another. — The Incentive of Trade. — Why Men engage 
 in Foreign Commerce. — Use of Bills of Exchange. — How England 
 Trades. — What Wealth is. — Would it not be an Advantage to have 
 Money similar to the Nations with whom our Trade is chiefly con- 
 ducted } — What effect would Unlimited Coinage of Silver Produce .-* 
 — Silver Bullion will Never be Easily Obtained. — The End which 
 Laws should Seek. — The Par Value Delusion. — Effect of Limited 
 Coinage. — Artificial Value of Coins. — Hard Pan. — Gold Premium. — 
 True Test of Value. — How Evils can be Averted. — Social Problems 
 will always be before Mankind. — What Inflation can do. — Confed- 
 erate Money. — A Cotton Basis for Money. — Why Goods are not 
 Sold when active Inflation is Progressing — Study of Social Topics. 
 — Conclusion. 
 
 " The simple believetJi every zuord : but the prudent man 
 looketJi well to J lis going!' 
 
 We have heretofore found that the ultimate object and 
 end of our governmental policy should be to establish jus- 
 tice and promote the prosperity and development of the 
 American people. To that purpose every means should 
 be made subordinate, and we should carefully deliberate 
 before believing the statements of classes whose clamors in 
 behalf of their o\vn interests burden the air. 
 
 We have also found that stability of the average rate of 
 prices is one of the most powerful influences which can be 
 devised to secure the aforesaid end. Furthermore, we have 
 found that, as the general scale of prices is merely a reflec- 
 tion of the value of the currency, stability of prices is pos- 
 sible only to the extent that uniformity of value is main- 
 tained by the money in which those prices are stated. It 
 follows that the answer to the aforesaid question resolves 
 
 473 
 
474 
 
 SOCIAL STRUGGLES. 
 
 itself into this : Would such a measure create stability of 
 prices ? 
 
 A large number of persons constantly proclaim that if 
 we establish unlimited coinage of both gold and silver, that 
 instead of the silver and gold dollars being on an equality 
 of value, the gold dollar will be at a premium and be dearer 
 than at present. They furthermore tell us that such an 
 inequality would produce greater fluctuations in prices than 
 now exist and be very disastrous to the national prosperity. 
 The chief argument in support of their doctrines is that as 
 gold has a fixed value and is the standard of coinage in the 
 nations with whom the bulk of our foreign commerce is 
 conducted ; to wit, with , England, France, Holland, and 
 Germany, it is necessary for us to have a similar currency on 
 an equality of value with those nations. Let us now see if 
 the aforesaid statements be correct. 
 
 FOLLY OF BLINDLY IMITATING OTHER NATIONS. 
 
 In the opinion of many intelligent observers, the peace 
 of Europe is akin to the peace of a man with a keg of gun- 
 powder and a lot of shavings stored in the cellar of his 
 house. At any time, a general war or widely spread revo- 
 lutionary movements may occur. Suppose, as a result of 
 such events, the money of European nations should become 
 worth only one-half what it now is. If the commerce of 
 this country require that our money should conform to 
 the European standard, in such case it would logically and 
 inevitably follow that we should at once change our cur- 
 rency to an equality with that of the nations with whom 
 we trade. But the same persons who gravely assure us we 
 cannot advantageously trade with Holland unless our mer- 
 chants employ the same kind of money in use in that coun- 
 try would protest against such a step. On the other hand, 
 it would also follow that if European nations adopted meas- 
 ures to double the present value of their money, we should 
 properly do the same thing with ours and make the term 
 " one dollar " mean as much value as the term '' two dol- 
 IsPrs " now does. 
 
IMITATION OF EUROPE. 
 
 47S 
 
 Adoption of the foregoing principles would be an entire 
 abandonment of the idea of maintaining a stable currency 
 and stable prices in this country. In its stead, we should 
 act on the notion that every fluctuation in the value of 
 European money and consequently every change in Euro- 
 pean prices should be reproduced in the United States by 
 appropriate legislation. 
 
 WHAT WE HAVE ACTUALLY DONE. 
 
 Absurd as the aforesaid proposition is, in fact, it is pre- 
 cisely what we have been doing since 1873. European 
 nations changed the meaning of the words "pound," 
 "franc," "mark," etc., by striking silver out of the statute 
 books as a legal tender and denying it free coinage. This 
 proceeding has resulted in an appreciation of the value of 
 gold to the extent of over 20 per cent. Prices have fallen 
 in the same ratio and Europe has suffered all the evils of a 
 contracting currency. Money has risen in value while all 
 other property has relatively fallen. Instead of seeking to 
 maintain uniformity in the value of their money and stabil- 
 ity in prices, those nations have steadily legislated to create 
 dearer money and cheaper goods and labor. Universal 
 distress has thus been produced among the industrial classes 
 while the holders of over twenty thousand million dollars' 
 worth of national bonds ■ have been correspondingly en- 
 riched. Practically the public debts have thus been silently 
 increased to the enormous amount of four thousand mill- 
 ions of dollars, without including the addition to private 
 indebtedness and the increase in the value of railroad 
 bonds. 
 
 In 1873, silver was slyly demonetized in the United 
 States. The foregoing tables of prices show conclusively 
 that the great change which has occurred in the meaning 
 of the term "one dollar" would not have taken place if, 
 without reference to the conduct of other nations, we had 
 steadily adhered to the principle of maintaining a stable 
 currency and stable prices in the United States. Instead 
 of that, we have been deluded with the notion, industri- 
 
476 
 
 SOCIAL STRUGGLES. 
 
 ously disseminated by persons who would make a profit 
 from its adoption, that because Europe had so legislated as 
 to change the value of money and the scale of prices, there- 
 fore, great disasters would befall us if we did not follow in 
 her footsteps. Without examination we have believed 
 these false cries. The tables aforesaid show that if we had 
 not demonetized silver, prices in the United States, since 
 1873, would have remained nearly on the level of prices in 
 gold at that time. This would have prevented an enor- 
 mous amount of wrong and suffering in this country, and 
 in consequence of the steadier employment of labor, and 
 greater creation of wealth, the United States would be far 
 richer than at present. But a few persons would not have 
 been as rich as they now are. 
 
 WHAT WE SHOULD NOW DO. 
 
 Shall we now continue to maintain our money at the 
 artificial height to which it has been raised by demonetizing 
 silver? Or, shall we return to the sound principle that sta- 
 bility in the value of United States money should be 
 sought for, without the slightest reference to the fluctua- 
 tions in the value of the money of foreign nations? The 
 latter course would not derange our foreign commerce in 
 the slightest degree. Having money different from that of 
 England would have no more effect upon our trade with 
 England than if she adopted silver and we retained gold. 
 If England doubled the value of a pound sterling, or 
 made it one half what it now is, such a proceeding would 
 not in the least disable us from trading with England. 
 
 HOW FOREIGN COMMERCE IS CONDUCTED. 
 
 Commerce between nations is carried on by an exchange 
 of commodities. Money is not used in such trade. There is 
 no such thing as international money. To a comparatively 
 small extent, gold and silver are used to pay balances in 
 such transactions but they are used as commodities and not 
 as money. If a New York merchant owe a merchant in 
 London ten thousand dollars he always sends him directly, 
 
HO IV FOREIGN MERCHANTS TRADE. 
 
 477 
 
 or indirectly, some commodity in payment. This maybe 
 a certain number of bales of cotton, a certain number of 
 bushels of corn, or a certain number of ounces of gold bul- 
 lion. Whether payment be made in quicksilver, copper, lead 
 or gold, the principle of the transaction is precisely the 
 samCo Payment is made by a commodity. The price of 
 this commodity is computed in the kind of money stated in 
 the agreement. But this is only a matter of a little arith- 
 metic and does not, of itself, affect the actual cost of the 
 commodity to either party. When greenbacks were quoted 
 at a discount of 50 per cent., it made no difference to the 
 New York merchant, in settling his accounts with a London 
 merchant, whether the wheat shipped to Liverpool were 
 computed at its price in greenbacks, or its price in gold. 
 It was essentially a question of a little computation. If all 
 nations in the world adopted the American silver dollar as 
 the basis of computing values, the only practical difference 
 resulting therefrom would be a little saving of time in com- 
 putation. 
 
 From 1797, for upwards of twenty years, England sus- 
 pended specie payments. But this made no difference in 
 the mode in which her merchants paid for foreign goods. 
 It was done with commodities before suspension, and after 
 suspension the payment went on as before. When specie 
 payments were suspended in this country in 1861, that 
 event did not arrest our foreign commerce for a day ; simply 
 because foreign payments are made, not in money, but in 
 commodities. 
 
 If the merchants of this country could not trade with 
 foreign nations unless provided with the same kind of 
 money as those nations, our mints would be asked to coin 
 the money of every country with whom we hold commerce. 
 A person trading with Russia would need " roubles " ; he 
 would need '' marks " to trade with Germany ; " francs " to 
 trade with France, etc., etc. But, in fact, merchants do not 
 need anything of the kind. Silver dollars are the Mexican 
 money. But it does not therefore follow that in order to 
 trade with Mexico merchants must provide themselves with 
 
478 
 
 SOCIAL STRUGGLES. 
 
 silver dollars. The essential thing in foreign trade is that 
 something should be sent abroad which foreigners prefer to 
 what they already have and which they are ready to give in 
 exchange for what has been sent them. 
 
 Foreign commerce is not conducted for amusement. 
 Neither is it carried on from benevolent or philanthropic 
 motives. Foreign commerce originates, whenever a man 
 thinks he can make a profit by buying a commodity in one 
 place, changing its value by carrying it to another place, 
 and there exchanging it for some commodity the value of 
 which can be increased by bringing it, on the return jour- 
 ney, to the place from which the first bought commodity 
 was taken. The result of this transaction is that he has 
 been the middle-man through whose help parties in one 
 country have bartered goods with persons in another coun- 
 try. 
 
 FOREIGN TRADE IS A BARTER OF ONE THING FOR 
 
 ANOTHER. 
 
 Let us sketch the steps by which farmers in Illinois 
 trade with farmers in Brazil and barter wheat for coffee. 
 The Illinois farmers sell their wheat for the dollars current 
 in the United States. This wheat is taken to a mill and 
 after being ground is shipped to New York, in which 
 market it is sold, as so many barrels of flour, to a merchant 
 who carries on commerce with Brazil. This merchant pays 
 for it with the dollars current in the United States. The 
 flour is then shipped to Rio Janeiro and there sold for the 
 money current in Rio Janeiro. With the proceeds from 
 the sale of the flour, a cargo of coffee is bought and paid 
 for in the same money received for the flour. 
 
 Or, as is frequently the case, when the ship'arrives in the 
 harbor of Rio Janeiro, the person in charge of the cargo 
 goes to a dealer in coffee and says : " I wish to buy a cargo 
 of cofTee. How much is coffee worth?" After learning 
 that fact, the next question is : " What will you allow me 
 per barrel for my flour and give me pay in coffee at so much 
 per hundred pounds?" If a bargain be made, the parties 
 
PROFITS OF MIDDLEMEN. . -g 
 
 thereto compute the value of the flour and coffee and ascer- 
 tain how much coffee shall be given in exchange for the 
 flour. The coffee is then brought to New York and sold 
 for dollars current in the United States to a wholesale 
 dealer in coffee. This dealer sells directly, or indirectly, to 
 a retail dealer of coffee in Illinois. He sells it to the same 
 farmers who sold the wheat, (the flour from which was 
 traded for the coffee,) and takes his pay in the same dollars 
 paid for the wheat. In Brazil the flour is passed from hand 
 to hand until it reaches the farmers who consume it and 
 pay for it with coffee. 
 
 The barter has then been completed. The farmers of Illi- 
 nois have exchanged their grain with the farmers of Brazil. 
 The result is similar to what would have occurred if a 
 farmer in Illinois could have walked across the road to a 
 telephone ofifice and said to a farmer in Brazil : " How- 
 much coffee will you give me for a bushel of wheat? " The 
 onl}^ difference is that the wheat grower and the coffee 
 planter have both had to pay a profit to several middlemen, 
 in addition to the charges for freight. The result of this 
 expense is that the man who consumes the flour gives a 
 great deal more coffee for it than is received by the man 
 who raised the wheat. And the man who consumes the 
 coffee gives more wheat for it than is received by the coffee 
 planters. 
 
 What becomes of the surplus -wheat not received or con- 
 sumed by the coffee planter, and the surplus coffee not 
 received by the wheat raiser? The answer is obvious. 
 Part of it has been expended in paying the actual cost of 
 transportation ; the balance of those commodities has been 
 taken, by the merchants who carried on this barter, as 
 profits. To get possession of this surplus, or balance of com- 
 modities, is the object of those ivho comhict foreign commerce 
 and tJi£ purpose for wliicJi they engage in it. 
 
 THE •INCENTIVE OF TRADE. 
 
 In the foregoing example, it is apparent that the princi- 
 pals of the trade are the wheat grower and the coffee 
 
48o 
 
 SOCIAL STRUGGLES. 
 
 planter. It is also evident that the incentive to the ex- 
 change of commodities is the antecedent fact that A has a 
 surplus of the thing which B lacks and is ready and willing 
 to exchange therefor an article desired by A, It further 
 appears that a difference between the kind of money used 
 in Illinois and that used in Brazil has not in the least hin- 
 dered the trade. Why is this ? Simply because the 
 Illinois man made the barter, not for the purpose of getting 
 money, but for the purpose of getting coffee. The Brazilian 
 made the barter, not for the purpose of getting the money 
 of the Illinoisian, but for the purpose of getting his wheat 
 in form of flour. The motives of the trade explain why 
 it has been conducted as it has. 
 
 WHY MEN ENGAGE IN FOREIGN COMMERCE. 
 
 We have seen that the principals engaged in bartering 
 wheat and coffee care nothing whatever about having a 
 similarity between the money of Illinois and the money of 
 Brazil. Let us now see whether the agents and subordi- 
 nates in this barter care any more about such similarity 
 than their principals do. The ultimate reason which in- 
 duces the New York merchant to become a party to the 
 aforesaid barter, is a desire to increase his wealth. The 
 form of said wealth is entirely subordinate to the essential 
 end and purpose ; to wit, its increase. He does not par- 
 ticularly care whether he becomes possessed of Brazil- 
 ian money, or any other money, or special thing, what- 
 soever. The sole question before him is this : After this 
 transaction be completed, will I have more wealth than 
 at present ? All other facts and considerations are second- 
 ary, and no consequence whatever, except in so far as they 
 may, or may not, tend to produce the final result desired. 
 When considering the enterprise, he has before him the 
 price of flour in New York stated in United States money; 
 the price of flour in Rio Janeiro stated^in Brazilian money; 
 the price of coffee in Rio Janeiro stated in Brazilian money; 
 the price of coffee in New York stated in United States 
 money ; and the expenses of conducting the business. It 
 
HOW PA YMENTS ARE MADE. 
 
 481 
 
 is a simple problem in arithmetic. If the solution of this 
 problem show the probability of his owning enough more 
 United States dollars, or more dollars' worth, after the 
 transaction be completed than before, to warrant the labor 
 and risk, he embarks in it. Otherwise, he does not. 
 
 Whether Brazil has or has not the same kind of money 
 as the United States, does not influence him in the least. 
 He only wishes to know whether a profit can be made out 
 of the trade. Neither would he be influenced in the slight- 
 est by knowledge that the money of Brazil was superior to 
 the money of the United States. He would care no more 
 for that than for the fact that the climate of Rio Janeiro, in 
 some respects, is superior to that of New York. 
 
 USE OF BILLS OF EXCHANGE. 
 
 In the aforesaid example, we have assumed that the 
 value of the coffee given in exchange for the flour, was 
 equal to that of the flour. Let us now see what occurs 
 when the value of the coffee exceeds that of the flour. In 
 such case, the balance due the Brazilian merchant would be 
 first computed in the money of Rio Janeiro. This balance 
 might then be paid in various ways ; but the principle of 
 payment would always be the same ; to wit, payment would 
 be made in a commodity. The agent in charge of the ship's 
 cargo might pay this balance by having brought with him 
 in the ship some bales of dry goods, some boxes of hard- 
 ware, some agricultural implements, or some bars of silver 
 or gold bullion. By some of these things, as commodities, 
 the balance might be paid directly or indirectly, in Rio 
 Janeiro. Or the ship's agent might say : " My principal 
 has shipped a valuable commodity to Liverpool ; to wit, a 
 large number of bales of cotton. In payment for that cot- 
 ton there is due him another valuable commodity , to wit, 
 so many ounces of gold or silver bullion. I have brought 
 with me certain documents which are evidence of those 
 facts. Now, I will give you an order directing the debtors 
 of my principal to deliver as much of this commodity to 
 you as is necessary to pay the balance due you." 
 31 
 
482 
 
 SOCIAL STRUGGLES. 
 
 Thus the BraziHan merchant is placed in ownership of a 
 commodity in London and the balance is thereby canceled 
 between him and the New York merchant. The Brazilian 
 merchant then directly, or indirectly, says to a coffee planter: 
 " My stock of coffee is reduced. I wish to buy your crop. 
 You owe a debt in London for dry goods. I own a valuable 
 commodity in London. I will transfer to you the owner- 
 ship of this commodity in payment for your coffee. You 
 can then transfer this commodity to your creditors in Lon- 
 don and you will then have paid your debt and I will own 
 your coffee." 
 
 The above named transfers of the ownership of commod- 
 ities are made by what are called bills of exchange and 
 drafts. These are nothing more nor less than a convenient 
 means of exchanging one commodity for another and pay- 
 ing a balance due one man, as a result of such exchange, by 
 giving him some other commodity. 
 
 HOW ENGLAND TRADES. 
 
 England trades with every nation on the globe. Gold 
 sovereigns are the peculiar money of England. But, when 
 English merchants send out their ships on trading voyages 
 they do not load them with sovereigns. They load their 
 ships with commodities and send them to places where 
 those commodities can be traded for other commodities, at 
 such a ratio of exchange, as will insure a profit when the re- 
 turn cargo is sold in England, or such other place as it may 
 be carried. For example, England ships hardware and dry 
 goods to Russia and takes hemp in exchange. The fact 
 that the money of England is different from the money of 
 Russia does not prevent such exchanges. The trade occurs 
 because a man in Russia has a surplus of hemp and lacks 
 hardware and cloth. At the same time, a man in England 
 has a surplus of hardware and cloth and wants hemp. The 
 men who carry on this barter are called foreign merchants, 
 and they do so because they get a profitable fraction of the 
 goods traded for doing the business. This fraction they 
 
RICH, WITHOUT MONEY. 483 
 
 get directly, or indirectly, as the case may be ; but they al- 
 ways get it, or cease to carry on the trade. 
 
 WHAT WEALTH IS. 
 
 A man is not necessarily poor because he have no money. 
 Wealth depends on the ownership of valuable things and 
 on the capacity and means of creating other valuable 
 things. For instance, here is a man who owns a thousand 
 acres of fertile land. It is situated in a salubrious region, 
 convenient to markets, and is under a high state of cultiva- 
 tion. On it stands a substantial farm-house well supplied 
 with furniture and every needed convenience. The barns 
 and out-houses are commodious. The farm is stocked with 
 the best breeds of horses and cattle and amply supplied 
 with all kinds of agricultural implements and machines. 
 The granaries are overflowing with grain. The dairy house 
 is piled full of cheese and butter. Large amounts of hay lie 
 untouched and stocks of grain are unthreshed. The farmer 
 owns all these things free of debt, but he has only five dol- 
 lars in money. Would any one be foolish enough to think 
 such a man poor? He is rich because he owns a large 
 amount of valuable commodities and is constantly creating 
 more. These he can exchange for other commodities and 
 supply his wants at will. 
 
 What is true of an individual is equally true of a nation. 
 Its wealth does not consist simply of money, but of valuable 
 commodities and the power to create others. A nation 
 with abundance of valuable surplus commodities need en- 
 tertain no fears of being unable to barter them with other 
 nations for other commodities. Whether her money be the 
 same as that of other nations, or not, is immaterial. The 
 essential thing is that she shall be able to give in exchange 
 valuable products needed by other nations. And the kind 
 of her money, in itself, has no influence on her foreign com- 
 merce. Money of stable and uniform value is necessary to 
 promote equitable dealings between her own citizens and 
 enable them to easily hold industrial and commercial asso- 
 ciation with each other. The money of Russia, Turkey, or 
 
484 
 
 SOCIAL STRUGGLES. 
 
 Germany does not concern the people of the United States 
 any more than the school system of those nations, or any 
 other feature or department of their domestic government. 
 We should attend strictly to our own business and not 
 meddle with that of other nations. American statesmen 
 should see that American citizens possess a stable currency 
 — no matter what currency other nations may have. 
 
 WOULD IT NOT BE AN ADVANTAGE TO HAVE MONEY SIMI- 
 LAR TO THE NATIONS WITH WHOM OUR TRADE IS 
 CHIEFLY CONDUCTED ? 
 
 That depends on circumstances. If those nations main- 
 tained a stable currency, it would be a trifling advantage to 
 us to have a currency precisely like it. If their currency 
 were unstable, it would be a disadvantage to us to conform 
 ours to it. It is of great advantage to the United States to 
 establish a stable currency for use in our own country ; but 
 whether this currency be similar to that of Russia, Germany, 
 or any other nation, is of comparatively little importance. 
 It is a minor detail which should always be subordinated to 
 the vital and essential thing, uniformity of value. 
 
 It would be some commercial convenience if the Rus- 
 sians, Germans, French, Spanish, Portuguese, Italians, and 
 Turks would all abolish their own, and use the English 
 language. But there is not the slightest probability at 
 present of their doing so. If they did, the only commer- 
 cial advantage we should derive from it would be a saving 
 of the existing necessity of translating those different lan- 
 guages into ours. But this is not a serious impediment to 
 interchange of ideas. Considerable numbers of persons are 
 familiar with more than one language and readily translate 
 one into another. After that is done, the printing press 
 becomes a universal interpreter and translator. 
 
 So long as a diversity of national language exists, every 
 merchant engaged in foreign commerce must directly or 
 indirectly use the services of an interpreter and translator. 
 The person who does this work at the same time translates 
 foreign money into domestic money. If Germany adopted 
 
SCARCITY OF SIL VER. 
 
 485 
 
 the English language and used the same kind of metallic 
 money as ours, a translation of German money into United 
 States money would still be necessary unless we could per- 
 suade the Germans to discard the use of " marks " and sub- 
 stitute "dollaus" therefor. The far distant future may 
 witness a change of this kind, — but it is idle to specu- 
 late upon it. Even if such a change were accomplished 
 its chief advantage would be the saving of a little arith- 
 metic. As all commercial transactions must in any con- 
 ceivable case be computed, such an economy would be 
 comparatively trifling. Every foreign merchant has printed 
 tables, which enable him at a single glance to translate 
 one kind of money into another. Whether this money 
 be made of gold or silver makes no difference in the princi- 
 ple on which this translation is made. 
 
 WHAT EFFECT WOULD UNLIMITED COINAGE OF SILVER 
 
 PRODUCE? 
 
 What the relative value of gold and silver will be in the 
 future no one can accurately predict, simply because no 
 one knows what conditions those metals will hereafter be 
 under. Our positive knowledge in that respect is bounded 
 by the fact that the circumstances and conditions relating 
 to them then, as now, will determine both their value rela- 
 tive to each other and toward all other things. 
 
 The unlimited coinage of silver would increase the num- 
 ber of dollars in circulation. The value of each one of 
 those dollars would not be less than the value of the silver 
 bullion contained in one of them. We have heretofore 
 shown that this bullion has now a greater value than it had 
 in 1872, but this is less than the present value of one of 
 our coined dollars. Under unlimited silver coinage the 
 value of each one of our dollars would closely approximate 
 the value of the gold dollar in 1872, The prices of com- 
 modities, the rate of wages and the price of real estate 
 would consequently rise to about the level they stood in 
 1872, stated in gold. The men now unable to sell their 
 goods and lands, and consequently overwhelmed with debt, 
 
486 
 
 SOCIAL STRUGGLES. 
 
 would be relieved from the condition created by the de- 
 monetization of silver and the consequent arbitrary changes 
 in the relative value of dollars and commodities. This 
 would revive business, diminish the number of idle persons 
 and the amount of idle machinery and thus increase our 
 daily production of wealth. It would strengthen the ten- 
 dency for this country to become by far the richest nation in 
 the world. This would necessitate the use of an additional 
 amount of money. 
 
 Whether we should then use nothing as metallic money 
 but silver coins, no one can predict with absolute certainty. 
 Under present conditions it is extremely probable that still 
 less gold than at present would be in circulation. 
 
 SILVER BULLION WILL NEVER BE EASILY OBTAINED. 
 
 But we must remember that the demand for silver rela- 
 tive to the supply, both for use in the arts and for money, 
 is steadily increasing, as fully shown heretofore by tables 
 of average relative prices. This fact has been obscured by 
 the more conspicuous advance in the value of gold, but its 
 existence is nevertheless certain. A great commercial 
 development is progressing in Asia, Africa and South 
 America, all silver-using continents. Their population is 
 so numerous, and their present stock of silver so relatively 
 small, that the addition of twenty-five cents per head to 
 the silver in use among them would immediately change 
 the present relative value of silver and gold in a marked 
 degree. An active demand for silver for the Asiatic trade 
 may spring up at any time. Whenever a change of this 
 kind is seen to be inevitable, the probabilities are that the 
 mints of the Latin Union will be opened for silver coinage 
 more freely than at present. Such a succession of steps 
 may soon occur, and as our ratio of coinage is sixteen 
 pounds of silver to one of gold, while that of Europe is 
 fifteen and a half of silver to one of gold, it would not have 
 to proceed very far before the bullion value of a United 
 States silver dollar would approximate the value of a gold 
 dollar sufficiently to prevent gold exportation. Moreover, 
 
THE TRUE END OF LA W. 
 
 487 
 
 the considerations heretofore set forth show that the mate- 
 rials from which pur money shall be made is of very little 
 importance. Stability of the amount of money is the vital 
 thing. 
 
 It should also be borne in mind that the large amount 
 of gold which the United States have drawn from Europe 
 during the last ten years has powerfully tended to widen 
 the difference between the relative value of gold and silver 
 on that continent. Whenever any considerable portion of 
 the gold now held in this country is returned to Europe, a 
 result will be produced precisely the opposite of that caused 
 by diminishing the amount of gold -there held. Every 
 million dollars' worth of gold shipped to Europe tends to 
 lower the value of gold in Europe and correspondingly 
 enhance the relative value of silver. 
 
 But there are other far more important considerations 
 than the foregoing. So long as we use gold as money, in 
 order to retain gold in this country we must increase the 
 wealth of this country. In the words of Adam Smith : 
 " Gold and silver, like other commodities, naturally seek 
 the market where the best price is paid for them, and the 
 best price is commonly given for everything in the country 
 which can best afford it." In order to increase our wealth 
 we must keep the labor and machinery of the country fully 
 at work, and this can best be done by abandoning the idea 
 of enacting special legislation to retain gold in this country, 
 and instead of that absurdity adopting a policy better fitted 
 to promote equity between all classes of persons. 
 
 THE END WHICH LAWS SHOULD SEEK. 
 
 The ultimate object of our Government should be to 
 advance the material prosperity, the happiness and the 
 intellectual and moral development of all those within its 
 jurisdiction. So long as these purposes are fulfilled, it is of 
 little consequence whether a large or a small amount of 
 gold remain in. this country. If gold leave us, as it may, 
 it will only be because we can more profitably sell than 
 keep it. Its owners will not give it away. 
 
488 
 
 SOCIAL STRUGGLES. 
 
 A considerable portion of Adam Smith's " Wealth of 
 Nations" is devoted to showing the fallacy of legislation 
 enacted on the theory that the wealth of a nation is deter- 
 mined by the amount of the precious metals within its 
 borders ; and that therefore measures should be adopted 
 to prevent their exportation. Adam Smith's arguments 
 on that matter have never been refuted. They apply with 
 the same force to our present situation as they did to Eng- 
 land in 1775. 
 
 What would be thought of the wisdom of a merchant 
 who owed $50,000, drawing interest, and kept $50,000 
 locked up in his safe? If it would be wisdom for an indi- 
 vidual to use his idle money to pay interest-bearing debts, 
 it is wisdom for a nation to pursue the same policy. By 
 so doing the national wealth would not be diminished. 
 On the contrary, its condition would be improved, and a 
 drain for interest account stopped. 
 
 Under a correct monetary system there would be no 
 more reason for being alarmed because five millions of gold 
 were shipped from this country in a week than for alarm 
 because five million dollars' worth of some other commod- 
 ity were exported in a week. 
 
 A rich merchant, unaware of the greater wealth of Girard, 
 is reported to have petulantly said to him, "■ I can buy you, 
 and sell you." To which Girard calmly replied, " That is 
 true. But I can buy thee and keep thee." 
 
 An increase of capital, a greater diversity and a greater 
 power of annual production, more fixed wealth, more con- 
 tented and intelligent laborers, and freedom from foreign 
 indebtedness will enable the American people not only to 
 buy gold whenever they have use for it, but also give them 
 power to keep it when they wish to do so. 
 
 THE PAR VALUE DELUSION. 
 
 With unlimited coinage, free from any charge beyond its 
 actual cost, gold and silver may properly be called commod- 
 ity money. That is, the normal value of a silver coin is 
 the value of the silver bullion contained therein, plus the 
 
EFFECT OF NUMBERS. 
 
 489 
 
 cost of coinage. And in like manner the normal value of a 
 gold coin is the value of the gold bullion contained therein, 
 plus the cost of coinage. But it must be steadily borne in 
 mind, that this is oily the case under unrestricted coinage of 
 both metals. 
 
 Whenever any legislative interference be interposed to 
 the free coinage of both gold and silver, the nature of 
 money made of those metals is radically changed. It 
 ceases to be a commodity money and at once partakes of 
 the nature of paper money. Its commodity character is 
 more or less merged into a numerical value. We have 
 heretofore found that the value of a coin depends on the 
 number of those coins in circulation. Under free coinage 
 of both gold and silver, the number of gold and silver coins 
 depends chiefly upon the amount of gold and silver bullion 
 in existence. The amount of material from which those 
 coins can be made is thus the dominant fact which fixes 
 the value of one of those coins. Legislation cannot in- 
 crease the amount of bullion, and so long as the weight and 
 fineness of coins are unchanged, their value depends to a 
 considerable extent on the amount of bullion in human 
 possession. 
 
 EFFECT OF LIMITED COINAGE. 
 
 But the moment legislation by any means whatsoever 
 determines the number of legal-tender coins, their number 
 is then determined by law, and not by the automatic in- 
 cr-ease or decrease in the amount of the commodities from 
 which they can be made. This is so simply because the 
 number of coins is no longer influenced by the amount of 
 bullion ; that dominant fact under free coinage, is elimi- 
 nated and in place of it is substituted the legislative enact- 
 ment which determines the number of ^coins regardless of 
 the amount of bullion. 
 
 We have heretofore discussed the fact that the value of 
 one commodity, of two things which are used for a similar 
 purpose, can be affected without increasing or diminishing 
 its amount. Any fact which changes the amount of the 
 
4QO SOCIAL STRUGGLES. 
 
 Other commodity has substantially the same effect as a 
 direct interference with the use and amount of the first 
 named commodity. 
 
 It therefore follows that in order to change the commod- 
 ity value of a silver coin it is not necessary to directly inter- 
 fere with the coinage of silver. An interference with the 
 free coinage of gold would produce the same result. Fur- 
 thermore, it follows that a change in the commodity value 
 of a gold coin can be produced without interfering with the 
 free coinage of gold. An interference with the coinage of 
 silver will produce the same result. 
 
 No matter which metal is denied free coinage, while the 
 other is unrestrictedly coined, the bullion, or commodity, 
 value of the metal which is coined will always equal the 
 value of one of the coins made therefrom, less the cost of 
 coinage. But the value of one of the coins made from the 
 metal denied free coinage will be greater than its commod- 
 ity value. A new condition has entered to affect its value ; 
 viz., legislative restriction on the number of those coins. 
 To the effect of the number of such coins, due to natural 
 limitations of their material, is added the legislative restric- 
 tion on the amount of this material which shall be con- 
 verted into coins. If this legislative restriction be rigid 
 enough, coins made from a metal with less commodity 
 value than the metal freely coined, will have the same value 
 as the coins whose commodity value and coined value differ 
 only by the cost of coinage. Thus, at the present time 
 gold is unrestrictedly coined while the coinage of silver is 
 restricted. The result is seen in an increased value of' gold 
 bullion, and a consequent increase of the value of the coins 
 made therefrom. The silver coins have the same value as 
 the gold coins because restricted in number. In other 
 words, both the gold coins and the silver coins are at a pre- 
 mium above their normal value ; viz., their commodity value 
 under free coinage of both metals. For it must be steadily 
 remembered that the value of one of all the coins in use 
 depends upon the total number of such coins. As a result 
 of this principle, an increase of the number of silver coins 
 
DIMINISHED NUMBER, INCREASED VALUE. 401 
 
 has precisely the same influence on the value of each and 
 every one of the gold coins, that would be exerted if by 
 some chemical process, silver could be transmuted into gold. 
 In either case the practical result would be the same, /. e., 
 an increase in the total number of legal-tender coins and a 
 corresponding decrease in the value of each one of them. 
 
 ARTIFICIAL VALUE OF COINS. 
 
 The .artificial price, the premium above their normal 
 value, which a gold dollar and a silver dollar now command 
 is shown by the average scale of prices being lower by rea- 
 son of restricted coinage. This premium on legal-tender 
 coins above their natural value under free coinage could be 
 increased to ten times what it now is ; or, in fact, to almost 
 any conceivable extent. All that would be requisite to 
 produce this result would be to still further restrict the 
 coinage. Silver coinage and the use of silver already 
 coined could be abolished. After that another step might 
 be taken in the same direction. The coinage of gold could 
 be placed under such restrictions that the value of a gold 
 coin would be many times greater than the value of the 
 bullion contained therein. The difference between a gold 
 coin and its materials. could be made as great as the differ- 
 ence between the value of a one-dollar greenback and the 
 value of the paper rags from which that greenback is made. 
 Sufficient limitation of the number of gold dollars would 
 make the term ''one gold dollar" mean as much value 
 as the term " twenty gold dollars " now does. In fact, 
 the value of " one gold dollar" would depend only on 
 the practical extent to which a restriction of the number of 
 those dollars and the number of other fellow legal-tender 
 dollars, could be carried. 
 
 HARD .PAN. 
 
 If the reader will carefully ponder the foregoing consid- 
 erations he will recognize the fallacy of the popular ideas 
 in regard to what is called " hard pan." That is, the no- 
 tion that by using a gold currency, a scale of prices is 
 
492 
 
 SOCIAL STRUGGLES. 
 
 reached which it is impossible shall become any lower, and 
 therefore are " hard-pan prices." When we consider that 
 prices always reflect the value of the units in which they 
 are stated ; and that the value of one of these units de- 
 pends on the total number of those units, we see that varia- 
 tions in prices depend on variations in the number of mone- 
 tary units. Finally, we see that the only " hard pan " limit, to 
 which prices may be depressed, is the practical extent to wJiicJi 
 the mass of mankind ivill alloiv those, tvho con Id make a profit 
 by restricting the number of monetary units, to actually do so. 
 Under unrestricted coinage and free circulation of both 
 gold and silver coins, there is a natural limit below which 
 prices will not usually fall. That is determined by the 
 total number of coins in circulation, which fact is largely 
 governed, under such conditions, by the amount of bullion 
 in human possession. But whenever a limitation be made 
 of the number of coins in use, the only limit to a fall in 
 prices is the extent to which the use of coins is restricted. 
 And it practically makes little difference how this limitation 
 of the number of coins is produced. It may be by the de- 
 monetization of silver ; by the demonetization of gold, by 
 locking up the coins, or by a variety of other methods. 
 The essential thing to lower prices being a contraction of 
 the number of monetary units in circulation. 
 
 GOLD PREMIUM. 
 
 TMany persons imagine that unrestricted coinage of silver 
 would /^Wz/rr a premium on gold dollars and make them 
 dearer than at present. The simple fact is that a premium 
 on a gold dollar already exists. Its value has been enhanced 
 by legislative restrictions on silver coinage. This premium 
 is now obscured from the view of ordinary observers by the 
 fact that limitation of silver dollars has given them a pre- 
 mium also. But unrestricted coinage of silver would re- 
 move the " par value " delusion and make the actual fact 
 apparent to all. 
 
 Instead of making gold dearer, as is commonly supposed, 
 such a measure would cheapen the gold dollar. Superfi- 
 
HOW TO ASCERTAIN VALUE. 403, 
 
 cially it might appear higher but in reality it would be 
 lower. For example, in the month of December, 1872, the 
 gold dollar was at a premium of 13 per cent, over the green- 
 back. When this premium disappeared many supposed 
 gold had been "cheapened by resumption." In fact, that 
 view of it was stated in thousands of newspapers. Although 
 gold is now at par with greenbacks it is really much dearer 
 than in 1872. 
 
 TRUE TEST OF VALUE. 
 
 The' only accurate test of the value of a dollar is this: 
 How much labor or how much of the products of labor 
 must be given in exchange for it ? What must be paid to 
 get it ? Whoever doubts that gold is dearer now than in 
 December, 1872, is invited to compute how much labor, or 
 how much of one of its products, was required to get a hun- 
 dred gold dollars then, and how much is now required. 
 
 The aforesaid considerations show that the unrestricted 
 coinage of silver by the United States would inevitably 
 lower the present value of a gold dollar. How much it 
 would lower it no one can compute with accuracy, because 
 there are several conditions involved not definitely known. 
 If one hundred millions of the gold now locked up in this 
 country were displaced by silver and shipped to Europe, 
 the effect on the value of the gold in Europe would be the 
 same as if we had shipped one hundred millions of silver to 
 Europe and on the voyage it had, by a chemical process, 
 been converted into 'gold. In fact, there would then be 
 one hundred millions more gold in Europe and the value of 
 each ounce of gold would be correspondingly lowered. A 
 general rise in European prices would be the result. The 
 present disparity between the value of gold bullion and sil- 
 ver bullion would be diminished. The gold dollar might be 
 nominally five, or ten per cent, above the value of the silver 
 dollar, but in reality it would be much cheaper than now. 
 Less labor would be required to obtain one gold dollar. 
 
AQA SOCIAL STRUGGLES. 
 
 HOW EVILS CAN BE AVERTED. 
 
 In view of the readiness with which prices can be de- 
 pressed, by contraction of the currency to a point so low 
 that every person in debt twenty-five per cent, of liis total 
 assets would thereby be made bankrupt and penniless, the 
 question naturally arises : What security have the masses of 
 the people that the few persons who would profit by such a 
 contraction will not at any time influence legislation and 
 produce it ? The answer is the same that applies to the 
 question of protection from all kinds of aggression and 
 wrong; to wit, the intelligence, vigilance, and courage of 
 the people. " Eternal vigilance is the price of liberty." 
 
 The wrongs and sufferings which have recently been 
 inflicted on the masses of Europe and this country, were 
 possible because the people have hitherto neglected to 
 study economic principles and consequently were easily 
 misled. Especially is this true of the United States, 
 where every man by his ballot has a share in the Gov- 
 ernment. Besides failing to observe the grave defects 
 in our financial laws and modes of taxation, the majority 
 have not seen that the existence of a large proportion of 
 monopolies is chiefly due to the present system of granting 
 patents and franchises. Ignorance and carelessness on the 
 part of the many have enabled a few cunning and unscrupu- 
 lous persons to plunder millions of people so silently and 
 imperceptibly, that they did not recognize the hands which 
 committed the theft. 
 
 SOCIAL PROBLEMS WILL ALWAYS BE BEFORE MANKIND. 
 
 So far as we can learn from history, the average man of 
 the year 1885 has the same disposition to take advantage of 
 his fellow mortals, that the average man had in the year 85. 
 Those who fancy that our laws will soon be such that fur- 
 ther watchfulness to prevent spoliation by class legislation 
 will be unnecessary, ignore all the lessons of the past. The 
 social and financial problems now under public debate are 
 not before us for a day, or a year, but for all time. They 
 
UNCHANGING PRINCIPLES. * ^gc 
 
 can only be solved by reference to eternal principles ; and 
 knowledge and practical application of those principles 
 will always be requisite to secure the highest welfare of 
 mankind. A class, comparatively small in numbers, but 
 powerful by reason of wealth and compact organization, 
 will always be on the alert to take covert advantage of the 
 majority, and under cover of law and some hypocritical pre- 
 tense, adapted to the occasion, quietly appropriate the 
 labor and goods of those who neglect a constant and intelli- 
 gent defense of their own interests. 
 
 The inference from the aforesaid facts is obvious. Our 
 Government derives its authority from the will of the vot- 
 ers. Unless the majority of voters are intelligent enough 
 to recognize the measures adverse to their interests, a cun- 
 ning minority will mislead them into voting for laws which 
 will enrich the few at the expense of the many. The only 
 safeguard against such an ever present danger is a widely 
 spread knowledge of the true principles of Political Economy 
 and Finance. 
 
 WHAT INFLATION CAN DO. 
 
 Every fact and principle heretofore stated concerning the 
 effects and evils of diminishing the amount of money and 
 lowering the general scale of prices, when such amount of 
 money has been conformed to by all the business of the 
 country, are equally true, whenever the case be reversed and 
 a great increase made in the amount of money. Such 
 money, no matter what guarantees of its payment may 
 exist, no matter how imperatively all persons are required 
 to receive it at its face value ; no matter how much wealth 
 may be pledged for its ''redemption," will certainly depre- 
 ciate. The fatal defect of an excessive number of monetary 
 units admits of no remedy short of a diminution of those 
 excessive numbers. 
 
 CONFEDERATE MONEY. 
 
 During the recent " unpleasantness " between the North- 
 ern and Southern States, I witnessed a striking example of 
 
496 
 
 SOCIAL STRUGGLES. 
 
 the truth of the foregoing statements and of the facility 
 with which men can not only mislead others but also deceive 
 themselves. The fortunes of battle left me in a hotel 
 whose landlord was so anxious to protect his guests from 
 burglars and other harm that he guarded their residence 
 night and day with armed men. The Richmond papers 
 Were daily brought us by newsboys in quest of our money. 
 Prices throughout the Confederacy had then largely risen 
 as an inevitable sequence of the issue of an immense num- 
 ber of Confederate dollars. But these papers used a kind 
 of reasoning in regard to this fact similar to that used by 
 New York papers in 1885, in regard to contraction. That 
 is, almost every conceivable cause for the admitted change 
 of prices was alleged, but the actual one. Not one of 
 them appeared to think a change in the total amount of 
 money in circulation had anything to do with the change 
 which had occurred in the value of money; and that the 
 scale of prices expressed the altered value of the mon- 
 etary unit. They gravely stated that prices were high 
 because of under production; the blockade; the diffi- 
 culty of shipping goods from one place to another because 
 the armies used the railroads ; want of labor because so 
 many men were in the army ; the waste of war ; fears that 
 the negro laborers would get beyond the lines protected 
 by Confederate troops, etc., etc. 
 
 A COTTON BASIS FOR MONEY. 
 
 These editorials informed their readers that the Confed- 
 erate Government could safely continue to issue hundreds 
 of millions of dollars. The reason assigned was that, unlike 
 any other similar emission of paper money which had ever 
 taken place in the history of mankind, Confederate money 
 zvas based on cotton, and cotton was a recognized form of 
 wealth in every quarter of the globe. They argued that no 
 matter how much money the Confederacy might issue, so 
 long as each dollar had behind it a dollar's worth of cotton, 
 either in actual existence, or that could readily be produced, 
 such money would not depreciate. Prices would be tempo- 
 
REPE TITION OF HIS TOR V. ^gy 
 
 rarily high by reason of other causes, but the amount of 
 such money could not cause a rise of prices. 
 
 Then computations were made to show how easily the 
 Confederacy, after obtaining its independence (which was a 
 certain event), could raise whatever amount of cotton that 
 might be needed to "redeem" every dollar based on cotton. 
 The necessity of cotton to all mankind was dwelt on with 
 great minuteness. The idea of questioning the absolute 
 truth of the aforesaid propositions was deemed too absurd 
 to merit serious refutation. The treatment of those who 
 ventured to even doubt the aforesaid doctrines, was addi- 
 tional evidence that there are two kinds of very disagreeable 
 people ; to wit, those who tell unpleasant lies, and those 
 Avho tell unpleasant truths. 
 
 The ugly fact that the prices of commodities, stated in 
 this vaunted money, continued to rise was sedulously as- 
 cribed to causes other than the real one. In fact, their 
 arguments in substance were the arguments, reversed^ which 
 all readers of papers in favor of making gold the sole legal 
 tender have recently seen. " The amount of money had 
 nothing to do with the alteration in prices." This last 
 statement was deemed proven by an allegation similar to 
 that employed to show that falling prices cannot be due to 
 exclusive use of gold ; viz., " Because the money was so 
 good, it could not possibly create a change of prices." 
 
 We all know the final result of this cotton experiment. 
 The money steadily sank in value with each million put in 
 circulation until the amount of it became so enormous that 
 each dollar was worth less than one cent, and then no one 
 wanted it at that rate. From the beginning of this experi- 
 ment to the end, precisely the same fact appeared which has 
 always been developed in every historical inflation of the 
 currency, viz.: the change in prices faithfully recorded both 
 the change in the amount of the money and the conse- 
 quent alteration of its value.* 
 
 * The following is a copy of a voucher for hospital supplies made 
 three days before the fall of Richmond, the original being the property 
 32 
 
498 
 
 SOCIAL STRUGGLES. 
 
 WHY GOODS ARE NOT SOLD WHEN ACTIVE INFLATION 
 IS PROGRESSING. 
 
 Another striking fact was developed ; and as the altera- 
 tion in the amount of the currency was precisely the op- 
 posite of contraction, this fact was precisely the opposite 
 
 of C. G. G. Merrill, of this city. The prices named were, of course, 
 
 Confederate money : 
 
 General Hospital No. 9. 
 
 1865. To Wm. T. Feutress, Steward. 
 
 March 22d, 3 chickens $90.00 
 
 " " Herbs 10.00 
 
 " " Onions for hash 10.00 
 
 " 23d, I peck sweet potatoes 33-oo 
 
 " "3 doz. eggs at $20 60.00 
 
 " " Pickle 10.00 
 
 •' 24th, I door mat 1 2.00 
 
 " " 3 large shad 90.00 
 
 " " 2 large fowls 90.00 
 
 " " I bushel turnips 35-oo 
 
 " " I peck sweet potatoes 35-oo 
 
 " 27th, Ashes for soap 10.00 
 
 " " I bushel turnips 30.00 
 
 " " Herbs for soup 5.00 
 
 " 28th, Herbs and onions ib.oo 
 
 " 29th, Marketing, herbs, &c 8.00 
 
 " " Repairing wagon , 6.00 
 
 " 30th, Onions 10.00 
 
 " " I bunch herbs i .00 
 
 ;.oo 
 
 Received at Richmond this 31st day of March, 1865, of John J. Gra- 
 vatt. Surgeon P. A. C. S., the sum of five hundred and sixty-five dollars 
 in full of the above amount. 
 
 William T. Feutress, 
 
 Hospital Steward. 
 I certify that the articles purchased as above are necessary ; are for 
 the exclusive use of the sick and wounded soldiers, C. S. A., in General 
 Hospital No. 9, and will be applied to their subsistence and comfort 
 alone, and that the articles could not be purchased at a lower rate. The 
 property in this voucher will be borne on my return for the half year 
 
 ending June 30th, 1865. 
 
 Surgeon in Charge. 
 
 I 
 
WHEN GOODS ARE HOARDED. ^gg 
 
 of the phenomenon produced by contraction. In times of 
 contraction prices are falling, and every one is anxious to 
 sell his goods and keep his money. But in the Confederacy 
 inflation was in progress, and, as an inevitable result, every 
 one wanted to keep his goods and sell his money. The rea- 
 son was obvious. Money was diminishing in value very 
 rapidly. Goods were rising in price so fast that when a 
 merchant had sold at retail he could not replace at whole- 
 sale prices. He was worth less than if he had closed his 
 store when it was full of goods. If a man could buy a 
 stock of goods on six months' credit, a handsome profit 
 was certain. Before the six months had passed the price 
 of half the goods would pay the note for the price of all 
 of them, thus leaving the other half of the goods as profits, 
 provided their owner kept them in form of goods. 
 
 In short, commerce was diseased. The malady and the 
 symptoms thereof were exactly the opposite of the busi- 
 ness derangement which has recently gorged New York 
 and other financial centers with idle money, while on every 
 side great numbers of persons became bankrupt through 
 inability to exchange their goods for money. In New 
 York money has been rising in value and its owners have 
 thereby been prevented from buying goods. They have 
 been waiting for still lower prices of goods and higher value 
 of money. In Richmond goods were rising in value and 
 their owners were disinclined to sell them because the 
 money in which payment would be made was falling in 
 value. 
 
 If the Confederacy had obtained its independence, only 
 one course would have sufficed to restore prices and the 
 value of their money to the rate prevailing at the com- 
 mencement of the war. That course would have essentially 
 consisted of levying, in some form, a tremendous tax on 
 the whole people to be paid in depreciated money, and the 
 destruction of this money as soon as paid into the public 
 treasury. If this had been accomplished to the requisite 
 extent, the value of the remaining money would have been 
 raised. But it is extremely unlikely that any other course 
 
coo SOCIAL STRUGGLES. 
 
 would have been adopted but that which has followed such 
 enormous issues of money, — repudiation of all of it. 
 
 HOW TO PREVENT INFLATION. 
 
 There is only one safeguard against the evils of infla- 
 tion. That is the same and the only thmg which can pro- 
 tect us against contraction, to wit, public intelligence 
 regarding the principles of finance. No people will ever 
 allow themselves to be misled and deeply suffer the evils 
 of either a contraction or an inflation of their money, who 
 fully understand one simple fact, viz.: The average scale of 
 prices is ahvays a correct indication both of the amount and 
 the value of the money in zvJiicJi those prices are stated. 
 
 Whenever the principle illustrated by this fact is gener- 
 ally comprehended, the people will perceive what is going 
 on, whenever a change occurs in the rate of prices on which 
 business and contracts have been adjusted and formed. 
 They will then at once instruct their servants that the 
 national financial policy is faulty. 
 
 STUDY OF SOCIAL TOPICS. 
 
 The quotation from the Century magazine in the preface 
 of this volume is a fair illustration of the state of mind in 
 which a multitude of well meaning, intelligent persons are 
 in regard to some social questions. They see that there is 
 something wrong, else the present conditions would not 
 exist ; but where the fault lies, or what it consists of, they 
 fail to recognize. 
 
 This perplexity does not arise from inability to reason 
 properly ; but from assuming certain fundamental premises 
 to be true which in fact are false. Thus, the editor afore- 
 said reasons admirably from premises he has not examined. 
 He says, " Money is plenty and prices low." His whole 
 statement of the case rests on the supposition that low 
 prices and a large amount of hoarded money are evidence 
 that " money is plenty." 
 
 The causes which led an intelligent and conscientious 
 gentleman to commit this error have heretofore been re- 
 
NEED OF HUMILITY. cqi 
 
 cited. The matter is here alluded to simply because it is 
 one of many kindred mistakes constantly being made from 
 a precisely similar reason, viz., Neglect to thorougJily test a 
 foundation before beginning to build upon it. 
 
 ISjo one can co^npute how many bricks will be required 
 to build a given wall unless he first ascertain the number 
 of bricks in one cubic foot of that wall. The same thine 
 is true of every other problem whatsoever, no matter to 
 what subject it relates. The bottom facts — the fundamen- 
 tal principles must be accurately learned before a single 
 safe step toward a solution of the question can be taken. 
 
 The study of finance and other economic subjects is gov- 
 erned by the same rules as the investigation of all other 
 matters. Inquirers should assume themselves completely 
 ignorant of knowledge they wish to acquire, and lay aside all 
 prejudice and superstition. Students must " become as lit- 
 tle children " and begin at the bottom of whatever they 
 wish to thoroughly understand. All accurate learning is 
 otherwise impossible. 
 
 A man should not hesitate to accept a demonstrated fact 
 and ask : Is this in accord with what I have heretofore be- 
 lieved, and is it as safe ? That has properly nothing what- 
 ever to do with the examination. The sole question with 
 which every proposition should be challenged ought to 
 be : Is this true? 
 
 Furthermore, a person should not allow himself to get 
 befogged by anxiety in regard to the effect which knowl- 
 edge of a new fact or principle will have upon society. He 
 should have confidence enough in the Creator of all Truth 
 to prevent fear of the consequence either of its discovery 
 or dissemination. Otherwise, he is guilty of the presumpt- 
 uous folly of imagining himself and fellows wiser and more 
 conservative than the Infinite. 
 
 Whoever correctly understands financial principles is 
 not, like others, bewildered by every change in the mon- 
 etary situation. A person ignorant of the fuTidamental 
 principles of arithmetic may be shown how to mechan- 
 ically solve one arithmetical problem. But, if another 
 
502 
 
 SOCIAL STRUGGLES. 
 
 one be presented to him which differs in the least from that 
 done without reference to principles, he is utterly unable to 
 take a single step toward its solution. In like manner, abil- 
 ity to correctly interpret the various financial facts which 
 are constantly arising depends on a cleau perception of the 
 principles involved. 
 
 CONCLUSION. 
 
 Many other topics invite discussion but the limits assigned 
 for this book have been reached. The chief intent has 
 been to state facts and correct principles, to stir the slimy 
 pools of superstition, rather than to present remedial meas- 
 ures in detail. Its many defects and shortcomings are en- 
 trusted to the kindness of a good-natured public. 
 
 Even if this work were a perfect picture of the situation 
 of affairs to-day, it would be imperfect to-morrow. Condi- 
 tions and circumstances are incessantly changing. Princi- 
 ples alone remain fixed. Moreover, our knowledge of 
 principles and consequent ability to properly apply them 
 to a given state of facts are steadily changing. 
 
 We are not quite as helpless as chips floating in the 
 middle of a river. We have a limited power to control our 
 destinies. But this little can only be done by adjusting 
 ourselves to the new conditions into which the irresistible' 
 stream of events on which we glide is constantly bringing us. 
 Suppose the captain of a sailing vessel, when starting from 
 New York on a voyage to Liverpool, should say : " Now, I 
 am going to be wise and conservative. I shall put my sails 
 and rudder just right when I start, and keep them un- 
 changed until my destination be reached." Such manage- 
 ment would never bring a ship across the ocean. The sails 
 and rudder may be right on leaving New York but they will 
 not remain so, unless steadily changed to meet the varying 
 conditions which the ship will encounter during her passage. 
 
 In like manner, the Social Ship on which our race is em- 
 barked cannot now be properly guided by the means ade- 
 
CHANGE NECESSITATES CHANGE. 
 
 503 
 
 quale at the beginning of her journey. We have floated 
 into different waters and are menaced by different gales. 
 Human progress and invention have developed and created 
 different conditions and each year widens the difference be- 
 tween the Present and the Past. 
 
 Justice is always justice. Equity'is always equity. But 
 the means best adapted to secure and promote justice and 
 equity change with altered circumstances. Let us not then 
 embrace the narrow delusion. that " conservatism " consists 
 in keeping our social sails and guiding machinery un- 
 changed, no matter into what currents we may drift nor 
 from what new direction a storm may threaten. Such con- 
 duct is at once shallow and unavailing. It is the favorite 
 device of little persons posing as profound thinkers and 
 statesmen. It will neither guide us aright nor enable us to 
 evade consideration of the social problems slowly but inces- 
 santly arising. Cowardice is useless. Whether we wish to 
 or not, we must bear and discharge the new responsibilities 
 and duties which every year will surely bring us. 
 
 An unseen Being has placed us on earth and appointed 
 the narrow bounds we cannot pass. Borne swiftly onward 
 by forces beyond our control, wisdom bids us recognize the 
 inexorable laws which govern us. We cannot change them 
 if we would. Nothing is possible for us, but, in an imperfect 
 way, to bring our conduct in harmony with them. And, 
 when these mighty forces bring new conditions and evolve 
 new facts, we must either conform our institutions to them 
 or be destroyed while attempting a foolish resistance. 
 
 Many persons, anxious for distinction, and perhaps im- 
 bued with a genuine love of good works, regret that Provi- 
 dence did not permit them to take part in some of the great 
 reformatory and progressive movements witnessed in the 
 past. Such persons should reflect that, although our race 
 has compassed great achievements, an enormous work lies 
 before it. For aught we know, the work undone is greater 
 than that accomplished. We are still in ignorance of a 
 multitude of things. Our social machinery still needs 
 reformation. 
 
504 
 
 SOCIAL STRUGGLES. 
 
 In the preface of a medical treatise, written,at the begin- 
 ning of this ceptury, these words appear: "The present 
 perfect state of medical science renders it impossible to 
 hereafter record any further discoveries. We can only ar- 
 range what is already known." 
 
 As a man who should now practice the aforesaid " per- 
 fect state " of medicine would justly be lodged in jail for 
 manslaughter, we smile at the conceit of this simple-minded 
 doctor. But are we not all, more or less unconsciously, 
 every day doing essentially what he did ? Nothing is 
 more common and more presumptuous and shallow than 
 the assumption that Wisdom is incarnated in the present 
 generation, and that further progress is impossible. Great 
 wrongs remain to be righted and great dormant truths await 
 the touch of the Reformer capable of their elucidation. 
 
 Therefore, O man of the Nineteenth Century, be not too 
 confident that your beliefs are correct and your knowledge 
 perfect. As if on a mountain of wisdom, you wear a com- 
 placent smirk and look with pitying contempt on the man 
 of the Fourteenth Century. But, is it not perfectly cer- 
 tain that the man of the Twenty-fourth Century will mete 
 you your own measure and will wonder how you bore an 
 existence darkened with so much superstition and igno- 
 rance? Your palpable deficiencies and the ill devised so- 
 cial organizations you have constructed should teach you 
 Humility. History should inspire emulation of the peace- 
 ful victories of your predecessors. Trust in, and love of 
 Truth should give you an industry and patience in its pur- 
 suit that nothing can either weary or discourage, and make 
 it easy to discard traditional errors without misgiving or 
 fear of the result. 
 
 Steady ! Forward ! 
 
APPENDIX. 
 
 A REVIEW OF THE FINANCIAL PORTION OF THE FIRST MESSAGE OF 
 PRESIDENT CLEVELAND AND THE ACCOMPANYING REPORT OF 
 THE SECRETARY OF THE TREASURY. 
 
 The foregoing was written prior to December i, 1885. Since 
 that time, the Message of President Cleveland and the Report of 
 his Secretary of the Treasury have been published. The present 
 administration has taken the position that its policy should be 
 in accordance with the interests and wishes of the great moneyed 
 capitalists, bondholders and bankers. This is evidenced by the 
 fact that all the President's financial suggestions are applauded 
 and approved by the newspapers which act as the spokesmen of 
 those classes. 
 
 These documents are therefore very interesting for two reasons. 
 
 First : They are an authentic statement by the virtual attorneys 
 of Wall Street of the beliefs and desires of the money lending 
 and financial center of this country. 
 
 Second : It is perfectly certain that the vast moneyed interest 
 which, to further its own aggrandizement, is intent on making 
 gold the sole legal tender, would shrink from no expense requisite 
 to secure the best available talent in the world to aid in the prep- 
 aration of an argument in its behalf which, at public expense 
 and with the weight of official authority, would be placed before 
 the whole American people and largely before the civilized world. 
 Therefore we can reasonably presume that these documents con- 
 tain as good an argument in favor of demonetizing silver as can 
 be made. 
 
 What profound and scientific principles are set forth in these 
 official papers to prove that gold should be made our sole legal 
 tender with free and unlimited coinage ? None whatever. The 
 arguments heretofore shown to be fallacious are merely reiterated. 
 
 What evidence is adduced to demonstrate that silver coinage 
 is an evil? None whatever. The same report which tells us 
 we have 215,000,000 silver dollars and that more would inflict 
 
5o6 
 
 APPENDIX. 
 
 disaster, informs us that France has about 600,000,000 of sil- 
 ver dollars in circulation. The population of France is over ten 
 millions less than the population of the United States ; her 
 wealth is less than ours ; and her growth in population, commerce 
 and wealth is vastly inferior to that of this country. Yet the 
 authors of these State papers do not say that France is suf- 
 fering by reason of too many silver dollars. But a simple cal- 
 culation shows that, leaving our rapid growth of population out 
 of the question, it would require twenty-one years of silver coin- 
 age, at the present rate, before we have as much silver in this 
 country as circulates in France. 
 
 These documents say that silver coinage is an evil. But to whom 
 is it an evil ? Is it not evident that the few rich money lenders 
 for whom these documents speak, regard silver coinage as an evil 
 because it is a hindrance to gains desired by them at the expense 
 of the rest of the community ? 
 
 Both of these official addresses base and rest all their argu- 
 ments and statements on one assumption : viz., that gold in some 
 mysterious way which, singularly enough, they do not think it 
 wise to explain, has a fixed, an unchanged and an unchangeable 
 value. It is presumed that no matter how much the demand for 
 gold may be increased, no matter how much its actual or relative 
 amount may be changed, it still remains at a " fixed value." As 
 we have heretofore dissected this idea, and found it a kindred 
 error to the notion that the earth stands still and the sun revolves 
 around it, further discussion of this assumption is unnecessary. 
 
 Both the Message and the Report are redolent of the prevalent 
 delusion that the common sense business principles which we 
 apply to all other things are inapplicable to financial affairs. The 
 most noticeable thing about the Message is the allegation that 
 silver coinage is the " ceaseless stream that threatens to overflow 
 the land." This, we are informed, will produce a " severe con- 
 traction of the currency," and also produce a disastrous " rise in 
 prices." This absurd statement arises from supposing that mi- 
 raculous and special laws preside over money. The President 
 imagines that, unlike all other scales, the scales of finance are 
 so wonderfully and strangely constructed that a weight placed in 
 one side will make both sides go down at once. The President 
 fancies, when the currency is contracted and thereby inevitably 
 made more in demand, scarcer, and more valuable, that then 
 
APPENDIX. 
 
 507 
 
 people will give more of this enhanced money for a certain thing 
 than before money rose in value. If this were so, a stoppage of 
 silver coinage would raise prices. But the President tells us 
 that prices will rise if silver coinage be not stopped. What a 
 confusion of ideas ! 
 The Message says : 
 
 " The necessity for such an addition to the silver currency of the nation 
 as is compelled by the silver-coinage act, is negatived by the fact that 
 up to the present time only about fifty millions of the silver dollars so 
 coined have actually found their way into circulation, leaving more than 
 one hundred and sixty-five millions in the possession of the Government, 
 the custody of which has entailed a considerable expense for the construc- 
 tion of vaults for its deposit. Against this latter amount there are out- 
 standing silver certificates amounting to about ninety-three millions of 
 dollars." 
 
 If the fact of silver lying in the Treasury-be evidence that silver 
 coinage should be stopped, then it follows that gold lying idle in 
 the Treasury is evidence that gold coinage should be stopped. 
 
 The Secretary of the Treasury says : 
 
 "The assets of the Treasury on the 1st of November, 1885, excluding 
 fractional coin and other unavailable items, were as follows ; 
 
 Gold coin and bullion $251,359,349.29 
 
 Less certificates outstanding 109,020,760.00 
 
 $142,338,589.29 
 
 Silver coin and bullion $167,657,878.45 
 
 Less certificates outstanding 93,146,772.00 
 
 $74,511,106.45." 
 
 Thus it appears that the amount of idle gold dollars is largely 
 in excess of the idle silver dollars, and, if the President's reason- 
 ing be correct, gold coinage is unnecessary. 
 
 The Message says : 
 
 " A special effort has been made by the Secretary of the Treasury to 
 increase the amount of our silver coin in circulation, but the fact that 
 a large share of the limited amount thus put out has soon returned to 
 the public Treasury in payment of duties, leads to the belief that the 
 people do not now desire to keep it in hand." 
 
 But, according to the foregoing statement of the Secretary, the 
 people do not desire to keep gold in hand ; and therefore gold 
 should no longer be coined. The simple fact is that the people 
 
5o8 
 
 APPENDIX. 
 
 generally prefer paper money to gold or silver ; but this does 
 not prove that either of those metals should be demonetized. 
 
 The Message tells us that silver dollars are " depreciated." 
 But the only evidence adduced in support of such an idea is the 
 fact that their bullion value is less than that of gold. The en- 
 hanced value of gold in consequence of an increased demand is 
 not considered for a moment. 
 
 The Message next states that European governments have de- 
 monetized silver, and tliat " the views of these governments are in 
 each instance supported by the weight of public opinion." 
 
 J3ut what is meant by " public opinion " in European countries ? 
 Is it not certain that those countries are governed by the priv- 
 ileged and the rich ; and that the masses of the people are not 
 represented? 
 
 The President then sa3's : 
 
 " The condition in which our Treasury may be placed by a persistence 
 in our present course, is a matter of concern to every patriotic citizen 
 who does not desire his Government to pay in silver such of its obliga- 
 tions as should be paid in gold." 
 
 As none of the Govemment bonds contain an agreement to pay 
 them in gold, this is assuming that every man who wishes the 
 bonds paid according to their tenor is not "patriotic." The Pres- 
 ident evidently fancies that patriotism requires the robbery of tax- 
 payers in order to pay bondholders differently from the agree- 
 ment made when the money was loaned. 
 
 We are next told : 
 
 " We have now on hand all the silver dollars necessary to supply the 
 present needs of the people. If the need of more is at any time apparent 
 their coinage may be renewed." 
 
 Who shall be the judge of the amount of dollars needed by the 
 people ? Shall the amount of metallic money be regulated by the 
 production of mines and the amount of metal in existence ; or, 
 shall it be regulated by the caprice of the administration? 
 
 On this point, Prof. W. S. Jevons, an economist of world-wide 
 reputation, says : " It might seem natural that one most important 
 point for discussion in an Essay on Money would be the quantity 
 of money required by a nation. Nothing would seem more desir- 
 able than to decide how much each person needs of paper, gold, 
 
APPENDIX. 
 
 509 
 
 silver or bronze currency, so that the Government might take care 
 to provide sufficient for every one. 
 
 " No one can tell how much currency a nation requires, and to 
 attempt to regulate its quantity is the last thing which a statesman 
 should do. We shall find that to ascertain how much money is 
 needed by a nation is a problem involving many unknown quanti- 
 ties, so that a sure solution can never be obtained." 
 
 Mr. Cleveland, however, appears to think he could tell just 
 how many silver dollars are needed in the United States. 
 
 Scores of other authorities could be quoted to sustain the fore- 
 going opinion of Prof. Jevons, but I will only cite the words of one 
 other writer. " Gold and silver coins of known weight and fine- 
 ness are admirably fitted to perform the functions of money. 
 Costing labor and always in demand, they have a solid and per- 
 manent value. Their purchasing power is not crippled when the 
 Government chooses to make others like them. There is no 
 motive on the part of any body or any power to multiply the 
 national coins to the extent of depreciation. Inflation, there- 
 fore, with depreciation and its attendant evils, is impossible. As 
 much may be said of contraction. Should there be temporarily, 
 a short supply of coin, an intenser demand would present sufficient 
 inducements to augment the quantity. Bullion would be taken to 
 the mint for coinage and importations stimulated. In this man- 
 ner, the evil would be soon cured. Thus is the supply adjusted 
 to the demand, and the accepted standard of value preserved by a 
 mechanism which is self-regulating. Human beings, prompted by 
 the love of gain, are instruments in a work too nearly connected 
 with the great industrial concerns of a people to be committed to 
 heads and hands less intelligent and energetic than those 
 prompted and guided by self-interest. 
 
 " The expression, ' The supply of money should be equal to the 
 wants of trade,' is at least intelligible provided the money referred 
 to be specie. It means that the business of a country should 
 have its proportion, and no more, of the circulating medium of the 
 world; that unnatural scarcity should be met by greater abun- 
 dance, and superabundance by greater scarcity; that the volume 
 should not be changed arbitrarily or capriciously; that any new 
 demand growing out of an enlarged industry should be relieved 
 by an ampler supply ; all for the purpose of preventing fluctua- 
 tions in the standard of value, and of holding prices at their nor- 
 
5IO 
 
 APPENDIX. 
 
 mal level. Every legitimate demand should be satisfied, but this 
 will be done by virtue of the inevitable law which governs the 
 movement of specie — a movement which may be embarrassed but 
 cannot be helped by supervision or outside interference. Govern- 
 ment, in this matter, as in some others, can do nothing but 
 blunder. Its whole duty is discharged and its useful ability ex- 
 hausted when it gives honest coins for all the bullion offered. It 
 might as well attempt to control the tides as superintend the ebb- 
 ing and flowing of the precious metals." 
 
 When the foregoing was written it was fully endorsed by the 
 same men who now tamper with the coinage and seek to have the 
 amount of metallic money controlled arbitrarily by Congress or by 
 the Secretary of the Treasury, Why has this change of sentiment 
 occurred ? Simply because they had not then generally and fully 
 grasped the idea that it was possible to tamper with the coinage 
 in such way as to increase, both the value of money, and of bonds 
 and other evidences of . indebtedness. They knew the people 
 would not submit to raising the weight of gold and silver coins, and 
 the fact that the same result could be reached by demonetizing 
 one of the precious metals was not then, as now, generally compre- 
 hended by the bankers and creditors. But as soon as they saw 
 that the coinage could be tampered with, in their interest, they 
 abandoned the doctrine that "Government should not interfere 
 with the amount of coinage," and raised a hypocritical wail that 
 "honesty" required legislative interference with the amount of 
 metallic money. 
 
 In so doing they abandoned the principles on which they have 
 stood for generations. How long will it be before they regret 
 advocacy of a doctrine so dangerous to themselves ? For it logi- 
 cally and inevitably follows, that if the legislature have a just 
 right to tamper with the coinage and increase the value of a dollar, 
 it has an equally good right to diminish the value of a dollar. 
 
 The President next informs us that there " exists a lack of con- 
 fidence among the people." 
 
 We ask : Confidence in what ? Is it not perfectly certain that 
 no one fears a rise of prices ? If the capitalists thought prices 
 were soon to rise they would not hoard money, but invest in 
 something which they expected to rise in value. The simple 
 fact is that under our present financial policy, it is gold and not 
 commodities which is rising in value. Gold is now hoarded be- 
 
APPENDIX. 
 
 511 
 
 cause it is expected that the coinage of silver may be stopped and 
 thus still further enhance its value. 
 
 If the owners of gold could be fully convinced that the coinage 
 of silver would never be stopped, what would they do ? It is cer- 
 tain that then, as now, they would try to increase their wealth. 
 As soon as they saw the source of an increased demand for gold 
 dried up they would see an end to a rise in its value and would 
 exchange gold for things whose price they expected would rise. 
 In other words, they would invest in real estate, machinery, 
 buildings and various other things. No longer hoarded, gold 
 would be thrown on the market and offered for sale. It would 
 consequently be practically plentier, — less demand would exist for 
 it and its value would naturally fall. This would be evidenced 
 by a rise of wages and prices of all kinds. Better times would 
 then reign for the masses of the people. 
 
 But, the root of the present controversy lies in this fact : viz., 
 When prices are falling and low, the times are better for the zaealthy 
 money lender than when wages and prices are high. Hence the 
 selfish interests of that class prompt them to desire low prices and 
 hard times for the majority. Nothing is more absurd than to im- 
 agine the selfish interest of a rich money lender as identical with 
 that of the whole community. 
 
 The Message concludes by stating, in substance, that the pres- 
 ent depression of prices and business is due to silver coinage. 
 
 If this were true, in nations which have stopped the coinage of 
 silver prices would be higher than in this country ; such nations 
 would be more prosperous than ourselves. But it is a notorious 
 fact that low prices and business depression have seized different 
 countries in the order in which they have demonetized silver. De- 
 pression of business is greater in European countries, with gold 
 as the sole standard, than in the United States with gold, silver 
 and greenbacks as the legal tenders. This fact is universally con- 
 ceded and not in the least degree explained by any theory ad- 
 vanced by those who advocate our adoption of the monetary pol- 
 icy of Europe. 
 
 secretary's report. 
 
 Let us next briefly examine the chief points in the Report of 
 the Secretary of the Treasury. The entire Report is based upon 
 the assumption that the value of money and the prices of com- 
 
512 
 
 APPENDIX. 
 
 modities cannot be affected by legislation. But, curiously enough, 
 the Report begins with a suggestion that two of these uninfluen- 
 tial laws be repealed : viz., 
 
 " I. The act of Feb. 28, 1878, which has been construed as a permanent 
 appropriation for perpetual Treasury purchases of at least $24,000,000 
 worth of silver per annum, although from causes mostly foreign that 
 metal is now of mutable and falling value, which must be manufactured 
 into coins of unlimited legal tender and issued to the people of the United 
 States as equivalents of our monetary unit. 
 
 "2. The act of May 31, 1878, which indefinitely postponed fulfillment 
 of the solemn pledge (March 18, 1869) not only of 'redemption,' but 
 also of ' payment ' of all the obligations of the United States not bear- 
 ing interest, legalized as $346,000,000 paper money of unlimited legal 
 tender, and required the post-redemption issue and re-issue of these 
 promises to pay dollars, equivalents of our monetary unit." 
 
 If legislation have no effect, why change the laws .'' 
 
 This repeal, the Secretary informs us, can be made " without 
 raising the United States monetary unit of value to a costlier dol- 
 lar." This statement is the logical result of the theory that 
 no matter how much additional demand be made for gold its 
 value remains unchanged. If the aforesaid statement of the Sec- 
 retary be true, then all the silver and all the paper money in the 
 world could at once be destroyed without making a gold dollar 
 " a costlier dollar." If the doctrine of the Secretary be true, the 
 discovery of a mine from which ten thousand millions of gold 
 could be readily taken would not lower the value of gold. This 
 would appear true, so long as we adopt the notion that the correct 
 way to test the value of gold is to compare one gold dollar with 
 another gold dollar. As one potato, at the same time and place, 
 is always worth another potato of the same size and quality, the 
 Secretary might as well say that potatoes have "an invariable 
 value." 
 
 Both the President and the Secretary speak of " compulsory 
 coinage " with the evident intention of conveying the idea that 
 the Government is under greater compulsion in regard to coining- 
 silver than in regard to coining gold. 
 
 This is clearly an unfair mode of stating the actual facts of 
 the case. The Government by law is under compulsion to coin 
 all the gold that may be brought to the mints for that purpose. 
 But the Government is not under compulsion to coin a single 
 
APPENDIX. 
 
 513 
 
 ounce of silver brought to the mint by bullion owners. If the 
 Government were under such compulsion, silver coinage would 
 have been much larger than it has been. It is required that not 
 less than two, nor more than four millions of silver per month be 
 bought and coined by the Government. But the matter is so 
 stated by the Secretary and President as to mislead many persons. 
 The Report then states : 
 
 "The history of the monetary unit shows that from 1792 to 1873 that 
 unit was embodied by law in either metal. The arrangement is such as 
 is now called bimetallic." 
 
 This is true, but for obvious reasons the Secretary omits to 
 state the important fact that the optioti of selecting the kind of 
 metal in which obligations should be discharged has always rested 
 with him who paid motiey and not with him who received it. Dur- 
 ing that time, all the United States bonds were authorized with 
 reference in each bond to the legal coin in which the bond was 
 to be paid. It is now pretended that the United States creditors 
 have the option of directing how they shall be paid. But when 
 these creditors originally bought the bonds they did not give the 
 Government the right to say how payment should be made for 
 said bonds. They paid for them in what was then the cheapest 
 legal tender — greenbacks. 
 
 The Report next says : 
 
 " During the time when the 371.25 troy grains of fine silver continued 
 to be a coin embodiment of the monetary unit, there was no appreciable 
 fluctuation in its value as compared with the mass of commodities, ser- 
 vices, and savings measured thereby. Slight variations in the gold coin, 
 therefore, made solely for the purpose of retaining both metals in use, 
 and for reaching a more perfect equivalence in order to retain both 
 metals in use, are only confirmations added to proof in the uniformity 
 (371.25) from 1792 to 1873. During the time when 23.22 grains of pure 
 gold have been either a concurrent or the single coin embodiment of our 
 monetary unit, there has been no demonstrable fluctuation in its value as 
 compared with the mass of commodities, services, and savings measured 
 thereby." 
 
 This is only another way of stating that the prices of labor and 
 commodities, stated in gold and silver, did not appreciably fluctu- 
 ate from 1792 to 1873. But whoever will look at an old file of 
 newspapers will find great fluctuations in the average scale of wages 
 and prices during that period computed in gold and silver coins. 
 33 
 
c I A APPENDIX. 
 
 Prof. Jevons has demonstrated that from 1809 to 1849, prices 
 of commodities fell in the ratio of 245 to 100. In other words, an 
 ounce of gold or silver bullion was worth nearly two and a half 
 times as much in 1849 as in 1809. 
 
 Every person of rriature age knows from personal recollection 
 that prices have undergone great fluctuations during said time, 
 no matter whether stated in gold, silver or paper money. 
 
 But as gold and silver during that time had substantially the 
 same value, in order to state that gold has an " invariable value," 
 it became necessary for the Secretary to claim that silver had 
 also a fixed value up to 1873. Suppose for the sake of illustration. 
 we assume that the Secretary be correct and that silver did actual- 
 ly have a fixed value from 1792 to 1873. What has occurred to 
 disturb this fixed value and make silver " depreciate and fluctuate " "i 
 The Secretary tells us in his Report that the " annual change in 
 the total amount of gold and silver in the world is a petty percent- 
 age, — say I 33-100 per cent. — and is divided equally between 
 gold and silver." Thus it is not even alleged that there has 
 recently been any extraordinary production of silver. 
 
 It is also certain that there has been no change in the physical 
 qualities of silver, — they are now precisely what they were a thou- 
 sand years ago. 
 
 Only one change has taken place and that is the demonetization 
 of silver. Previous to 1873, the majority of mankind imagined 
 silver had " a fixed value " because they compared it simply with 
 itself ; or what was practically the same thing, with its fellow legal 
 tender, gold. But the moment the legal-tender quality was re- 
 moved from silver and its value measured only by the value of 
 gold, silver appeared to fluctuate, while gold, compared only with 
 itself, appeared to stand still. 
 
 If we test the value of silver by the true method of determining 
 the value of any kind of money ; viz., the average scale of the 
 prices of labor and commodities, we shall find that the so-called 
 " depreciation " of silver has kept about an even pace with the 
 fall in other prices. This shows that since 1873, the period during 
 which the Secretary tells us silver has begun to " fluctuate," the 
 real value of silver has changed but little. One thousand ounces 
 of silver bullion will to-day, on the average, buy more property 
 than one thousand ounces of silver would buy in 1873 when silver 
 was " at par " with gold. 
 
APPENDIX. 
 
 515 
 
 The Secretary then speaks of " the impotence of any nation's 
 legislation to affect prices." But, it is no compliment to the Secre- 
 tary's intelligence, to assume that he does not know perfectly well 
 that the legislation he asks for will lower prices, and place the 
 control of the currency, and therefore the control of prices, more 
 in the hands of bankers than at present. 
 
 The Secretary makes a statement to the effect that, inasmuch as 
 the greater portion of our foreign trade is with nations using gold, 
 therefore we need a gold currency, so that our coins can be 
 shipped in payment of balances. 
 
 Ignorant people suppose our coins are thus shipped. But the 
 Secretary of the Treasury should know that foreign balances are 
 paid with bullion and not with coin. Whether we have coin of 
 any kind in circulation or not, bullion pays the balance. 
 
 The Report lastly says : 
 
 " The range of prices is lower to-day than since the discovery of gold 
 in California. Man's inventions and industries are hammering down the 
 prices of all the products of man's labor. If one New England town, by 
 one week's labor, can shoe all the feet in Cincinnati, Chicago, and St. 
 Louis for a year, when a year's work was too little one decade ago, how 
 shall not the price of shoes go down ? Everywhere the effort is to ob- 
 tain shelter, clothing, food, and the ornaments of these necessities of life 
 at a smaller expense of mental energy and bodily toil. The history of in- 
 ventions is the record of permanent reductions of the cost of getting 
 man's necessities. This reduced cost makes possible the enlargement 
 of the comforts of all, a higher and higher standard of Hfe for the poor. 
 How shall the reduced cost not appear in dropping prices ? But things 
 on hand bought to sell fall while held. To the trading classes a fall of 
 prices when comprised in too brief periods cannot but bring some measure 
 of distress ; when continued for too long periods, cannot but entail a gen- 
 'eral depression of trade. But when it is neither sudden nor prolonged 
 enough to throw large numbers out of employment, the great mass 
 of working men and women find in lower prices almost unmi.xed good. 
 Wages are always at once exchanged, with some deduction for saving, 
 and if prices are lower the same wages buy more. Even where reduced 
 prices necessitate reduced wages (and on the whole, even in Europe, 
 the return to labor grows more and more) the wage-receiver gets the 
 advantage of wages being slow to move, as he gets the disadvantage of 
 their being the last to move when from a degradation of the unit of 
 value, or its legal equivalent, prices measured by that unit going up, the 
 same wages buy less. To keep the unit of value stable is the true limit 
 of legislative control over prices." 
 
5i6 
 
 APPENDIX. 
 
 As prices are an infallible index of the value of money, the 
 admission that prices are now lower than since 1849 is an admis- 
 sion that gold has risen over twenty-five per cent, in value since 
 1873. It is also an admission, that if the holders of United 
 States bonds were now paid in silver dollars, according to the 
 tenor of said bonds, they would receive more actual value than 
 they would have received in 1873, if they had then been paid in 
 gold dollars. Said admission is also equivalent to saying that, 
 since 1873, gold has fluctuated in value more than silver, since 
 there has been a greater uniformity of prices for the past twenty- 
 five years stated in silver than stated in gold. 
 
 But the Secretary tries to make us think that said fall in prices 
 has been caused by " man's inventions and industries " and not 
 by a diminution of the amount of money in circulation. In so 
 doing, he abandons the long and indisputably established princi- 
 ple that prices are invariably affected by either increasing or di- 
 minishing the amount of the circulating money in which those 
 prices are stated; no matter of what materials that money be made. 
 If the Secretary be correct, the fact that a pair of boots, in Rich- 
 mond, on January i, 1865, were worth three or four hundred 
 dollars, did not show an increase in the currency which bought 
 said boots, but indicated a want of " invention and industry." 
 
 Prof. Rogers, the greatest living authority on wages and prices 
 in England, tells us that from 1450 to 1877 the average scale of 
 prices in England rose 1200 per cent. ; — that is, they were, on the 
 average, twelve times as high in 1877 as in 1450. 
 
 In no period of English history have " man's inventions and 
 industries " made greater progress than during the period in 
 which this great rise of prices has occurred. 
 
 If the theory of the Secretary were correct, said fact would be 
 reversed ; — prices would have been on the average lower in 1877 
 than in 1450. The plain fact, known to every student of history, 
 is that the discovery of the gold and silver mines of America 
 poured a vast amount of the precious metals into the channels of 
 commerce and largely raised prices throughout the civilized world. 
 
 The New York Tribune, a zealous supporter of the Secretary's 
 policy, on Dec. 28, 1885, says : 
 
 " It is often said that silver is worth as much as it was in 1870. In the 
 sense in which that phrase is ordinarily used and meant to be under- 
 stood, the statement is not true, and it is no defense of it to say that 
 
APPENDIX, 
 
 517 
 
 wheat, corn and other important products have declined since 1870 a 
 little more than silver. They have declined in the main for reasons 
 which have nothing to do with the use or disuse of silver — because of 
 cheaper transportation, for instance, and the use of improved machinery, 
 and the accumulation of capital and the low rate of interest. 
 
 From 1850 to 1870, transportation steadily grew "cheaper"; 
 there was greater " use of improved machinery " ; a great " accu- 
 mulation of capital " ; and a tendency to a " low rate of interest." 
 During those twenty years, if the Secretary and Tribune be cor. 
 rect in their theories, prices would have steadily fallen. But, 
 every man of mature age knows perfectly well, from personal 
 observation, that those years were characterized by a considerable 
 rise in the average rate of prices. Furthermore, every intelli- 
 gent man knows that the events which are above enumerated as 
 causing lower prices were in as full operation before, as since 1870. 
 Theories which are thus contradicted by facts may amuse some 
 persons but they have no other utility. The average price of com- 
 modities has fallen because, while the products of industry have 
 increased in number and amount, the money in which the prices of 
 those products are stated has relatively diminished in amount. 
 
 The Secretary's language implies belief that prices follow a 
 mysterious "cycle," and that the value of a dollar is beyond 
 " legislative control." But there is no greater mystery about 
 the rise or the fall of the value of a " dollar " than there is about 
 the value of a bushel of wheat. A diminution of the number of 
 bushels of wheat in a country tends to increase the value of each 
 one of those bushels. An increase of bushels tends to make them 
 cheaper. The value of " dollars," no matter of what material 
 they be made, depends on precisely the same principle as the 
 value of " bushels." 
 
 Furthermore, we should remember that the value of a bushel 
 of any kind of grain can be increased without diminishing the 
 number of bushels of that grain in existence. Suppose the farm- 
 ers of a certain country have raised a hundred million bushels of 
 corn and a hundred million bushels of oats. If, in some way, 
 the oats be destroyed, the corn is in greater demand to feed 
 animals with and consequently is made more valuable. It is 
 always the relative plenty or scarcity of a thing which lowers or 
 raises its value. The value of gold and silver is governed by 
 the same laws which regulate the value of corn and oats. Gold 
 
5i8 
 
 APPENDIX. 
 
 was not diminished in actual amount by demonetizing silver. 
 The fall of prices stated in gold indicates the extent to which 
 it has been made relatively scarce by demonetizing silver. 
 
 It is true that invention enables the same amount of labor to 
 produce more wealth than previously, and that changes are thus 
 wrought in the ixlative prices of different things. But such altera- ' 
 tions do not affect the average scale of wages and prices. While 
 the advance in science, art, and mechanical skill has greatly low- 
 ered the prices of many things it has enormously raised the value 
 of many others. For example, witness the changes in the value of 
 real estate, timber, coal, stone, sand, water and many other things 
 which had almost no price before invention brought them in de- 
 mand by creating a new or an additional use for them. The true 
 test of prices is found in a careful comparison of the prices of all 
 things (including, of course, labor) bought and sold at one period 
 of time, with the prices of all things bought and sold at another 
 period. Such a test shows the amount of money in circulation the 
 dominant cause of changes in the average scale of prices. 
 
 Since 1873, " invention and industry " have been no greater than 
 during the twelve years immediately before that time. But for 
 the twelve years which have elapsed since 1873 prices have steadily 
 fallen. And this fall is as noticeable as anywhere else in those 
 commodities in the production of which no marked invention has 
 occurred. For instance, note the great fall in cotton ; pig iron, pork, 
 wheat, cheese and other products of the soil. No increased 
 " invention " has taken place in the mode of producing the great 
 mass of valuable things whose price has fallen. 
 
 The Secretary, like the majority of bankers, has a great affec- 
 tion for "working men and women." He tells us that the fall 
 in prices has been to those classes " almost unmixed good." 
 
 Let the Secretary test this statement by actual contact with 
 " working men and women." Let him first visit a few individuals 
 who form part of the millions of farmers whom the enhanced value 
 of gold has compelled to sell the products of their toil at very low 
 prices while their taxes and debts were unchanged. Let him next 
 talk with the laborers in mines, forges, and factories and ask : 
 " Are you not better off now than in good times ? " 
 
 If the Secretary be right in regard to the blessing of low prices 
 and hard times to the laboring classes, why should he talk about 
 
APPENDIX. 
 
 519 
 
 *' our present troubles " as he does ? If such be the case, we are 
 not in " trouble." 
 
 Is not the talk of all rich money lenders about the " blessing to 
 the poor of low prices " a deceitful mockery ? Common observa- 
 tion tells us that the wages of laborers are usually cut down more 
 than the percentage of fall in the prices of the necessaries they 
 buy. This must necessarily be so. When prices fall, money 
 rises in value. The creditor classes then make gains and what 
 they gain some one else must lose. If wages went down only to 
 the extent that other prices fell, the wages receiving classes would 
 not be compelled to bear any part of the losses which some per- 
 sons must incur in order to increase the value of the creditor's 
 bonds and mortgages. It is matter of common knowledge that 
 what are called " hard times " usually bear with more severity on 
 those who work for daily wages and on the farmers than on any 
 other classes. When market prices are falling, the retail dealers 
 always endeavor to throw the consequent losses on their custom- 
 ers. Thus the assumption of the Secretary, that the loss from 
 falling prices is borne entirely by the trading classes is incorrect. 
 Those who have a fixed annual salary, like the President and the 
 Secretary, are better off in "hard times" than in "good times." 
 And to all persons under similar circumstances, " hard times for 
 the majority" means good times for them. 
 
 What does the Secretary mean by saying that to " keep the unit 
 of value stable is the true limit of legislative control over prices ? " 
 If he mean that the same specific things should always form the 
 legal tender ; that coins should always be of the same weight, fine- 
 ness and material ; then the act of 1873 which changed the specific 
 things constituting the national legal tenders was an outrage 
 which should at once be redressed by restoring the coinage to 
 the previously established specific things as legal tenders ; to wit, 
 23 22-100 grs. of gold or 371 1-4 grs. of silver, as one legal dollar 
 at the option of the payer of said dollar. Both of said coins to 
 have no coinage limit except the amount of gold or silver bullion 
 brought by the people to the mints. 
 
 If the Secretary mean, by the words " stable value," a unit of 
 which either the weight or the materials have been, or should be, 
 changed in order to keep its value stable, then he means that as 
 gold has risen in value we should at once reduce the weight of the 
 
^2o APPENDIX. 
 
 gold dollar for the purpose of having it of the same value it was 
 when our Government bonds were first sold. 
 
 If the Secretary intend to convey the idea that the gold dollar 
 is of the same value now that it was when the silver dollar had free 
 coinage, then he intends to convey an idea that is utterly false. 
 He might as well say that the destruction of all the bituminous coal 
 in the world would not raise the value of anthracite coal. When 
 the silver dollar was demonetized the gold dollar was thereby 
 placed under different conditions ; the amount of gold in the 
 world was not thereby increased, but the use, and consequent 
 demand for gold were largely increased. The relative amount of 
 gold in the world was diminished by demonetizing silver. 
 
 Suppose the various nations which have demonetized silver had 
 selected gold as the metal to be discarded. Would silver then have 
 remained at the same value it had when gold was its fellow legal 
 tender ? Not at all. The amount of silver would not be in- 
 creased by such legislation but the demand for silver would be 
 enormously increased. Silver compared with itself would then be 
 unchanged in value ; — it would remain at "par." But compared 
 with gold and all other commodities, it would have risen in value 
 just as gold now has. This fact is virtually conceded by both the 
 President and Secretary ; otherwise all their talk about an " inter- 
 national " arrangement for coinage is the sheerest nonsense. If 
 legislation have no effect on the value of gold, then it necessarily 
 follows that international legislation in reference to coinage could 
 not have the slightest effect on the value of either gold or silver. 
 
 If the theories of the President and Secretary be true, a unani- 
 mous agreement of all the nations in the world to coin silver at a 
 definite ratio to gold would not in the least change the relative 
 demand for one or other of those metals ; and consequently 
 would not alter their relative value. But the Secretary informs 
 us that the " fixed value " which silver had prior to 1873 " was 
 upset by Germany." If legislation have no effect on value how 
 could German laws " upset " the value of silver ? Do not such 
 contradictions show the falsity of the Secretary's theories ? 
 
 Artful sophistry may endeavor to conceal it, but the fact re- 
 mains unaltered, that tampering with the coinage and currency is 
 an insidious means of either raising or lowering prices. When 
 prices are thus stealthily altered the crime is precisely the same 
 as when theft is committed by lessening. the weight or fineness 
 
APPENDIX. 
 
 521 
 
 of coins. How low could prices and wages be reduced by those 
 now in control of the financial policy of this country and Europe ? 
 Without changing the weight of a gold dollar, it is perfectly cer- 
 tain, that if permitted by the people the currency could be so manip- 
 ulated by legislation that the price of a barrel of good flour in 
 New York City would be only one dollar, and all other prices 
 correspondingly low. This would necessarily involve the concen- 
 tration of wealth in few hands to an extent compared with which 
 the present disparity would appear insignificant. 
 
 All history tells a monotonous story in regard to wrong and 
 oppression. Once fully begun, encroachments on popular rights 
 have never ended by the voluntary acts of the spoliators. In all 
 ages they have invariably continued until met by a force superior 
 to their own. Human nature is unchanged. What always has 
 been, will again occur. The only uncertain thing about the pres- 
 ent situation is this : How much will they first endure ; how 
 much time will pass, before the masses of the people discover the 
 actual facts, realize how they have been, and are being deceived 
 and wronged, and assert their superior power ? In the United 
 States it is easy for them to quietly do so, by action at the ballot 
 boxes. The needful thing is that a majority of voters should pos- 
 sess a sufficiently clear knowledge of principles to enable them 
 to correctly interpret unpleasant facts relating to the political and 
 social organization of this country. 
 
INDEX. 
 
 INTRODUCTORY. 
 
 Natural laws are not only invariable 
 but they apply impartially to all 
 things, I. 
 
 What political economy is, 2. 
 
 A mistaken belief, 3. 
 
 How economic laws should be con- 
 sidered, 3. 
 
 Mankind are governed by many 
 emotions and thoughts, 4. 
 
 Common mode of writing economic 
 works, 5. 
 
 Political economy is an imperfect 
 science, 6. 
 
 A confession, 8. 
 
 Ignorance is the mother of credu- 
 lity, 9. 
 
 The plain truth, 11. 
 
 Why mankind make such slow 
 progress, 1 1. 
 
 Original thought is not common, 13. 
 
 Mankind prefer old to new things, 
 14. 
 
 Evils perpetuate themselves, 15. 
 
 Need of elementary study, 16. 
 
 Terrible fruits of false premises, 18. 
 
 CHAPTER II. 
 
 W^hat is money ? Its functions ; 
 
 very important that all should 
 
 understand, 19. 
 Prevalent ideas about money, 19. 
 False dogmas by the million, 22. 
 How the people came to be misled, 
 
 23- 
 
 CHAPTER III. 
 
 Why we use money, 24. 
 What a science is, 24. 
 How to study money, 25. 
 What capital is, 26. 
 
 Distinction between wealth and 
 
 capital, 27. 
 No use for money when no wealth 
 
 exists, 28. 
 A colony without wealth, 29. 
 Need of tools, 30. 
 Value of a thing is dependent on 
 
 circumstances, 31. 
 The value of land, 32. 
 Need of capital, 32. 
 How commerce began, 33. 
 Definition of trade, 35. 
 How trade is often carried on, 35. 
 W^hat simple barter is, 36. 
 Advantages of direct barter, 36. 
 Mechanism of exchanging things 
 
 by use of money, 37. 
 Who are principals in a trade, 38. 
 Simple barter is still in use, 40. 
 How barter tends to produce fair 
 
 bargains, 41. 
 Bartering labor, 42. 
 Making " bees," 44. 
 Growth of classes, 45. 
 What a snob is, 45. 
 Barter often the best way to trade, 
 
 45- 
 
 Profits of middlemen, 46. 
 
 Barter could be employed more 
 than it is, 49. 
 
 Best test of wages, 49. 
 
 Facilities for barter should be in- 
 creased, 50. 
 
 Importance of citizens being ac- 
 quainted, 52. 
 
 Wealth of cities, 52. 
 
 Facts in regard to middlemen, 53. 
 
 Parallel railroads, 53. 
 
 Increase of middlemen, 54. 
 
 CHAPTER IV. 
 
 Indirect barter, 55. 
 
 Origin of commission merchants, 56. 
 
 Origin of merchants, 57. 
 
 523 
 
524 
 
 INDEX. 
 
 A merchant's profits are for infor- 
 mation, 58. 
 
 Fairs, 59. 
 
 When indirect barter begins, 60. 
 
 Foreign commerce is barter, 61. 
 
 Effect of destruction of gold and 
 silver, 62. 
 
 CHAPTER V. 
 
 Money, 63. 
 
 Trade through a third person, 64. 
 
 Trade through a third thing, 64. 
 
 Ancient kinds of money, 64. 
 
 The peculiar use of money, 65. 
 
 Mechanism of trading through the 
 medium of a third thing, 65. 
 
 What commerce is and how it de- 
 veloped, 67. 
 
 Difference between barter and ex- 
 change with money, 68. 
 
 Definition of the word " money," 69. 
 
 A common but false idea, 70. 
 
 Some debts can only be paid with 
 coin, 72. 
 
 The same thing may have several 
 definitions, 73. 
 
 Why barter is often impracticable, 
 
 74- 
 Origin of the use of money, 76. 
 Legal-tender laws, 77. 
 Effect of a change in value of the 
 
 legal tender, 78. 
 Development of money, 80. 
 A poor old thing is preferred to a 
 
 good new thing, 82. 
 What we can reasonably expect, 84. 
 Bankers and money, 85. 
 An irresistible movement, 85. 
 
 CHAPTER VI. 
 
 Origin of prices, 87, 
 
 Primitive mode of stating prices, 88. 
 
 Need of comparing all things with 
 a few things, 89. 
 
 Money of account, 91. 
 
 A price is always a mode of com- 
 paring one thing with another, 93. 
 
 A money price is always a numer- 
 ical comparison, 94. 
 
 Antiquity of numerical comparison, 
 
 95- 
 Fractional money, 95. 
 Primitive mode of making change, 
 
 97. 
 
 Division of values one function of 
 money, 99. 
 
 Money of account, resumed, 100. 
 
 How value is expressed, loi. 
 
 What happens when specie pay- 
 ments are suspended, 103. 
 
 Money of account would survive 
 the destruction of all other 
 money, 104. 
 
 False predictions, 105. 
 
 The weight of coins is seldom con- 
 sidered, 106. 
 
 Rise and fall of prices, 107. 
 
 CHAPTER Vn. 
 
 Effect of legislation on value, no. 
 
 What legislation is, in. 
 
 Power of legislation is limited, 
 
 113- 
 
 The laws of trade, 113. 
 
 An absurd question, n4. 
 
 Human capacity is limited, n5. 
 
 Inconsistency of those who deny 
 that legislation can create value, 
 n6. 
 
 Historical example of the creation 
 of value by legislation, n7. 
 
 Evidences that a thing is valuable, 
 n9. 
 
 Value of a man's services, 120. 
 
 Legislation may change the value 
 of a person's services, 121. 
 
 Historical legislation which affect- 
 ed values, 121. 
 
 Effect of the aforesaid law, 125. 
 
 What made the aforesaid law pos- 
 sible, 125. . 
 
 A plea in defense of the money 
 lenders, 126. 
 
 Effect of other legislation on paper 
 money, 126. 
 
 Bankers' schemes, 127. 
 
 National bank act, 128. 
 
 Subterfuges, 130. 
 
 Why national bank-notes have not 
 been destroyed, 130. 
 
 Attacks on the greenbacks, 131. 
 
 The five-twenty bonds, 132. 
 
 Difficulty of satisfying avarice, 133. 
 
 A hypocritical pretense, 134. 
 
 Proclivity of mankind to hypocrisy, 
 
 134- 
 Means employed to perpetrate a 
 crime, 136. 
 
INDEX. 
 
 525 
 
 Why Horatio Seymour was de- 
 feated, 137. 
 National credit, 138. 
 What experience teaches, 138. 
 Effect of act of March 18, 1869, 
 
 139- 
 When legislation creates value, 
 
 139- 
 
 Other acts of repudiation and dis- 
 grace, 140. 
 
 What made the aforesaid wrongs 
 possible, 142. J, 
 
 Fruits of crime and folly, 143. 
 
 Views of a so-called statesman, 144. 
 
 Simple facts overthrow false theo- 
 ries, 144. 
 
 CHAPTER VIII. 
 
 Value ; a clear understanding of its 
 
 nature indispensable, 146. 
 How to study value, 147. 
 Location apparently affects value, 
 
 148. 
 Creation of value by transportation, 
 
 149. 
 Effect of time in creating value, 152. 
 Difference between value and 
 
 weight and measure, 152. 
 Change of place not the real cause 
 
 of changes in value, 153. 
 Men change values by time, place, 
 
 and mode of sale, 154. 
 A merchant's success, 155. 
 The essence of value, 156. 
 Intrinsic value, 156. 
 Changes in value in consequence of 
 
 changes in circumstances, 157. 
 The result which creates value, 159. 
 Unusual values, 160. 
 Value of water, 160. 
 Changes of value are always 
 
 wrought by the same law, 161. 
 How value is diminished, 162. 
 How value is increased, 163. 
 What gives stability to values, 164. 
 Common idea of the cause of value, 
 
 164. 
 Why land has risen in value, 165. 
 Why personal property changes in 
 
 value, 165. 
 Effect of law on the value of gold 
 
 and silver, 166. 
 Things do ngt possess two values, 
 
 167. 
 
 Exchangeable value, 168. 
 
 Final analysis of the nature of 
 value, 170. 
 
 Different amounts of value created 
 by the same amount of labor, 171. 
 
 Why labor does not always create 
 wealth, 172. 
 
 How we state value, 174. 
 
 Distinction between value and in- 
 herent qualities, 177. 
 
 Value not an intrinsic quality, 178. 
 
 Legislation has no effect on intrin- 
 sic qualities, 179. 
 
 A prolific error, 180. 
 
 What is necessary to the existence 
 of value, 1 80. 
 
 Value is always relative, 181. 
 
 Only one way to learn the nature 
 of value, 183. 
 
 False theories in regard to land, 
 184. 
 
 CHAPTER IX. 
 
 The silver question • it compre- 
 hends many things, 187. 
 
 Historical sketch of the silver dol- 
 lar, 188. 
 
 Acts of 1834 and 1837, 190. 
 
 Relative value of silver and gold 
 dollars, 191. 
 
 Option of payment by either gold 
 or silver, 191. 
 
 Tendency of commerce, 192. 
 
 Established right of both creditors 
 and debtors, 193. 
 
 Silver coinage, 194. 
 
 Effect of demonetizing silver, 194. 
 
 Contagiousness of vice, 195. 
 
 False doctrines framed into law, 
 196. 
 
 Fundamental facts about gold and 
 silver, 197. 
 
 Gold and silver production, 198. 
 
 World's production, estimated in 
 pounds for twenty-year periods, 
 198. 
 
 World's production of precious 
 metals, estimated in dollars for 
 different periods, 199. 
 
 World's production of gold and 
 silver for 383 years, estimated in 
 dollars, for different periods of 
 time, 200. 
 
 Attempt to demonetize gold, 202. 
 
526 
 
 INDEX. 
 
 Present consumption of gold in the 
 arts, 203. 
 
 Origin of tlie war on silver, 203. 
 
 An old subterfuge, 205. 
 
 Effect of legislation on the value of 
 a dollar, 206. 
 
 Value of all things dependent on 
 the same law, 207. 
 
 An example of legislative theft, 
 208. 
 
 A talk with a clergyman, 209. 
 
 One purpose under various pre- 
 tenses, 210. 
 
 A doctrine dangerous to creditors, 
 •211. 
 
 Ought the silver dollar to be made 
 heavier? 212. 
 
 Danger of robbing debtors, 213. 
 
 Debt not disreputable, 213. 
 
 The true doctrine, 214. 
 
 Nothing is more detestable than 
 hypocrisy, 214. 
 
 The cry for honesty, 215. 
 
 Groundless charges against silver, 
 217. 
 
 Why silver does not circulate, 217. 
 
 Superiority of paper money, 218. 
 
 The essential allegation in favor of 
 gold, 221. 
 
 Has gold a fixed value? 222. 
 
 The bullion report, 222. 
 
 Facts which overthrow the com- 
 mon theory in regard to gold, 
 224. 
 
 Origin of a belief in the fixed value 
 of gold, 224. 
 
 By comparison with things other 
 than itself is the only way in 
 which we can ascertain and state 
 any of the qualities of any object 
 or thing, 226. 
 
 All ideas are relative, 227. 
 
 Need of comparing one thing with 
 something beside itself, 228. 
 
 Value should be tested as all other 
 things are, 229. 
 
 Logical results of comparing gold 
 only with gold, 230. 
 
 Result of unlimited coinage of sil- 
 ver, 231. 
 
 Corrett mode of stating the value 
 of gold and silver, 232. 
 
 What a price is, 233. 
 
 Money changes in price like other 
 things, 234. 
 
 How to test the price of money, 
 
 234- 
 The price of gold, 235. 
 Correct test of the rate of interest, 
 
 236. 
 Public debts and taxes, 237. 
 An example of benevolence, 237. 
 The true explanation, 238. 
 What has changed the value of 
 
 gold, 238. 
 America bearing down the prices 
 
 of American goods, 239. 
 Effect of lowering prices in Eng- 
 land, 239. 
 The delusion that gold prices 
 
 would not fall, 240. 
 Effect of making a metal legal 
 
 tender, 241. 
 Has silver depreciated in value? 
 
 243- 
 
 How to test the value of silver, 
 245. 
 
 Table of relative prices, 250, 251. 
 
 Another comparison of prices, 253. 
 
 Average and comparative prices of 
 the principal domestic commod- 
 ities exported from the United 
 States from declared values at 
 time of export, in gold, 254, 255. 
 
 Ought an equality to be maintained 
 between the value of the gold 
 and the silver dollar, 256. 
 
 Statements of the New York Tri- 
 bune, 256. 
 
 Silver more stable in value than 
 gold, 257. 
 
 Stability of prices is the practical 
 result of a stable currency, 259. 
 
 The 125-cent dollar, 260. 
 
 Labor, a test of value, 260. 
 
 Silver has risen in value, 261. 
 
 Why silver has not fallen in value, 
 261. 
 
 Silver has always fluctuated in 
 value, 263. 
 
 Why England has a gold currency, 
 264. 
 
 Should we make times harder in 
 Europe? 265. 
 
 Are payments in silver honest ? 
 265. 
 
 Written contracts more reliable 
 than vague understandings, 267. 
 
 A man cannot lose what he never 
 owned, 268. 
 
INDEX. 
 
 527 
 
 Differences in relative value of gold 
 
 and silver, 268. 
 A suggestion for consideration, 
 
 269. 
 Result of entire demonetization of 
 
 silver, 271. 
 The idea of coercing England, 271. 
 Ought prices to be depressed by 
 
 legislation ? 272. 
 The best kind of money, 273. 
 Stable money best for the masses, 
 
 274. 
 A stable currency best for debtors, 
 
 275. 
 Why different classes have differ- 
 ent ideas, 275, 
 A notorious fact, 276. 
 A letter from an " economist," 276, 
 
 CHAPTER X. 
 
 Is money capital ? 280. 
 
 Nature of capital, 280. 
 
 Similarity betw^een money and 
 blood, 281. 
 
 Money helps production without 
 forming part of products, 281. 
 
 No kind of capital produces with- 
 out labor, 282. 
 
 Many kinds of capital have special 
 functions, 282. 
 
 All hoarded things are useless 
 when hoarded, 283. 
 
 A useless thing is not capital, 283. 
 
 When money is used, 284. 
 
 The true test of money, 285. 
 
 Control of money is control of la- 
 bor, 285. 
 
 How money may be controlled, 286. 
 
 Who should control the amount of 
 money, 287. 
 
 The true doctrine, 288. 
 
 Jeffersonian democracy, 289. 
 
 A conservative measure, 290. 
 
 CHAPTER XI. 
 
 Effect of changes in the amount of 
 
 money, 291. 
 W^hat a dollar is, 292. 
 Why prices fall to such an extent 
 
 when the currency is contracted, 
 
 294. 
 How we state the value of a dollar, 
 
 295. 
 
 Effect of habit on ideas of the value 
 
 of a dollar, 296. 
 Dollars and bushels are governed 
 
 alike, 297. [298. 
 
 How monopoly can change prices. 
 Monopoly can change the value of 
 
 a dollar, 298. 
 Monopolies in California, 299. 
 Money kings wish to corner money, 
 
 299. 
 Creditors can be robbed by inflat- 
 ing the currency, 300. 
 History of inflations, 300. 
 Paper money is not helped by what 
 
 is " back of it," 301. 
 Inflation is possible without issuing 
 
 paper money, 302. 
 Paper money inflation a pretext for 
 
 crime, 302. 
 Not a fancy sketch, 304. 
 Sudden changes in the currency 
 
 paralyze business, 304. 
 Why money is hoarded when prices 
 
 are falling, 305. 
 The true test of the cheapness of 
 
 money, 305. 
 Difference between temporary pos- 
 session of money and ownership 
 
 of it, 305. 
 A mistake in diagnosis, 307, 
 A typical writer, 308. 
 Lack of confidence in prices is the 
 
 reason men hoard money, 310. 
 Effect of slow changes in the 
 
 amount of money, 310. 
 What we should seek, 312, 
 
 CHAPTER XII. 
 
 Alleged causes of hard times : The 
 real causes are not usually as- 
 signed, 313. 
 
 Actions are more trustworthy than 
 words, 314. 
 
 No lack of confidence in silver dol- 
 lars, 314. 
 
 The confidence cry, 315. 
 
 The bankrupt law did not make 
 hard times, 317. 
 
 Overproduction, 317. 
 
 What production is, 318. 
 
 Tendency of poverty, 319. 
 
 Tramps, 320. 
 
 Capacity to labor is a form of prop- 
 erty, 321. 
 
528 
 
 INDEX. 
 
 The farmers and overproduction, 
 321. 
 
 Who are benefited by falling prices ? 
 '^22, 
 
 London and New York are the 
 chief authors of the cry " over- 
 production," 322. 
 
 A temporary cure of " overproduc- 
 tion," 323. 
 
 Great changes in the amount of 
 money in circulation destroy 
 wealth, 324. 
 
 When a thing has the greatest 
 value, 324. 
 
 What each person should possess, 
 
 325- 
 An example of destruction of value, 
 
 325- 
 Report of an embassy from China, 
 
 327- 
 
 CHAPTER XIII. 
 
 Prices : They are always an ap- 
 praisal of two things and a com- 
 parison of one with the other, 333. 
 
 What hard pan is, 334. 
 
 13th-century prices, 334. 
 
 A wedding in 1528, 334. 
 
 Causes of fluctuations in prices, 335. 
 
 Natural remedies, 337. 
 
 Discounting the future, 338. 
 
 Dangers of debt under the present 
 monetary system, 339. 
 
 Power of combined money capital, 
 
 341- 
 Irregularity of prices, 342. 
 " Why silver falls," 343. 
 Why falling prices throw workmen 
 
 out of employment, 346. 
 
 CHAPTER XIV. 
 
 Specie payments, 348. 
 
 The essential condition requisite to 
 
 give value to paper money, 349. 
 Specie payments, 349. 
 Chief objection to specie payments, 
 
 350- 
 
 How banks of issue raise and lower 
 prices, 351. 
 
 Essential feature of specie pay- 
 ments, 352. 
 
 How bankers evade their promises, 
 352. 
 
 The chief evil of specie payments, 
 
 353- 
 
 What occurred in 1857, 354. 
 
 What experience has shown, 355. 
 
 Legitimate banking, 355. 
 
 National banks have special priv- 
 ileges, 356. 
 
 National banks are unfair monopo- 
 lies, 357. 
 
 The flow of coin, 358. 
 
 Results of draining away money, 
 360. 
 
 A universal natural law, 362. 
 
 What we should attempt, 363. 
 
 The end toward which we are trav- 
 eling, 363. 
 
 CHAPTER XV. 
 
 Franchises, 365. 
 
 What a patent is, 365. 
 
 Patents may be used to plunder 
 
 the community, 366. 
 What a franchise is, 366. 
 What a railroad franchise is, 367. 
 Watered stock, 368. 
 
 CHAPTER XVI. 
 
 Interest of money, 370. 
 The rate of interest is too high, 370. 
 Why men pay any interest, 371. 
 Human nature is unchanged, 372. 
 Capital is necessary to existence, 
 
 373; 
 
 Free interest, 374. 
 
 The difference between the rich 
 
 and poor, 376. 
 Different rates of interest, 376. 
 Note, 377- 
 
 CHAPTER XVII. 
 
 The relations of capital and labor, 
 
 382. 
 Need of more capital than before 
 
 expensive machines were used, 
 
 383. 
 Mistaken ideas about freedom of 
 
 trade, 384. 
 Patent laws cause an inequitable 
 
 distribution of wealth, 384. 
 Nature of the antagonism between 
 
 capital and labor, 385. 
 Different interests produce different 
 
 conduct, 388. 
 
INDEX. 
 
 529 
 
 Why laws were created, 388. 
 Why laws should continually 
 
 change, 389. 
 Contention between labor and cap- 
 ital should be settled by law, 390. 
 Origin of law, 391. 
 Further progress is necessary, 391. 
 Ought every man be allowed to do 
 
 as he pleases, 392. 
 A dangerous doctrine for the rich 
 
 to preach, 394. 
 What should be, 395. 
 Rise of rents, 396. 
 Hours of labor, 397. 
 Comparison with a hundred years 
 
 ago, 398. 
 Is equity being done ? 400. 
 Free trade is possible only when 
 
 both parties have liberty of 
 
 choice, 401. 
 How workmen may rob employers, 
 
 402. 
 When free trade occurs, 402. 
 What a good bargain is, 403. 
 Laws are outgrowths of human 
 
 necessity, 403. 
 Siege of Paris, 404. 
 When- laws need revision, 405. 
 Test of the wisdom of a law, 405. 
 
 CHAPTER XVIII. 
 
 Remedies for social conflicts, 407. 
 
 Legislation should foster equality 
 of wealth, 408. 
 
 Measures should be general in pref- 
 erence to special, 408. 
 
 Potency of money, 409. 
 
 Evils of waste, 410. 
 
 Foolish and wasteful brutality, 410. 
 
 Bad modes of building, 41 1. 
 
 Many kinds of waste, 41 1. 
 
 Taxation, 413. 
 
 How taxes should be levied, 413. 
 
 What a tariff is, 415. 
 
 Taxation should always be laid 
 with a twofold purpose, 415. 
 
 Advantages of indirect taxation, 
 
 417- 
 Corporations, 417. 
 One of the main roots of the labor 
 
 question, 418. 
 Ownership of whatever performs 
 
 labor is ownership of labor, 419. 
 A fish-hook-machine, 420. 
 
 34 
 
 A man sh(Hild control his means of 
 subsistence, 421. 
 
 Need of a large amount of capital, 
 422. 
 
 Inventions should not be made 
 means of oppression, 424. 
 
 How inventions are made, 424. 
 
 All should be benefited by discov- 
 eries and inventions, 425. 
 
 Growth of inequality, 425. 
 
 What should be done, 426. 
 
 CHAPTER XIX. 
 
 Socialism, 428. 
 
 Horror of socialism, 429. 
 
 What socialism is, 429. 
 
 A socialistic post-office, 430. 
 
 Socialistic schools, 431. 
 
 Socialistic libraries and parks, 432. 
 
 Socialistic water and fire-engines, 
 
 432. 
 Socialistic money, 433. 
 Socialism at West Point, 433. 
 Socialistic enterprises, 434. 
 Advantages of socialism, 435. 
 Should socialism be extended ? 437. 
 Socialism does not favor laziness, 
 
 and unthrift, 437. 
 How to help the poor, 438. 
 Ungrateful snobs, 438. 
 Future probabilities, 439. 
 Causes of discontent, 439. 
 Why some are richer than others, 
 
 440. 
 What shall we do ? 442. 
 Lessons of experience, 443. 
 "With what measure ye mete, it 
 
 shall be measured to you again," 
 
 444. 
 Need of hastening slowly, 444. 
 Need of changing our patent laws, 
 
 445- 
 No cheap telephones before the 
 
 year 1900, 446. 
 Defects in our social system, 447. 
 Folly of violence, 448. 
 The true course, 448. 
 
 CHAPTER XX. 
 
 How shall we create a stable cur- 
 rency ? 450. 
 
 Stability of value possible only when 
 conditions are stable, 451. 
 
530 
 
 INDEX. 
 
 Money is not strictly a measure of 
 
 value, 451. 
 Difference between money and 
 
 other standards, 454. 
 Some relative facts, 455. 
 Effect of paper money, 456. 
 Effect of hoarding- gold, 457. 
 Why prices change, 458. 
 Changes in the number of stand- 
 ards, 459. 
 Silver and gold are governed by the 
 
 same natural law, 460. 
 Duty of Congress, 461. 
 Importance of the dollar having a 
 
 uniform value, 461. 
 The central question, 463. 
 Fruit of a false premise, 463. 
 Money must be adapted to public 
 
 intelligence, 464. 
 Financial measures suggested for 
 
 consideration and amendment, 
 
 465- 
 
 The proper inscription, 466. 
 
 A perfect currency, 469. 
 
 Successful use of paper money re- 
 quires intelligetace, 470. 
 
 What will ultimately occur, 471. 
 
 CHAPTER XXI. 
 
 Ought the United States maintain 
 the gold and the silver dollar at 
 an equality of value ? 473. 
 
 Folly of blindly imitating other 
 nations, 474. 
 
 What we have actually done, 475. 
 
 What we should now do, 476. 
 
 How foreign commerce is con- 
 ducted, 476. 
 
 Foreign trade is a barter of one 
 thing for another, 478. 
 
 The incentive of trade, 479. 
 
 Why men engage in foreign com- 
 merce, 480. 
 
 Use of bills of exchange, 481. 
 
 How England trades, 482. 
 
 What wealth is, 483. 
 
 Would it not be an advantage to 
 have money similar to the nations 
 with whom our trade is chiefly 
 conducted ? 484. 
 
 What effect would unlimited coin- 
 age of silver produce ? 485. 
 
 Silver bullion will never be easily 
 obtained, 486. 
 
 The end which laws should seek, 
 487. 
 
 The par value delusion, 488. 
 
 Effect of limited coinage, 489. 
 
 Artificial value of coins, 491. 
 
 Hard pan, 491. 
 
 Gold premium, 492. 
 
 True test of value, 493. 
 
 How evils can be averted, 494. 
 
 Social problems will always be be- 
 fore mankind, 494. 
 
 What inflation can do, 495. 
 
 Confederate money, 495. 
 
 A cotton basis for money, 496. 
 
 Why goods are not sold when ac- 
 tive inflation is progressing, 498. 
 
 How to prevent inflation, 500. 
 
 Study of social topics, 500. 
 
 APPENDIX. 
 
 A review of the financial portion 
 of the first message of President 
 Cleveland and the accompanying 
 report of the Secretary of the 
 Treasury, 505.