INDEX.

☞ The References are to Sections, not to Pages.

• Argyle, Duke of: restrictions on the contract for labor, 348
• Anarchism, 636
• Arithmetical w. Geometrical progression, 392-3
• Art: Political Economy as an art (a branch of statesmanship) distinguished from political economy as a science, 27-81
• Assignats, so called, of French Revolutionary period, 219, 445
• Athens, progressive taxation in, 600
• Austria, paper money, 443
• Authority, legal, excluded from our definition of value, 8
• Ability, as the rule of taxation, 595-7, [See, also, Faculty]
• Abstinence, the creator of capital, 87-93; interest, the reward of abstinence, 288
• Accumulation, how influenced by the rate of interest, 288
• Agriculture—deemed by the physiocrats the sole source of wealth, 48; subject to the condition of “diminishing returns,” 49-53 ; plea that manufactures should be built up artificially to save exportation of the properties of the soil, 56-9 ; follows the pastoral condition in natural order of development, 63; the fluctuations in agricultural products render them a defective standard for deferred payments, 188-90 ; competition of agriculture with manufactures in new countries, 618-28
• Alcoholic beverages, English expenditure upon, 406n
• Alison, Sir A.; the potato, 404n
• Amsterdam, Bank of, 523
• Andersen, J., announces law of rent, 265

• Babbage, Charles: cost of the materials of the iron manufactures, 53
• Bacon, Lord: the true labor of philosophy, 24; the burden of taxation, 414; on usury, 419, 423n
• Bagehot, Walter: influence of inconvertible paper money on foreign exchanges, 220, 565 ; the early Italian banks, 522; bimetallism, 568
• Balance of Trade, 545-53
• Banking Functions, the, 522-8; the banking agencies, 529 ; the State participating in the profits of banking, 577
• Banking principle, the, so-called, vs. the currency principle, 225-0
• Bank Money, Chap. 6, Part III
• Bank of England, 222, 325; its foundation, 522
• Bases of Taxation, 590
• Bastiat, F.: confuses ethical and economical reasoning, 37; the economical harmonies, 846; the story of Jacques Bonhomme, 412
• Barter, the primitive form of exchange, 161-2
• Beaulieu, Leroy, domains, 576n
• Belgium, underfed laborers, 68
• Bentham, Jeremy: escheat vice taxation, 573 ; approves banking monopolies, 578 ; attacks judicial fees, 581
• Bequest, [See Successions]
• Bi-Metalhsm, 559-71
• Birth-rate, diminished by increase of economic desires, 397401
• Bo wen, Francis: the value denominator, 183n
• Brabazon, Lord: inadequate food of French factory hands, 68
• Brassage, 196 Edition: current; Page: [526]
• Brassey, Thomas, Sir : superiority of English labor in railway construction, 79
• Brodie, George: sale of offices by Charles I., 575n; monopolies, 578
• Building lots, rent of, 280
• Bullion, its relation to coin, 193-200, [See Seigniorage]
• Burke, Edmund: nothing so great an enemy to accuracy of judgment as want of classification and distribution, 44; the fiscal motive to paper money issues, 444

• Cairnes, John E.: The character and logical method of Political Economy, 18-20 ; asserts for it the dignity of a science, 25 ; importance of the law of “diminishing returns,” 48 ; the friction of retail trade, 149 ; relief of overcrowded occupations, 342 ; indifference of the rate of profits, 373 ; laiatcsfaire, 813; co-operation, 428; bi-metallism, 568
• Calvin, John, on usury, 418
• Cameralistic science, its subject matter, 359
• Canard, N. F.: the diffusion of taxes, 608
• Cancellation of indebtedness, by banks and clearing houses, 524
• Capability, productive, of a community, Chap. 4, Part II
• Capital, Chap. 3, Part II; partial immobility of capital, 104; the remuneration for its use, i. e., interest, Chap. 3, Part IV.; relation of capital to the scheme of co-operation, 426-8; relation of capital to wages, 320,334-6 [With reference to taxation, see Wealth]
• Carey, H. C.: his attacks upon the doctrine of rent, 484-92
• Catallactics, the word offered by Archbishop Whately, as a SUD-stitute for political economy, 43
• Celibacy, [See Marriage]
• Chadwick, Edwin: the cellar populations of the English cities, 71
• Charles I., of England; sale of offices, 575; of monopolies, 578
• Chastity, female, how affected by the provisions of the English poor laws, 450
• Cheap ti. Dear Food, 404
• Cheap money, is inconvertible paper money cheap 1 214-6
• Cheerfulness, as contributing ta labor power, 76-8
• Cherbuhez, A. E.: domains, 576
• Chevalier, Michel; money economizes labor, 164; applies the term Brassage to the actual cost of coinage, 196u; industrial effects of an increase of the money supply, 445n ; bi-metallism, 568
• Child, the, its relation to the subsistence of the family, 387-8
• Civilization tends to diminish the sum of values, 12; effects of money in promoting civilization, 164
• Clamageran, J. J.: the physiocratic theory of taxation, 583u
• Clearing-house, the bankers' bank, 524
• Climate: a good climate is not capital but a favorable condition of production, 86
• Clothing, its relation to subsistence, 384
• Cobden, Richard: the commutation of the feudal burdens upon land in England, 500
• Coinage, 168,179-80; cost of, t. i.e., seigniorage. Chap. 4, Part III
• Coin basis of bank money, [See Reserve, Specie]
• Coin, debasement of ; seigniorage, Chapter 4, Part III
• Combination, in economics opposed to competition, 139
• Comfort, ideas of, developed in the progress of society, 19, 395-9
• Commerce, the old time theory that it could be beneficial to but one party, 3 [See also Exchange and International Trade]
• Commodities, distinguished from services, 247-9
• Communism, 633
• Community of goods, what would become of wealth ? 11
• Competition defined, 129 ; relation of competition to the doctrine of rent, 268-76 ; relation of competition to the doctrine of interest, 298; to the doctrine of wages, Chap. 6, Part IV, also 465-73 Edition: current; Page: [527]
• Comte, Aug.: denies to political economy the character of a science, 35-6
• Consumers and producers, possible misunderstandings between, Chap. 7, Part III
• Consumption of wealth: Prof. Leslie holds that the neglect of this department of inquiry is due to the assumption of a beneficent order of nature, 35 ; consumption as a department of political economy, 381-2, Part V, passim
• Consumptive w. productive cooperation, 432-8
• Continental currency, so-called, of the American revolution, 207, 209, 219
• Contributions to the treasury of the State, 572 ; (compulsory: see Revenue of the State and Taxation)
• Co-operation: an effort to get rid of the entrepreneur, 108; erroneous conceptions of many economists, 316-7, 426-8; anticipated benefits of, 429-31; practical difficulties, 432-6
• Corn rents, 188-90
• “Corn Laws” (English), 83
• Corners, so-called, as a tool of the speculating class, 140, 364
• Courcelle-Seneuil, J. G.: depreciation not a necessary result of inconvertibility, 213n ; the theory of bank money, 234
• Creasy, Sir Edward, the feudal burdens on land, 498
• Credit sales, the characteristic, 186; their great importance in modern exchange, 187; the multiple standard of deferred payments, 459-64
• Crises, [See Panics]
• Cultivation, descending to inferior soils, [See Diminishing Returns]
• Currency principle, the so-called vs. the banking principle, 224-6
• Custom, its influence in modifying law or competition, 19; is always, in theory, opposed to competition, 129; its effects on price, 145-6

• Darwin, Charles: the power of geometrical increase, 393
• Dear vs. Cheap Food, 404
• Debasement of the coin, Chap. 3, Part III
• Debtor class, their demand for paper money issues, 445
• Decency, ideas of, developed in the progress of society, 19; power to check population, 394, 400-1
• Deferred payments, standard for, [See Standard, etc.]
• Definitions, in economics, not less valuable because certain objects may fall across the lines of demarkation, 6 ; difficulty which political economy encounters from the use of terms taken from common speech, 42-3
• Degradation of the laboring class, through unequal competition, 339-47, 466
• Demand and supply, defined, 125 ; desire is not demand, 126; operation of demand and supply illustrated, 125-40; (Money), 170
• Demand, international, equation, of, 153
• Denominator of value, 182-8; how about paper money ? 210
• Departments, the four departments of political economy, 44; reasons for their retention, 111, 347-9
• Deposits, fictitious, as a means of evading usury laws, 422 [See Safe Deposit]
• Deposit and discount, the great banking function, 526
• Depreciation, not a necessary result of debasement of coin, 197, 201; or of inconvertibility of paper, 213
• DeQuincey, Thomas: “Profits are the leavings of wages,” 327
• Desire is not demand, 126
• Desires, economic, tend to multiply as fast as gratuity replaces value in the case of articles which were the subject of former desires, 134, 63, 66-7, 92-3, Chap. 2 and 3, Part V
• Destruction of wealth, keeping down accumulations of capital, 110; popular notion that it stimulates production, 411-3
• Deterioration, liability to, as affecting price, 143 Edition: current; Page: [528]
• Devon, Earl: Irish Commission of, 1844, 394
• Diet, diversified, taste for, as antagonizing the procreative force, 898
• Difference, economic, what constitutes an economic difference ? 183
• Diffusion of taxes, 606-10
• Diminishing returns in agriculture, 51-4, 257
• Discipline creates no f orce.but may prevent waste, 348-51
• Discount and deposit, the great banking function, 526
• Discredit of money, its influence on the money demand, 200-1
• Distribution, as a department in political economy, Chap. 1, Part IV
• Division of Labor [See, also, Territorial Div. of Lab.], how it originates, 80 ; how it becomes a source of productive power, 81-3; gives rise to exchange, 112; evil possibilities attendant upon, Chap. 7, Part III
• Domains, as a source of revenue to the State, 576
• Douglass, William: the debtor class in early Massachusetts, 445
• Dress, as a form of consumption, 884
• Dynamics of wealth, found in consumption, 382

• Economics, [See Political Economy]
• Efficiency of the individual laborer, dependent on several causes, 65-78; varying efficiency of labor in different countries, 79 ; relation to wages, 456
• Emigration of capital, 299; of labor, 298-9
• Employer, the, [See Entrepreneur]
• Employment, regularity of, as an element of wages, 320
• Employed laborer, [See Laborer]
• England, insufficient food of agricultural laborers, 68; contrasted with India and Kussia as to the efficiency of its laboring population, 79; its industrial organization, 252; rents kept down by public sentiment, 269; its usury laws, 419; poor laws, 447-51; relation of wages to capital, 454 ; factory legislation, 467 ; its strikes, 467 ; progressivity in taxation, 601
• English School of Political Economy, so called, 17 ; erroneous views of English economists regarding the relation of wages to the product of industry, 326
• Entrepreneur class, the, their function, 85, 231, 245 ; as claimants to a share of the product of industry, 252, 330-2, Chap. 4, Part IV, also 474-82; the State as entrepreneur, 577
• Equation of international demand, 153
• Equity, political, its relation to political economy, 86
• Equities of contribution to the State, 583 [See also Taxation]
• Escheat, as a source of State revenue, 578
• Esprit de corps in industry, 84
• Ethics, relation to economics. 19, 36
• Exemptions from income, prior to taxation, 600-1
• Exchange, the old-time theory that it could be beneficial to but one party, 3; arises from the division of labor, 112, 286-7; ite reaction upon production. Chap. 7, Part III
• Exchange, the science of, this term offered as a substitute for Political Economy, 5-6
• Exchange, as a department of Political Economy, Part III ; how distinguished from distribution, 247-9
• Exchange, (Trade) International, Chap. 2, Part III
• Exchanges, Foreign, 541-58 ; relation to Bi-metallism, 563-5
• Exhaustion of the soil, 56-8
• Expenditure, as the basis of taxation, 592-4

• Factory laws, 471-3
• Faculty, as the basis of taxation, 595-7
• Family, the formation of, 386-7; solidaritv of, 390
• Fawcett, ft.: insufficient food of West of England laborers, 68. Edition: current; Page: [529] Cottier rents in Ireland, 273n ; differing wages in different localities, 273 ; the doctrine of the Wage Fund, 453n.
• Fecundity, made by M. Comte a test of a true science: does political economy bear this test ? 25
• Fees, as a means of revenue, 581:
• Feudal burdens on land, how commuted ? 498
• Fiat money, [See Inconvertible Paper Money]
• Final utility, 131,139
• Financiering, as a banking function, 322
• Fines and forfeitures, as a source of revenue to the State, 574
• Fittest, survival of, [See Survival]
• Fixed incomes, relation to the multiple standard, 464
• Food, [See, also, Subsistence]: its relation to labor power, 66 ; the primary form of capital, 87, 97,
• Force, productive, can not be lost out of nature, but may be lost out of man's reach, 56
• Forced circulation, generally a characteristic of government paper money, 207
• Forced sales, sometimes caused.by usury laws, 423
• Form-value, 46
• France : underfed factory hands, 68; repression of population, 401; progressivity in taxation, 600-2
• Francis, John : the city banks of London, 526
• Free, distinguished from gratuitous coinage, 195
• Free trade and exhaustion of the soil, 56 ; and the territorial division of labor, 57, 613-23 [See Protection OT. Freedom of Production, Part VI.]
• French economists apt to confuse ethical and economic reasoning, 37 : right in their views of the relation of wages to the product of industry, 326n
• Fullarton, J.: the theory of bank money, 224

• Gallatin, Albert: bank money becomes a sort of legal tender, 228n
• Gangs, agricultural, so-called, la England (children), 842
• Garnier, Joseph : progressivity in taxation, 6(10
• Genoa, bank of (St. George), 528
• Geometrical m. arithmetical progression, 392-4
• George, Henry, his “Progress and Poverty,” 506-21
• Germany, its railroad system, 577
• German school of political economy, so-called, 17
• Gibbon, E., likens money to letters, 164
• Gilbert's Act (English Poor Laws), 448-9
• Girdlestone, Canon : the diet of the laborers of Devonshire, 68
• Girardin, Emile de: voluntary contributions, 572n
• Gladstone, Wm. E. : his Budget Speeches, 586n
• Glut, [See Overproduction]
• Gluttony: regarded by Mr. Mill as a perpetually antagonizing principle to the desire of wealth, 21
• Gold [See Precious Metals; in iu relations to Silver, see also Bimetallism]
• Gouge, Wm. M. : the 'heory of bank money, 225
• Government, as producer and consumer, 357-60,414-6; its revenue, and the means of obtaining it, 572-84
• Government administration of pro. ductive property, 505, 576-7
• Grain, as money, 189-90
• Gratuity, relation to value, 12-3
• Gratuitous, distinguished from free, coinage, 195
• Greed, often antagonistic to the enlightened pursuit of wealth, 23, 378
• Greenbacks, so-called, of the United States, 209, 311, 444
• Gresham's Law, 181
• Ground rents, 288

• Hallam, H. : the penal code of Ireland, 271
• Hamilton, Alex. : the danger of paper money issues, 444n
• Hard times, so-called, their cause, 23542
• Harmonies, the economic, 344-6 Edition: current; Page: [530]
• Harrison, Fred'k; the small success of productive co-operation, 484,
• Harvesting, subject to the condition of diminishing returns, 53n
• Hastings, George W. : necessity of the workhouse test, 453
• Hazardous risks of capital, how compensated, 293-7
• Health is not wealth, though perhaps better than wealth, 10
• Heara, Win. B.: substitutes the term Plntalogy for Political Economy, 48; explains the former idleness of the Scottish people, 78
• Hebrews, ancient, usury forbidden, 417-8
• Higgling in the market, 149-50
• Hoffmann, J. G. : the literature of taxation, 685
• Holland, underfed laborers, 68
• Hopefulness in labor, as an element of productive power, 76-8
• Hunter state, the, 60
• Huskisson, Wm. : repeal of the laws against combinations, 467

• Immobility of capital and labor [See Mobility, etc.]
• Income as the base of taxation, [See Revenue]
• Inconvertible Paper Money, Chap. 5, Part III
• Increment, the unearned, of land, 257, 265, 493, et seq.
• India—the efficiency of its laboring population contrasted with that of England, 79; increase of population and condition of the people, 394 ; possible relation of taxation to production, 415
• Indifference of the rate of profits, a doctrine, 873-80
• Indolence, regarded by Mr. Mill as a perpetually antagonizing principle to the desire of wealth, 21
• Inflation (money), 198-204, 218, 219-20, 441-5 ; tendency to inflation inhering in political money, 439-45
• Inglis, H. : the city houses of Ireland in 1834, 70
• Injuries, economic, tend to remain, 346-7
• Injustice, only becomes a subject for the consideration of the economist when it issues as an economic force influencing the actions of men with respect to wealth, 86
• Institutions, how far shall they be considered by the economist ? 19
• Insurance of the principal, an important element of interest, 383
• Intellectual elements of supply and demand, 147
• Intelligence, not wealth, 9-10; as a source of productive power, 72-4
• Interest, as a share in the product of industry, 252, 332-6, 868-9; Chap. 8, Part IV [See Usury Laws}
• International Trade: international values, 151-8
• International distribution-of money, 176
• International division of labor [See Territorial, etc.]
• Invention facilitated by the division of labor, 82
• Ireland, the economic mischiefs of its land tenure almost irrespective of considerations of political equity, 36; inadequate shelter of the laboring population, 70; the “starving season,” 94; rents: relation of the landlord and tenant class, 2714; increase of population and state of the peasantry prior to the famine, 394
• Irish, their traditional idleness at home due to unfair laws, 78

• Jarvis, Edward : varying viability of the several nations of Europe, 320
• Jevons, W. S.: illustration of the descending scale of utility, 131; but one price for a commodity, 132-3; substitution of one commodity for another, in use, as affecting price, 142n; the British coin, 180; the denominator of value, 182; advocates a tabular or multiple standard, 191, 463; repudiates the doctrine of the wages fund, 326; the laissez faire doctrine, 880; the law of wages, 326; the dynamics of wealth, 882n; his Money and the Edition: current; Page: [531] Mechanism of Exchange, 524n; government interference with labor, 349, 332,471; fluctuations in the value of gold, 1789-1874, 440; bi-metallism, 568
• Johnson, 8. W. Prof.: on the renewal of the soil by “weathering” and nitrification, 59
• Johnston, J. F. W. Prof.: the constituents of the soil taken away in the crop, 56

• Knies, Prof.: his classification of values, as time-value, place-value and form-value, 46
• Knights of Labor, Part VI
• Kropotkin, Prince : on Anarchy, 626

• Labor: employed in agriculture subject to the condition of diminishing returns, 49-52 ; not so when employed in mechanical industries, 53-4; as one of the three primary agents of production, Chap. 3, Part II; varying efficiency of labor, 65-79; division of, 80-4; partial immobility of labor, 104; relation of labor to value, 119-24
• Laborer, the, as a claimant to a share of the product of industry, 252; Chaps. 5 and 6, Part TV; the residual claimant upon the product of industry, 322-86
• Laiaaes fain, the doctrine, 344-52, 380
• Land, its tenure, how far of consequence to the economist ? 19, 36; one of the three primary agents of production, 47-8; its capability of increased production, 49-54; influence of a popular tenure upon population, 401 [See building lote, pastures, water privileges, wood lots, mines; see also, Nationalization of the Land; see, also, Chapter on Rent, Part IV, and Attacks on the Doctrine of Rent, Part VI]
• Landlord, the, as a claimant to a share in the product of industry, 252, Chap. 2, Part IV, 328-34, 868-70
• Latin-Union, so-called, its monetary league, 195, 571
• Laws, how far shall they be considered by the economist, 19
• Leave-them-as-you-find-them rule of taxation, 590
• Leslie, T. E. Cliffe: influence of natural theology on political economy, 35; influence of a popular tenure of the soil upon population, in France, 401
• Liverpool, Lord: ancient bankers, 522
• Loans, [See Interest and Usury Lawsf
• Locke, John, on usury, 424
• Lotteries, as a means of revenue to the State, 579
• Luxury, ideas of, developed in the progress of society, 19; its appearance in human societies, 398-9

• Machinery : great differences among different peoples in the capacity of using it, 734; introduction of machinery as tending to set producers and consumers apart, 231-8
• Malthus, T. R. : the law of population, 891, 395, 402
• Man, the economic, 21
• Manchester, or Laieeez Faire, school of economists, 348
• Mansfield, Lord: diffusion of taxes, 606
• Manufactures: not subject to the condition of diminishing returns, 53-4 ; plea for building up local manufactures to prevent waste of soil, 56-9 ; relation to agriculture, in new countries, 61823
• Market, what is it ? 134
• Market price, its relation to normal price, 139
• Marriage : early marriages in Ireland, 394 ; discouraged by economic desires, 897 Marshall, Alfred and Mary Paley, Economics of Industry: honesty, a part of the “personal wealth” of a country, 9 ; possible savings of Asia and England contrasted, 93n ; influence of “plant” on the prices of commodities, 144n ; the course of speculation and the cause of panics, 232; effect upon accumulation of a low rate of interest, 288n; origin of business profits, 311 Edition: current; Page: [532]
• Martineau, Harriet: effects of a premium on illegitimacy, 450
• Massachusetts paper money, 443
• Mastership in production, 80,105-9, 331, 339 [See chapter on Profits in Part IV ; also article Cooperation in Part VI]
• Materials, the third form of capital, 96-7
• May, Sir E: the English Crown lands, 576n
• McCulloch, J. R.: varying fertility of soils, 254; relation of wages to profits, 327n; wages and cheap food, 404; governmental expenditure, 414; effects of an increase of the money supply, 445n; proposes the purely economic theory of taxation, 583, 605; his treatise on taxation and the funding system, 586
• Measure of value, so-called, [See Denominator of Value]
• Mechanical industry, not subject to the condition of diminishing returns, 534
• Medium of exchange, money serves as the, 163; how about paper money 1 309
• Metals as money, 166
• Metals, the precious, as money, 167; the irregularity of their production, 188-9, 440, [See also Bi-metallism and Multiple Standard]
• Middlemen in Ireland, 373
• Mill, John Stuart: correctness of the popular conception of wealth, 6; fails to observe distinction between wealth and property, 15 ; his statement of the premises of the Ricardian school, 21 ; he replies to Comte's criticism founded on the consensus of the social phenomena, 39 ; recognizes exchange as a department of political economy, llln; the friction of retail trade, 149 ; the equation of international demand, 153 ; the unearned increment of land, 284, 497-500 ; doctrine of the wage fund, 453
• Mines, rental of, 281
• Mints, of various countries, 180n
• Mobility of capital and labor, how far secured, 104, 339-45
• Money, Chaps. 8, 4, 5 and 6, Part III; interest paid, in general, not for the use of money, but of other forms of capital, 286 [See, also, Bank Money, Inconvertible Paper Money, Political Money, Bi-metalUsm]
• Monometallism [See Bi-metallism]
• Monopolies, as a source of revenue to the State, 578
• Monopoly value, 121
• Moral considerations, how far do they concern the economist f 19, 36
• Moral elements of supply and demand, 147
• Mosaical code, prohibits usury, 417
• Mortgages, are they wealth, or only property f 15
• Motives, economic, shall all be taken by the economist, or only a few leading motives ? 16-22
• Multiple standard, for deferred payments, 181, 459-64

• Napoleon, avoided the use of paper moneys 314
• “National” Political Economy, so-called, 32; why should industrial correspond to political entities ? 615-6
• Nationalization of the Land, 498505
• Natural Theology: its relation to political economy, 35
• Nature, the assumption of a beneficent constitution of, as influencing the pursuit of political economy, 35
• Nature, human: how far shall the economist seek to comprehend it, and include it in the premises of his reasoning ? 16-23
• Neison, Dr.: varying mortality of the several trades and professions, 330
• New countries, so-called, why wages are high in them, 61823
• Nicholls, Sir George: effects of Gilbert's act, 449
• Nitrification, so-called, as a means of renewing the soil subject to culture, 59
• Nominal e». real wages, 831
• Nominal vs. real cost of labor, 331 Edition: current; Page: [533]
• Normal price: its relation to market price, 187-8
• Norman, Geo. Warde: the theory of bank money, 325
• North, Dudley: free coinage, 195

• Occupation, change of, aa a means of relieving the labor market, 842
• Offices, sale of, 575
• One price only for a commodity, 132
• Opinion, public: influence on wages, 353-4
• Organization of industry, 84-5; as affecting price, 144
• Ortes, G.: intimates the laws of population, 395
• Over-production, what the term means, 408-10
• Overstone, Lord : the theory of bank money, 225; the course of speculation and over trading, 282; fictitious deposits, 432

• Panics, the causes of, 232-8, 239 ; in the United States, 243
• Paper money [See Bank Money and Inconvertible Paper Money]
• Par of exchange : what it is, 543 ; between gold-using and silverusing countries, 561
• Parieu, E. de : the literature of taxation, 585; the iiffusion of taxes, 609
• Pastures: relation to arable lands, 277
• Pastoral state, the, 61
• Pauperism, 446-52
• Perry, A. L. Prof.: doctrine of the indifference of the rate of profits, 373, 379; doctrine of the wage fund, 453
• Petty, Sir Wm.: his theory of taxation, 592
• Physiocrats, the French, treated political economy as an art, 29 ; deemed agriculture the sole source of wealth, 48 ; their theory of taxation, 588
• Physiology of man, how far of consequence to the economist ? 16-20
• Picking, or selecting, the com, 179
• Place-value, 46
• Plant, so-called, its existence as affecting price, 144
• Plutology, the term offered by Prof. Hearn as a substitute for political economy, 48
• Political economy, its character and logical method, Part I
• Political money, 439-45 ; [See also, Inconvertible Paper Money]
• Politics, and economics, 349
• Polo, Marco: the Chinese paper money, 206
• Poor laws, [See Pauperism]
• Pope, the, as a capitalist, 572
• Population increases as tribes pass from the hunter to the pastoral state, and again as they initiate agriculture, 60-3; relation of subsistence to population, Chap. 1-3, Part V ; effect of the increase of population in driving cultivation down to inferior soils, 51-4, 99, 257, 271-4 ; [See, also, The Nationalization of the Land, Part VI
• Potato philosophy of wages, 404
• Practical men, so-called or selfcalled, their readiness to assert their opinions on economic questions, 41
• Prediction, capability of, made by M. Comte a test of a true science, 25
• Prejudices, popular, their influence on political economy, 40
• Premises of political economy, 1823
• Price, relation to value, 115 ; but one price for a commodity, 132 ; normal and market price, 137-9 ; price the agent in the international distribution of money, 176; relation of rent to the price of land, 261 ; to the price of agricultural produce, 262 ; relation of profits to the price of manufactured produce, 311
• Price-current, need of, 182-8 ; how about paper money ? 210
• Price, Bonamy, objects to dropping the word wealth, 5 ; depreciation not a necessary result of inconvertibility, 213
• Procreative force, the, its capabilities, 891-3 ; its persistence, 394; antagonized by economic desires, 397401
• Production of wealth, 44; Part II; modes of production, 46; Edition: current; Page: [534] agents of production, 47 ; prodaetive capability of a communrtr, Chap. 4, Part II; reaction of exchange upon production, Chap. 7, Part III; reaction of distribution upon production, Chap. 8, Part IV
• Producers and consumers, their relations and possible misunderstandings, Chap. 7, Part III
• Productive co-operation, [See Cooperation]
• Production, cost of, how related to value, 119-124, 151-8
• Profits, of the entrepreneur, his motive in production, 281,239 ; profits, a share of the product of industry, 252, Chap. 4, Part IV; profits and rent are species of the same genus, 807-10 ; profits do not form a part of the price of manufactured products, 311; are not obtained by deduction from wages, 312; doctrine of the indifference of the rate of profits, 373,379 ; in co-operation the laborers aim to secure the entrepreneur's profits, 376-7
• Progressive taxation, 600-2
• Property, relation to wealth, 15
• Protection m. freedom of production, 611-23
• Protectionist writers, hold that each country has a political economy of its own, 32; make much of the exhaustion of the soil, 56-8 [See, also, Protection us. Freedom of Production]
• Purdy, Fred.: variations in wages throughout England, 356n
• Purveyance, as a means of revenue, 880

• Quasi taxes, 578-81
• Quesnay, M., his school of economists, 29, 48

• Raguet, Condy: bank money in the United States, 223, 225
• Railways of Germany, 577
• Real M. nominal wages, 319-20
• Real vs. nominal cost of labor, 321
• Realized wealth, (taxation) [See Wealth]
• Redeemability of paper money, what it implies, Chaps. 5 and 6, Part in
• Registration of land, the requirement adds virtually to the facility of transfers, 351
• Rent, as a share in the distribution of the product of industry, 252, Chap. 2, Part IV ; its relation to the price of land, 261 ; its relation to the price of agricultural produce, 262 ; tends to rise with growth of population, 257, 289, 497 ; rent and profits are species of the same genus, 307-10 ; does rent belong in equity to the community ? 284 [See also Nationalization of the Land, and Attacks upon the Doctrine of Rent, Part VI]
• Repercussion of taxes, [See Diffusion, etc.]
• Reserve, specie, of bank money, 223
• Restriction, so-called, the English, 207,444
• Retail trade, the friction of, 148-9
• Revenue (individual), as the basis of taxation, 589, 591, 598
• Revenue of the State, 572-84
• Ricardp, David: his school of political economy, 22; treats political economy as a science, not as an art, 30 ; his views on seigniorage, 197-200; depreciation not a necessary result of inconvertibility, 213u ; his relation to the doctrine of rent, 265; [See also, Attacks on the Doctrine of rent, Part VI] relation of wages and profits, 327 ; the incidence of a land tax, or tax on rents, 499
• Rogers, J. E. T. : rents in England, 269; wages and cheap food, 427u; co-operation, 427n; the insurrection of the peasantry under Richard II, 469; the diffusion of taxes, 607
• Roscher, Win. : definition of capital, 87n; proportion of produce consumed upon the farm, 112n ; advocates tabular or multiple standard, 191; the variety of man's economic wants, 895n; his reference to H. C. Carey, 487
• Russia, the efficiency of its laboring population contrasted with that of the English, 76; paper money, 443

Edition: current; Page: [535]

• Safe deposit, as a banking function, 526
• Sanitary conditions, as affecting the efficiency of labor, 69, 70
• Saving [See Abstinence]
• Say, J. B.: progressive taxation, 600 ; diffusion of taxes, 607-8
• Scarcity value, 121
• Schools of political economy, 1623
• Science, does political economy attain this dignity ? 25; distinction between political economy as a science and as an art, 27-8
• Scotch, once an idle people, 78
• Scotland, inadequate shelter of the laboring population, 70
• Seasons, their influence on regularity of employment, 820
• Seigniorage, Chap. 4, Part III
• Selecting, or picking;, the coin, 179
• Senior, N.W.: relation of value to wealth, 7 ; relation of gratuity to value, 12 ; relation of rights or credits to wealth, 15 ; distinction between political economy as a science and as an art, 29 ; labor not essential to value, 120 ; money is “abstract wealth,” 184; opportunities for extra earnings, 819 ; the consumption of wealth, 381 ; relation of famine to war, 395n ; the order of succession of human desires, 396 ; what is a luxury ? 399; his statement [of the law of population, 395
• Sentiment, personal, excluded from definition of value, 7; sentiment and political economy, 38; sentiment as modifying the influence of competition, 129
• Services, distinguished from commodities, 247 ; services of the possessors of health, skill, strength and intelligence may be the subjects of exchange, though those qualities can not be, 9-10
• Settlement, (parochial), English law of, 451
• Shelter, its relation to subsistence, 384
• Shocks, economic, their propagation through the industrial and commercial body, 287-43
• Silver, [See Precious Metals; in itt relation to Gold, see, also, Bimetallism]
• I Sismondi, M. : rents in Tuscany, 270 ; influence of a popular tenure of the soil upon population, 401
• Skill is not wealth, though it may become the means of acquiring wealth, 9-10
• Slave labor, the cause of its inefficiency, 77
• Smith, Adam : his Wealth of Nations, effect upon the relations of States, 3; treated political economy mainly as an art, 80; his economic writings influenced by his views as a professor of natural theology, 35; bank money, 223 ; the immobility of labor, 340; masters always in a combination not to raise wages, 468n; the bank of Amsterdam, 523; voluntary contributions to the State, 572 ; inefficiency of government administration of productive property, 576; hia maxims regarding taxation, 586-9
• Social dividend theory of taxation, 588
• Socialism, 624-33
• Sociology: its relation to political economy, 89
• Soil, the, a fund for the endowment of the human race, 55
• Soldiers, their services economic in England, non-economic in Germany, 8
• Solidarity of the family, as related to natural selection, 390
• Specie reserve of bank money, [See Reserve]
• Speculation, the course of, 232-3 ; the speculating class and their gains, 361-4
• Steuart, Sir James, treated political economy as an art, 30
• Standard of deferred payments, usually called standard of value, 184-90 ; how about paper money ? 218-9; how about bi-metallio money ? 440-5, [See also Multiple Standard]
• Statistician, the economic, to be distinguished from the economist, 34 Edition: current; Page: [536]
• Stock, influence of a stock of a commodity on its price, 13943
• Storage, necessity of, as affecting price, 148
• Strikes, 852, 468-70 ; co-operation would abolish strikes, 430
• Structure in industry, 103-9
• Subsistence: 86-7, 94, 97, 453-5 ; in its relation to population, Chapters 1-3, Part V
• Substitution of one commodity for another in use, as affecting price, 142
• Successions, limitations upon and taxation of, 573
• Sumner, W. G. Prof. : the doctrine of protection, 614, 616
• Supply and demand, 125-140 ; (Money) 174
• Supply is not equivalent to stock, 140
• Survival of the. fittest, how far carried out in the human family, 390
• Sympathy with labor, [See Opinion, Public]

• Tabular standard, for deferred payments, [See Multiple Standard]
• Taxation, its place in political economy, 357-60; Bentham'sand McCulloch's view of taxation as stimulating production, 414-6; how taxation may be considered, 582-4; the principles of, 585-810 [See, also, Quasi Taxes] Territorial division of labor, 83; the protectionist argument for limiting it, 611-6
• Theology, natural: the proper attitude of the economist towards it, 35
• Thompson, Prof. R. E.: exhaustion of the soil, 56
• Thornton, Henry: the country banks of England, 525
• Thunen, J. H. von: the principle of diminishing returns applies even to the harvesting of crops, 53n
• Titles, sale of, 575
• Time-value, 46
• Tocqueville, A. de: sale of offices in France, 575
• Tooke, Thomas: depreciation not a necessary result of inconvertibility of paper money, 213n; the theory of bank money, 224
• Tools, the second form of capital, 95; their importance in production, 98
• Torrens, Robert: the theory of bank money, 225
• Trades-Unions, 465-6 [See, also, Knights of Labor, Part VI]
• Transportation, in its relation to rent, 259-60; in its relation to prices, 176
• Tributes from colonies, dependencies and conquered nations, 574
• Truck, 473
• Turgot, A. R. G.: the only physiocrat who treated political economy as a science ; his strictly scientific method, 29
• Twiss, Travers : the potato in Ireland, 404u

• Under-production, what it results from, 407-10
• Underconsumption, so-called, 409
• Unearned increment of land [See, Increment, etc.]
• United States: the laboring population well fed and well sheltered, 68-70; capable of using delicate and intricate machinery, 75; its money, 223-5 [See; also, Greenbacks]; panics, 243; rents, 268; increase of population, 392; its usury laws, 419; its banking agencies, 528-9, [see, also, the National Banking System, Part VI ] ; considered with reference to the question of protection, 616-22
• Usury and usury laws, 368-9, 417-25
• Utility, how related to value, 118; useful, in economics, does not mean beneficial, 117 [See Final Utility]

• Value: related to wealth as attribute to substance, 7; denned, 8-9, 114; relation to price, 115; to utility, 116-7; is it a momentary phenomenon ? 118; how related to labor, 119-24; value is governed by the relation of demand and supply, 125; the value of money, 169, 197-203, 212
• Voluntary contributions [See Contributions]

Edition: current; Page: [537]

• Wage fund theory. 337 [See, also, PlrtVI]
• Wages: as a share of the product of industry, 253; are not diminished by the sums received by the landlord class as rent, 263, 323; or by the sums received by the employing class as profits, 312, 325; the law of wages, Chaps. 5 and 6, Part IV; why wages are high in new countries, 618-23
• Walker, Amasa; the theory of bank money, 225; co-operation, 427n
• Warren, W. F.: voluntary contributions to the State, 572
• Waste of materials (avoidable) an important element in production, 72, 330-3
• Waste of soil, 256; some degree inevitable, 58; its relation to rent, 278
• Water privileges, rent of, 278
• Wealth: the subject matter of political economy, 1-8; definition, 4; relation of wealth to value, 7; [See, also, throughout, Capital] ; as the basis of taxation, 604
• Weathering, so-called, as a means of renewing the soil subject to culture, 59
• Welfare, human, not the subject matter of political economy, 10
• Wells, D. A. : exemption in taxation is confiscation, 599
• Whately, Eichard: popular prejudices aroused by political economy, 40; substitutes the term catallactics for political economy, 43; profits a species of the same genus as rent, 306
• Whewell, William : his definition of science, 25
• Wife, the,relation to theBubsistencet of the family, 386
• William III, of England, dissipates, the estates of the crown, 576
• Wilson, Dr.: on usury, 419
• Wilson, James: depreciation not a necessary result of inconvertibility of paper money, 218n; the theory of bank money, 224
• Wolowski, Louis: no paper money in Poland, 206
• Wood lots, rent of, 282
• Workhouse test of pauperism, 447-50

• Young, Arthur: “the magic of property,” 77; expenditure at. the basis of taxation, 592

∗

“On the Character and Logical Method of Political Economy,” first published in 1857; reprinted, revised and enlarged in 1875, just before the lamented author's death.

∗

In his great work, subsequently published, Mr. Mill did not confine himself to the method here described; but professedly dealt with Political Economy in many of its “Applications to Social Philosophy.”

∗

See paragraph 48.

∗

A distinguished English Economist, quoting this remark, in the Contemporary Review, asks with some asperity, “What, then, should the political economist preach?” I answer, nothing. His business is to teach and not to preach. He acquits himself of his duty when he shows the relations of cause and effect within the field of industry, leaving it to statesmen, moralists and men of affairs to act for themselves, or to preach to others, with reference to what the political economist teaches.

∗

Labor will form the subject of Chapter II of the present book; Capital, the subject of Chapter III. We shall necessarily speak of labor and of capital before reaching those topics, in their due order, but what we shall thus say will be confined within limits which will allow no misunderstanding on the part of the reader.

†

That there is a surplus in agriculture, over the cost of production, is sufficiently proved by the payment of rent to the owner of land. (See Chapter on Rent.)

∗

It has been shown that this principle of increasing difficulty, or of diminishing returns, applies even to the harvesting of crops. Roscher quotes from Von Thünen a table showing the experience of agricultural laborers in attempting to glean all the potatoes of a field. Supposing 100 scheffels to represent the quantity grown on a given area, a single laborer could gather 30 in a day, while the average of the first four laborers would be 20. But the fifth man would only gather 6.6; the sixth man only 4.4; the seventh man only 3, and so on.

∗

Prof. S. W. Johnson, of Yale College, Director of the Connecticut Agricultural Experiment Station.

Prof. Johnson further remarks: “The crops that astonish us by their heavy acreage-yield are not the crops that feed the nations. The wheat fields and corn fields of ‘the West’ yield but 15 bushels of wheat and but 40 to 50 bushels of corn. The hay, the pasturage, which make up the grand total of our forage, are obtained at an average rate of one ton, per acre. The 40 bushels of wheat, 90 of corn, 2 ½ tons of hay, that good farmers, in long cultivated regions, gather, per acre, from small areas, are exceptional. For these exceptional natural fertility, or natural manuring, or else exceptional artificial fertilization are required; but for the agricultural production of the world “im grossen und ganzen“ small crops per acre, fed mostly by natural disintegration of the soil and natural nitrification, as by natural rainfall and natural supplies of carbonic acid and solar energy, are the rule.”

∗

A remarkable illustration of the strong natural aptitude of the American for the use of machinery, has come to my notice during the present year, 1887. A boot and shoe manufacturer, employing eleven hundred hands, had occasion, during a great and long-protracted strike, to replace considerably more than half of the old operatives by new hands. This branch of industry is well known for the vast variety of highly intricate and delicate machinery which it uses. Yet at the end of five months, during which this substitution had been carried through to completion, the machines in this factory were found, on careful inspection, to be in absolutely as good condition, as at the beginning of the strike.

Had an English manufacturer carried through such a replacement of old by new hands, his machinery at the end of that time would have been worth just what it would have sold for, by the pound, as old iron.

∗

Imposing high duties on foreign grain imported into England. These laws were repealed by Parliament in 1846, under the leadership of Sir Robert Peel. The study of the history of the Repeal movement affords an admirable economic exercise.

∗

The reason for this exception will appear when we come to treat of the rent and price of land.

∗

“All labor expended for a distant end falls under the head of capital.”—roscher.

∗

Prof. Marshall remarks that the whole continent of Asia, with its thousand millions of inhabitants, has less power of saving than England has.

∗

Excluding land and natural agents, considered as unimproved.

∗

The important mistake committed by Mr. Henry George, through overlooking this point, will be indicated in Par. 515–7.

∗

I speak here of industry as a whole, and especially of the largest branches, supplying general markets. When we come to speak of Industrial Co-operation, in Part VI, I shall note certain possible exceptions, in the case of smaller branches of industry supplying narrower markets.

∗

To this Mr. Mill forms a conspicuous exception. He makes exchange, as distinguished from production and from distribution, the subject of one of the books of his Political Economy.

∗

In England, says Prof. Roscher, it is 38.8 per cent. of the supply that comes to the market; in Belgium, 40; in Saxony, at least 50 per cent. In Germany, the farmers consume on an average, two-thirds themselves.

The ratio between the portion of the crop marketed and the portion consumed at home, is, of course, not the same for any two countries, or for the same country, at any two dates. It is continually changing with changes in the habits of living among the people, with changes in the facilities of transportation, etc.

∗

The significance of this qualification will be seen when we come to speak of International Exchanges, in the following chapter.

∗

We have before stated that the supply of any article is not necessarily confined to the stock in markets or warehouses, but embraces all that producers stand ready to bring forward at the price named, within the period over which the demand extends. In the present illustration, we are assuming the producers to be getting out the seaweed from day to day.

∗

When we reach the department of Distribution, Part IV, we shall give the generic name of Rent to this excess of price over cost of production.

∗

This is called a “corner.”

∗

“We must, in fact, treat beef and mutton as one commodity of two different strengths, just as gold at eighteen carats and twenty carats is hardly considered as two, but as one commodity, of which twenty parts of one are equivalent to eighteen of the other.“—Jevons—”The Equivalence of Commodities.”

∗

“Prices are liable to great fluctuations in trades in which there is a great use of fixed capital.”—Marshall—“Economics of Industry.”

∗

At first, coins were impressed on one side, as is now the “gall,” the only native coin of Cochin China. This allowed the metal to be shaved from the smooth side of the coin. Afterwards characters were stamped on both sides, but the area of the coin was not fully defined, allowing the edges to be clipped, as is largely the case with the Tomans of Persia. Later improvements surrounded the coin with a well-defined rim, while the edges were milled to still further protect the integrity of the piece.

∗

I have already quoted (par. 120) the remark of Prof. Senior that “any other cause limiting supply is just as efficient a cause of value in an article, as the necessity of labor to its production.”

∗

This function of banks will be spoken of, more at length, under that title in Part VI.

∗

Three gold coins, the Russian Imperials, the French Napoleons, and the American Eagles, are bought by the Bank of England without remelting. The United States Mint turns out the finest gold coin of the world; the Russian Mint the next best. The mint of France was, fifty years ago, charged with grave errors, all on one side, viz., in favor of the minters; but that mint is now of high authority. The mint of Great Britain has until recently been badly managed and has done poor work, in comparison with the others named, not out of any dishonest intention, or lack of mechanical skill, but from adherence to old fashions and antiquated machinery. Mr. Ernest Seyd and Prof. Jevons concurred some years ago in a very unfavorable criticism of the establishment on Tower Hill. More recently there has been improvement.

†

Prof. Jevons estimated the proportion of “light” sovereigns in England, that is, of sovereigns reduced below the legal standard for circulation, to be 30 per cent., the proportion in some agricultural districts rising to 44 per cent.

∗

From Sir Thomas Gresham, founder of the Royal Exchange of London. Died 1579.

†

Mr. Ricardo clearly expressed this necessary qualification of Gresham's Theorem, but, in doing so, has been followed by few writers. It is, he says, “a mistaken theory to suppose that guineas of 5 dwt. 8 grains, can not circulate with guineas of 5 dwt., or less. As they might be in such limited quantities that both the one and the other might actually pass in currency for a value equal to 5 dwt. 10 grains, there would be no temptation to withdraw either from circulation; there would be a real profit in retaining them.”

∗

Hence we see the error of Prof. Bowen's statement: “We can do without money as a medium of exchange, and can even barter commodities for other commodities without the use of any medium. But we can not do without money as a common standard or measure of value.” Were we to do without money in the former capacity, we should perforce have to do without it in the latter, inasmuch as it is only by being actually used as a medium of exchange, that the power of money to purchase each commodity by turns became known.

∗

Prof. Senior calls money “Abstract Wealth.”

∗

The distinction between gratuitous coinage and free coinage, is not sufficiently observed. Where no seigniorage charge is made, but the coin contains the full amount of bullion which corresponds to its mint value, i. e., when the dollar contains one hundred cents' worth of metal, that is gratuitous coinage. Free coinage exists, where any owner of bullion has the right to have it coined on the same terms as the government, or as any other citizen, whether with or without a seigniorage charge. Thus free coinage exists in England in regard to gold. Any subject can bring gold, in any amount, to the mint and have it made into gold coin; but free coinage does not exist with respect to silver, that metal being coined only in such amounts as the Government, through the Bank, deems necessary for supplying the people of the Kingdom with “change.”

In the United States free coinage exists also in regard to gold; but the coinage of silver is restricted. By the law of 1878, the Secretary of the Treasury must coin two millions of silver dollars a month, and may coin four millions, but no more. The coinage of half and quarter dollars, and of smaller pieces of silver, is governed by the same principle as in England. During the continuance of the bi-metallic system (Part VI) in the states of the “Latin Union” (France, Italy, Belgium, and Switzerland), free coinage existed in regard to both metals. The coinage of silver is now restricted in those countries.

∗

M. Chevalier has proposed to apply the term Brassage to the charge for the actual cost of coinage.

∗

The idea that values are “measured” by money, has a great deal of tenacity. A somewhat more extended discussion of this question will be found in my work on Money, Chap. XIV.

∗

On a point so vital it may be well to add authority to reason, especially as current American literature misrepresents the real purport of economic opinion on this subject.

Mr. Thomas Tooke, the most eminent economic statistician of the world, explicitly and repeatedly states that depreciation is not a necessary consequence of inconvertibility.

Mr. James Wilson, founder of the London Economist, and a states man and financier of wide experience, declares that if the amount of inconvertible paper be properly regulated, “there is no reason whatever why such notes should suffer depreciation.”

M. Courcelle-Seneuil, a French writer on Finance, whose views are entitled to much consideration, expresses the opinion that if the emissions of paper money be moderate, they may have the same value as metallic money.

I have made use of three names of the first rank in the economics of finance. Let me now quote, at greater length, the most illustrious writer known to monetary science.

“The whole charge for paper money,” says Mr. Ricardo, “may be considered as seigniorage. Though it has no intrinsic value, yet by limiting its quantity, its value in exchange is as great as an equal denomination of coin, or of bullion in that coin. It is not necessary that paper money should be payable in specie to secure its value; it is only necessary that its quantity should be regulated according to the value of the metal which is declared to be the standard.”

∗

Hence the phrase the “the blood-stained Greenback.” Lest I should be misunderstood, let me say that it is my firm belief that the issue of inconvertible paper money is never a sound measure of finance, no matter what the stress of the national exigency may be. I believe it to be as surely a mistaken policy as the resort of an athlete to the brandy bottle. It means mischief always. If there is ever a time when a nation needs its full collected vigor, with a steady pulse, a calm outlook, a firm hand, a brain undisturbed by the fumes of this alcohol of commerce—paper money—it is when called to do battle for its life with superior force. It is to my mind the highest proof of the supreme intellectual greatness of Napoleon, that, during twenty years of continuous war, he never was driven to this desperate and delusive resort. I hold any man to be something less than a statesman, in the full sense of that word, who, under any stress of fiscal exigency, supports or submits to a measure for the issue of paper money not convertible, at the instant, on demand, without conditions, into coined money. The political arguments by which such measures are always supported, on the outbreak of war, seem to me the veriest trash, due half to ignorance, and half to cowardice.

∗

The relations of inconvertible paper money to foreign trade and international exchanges will be spoken of in paragraph 220.

∗

Mr. Condy Raguet thus describes the action of American banks during this period, when in a state of suspension:

“Banks, when they default in their payments, not only never ask the indulgence of their creditors, for any specified extension of time, but they do not even think themselves under obligation to pay interest to the creditors for the funds they forcibly detain from them; nay, they frequently, in the midst of their insolvency, declare dividends of the very profits which actually belong to their creditors.”

Of an earlier period Mr. Gallatin has written: “It was the catastrophe of the year 1814 which first disclosed not only the insecurity of the American banking system, as then existing, but also that, when a paper currency, driving away and superseding the use of gold and silver, has insinuated itself through every channel of circulation, and become the only medium of exchange, every individual finds himself, in fact, compelled to receive such currency, even when depreciated more than twenty per cent., in the same manner as if it had been a legal tender.”

†

“By convertibility of the paper,” says Mr. Tooke, “according to the ordinary signification of the term when applied to bank notes in this country (England), is meant that a holder of a promissory note—payable on demand—may require payment in coin of a certain weight and fineness, and in the event of refusal or demur, such payment is enforced by law against the issuer, to the utmost extent of his property. The issuer, whether a private or joint-stock banker, is considered to have failed. The circulation of his notes is at an end, and he is subject to the process usual in cases of insolvency.”—[“History of Prices.”] Compare this with the state of things disclosed by Mr. Raguet, in the footnote last preceding.

∗

The principal features of the act of 1844, as affecting the circulation, are as follows: 1st. The Bank of England is allowed to issue notes, in a constant sum of £15,000,000, without any specie basis. For all notes above this, it must have, pound for pound, a specie reserve, of which one-fifth may be silver. [This last in consideration of the commercial and political relations of England with India, which has silver money.]

2nd. The issue department and the banking department of the Bank are completely divorced, becoming as separate as the Customs and the Internal Revenue bureaus of our own government.

3rd. No London bank can issue notes, nor can any bank chartered since 1844; while the issues of the English banks then existing are limited to their ordinary outstanding circulation prior to that date.

∗

If the tract were held by one person, or by several persons acting in concert, a monopoly would be established, and a rent might be exacted. What would be the limit of that rent? Two bushels an acre, inasmuch as one would do better for himself to take up for cultivation a portion of the 22-bushel tract, paying no rent, than give more than two bushels for the use of an acre of the more productive land.

But this rent of two bushels per acre, would not be paid for the whole of the first tract, but only for the number of acres actually required for cultivation in order to furnish subsistence for the community. All the owners in the combination would have to divide among themselves the aggregate sum so obtained, none obtaining so much as two bushels an acre for his individual estate. Should any one owner try to overreach the others and secure the full rent for the whole of his own land, the “ring” would be broken, competition would set in, and rents would fall to the minimum.

∗

It is not, however, wholly inappropriate to join the name of Ricardo to this doctrine, on account of the great force and clearness with which he expounded and defended it. Anderson's statement of the same principle, though perfectly correct, was so made as to attract no attention, and it was not till long after Ricardo made the doctrine famous, that it became popularly known that the substance of it was contained in Anderson's work.

∗

Cottier rents are nominal in pecuniary amount, because these rents are fixed so high that it is impossible for the cottiers ever to pay them. The nominal amount of the rent far exceeds the whole produce which the land would yield.—H. Fawcett, “Pol. Economy.” This statement is probably somewhat too sweeping.

∗

In general, taking all classes of producers into account, this will be so. Yet the effect of a reduction of the rate of interest is not wholly upon one side. Prof. Marshall very justly exhibits an effect of a reduction of the rate of interest, which, with a certain class of producers, might and probably would operate in the opposite direction.

“A high rate of interest no doubt affords a liberal reward of abstinence, and stimulates the saving of all who are ambitious of earning social position by their wealth. Again, if a man is in doubt whether to save in order to make provision for himself or his family, the expectation of a high rate of interest may induce him to save; because the higher the rate of interest, the larger the amount of future enjoyment which can be obtained by sacrificing a given amount of present enjoyment.

“But the history of the past and the observation of the present show that it is a man's temperament, much more than the rate of interest to be got for his savings, which determines whether he makes provision for his old age and for his family, or not. Most of those who make such a provision would do so equally whether the rate of interest were low or high. And when a man has once determined to provide a certain annual income, he will find that he has to save more if the rate of interest is low than if it is high. Suppose, for instance, that a man wishes to provide an income of £400 a year on which he may retire from business, or to insure £400 a year for his wife and children after his death. If the current rate of interest is 5 per cent., he need only put by £8,000 or insure his life for £8,000; but if it is four per cent., he must save £10,000 or insure his life for £10,000.”

∗

“Many employers of labor, in some parts of England more than half, have risen from the ranks of labor. Every artisan who has exceptional natural abilities has a chance of raising himself to a post of command.”—Marshall's “Economics of Industry.”

∗

Prof. Alfred Marshall says: “The earnings of management of a manufacturer represent the value of the addition which his work makes to the total produce of capital and industry.”

∗

Certain minor shares in distribution will be treated in the next chapter. For the purposes of the present discussion they may safely be disregarded.

∗

This is substantially the position taken by the lamented Prof. Stanley Jevons, of University College, London, who states that “The wages of a working man are ultimately coincident with what he produces, after the deduction of rent, taxes, and the interest of capital.” In this matter of Wages, Prof. Jevons emphatically repudiates the doctrines generally accepted in his own country, saying: “Our English Economists have been living in a fool's paradise,” and frankly ranges himself with the French economists, “from Condillac, Baudeau, and Le Trosne, through J. B. Say, DeStutt Tracy, Storch, and others, down to Bastiat and Courcelle Seneuil.”

“The truth,” he declares, “is with the French School, and the sooner we recognize the fact, the better it will be for all the world, except, perhaps, the few writers who are too far committed to the old erroneous doctrines to allow of renunciation.” [Preface to the Second Edition of his Theory of Political Economy, 1880.]

I may remark that when, in 1874, I had occasion to trace the genesis and the literary history of the Wage Fund Theory (See North American Review, January, 1875), I did not find a single French economist infected by the pernicious doctrine which long held sway across the channel.

∗

With the exception, still, of the State and of the speculator, whom it has seemed best, for clearness of view, to remove altogether from the present discussion, and whose shares in the distribution of the product of industry will be elsewhere considered.

†

“There is no other way,” said Ricardo, “of keeping profits up, but by keeping wages down.” “Profits,” said Mr. McCulloch, “vary inversely as wages; that is, they fall when wages rise, and rise when wages fall.”

In both these statements, the word profits is used to include interest, as elsewhere explained.

∗

A discussion of the Wage Fund Theory will be found in Part VI. A few years ago, I should not have presumed to pass by this point without undertaking a formal refutation of that theory which, till recently, had complete possession of the English Economists. The fact that, though now generally abandoned, it still holds its place in so many treatises on the shelves of our libraries, some of which are even now used as text-books in our Colleges, appears to require some notice to be taken of it.

∗

“The modern English citizen, who lives under the burden of the revised edition of the statutes, not to speak of innumerable municipal, railroad, sanitary and other by-laws, is, after all, an infinitely freer, as well as nobler, creature, than the savage who is always under the despotism of physical want.” Jevons—“The State in Relation to Labor.”

∗

“The outcome of the inquiry is that we can lay down no hard and fast rules, but must treat every case, in detail, upon its merits. Specific experience is our best guide, or even express experiment where possible.” Jevons—“The State in Relation to Labor.”

∗

“Masters are always and everywhere in a sort of tacit, but constant and uniform, combination not to raise the wages of labor above their actual rate.”—Adam Smith: “Wealth of Nations.”

†

In discussing his valuable agricultural statistics before the London Statistical Society, Mr. Fred. Purdy said: “It would appear that no commodity in this country presents so great a variation in price, at one time, as agricultural labor, taking the money wages of the men as the best exponent of its value. A laborer's wages in Dorset or Devon are barely half the sum given for similar services in the northern parts of England.” Among the causes of this Mr. Purdy cites “the natural vis inertia of the class.”

∗

“The land of a country presents conditions which separate it economically from the great mass of the other objects of wealth—conditions which, if they do not absolutely and under all circumstances impose upon the state the obligation of controlling private enterprise in dealing with land, at least explain why this control is, in certain stages of social progress, indispensable; and why, in fact, it has been constantly put in force whenever public opinion or custom has not been strong enough to do without it.” … “And not merely does economic science, as expounded by its ablest teachers, dispose of d priori objections to a policy of intervention with regard to land, it even furnishes principles fitted to inform and guide such a policy, in a positive sense.”

—Prof. John E. Cairnes.

∗

Oddly enough, many economists who have been serenely confident that any possible reduction of wages, under pressure from the employing class, would not injure the body of laborers, holding that whatever might thus for the time be taken from wages must infallibly, and before long, be restored to wages, [see remarks of Profs. Cairnes and Perry above], have manifested the greatest anxiety lest profits should be unduly reduced through the encroachments of wages. Not a few of these writers have formally warned the laboring class against demanding higher wages, lest they should so reduce the profits of business as to impair or destroy the employer's interest in production. It is difficulty to see the consistency of these two opinions. If what is unduly taken from wages, by pressure from the employing class, is certain to be restored to wages, why may it not be that whatever is unduly taken from profits, by pressure from the laboring class, shall, in the end, be restored to profits? If the economic harmonies exist, they surely must “work both ways.”

∗

Prof. N. W. Senior.

∗

The late Prof. Jevons, in the introduction to his “Theory of Political Economy,” after noting the close analogy to the science of Statical Mechanics presented by the Theory of Economy proposed by him, significantly says: “But I believe that Dynamical branches of the science of Economy may remain to be developed, on the consideration of which I have not at all entered.” Elsewhere Prof. Jevons says: “We, first of all, need a theory of the Consumption of Wealth.”

∗

“It is impossible,” says Senior, “that a positive check so goading and remorseless as famine, should prevail without bringing in her train all the others. Pestilence is her uniform companion, and murder and war are her followers.”

†

“The much greater number and the longer continuance of his wants,” says Prof. Roscher, “are amongst the most striking differences between man and the brute. While the lower animals have no wants but necessities, and while their aggregate wants, even in the longest series of generations, admit of no qualitative increase, the circle of man's wants is susceptible of indefinite extension. And, indeed, every advance in culture made by man finds expression in an increase in the number and in the keenness of his rational wants.”

∗

N. W. Senior.

∗

The law of so-called partible succession, prevailing widely over the western part of Continental Europe.

∗

January 25, 1883.

∗

Dr. Travers Twiss states that it was calculated prior to the famine, that two-thirds of the population of Ireland lived wholly on potatoes. Sir Arch. Alison says: “Three times the number of persons can be fed on an acre of potatoes who can be maintained on an acre of wheat in ordinary seasons.”

∗

When we remember that the expenditure of the people of Great Britain, annually, for alcoholic beverages, reaches the enormous sum of £180,000,000, or %900,000,000, four-fifths, at least, of which is spent in a way that is not only without any beneficial effect, but is positively injurious, a large part of it going to the destruction of moral, intellectual and physical power, we get a rude measure of the force which a wiser consumption of wealth might introduce into the economic life of that country.

∗

The result is the same if the distorted production of the past has taken the form of an excess of machinery and plant in some lines or in many lines of manufacture, or an excess of the means of transportation.

∗

I can not forbear to quote the words of Bacon: “The blessing of Judah and Issachar will never meet: that the same people should be both the lion's whelp and the ass between burdens; neither will it be that a people overlaid with taxes should ever become valiant and martial.”

†

The early marriages of India are attributed to the religious beliefs of the people, as they hold that the welfare of the soul after death depends greatly on the performance of the burial rites by male offspring of the deceased.

∗

This is, in fact, involved in the theory of the British administration of India. The reasons are well stated in the following paragraph from the Times of 1879:

“In England the remission of taxation is urged with great force, because it is said that taxes remitted will fructify in the pockets of the people. No result of this kind can be expected in India. If the conditions of living are made easier there, as they would be by a remission of taxes, the consequences would not be an improvement in the well-being of the people, but an increase of their numbers. Our duty, therefore, as guardians and governors of the people, charged with the responsibility of keeping alive in times of famine a vast population with no reserved resources of its own, is to save for those who do not save for themselves, to keep a margin of income over expenditure so that we may have in hand a fund upon which to draw in the recurrent periods of distress. This is a leading principle in Indian finance. Whoever forgets this neglects the primary duty of an Indian administrator.”

∗

37, Henry VIII. Though thus legalized, public sentiment and particularly the opinions of the clergy remained in a high degree hostile to usury. “I do wish,” said Dr. Wilson, in his Discourse upon Usury, published more than twenty years after the act of Henry VIII., “some penal law of death to be made against usurers, as well as against thieves and murderers, for that they deserve death much more than such men do; for these usurers destroy and devour up, not only whole families, but also whole countries, and bring all folks to beggary that have to do with them.”

∗

The reader is referred to par. 286 for the demonstration that interest is paid for the use of capital, not always, not generally, not often, for the use of money, as such. In the present article, however, in writing of usury laws and the means of evading them, I shall use the phrases of the so-called Money Market, more properly the market for the loan of capital; and shall speak of money being scarce, money being worth such a per cent., etc., meaning always thereby, capital.

†

Samuel Jones Lloyd, afterwards Lord Overstone, in his testimony before the British Commons Committee of 1841, said: “The compensation to the banker for his loss in advancing money upon discount, at a rate below its real value, would be found in the value of the accounts kept with him by the parties to whom such advances were made.”

∗

In his standard work on usury, Plowden states that “Dry Exchange” was sometimes carried, in his day, to a very great extent. The borrower “draws” on an imaginary person in a foreign country. After the expiration of the time the bill is to run, comes a “protest” from that country for the non-payment of the bill, with the re-exchange of the money thence to the place where the money was drawn, the paper having, in fact, never been out of the country. “The borrower,” says this writer, “being thus charged with exchange, re-exchange, protest and incidental expense, pays in all, some twenty or thirty per cent.”

∗

A witness before the Commons Committee of 1841. testified that he once negotiated in a period of stringency a loan of £100,000 to a mercantile house, for the term of seven years, although the borrowers only wanted the use of the capital for a few months, and would have been glad to take it for that time, at a high rate of interest, had this been permitted by the law.

∗

It is to this Lord Bacon alludes when he says, “Were it not for this easy borrowing upon interest, men's necessities would draw upon them a most sudden undoing, in that they would be forced to sell their means (be it lands or goods) far underfoot; and so whereas usury doth but gnaw upon them, bad markets would swallow them quite up.”

∗

“It is in vain,” says John Locke, “to go about effectually to reduce the price of interest by a law; and you may as rationally hope to set a fixed rate upon the hire of houses, or ships, as of money.” And elsewhere this eminent philosopher calls a law to regulate the rate of interest “a law to hedge-in the cuckoo.”

∗

Prof. Thorold Rogers defines co-operation justly, as “a scheme … by which the laborer can unite the functions and earn the wages of laborer and employer, by superseding the necessity of using the services of the latter functionary.”

Prof. Amasa Walker had previously given expression to the same conception of co-operation.

∗

By many called Distributive.

∗

Within the last three or four years, a fresh crop of co-operative enterprises has sprung up, especially in the United States. Time has not yet served to determine the question of success or failure. The fullest accounts of these enterprises will be found in the publications of the American Economic Association.

∗

In the same vein, Alexander Hamilton: “In great and trying emergencies there is almost a moral certainty of its becoming mischievous. The stamping of paper is an operation so much easier than the levying of taxes, that a government in the practice of paper emissions would rarely fail to indulge itself too far in the employment of this resource.”

∗

Thus M. Chevalier says: “Such a change will benefit those who live by current labor: it will injure those who live upon the fruits of past labor, whether their fathers' or their own. In this it will work in the same direction with most of the developments which are brought about by that great law of civilization to which we give the noble name of progress.”

And Mr. J. R. McCulloch declares that “though, like a fall of rain after a long course of dry weather, it may be prejudicial to certain classes, it is beneficial to an incomparably greater number, including all who are actively engaged in industrial pursuits, and is, speaking generally, of great public or national advantage.”

∗

The law of parochial settlement was enacted in the reign of Charles II. While other restrictions upon the movements of population gradually gave way, during the two centuries following, before the expansion of industrial enterprise and the liberalizing tendencies of modern thought, the mischievous tendencies of the Law of Settlement were given a wider scope and an increased severity, from reign to reign. Migration within the Kingdom was practically prohibited. If the laborer, in search of employment crossed the boundaries of that one of the fifteen thousand parishes of England in which he belonged, he was liable to be apprehended and returned to the place of his settlement. Parish officers were perpetually incited by the fears of the rate-payers to the utmost zeal in hunting down and running out all possible claimants for public charity, on whom, if unmolested, residence would confer a right to support. “Where,” says Prof. Rogers, “an employer wished to engage a servant from a foreign parish, he was not permitted to do so unless he entered into a recognizance, often to a considerable amount, to the effect that the new-comer should not obtain a settlement, else the bond to be good against the employer. Parochial registers are full of such acknowledgments.”

∗

“There is supposed to be, at any given instant, a sum of wealth which is unconditionally devoted to the payment of wages of labor This sum is not regarded as unalterable, for it is augmented by saving and increases with the progress of wealth; but it is reasoned upon as, at any given moment, a predetermined amount.”—J. S. Mill: The Fortnightly. May, 1869.

∗

“That which pays for labor in every country is a certain portion of actually accumulated capital, which can not be increased by the proposed action of government, nor by the influence of public opinion, nor by combinations among the workmen themselves. There is, also, in every country, a certain number of laborers, and this number can not be diminished by the proposed action of government, nor by public opinion, nor by combinations among themselves. There is to be a division now, among all these laborers, of the portion of capital actually there present.”—Prof. A. L. Perry, Pol. Econ. In the later editions of his treatise, Prof. Perry modifies his statement.

†

“The circulating capital of a country is its wage-fund. Hence, if we desire to calculate the average money wages received by each laborer, we have simply to divide the amount of this capital by the number of the laboring population.”—Prof. H. Fawcett: The Economic Position of the British Laborer.

†

“More than that amount (the wage-fund), it is assumed, the wages-receiving class can not possibly divide among them; that amount, and no less, they can not but obtain: so that, the sum to be divided being fixed, the wages of each depend solely on the divisor, the number of participants.—J. S. Mill: The Fortnightly. May, 1869.

∗

“Masters are always and everywhere in a sort of tacit, but constant and uniform, combination not to raise the wages of labor above their actual rate.”—Adam Smith.

∗

Persons holding land by a servile tenure.

∗

“In discussing these matters, we need, above all things, discrimination. One hundred modes of government interference might be mentioned of which fifty might be very desirable and fifty condemnable. In each case, as I contend, we must look to the peculiar aim, purpose, means and circumstances of the case.”—Prof. Jevons: The State in Relation to Labor.

∗

See par. 21.

†

A long series of parliamentary battles have been fought over the question of Truck, that is, the payment of wages in commodities instead of the money of the realm. By the act of 1833, this practice (except in the form of giving “board” as a part of wages) was prohibited in respect to mining and manufacturing industry generally.

∗

In fact, the Knights of Labor, at their maximum, included about ten per cent. of the laboring population, agricultural or mechanical. Within the large factory industries, however, the proportion was very much greater, the “Knights” having almost complete control of many trades.

∗

The designation of this new weapon of industrial and social warfare is derived from an Irish gentleman, one Captain Boycott, against whom it was, a few years ago, so conspicuously employed by his hostile tenants as to cause his name to be permanently affixed thereto. To boycott is simply to place under a ban. No person who respects the authority which lays the boycott will deal with a person thus placed under the ban, or with any person who does deal with him.

∗

In stigmatizing this doctrine he continually joins together the names of “Ricardo and Proudhon.”

∗

Carey: The Past, Present and Future, p. 60.

†

Carey: Political Economy, vol. I., p. 102.

℡

This discussion of Mr. Carey's propositions is abridged from my work, “Land and Its Rent,” published in 1883.

∗

Political Economy, vol. I., p. 35.

∗

Past, Present, and Future, p. 23.

∗

See par. 257.

∗

Past, Present, and Future, p. 24.

∗

Past, Present, and Future, p. 32.

∗

A distinguished agricultural chemist of Great Britain, author of “Notes on North America.”

∗

“If the Grosvenor, Portman and Portland estates belonged to the municipality of London, the gigantic incomes of those estates would probably suffice for the whole expense of the local government of the capital. But these gigantic incomes are still swelling; by the growth of London they may again be doubled in as short a time as they have doubled already.”—Ibid. Prof. Adolph Wagner, of the University of Berlin, advocates the assumption by the State of all urban real estate, while deprecating the extension of the principle to agricultural land.

∗

On the other hand, Mr. Ricardo says, “If a land tax be imposed on all cultivated land, however moderate that tax may be, it will be a tax on produce, and will therefore raise the price of produce.”

∗

It will be seen from what follows that it is only in this respect that Mr. Henry George's proposal differs from that of Mr. Mill.

∗

For example, all over England, Ireland and Scotland, agricultural rents have been steadily falling through the past ten years or more. So it has been in many of the States of the American Union.

†

No one who has studied with care, as Mr. Mill had done, the question of “Unexhausted Improvements” as an element in tenant right, could fail to appreciate the appalling difficulties which would attend the appraisement of real estate for a purpose like that in view of the LandTenure Reform Association.

∗

Neither Mr. Mill nor Mr. George proposes that the title of land shall pass to the state. They agree on the plan of advancing the taxes upon the land so as to conflscate the successive increments of value.

∗

The paragraphs following are condensed from my work, Land and Its Rent.

∗

It will be observed that in the extracts quoted it is cultivation which is spoken of.

∗

This episode, consequent on the fast approaching completion of the first trans-continental railway, appears to have profoundly affected Mr. George's mind, and have produced in him the belief that what there and then took place, under extraordinary circumstances, is a common incident of land ownership.

∗

“Contemporary Review,” November, 1882.

∗

“Irrespective of the increase of population,” to use Mr. George's own voluntary qualification.

∗

As justly characterized by Mr. J. S. Mill.

∗

See statement of Gresham's Law, par. 181.

∗

The subject of the Clearing House and, indeed, all the agencies and instrumentalities of trade will be found treated most lucidly and justly in Prof. Jevons' work “Money and the Mechanism of Exchange.”

∗

In his famous work on Paper Credit, published in 1802.

∗

The first part of this article is condensed from the twelfth chapter of my work on Money, Trade and Industry.

∗

Prof. Sumner, in his History of American Currency, states that the Farmers' Exchange bank, of Gloucester, Mass., was organized with a nominal capital of one million dollars. Only %19,141.46 was ever paid in; and of this the directors subsequently withdrew their own subscriptions, leaving %3,081.11. One man bought out eleven directors for %1,300 each and then loaned himself %760,265. When the bank failed it had %86.46 in specie. The bank notes outstanding were estimated at %580,000.

∗

“That the evils of this period were due chiefly to vices of paper money banking seems too clear to be questioned. The opening up of the western country would inevitably have led to much wild adventure, commercially and industrially; but it was the ‘elasticity’ of the circulation, the facility of local issue, without the reality, or scarcely the pretense, of redemption, which made the banks, even the best of them, reckless as to the character of the enterprises to which they gave assistance; while the money thus put into circulation, without ‘reflux,’ enhanced prices, and still further stimulated both speculative investments and speculative trading. When the courage of the better class of banks gave way, hundreds of ‘wild cat’ or ‘coon-box banks,’ so called, without capital, without a constituency, with no past and no expectations of a future, whose managers risked nothing and had nothing to lose, came forward with loans of notes to speculators who planned to build cities in the wilderness, or contractors who proposed to construct roads and bridges without materials, tools, or money to pay wages. Again, as in early New England, a bank meant a batch of paper money.”—Walker: Money, Trade and Industry.

∗

See paragraphs 224–6.

∗

Prior to 1837 commercial credits were often extended to twelve and even eighteen months.

∗

This was a system, gradually developed, by which substantially all the banks of New England were brought to maintain a deposit with the Suffolk Bank of Boston, in consideration of which that bank bound itself to redeem their notes on presentation.

∗

The act establishing the national banking system bears date February, 1863.

∗

Specie payments were resumed on January 1, 1879.

∗

After the destruction of the second United States Bank and the crisis of 1837–9, the United States government adopted the policy of keeping its funds in its own treasury at Washington, or in the custody of “assistant treasurers,” appointed in the great commercial cities. The offices of the assistant treasurers are popularly called “sub-treasuries.” The origin and development of the sub-treasury system will afford an admirable economic exercise for advanced students.

∗

Except, of course, in great and sudden emergencies, like the outbreak of a war, or the occurrence of a commercial crisis.

†

Except in great and sudden emergencies, as indicated in a previous note.

∗

“To contract a foreign loan is [with regard to the Balance of Trade] equivalent to an increase of exportation.”—Goschen.

∗

A study of the methods used in the payment of this indemnity, and of its financial and industrial effects, will constitute an admirable exercise for a pupil well-grounded in economic principles.

∗

“An exclusively maritime country could discharge its obligations to other countries which supply it with necessaries, simply by becoming their carrier, without exporting any produce or manufactures to them in return.”—Goschen.

∗

Of this Mr. Goschen says the “primary cause is to be found in the stupendous and never-ceasing exports of England, which have for effect that every country in the world, being in constant receipt of English manufactures, is under the necessity of making remittance to pay for them, either in bullion, in produce, or in bills.”

∗

Bagehot's “Lombard Street” will be found most interesting and instructive to an advanced student in economics and finance.

∗

Walker: Money, Trade and Industry, pages 292–98.

†

The Bank has, in pursuance of this policy, more than once raised the rate of discount as high as eleven per cent.

∗

If, for example, Germany were resolved into its constituent States, several would naturally gravitate towards the gold-using group; more, still, towards the silver-using group. In like manner, Northern Italy might go to the gold-using group, while Southern Italy would tend the other way.

†

The distinction between free and gratuitous coinage is noted in par. 196.

∗

The question of foreign exchanges has been treated under a preceding title.

∗

Take the present century only, for illustration. When the century opened, silver was in course of rapid production. Three dollars' worth of silver was taken out, where one dollar's worth of gold was produced. Then came the series of South American and Mexican revolts and revolutions, between 1809 and 1829, by which mining machinery was destroyed, mining populations scattered, and the most prolific mines of the world closed. Mr. Jacob estimates that the stock of the precious metals in civilized hands fell off one-sixth in those twenty years. But gold now came in to fill the void. In 1823, the mines of the Oural began to yield largely, while about 1830 the gold sands of Siberia became known. And now only 68 cents' worth of silver was produced to a dollar's worth of gold.

In 1848 and 1851 came the gold discoveries of California and Australia, and so altered was the relative production of the two metals that only 27 cents' worth of silver was taken out, to a dollar's worth of gold! After 1861, however, the facts of production became more favorable to silver. In 1873 began a still further movement in the same direction. The director of the United States mint estimated the world's production of gold in 1884 at one hundred and two million dollars, and of silver (at 16: 1 of gold) at one hundred and sixteen million dollars.

∗

I do not here present the argument from thestatus in favor of the remonetization of silver in Europe and America, as money of full legal tender power, at a certain ratio to money of gold, under free coinage. That argument has respect to the vast bodies of debts and fixed charges, both public and private, contracted before the German demonetization of silver (say, 1873). It is urged that to require these debts, whether interest or principal, or both, to be paid in money whose purchasing power has been enhanced by the diminution of its volume through the extrusion of silver (except as small change) from the money system of Europe and America, will prove both a grievous injustice, as between debtor and creditor, and a great source of injury to trade and production. The English economic statisticians are generally agreed that the purchasing power of gold has largely increased since the German demonetization. How far this has been in consequence of that demonetization, is matter of dispute. The aggregate amount of national debts is now stated at %27,000,000,000. There are, in addition, vast bodies of public or political indebtedness, on the part of counties, cities and towns. Then we have the enormous mass of corporate (industrial), and private debts, the burden of which (at any time) depends primarily upon the purchasing power of the money in which interest or principal is to be paid.

∗

French revolutionary style for the year 1808, the date commonly assigned to the establishment of the bi-metallic system in France.

∗

Voluntary Taxation, says Emile de Girardin, it is the State stimulated; it is the State economical; it is the State Republican and Democratic.

†

The words Dona, Benevolences, etc., in the history of revenue, testify to the original assumption that contribution was voluntary.

∗

The Pope was the greatest capitalist of the Middle Ages. The British Parliament at one time declared the revenues derived from the people of that Kingdom by the Pope to be five times as great as those obtained by the Crown.

†

Rev. Dr. Warren, President of Boston University.

∗

The principle of Bentham's proposal is sanctioned by the legacy and succession duties of England, which exact ten per cent. from strangers, and only one per cent. from children.

†

It would be specially interesting to compare the system of exaction practiced by the Greeks, Carthaginians and Romans, in ancient times, and by the Dutch and Portuguese, in modern times, with the English system of seeking the interest of the mother country, or the conquering country, in the right to impose navigation laws and commercial restrictions, and in the benefits of patronage in officering the public service of colonies and dependencies.

∗

The sum paid to constitute a Baron was £10,000; a viscount, £15,000, an Earl, £20,000.—Taylor, Hist. of Taxation in England.

“The price of the dignity of a Baronet,” says Taylor, “was equivalent to £1095, ninety-three of whom were created.”

These are instances of the sale of offices to willing purchasers. James' son, Charles I., undertook the sale of his offices to his subjects, willy nilly. He revived the feudal practice of “Knight's Fee,” and compelled persons holding land of a certain yearly value to come up and be knighted, or submit to a fine for contumacy. Brodie says, “Charles did not restrict it to men of landed property, but included lessees, merchants, and others.”—Hist. Br. Empire.

∗

M. Leroy Beaulieu dwells upon the distinction between the property of the State, which is left to the enjoyment of the community, or which is devoted to government uses, and that which is sought to be administered productively. The former he terms domains public; the latter domaine privé de l'Etat.

∗

Did our space allow, it would be interesting to refer to the alienations and resumptions and renewed alienations of the Crown-lands, through the reigns of the Tudors and the Stuarts. Strangely enough, it was that model financier, William III., who effected the greatest havoc among the royal domains. One can scarcely read of the wholesale squandering of the property of the Crown by this monarch, without the suspicion that he clearly saw the coming on of the modern system of finance, when the necessities of the state should be met, no longer by rents and fines and forfeitures and escheats and purveyance, but by systematic taxation; and that, in something like contempt for the feudal sources of revenue, he purposely chose to dissipate the patrimony on which his predecessors had relied. “At the end of William's reign,” says Sir E. May, “Parliament, having obtained accounts of the state of the land revenues, found that they had been reduced by grants, alienations, incumbrances, reversions, and pensions, until they scarcely exceeded the rent-roll of a squire.”

∗

Science Economique. Worth mentioning in this connection are the sugar plantations, private property of the Khedive of Egypt, the guano deposits of Peru and Chili, and the mahogany forests of Honduras, on the credit of which vast loans have been obtained, within recent years, in the London market.

†

Adam Smith remarks that no two characters are more inconsistent than those of trader and sovereign. “If the trading spirit of the English East India Company rendered them very bad sovereigns, the spirit of sovereignty seems to have rendered them equally bad traders.”

‡

The Prussian Bank in 1874 declared dividends of 12 3–4 per cent. One-half the net gains of the bank go to the state. The United States was a partner to the extent of one-fifth in the bank of 1791–1811, and again in that of 1816–1836.

∗

The story of the rapid extension of monopolies in England under Elizabeth, of the indignation aroused thereby throughout the realm, and of the submission of the haughty Tudor to the rising storm, is familiar to every school-boy. Hume remarked that, had Elizabeth's system of monopolies been continued, the England of his day would have contained as little industry as Morocco or the coast of Barbary.

Charles I. played the same game as Elizabeth, and aroused an equal popular indignation, until even the subservient judges kicked at the restraints everywhere imposed upon trade.

Says Brodie, after referring to the soap monopoly: “Almost every article of ordinary consumption, whether of manufacture or not, was exposed to a similar abuse; salt, starch, coals, iron, wine, pens, cards and dice, beavers, felts, bone-lace, etc., meat dressed in taverns, tobacco, wine casks, brewing and distilling, lamprons, weighing of hay and straw in London and Westminster, gauging of red herrings, butter-casks, kelp and seaweed, linen cloth, rags, hops, buttons, hats, gutstring, spectacles, combs, tobacco, pipes, etc., saltpeter, gunpowder, in short, articles down to the sole gathering of rags, were all under the fetters of monopolies, and consequently deeply taxed.”

∗

It is to be noted that the laws against private lotteries which, doubtless, did much to educate that public sentiment which now makes even public lotteries impossible in many countries, originated in the desire to secure to the state the profits of this source of gain.

∗

“Ils établissent d'abord que la terre seule donne un revenu net, c'està-dire, un revenu qui excede les dépenses nécessaires pour l'entretien des cultures et des cultivateurs; ils établissent ensuite que ce revenu net est la source qui alimente tous les au es revenus; ils en concluent qu'il est inutile de poursuivre les revenus mobiliers à travers les mille canaux où ils circulent: qu'il est plus commode et plus juste de les atteindre à leur source, et ils aboutissent à la théorie de l'impôt unique sur le revenu foncier.”—Clamageran: Hist. de l'Impôt en France.

†

“The distinguishing feature of the best tax is, not that it is most nearly proportioned to the means of individuals, but that it is easily assessed and collected, and is, at the same time, most conducive to the public interests.”

∗

I have been severely blamed for using language even stronger than this, in former editions of this work. I dare say my statements were too sweeping. Mr. Newmarch's papers on public debts and Mr. Gladstone's Budget speeches are never to be mentioned without honor. Mr. Robert Giffen, Prof. Cliffe Leslie, Mr. Inglis Palgrave, and Prof. Thorold Rogers have made important contributions to many questions touching local or imperial taxation.

∗

“I. The subjects of every state ought to contribute towards the support of the government as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.

“II. The tax which each individual is bound to pay ought to be certain and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.

“III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.

“IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.”

∗

“Now I beg you to remark the strange assumptions that underlie this reasoning. Human interests are naturally harmonious; therefore we have only to leave people free, and social harmony must result; as if it were an obvious thing that people knew their interests in the sense in which they coincide with the interests of others, and that, knowing them, they must follow them; as if there were no such things in the world as passion, prejudice, custom, esprit de corps, class interest, to draw people aside from the pursuit of their interests in the largest and highest sense. Nothing is easier than to show that people follow their interest, in the sense in which they understand their interest. But between this and following their interest in the sense in which it is coincident with that of other people, a chasm yawns. That chasm in the argument of the laissez-faire school has never been bridged. The advocates of the doctrine shut their eyes and leap over it.”—Prof. John E. Cairnes.

∗

Much as I admire the pithiness and vigor of Prof. Sumner's argument before the Tariff Commission, in 1883, I can not but think that he unduly disparages the losses to production which occur under the regime of free-exchange. I have in another place (pars. 99–109, and again 236 to 243) adduced considerations which seem to me to justify a very serious view of the extent and importance of these losses. Let the protectionist, if he can, show good grounds for believing that under the system he proposes there would be a better outcome.

∗

“If it be asserted that states which pursue different industries can not afford to trade freely with one another, here we have them, New York and Pennsylvania, Massachusetts and Minnesota, Maine and Louisiana. If it be asserted that states with like industries can not afford to trade freely with one another, here we have them, Indiana and Illinois, Iowa and Minnesota, Massachusetts and Rhode Island, Alabama and Mississippi. If it be said that small states can not afford to trade freely with great empires, here are New York and Connecticut, Pennsylvania and Delaware. Why do not the great states suck the life out of the small ones? If it be said that new states, with little capital, and on the first stage of culture, can not afford to exchange freely with old states having large capital and advanced social organization, here are New York and Oregon, Massachusetts and Idaho. How can any territories ever grow into states under the pressure? If it be said that a state which relies on one industry can not afford to exchange freely with one which has a diversified industry, here are Pennsylvania and Colorado, California and Nevada, any of the cotton states and any of the Northeastern states.”—W. G. Sumner, “Protection in the United States.”

∗

The reader who may be interested to see the most and best that can be said in behalf of this strange doctrine of anarchy, is referred to an article by Prince Kropotkin in the Nineteenth Century for August, 1887.

∗

The general movement by which roads and bridges have almost universally been made free, began, even in the most enlightened countries, only sixty or seventy years ago.

∗

Scribner's Magazine. January, 1887.