\V V ^ vfe. ^^ v IMAGE EVALUATION TEST TARGET (MT-3) /> M >%'' /i*:^ <% t^^ ^v ■ 1.1 11.25 S Itt 12.0 u 150mm LIED^ APPLIED ^ IIVHGE . Ino lasSEMlllfWnSlrMl W ochMU f . NY 14609 USA Piwra: 71W4K-Oa00 Fax: naoaMtM e IMS. A«plM kntgi, Me., M M(Mi mMNM ^ ><^ ^ CIHM Microfiche Series (IMonograplis) ICMH Collection de microfiches (monographies) CMMdiMi Ifwthut* for HiMorleal MieroraproductioiM / InstHut Canadian da microraproduetiona Matoriquaa TiM imiiuita Iim aiumpiad to afc u iw tfM bMt wifliMl copy aMiWMt fw lilininf. Fmuwh of Mt copy MtMdi may ht Miliogr ii yhicaMy uni^M, wMch nmv aliar any of liM iwnii in tiM raprodyctien, or Mffiidi niay lianificMliv dianoK Um ummI mwliod of filNimg, an □ Coloyrad covart/ C oywrtww <« cowtew □ COMTI (lMIU||t4/ COMMfMra □ C o»w« fMtorad MMl/or Iw i iii nw d/ CoMMTtura rMtawrw ct/ou patUmlte □ CoMT titte miuinfl/ Lo titra dt cooMrtura manqiM □ Coloyfad Mapi/ CaiMt liograpliiquas an aotilaMr El Colowad ink (i.a. oiiiar tlian Mua or biacfc)/ Enara da aonlawr (i ji. autra 411a fetaoa ou noira) C olOMiad piaiat and/or illiiMratiom/ at/d«i illMtratiom an aoidaMr L'iMtiMta luiaM aMM^Iaira ^ MM pawt-too tMll OII«li DC: as: ai/oM I IftiMdiiMMaa 0S □ OuaUty of yrini aariai/ OnaliiiiniiBlidar) r~~| Bound with otliar matarial/ [—1 Inaliidai IndaaUa)/ LJ CMiviMd m IdaU indaM U taMwa larrte pant catHar da l*o«fera OM da la U tiwa da foO'iHa prowantt rnTidaNpdfiiMM/ LJ NitdiMradalaUwateii feaon OMinad f roM filmiNf/ r^CapiiMiofiHiii/ LJ ThndtdipwtdalaUwiiMn mail, ion^ua cala teit pouiMa. Mt pa|N o'oiH patMtilmaai. n ^UnAfiMM teAftetfteiMsl tfs to livti IZI to:/ CoaMoantairai iMoolAniantairaat fagoa ahelly ofeaaurod ky tUtooa havo hoaii roff laad «o poaalMo IM90. onauro Um koat TMt Ham ii f ilNiad at dia radiiaiioo ratio I Ca dQWiiawt ait fikw* au taoa da ri d i m io w ii i di»rf ri da w m. 10X 14X MX ax MX ax / ux MX aox a«x MX »x Th* copy filmed her* ha* baan tattM gafMroshy of : Unhwnityo fVtetiKto McPlMnon Lferafy Tha imagaa appaaring poaaiMa eonaidarinfl of ttM original copy fNtning contraat apoeifieationac in quality lagibillty Original eepiaa in printad ■■ginning wim Jitu iiwn tha laat paga ««ith a printad or •ion, or tha back eovar whan othar original eoplaa ara fHmad firat paga with a printad or iNuatratad INuatratad inipraa- or Wuatratad Impraaaien. Tha iaat raeordad frama on aaeh mierofleha ahaN eontain tho aymbol -^> (moaning "CON- TINUeO"). or tho symbol ▼ (mooni»ig "END"), Mapa, plataa. eharta. ate., may ba fHmad at diffaront roduetion ratioa. Thoaa too larga to bo antiraly ineiudad in ono oapoaura ara fHmad begi nn ing in tha upper left hand eomer, left to right and top to bottom, aa many framee aa required. The foNowing diegrema Hluatrate the L'exemplaira fUm« fut reproduit grice * la g4n4roaiti da: Unjwrdty of Victoria Im imagea auivantas ont «t« raproduitea avac la piua grand soin. eompta tanu da la condition at da la nettat* do I'Mcmpleire filnti. at an conformity avoc lea conditiona du contrat da filmege. Lea ammpiairee origineun dent la couwerture an papier eat imprimto sont film4a an commen^nt per le premier plat at 1% terminent soit per le <*•'"**»• P»9» qui comporte une empreinte dimpraaaion ou dlHuatration. soit per le second plot, selon ie cea. Tous lea autras axempieiraa originau« sent flimte en commenfom per le premiere pege qui comporte une enipreinte dimpreaaion ou d'iNuatration et en tarminem per laderni«re pege qui comporte une telle empreinte. Un dee aymbolee Miiventa apparrttra sur la damlAre imege do cheque microfichav selon le cea: la symbole — *> signifie "A SUIVRI". le symbole ▼ signifie "RN". Lee certea. planchee, tabloeux. etc.. peuvent Atre filmte i dee taux da rMuction diffirenta. Loraque la document eet trop grend pour Atre reproduit en un soul ellch«. il est film* i pertir do I'engle supdrieur geuche. do geuche « drolte. et do heut en baa. an pranem le nombre d'Imegee ni c eeselre. Leo diegremmes suivonts IHustront le mdthode. 1 2 3 1 2 3 4 8 6 # # The Empire of Business r '■J / B ± ANDREW CAKNKGIE 1^ J ttiq")ire of- fiusiii<;-^ Hv VfClr . J vis The Empire of Business "•Y By Andrew Carnegie Aitker of " CmhI o« W«altk," " Triapkut Ommcmct." " AMricn rMfta4iu4 ii Btluia," " Ua»U dw WmM. ' 1^ TORONTO WILLIAM BRIGGS 1902 VJCTORIA COLLEGE LIBRARY Copynpit t^M by DOUBLEDAY, PAGE ft CO. PubUihtd April, ign. PUBLISHERS' NOTE Several of the chapters of this book first appeared in various forms in several periodicals to which acknowl- edgments are due: From Thb North Aubrican Rbvibw Th* A.B. C. of Money and The Bugaboo of Trusts From Thb Forum What Would I Do With the Tariff if I Were Czarf From Thb Nbw York Evening Post Steel Manufacture in the United States From Thb Nbw York Tribunb How to Win Fortune From The Iron Age Iron and Steel at Home and Abroad From The New York Journal The Three-Legged Stool From The Youth's Companion Thrift as a Duty From The Contemporary Review of Britain The Cost of Living in Britain Compared with the United States From Thb Ninbtbbntr Century of Britain The Manchester School and To-day From Macmillan's Magazine The Natural Oil and Gas Wells of Western Pennsylvania Wealth and Its Uses Poverty an incentive to great achievement. Surplus wealth allows merely an elaboration of the simple needs of Ufe. Wealth helps consoUdation and cheapens production. ai 71 CONTENTS THE Road to Business Success » A Talk to Young Men Lessons drawn from a long business career. The a. B. C. op Money Barter— the direct exchange of commodities. The needs and uses of money. Comparison of the two standards— gold and silver. How the money stand- dard affects the credit of a nation. The Common Interest op Labour and Capital Employer and employe interdependent. The ad- vantages of mutual trust. The employer who helps his workmen through education, recreation and social uplift, helps himself. Thrift as a Duty The Duties of Rich Men Thrift an evidence of civilization. Saving one of the highest duties of citizenship. The accumulation of a competence a duty; the acquirement of vast wealth not a virtue but a great responsibility. How To Win Fortune ,03 The advantages of s n early start. College education not necessary to business success. Poor boys the successful men of to-day. Men of business abiUty sure of recognition. : i 95 "5 1^.11 <■': u CONTENTS Thb Bugaboo op Trusts What is a Tnat ? Combinations the order of the day. TrusU that increase production and reduce prices. Anglo-American Tradb Rblations Contrasting the commercial methods of the two countries. The part the tariff plays in trade. Pro- tective tariff in the United States; free trade in Britain, a comparison of results. Business Business is a large word and in its primary meanings covers the whole range of man's efforts. The same principles of thrift, energy, concentration and brains win success in any branch of business from medicine to dry goods. Stbbl Manufacture in the United States Some reasons why the United States has become the greatest steel-p oducing country in the world. Com- parative costs of raw material and manufacture of steel in this country and abroad. 173 189 aa9 US The Cost op Living in Britain As compared with the United Stotes. The costs of the necessities of life in England and America. Why the American can enjoy luxuries that are denied the Englishman. Oil and Gas Wells 163 a short history of the discovery of oil and gas. The method of driving wells and the use of the product. The fortimes won on a small capital. The possibilitie* of its use in the future. The Three Legged Stool Scheme of the world's work. The triple alliance of labour, capital and business ability are necessary to produce successfully. Each dependent on the others— combined, invincible. 28s CONTENTS Railroads Past and Present R«ln»ding in the seventies; rails, systems, speeds, salanes and methods. Railroading in the future. The needs of the railroad man and his lesponsibilities. Iron and Steel at Home and Abroad Conditions of the iron trade in the United States and abroad compared. The future of these metals. The Manchester School and To-day The British contention that each nation is specially qualified for but one general branch of industry dis- cussed and combatted. What Would I Do With the Tariff If I Were Czar.? The advantage of taxing the imported luxuries heavily Md reducing the tax on raw materials and necessities. A few striking examples of correct and misapplied tari£Fs. "^ PAoa 391 303 3" 3*7 .! I 1^: ' II i k \ •1 The Road to Business Success A Talk to Young Men Lessons drawn from a long business career. THE ROAD TO BUSINESS SUCCESS A TALK TO YOUNG MEN IT is well that young men should begin at the beginning and occupy the most subordinate positions. Many of the leading business men of Pittsburg had a serious responsibility thrust upon them at the very threshold of their career. They were introduced to the broom, and spent the first hours of their business lives sweeping out the office. I notice we have janitors and janitresses now in ofiices, and our young men unfortunately miss that salutary branch of a business education. But if by chance the professional sweeper is absent any morning the boy who has the genius of the future partner in him will not hesitate to try his hand at the broom. The other day a fond fashionable mother in Michigan asked a yoting man whether he had ever seen a yotmg lady sweep in a room so grandly as her Priscilla. He said no, he never had, and the mother was gratified beyond measure, but then said he, after a pause, " What I should like to see her do is sweep out a room. " It does not hurt the newest comer to sweep out the office if necessary. I was one of those sweepers my- self, and who do you suppose were my fellow sweepers ? From an address to Students of the Curry Commercial CoUese. Pittsburg, June aj, 1885 THE EMPIRE OF BUSINESS If :.', David McCargo, now superintendent of the Alleghany Valley Raihroad; Robert Pitcaim, Superintendent of the Pennsylvania Railroad, and Mr. Moreland, City Attorney. We all took turns, two each morning did the sweeping; and now I remember Davie was so proud of his clean white shirt bosom that he used to spread over it an old silk bandana handkerchief which he kept for the purpose, and we other boys thought he was putting on airs. So he was. None of us Iiad a silk handkerchief. Assuming that you have all obtained employment and are fairly started, my advice to you is "aim high. " I would not give a fig for the young man who does not already see himself the par^ ler or the head of an im- portant firm. Do not rest content for a moment in your thoughts as head clerk, or foreman, or general manager in any concern, no matter how exten- sive. Say each to yourself. "My place is at the top." Be king in your dreams. Make your vow that you will reach that position, with untar- nished reputation, and make no other vow to distract your attention, except the very commend- able one that when you are a member of the firm or before that, if you have been promoted two or three times, you will form another partnership with the loveliest of her sex — a partnership to which our new partnership act has no application. The liability there is never limited. THE ROAD TO BUSINESS SUCCESS Let me indicate two or three conditions essential to success. Do not be afraid that I am going to moralize, or inflict a homily upon you. I speak upon the subject only from the view of a man of the world, desirous of aiding you to become successful business men. You all know that there is no genuine, praise- worthy success in life if you are not honest, truthful, fair-dealing. I assume you are and will remain all these, and also that you are determined to live pure, respectable lives, free from pernicious or equivocal associations with one sex or the other. There is no creditable future for you else. Otherwise your learn- ing and your advantages not only go for naught, but serve to accentuate your failure and your disgrace. I hope you will not take it amiss if I warn you against three of the gravest dangers which will beset you in your upward path. The first and most seductive, and the destroyer of most young men. is the drinking of liquor. I am no temperance lecturer in disguise, but a man who knows and tells you what observation has proved to him; and I say to you that you are more likely to fail in your career from acquiring the habit of drinking liquor than from any, or all, the other temptations likely to assail you. You may yield to almost any other temp- tation and reform — may brace up, and if not recover lost ground, at least remain in the race and secure and maintain a respectable position. But from the insane y .t! )1 r I : 6 THE EMPIRE OF BUSINESS thirst for liquor escape is almost impossible. I have known but few exceptions to this rule. First, then, you must not drink liquor to excess. Better if you do not touch it at all— much better; but if this be too hard a rule for you then take your stand firmly here:— Resolve never to touch it except at meals. A glass at dinner will not hinder your advi. ce in life or lower your tone; but I implore you hold it inconsistent with the dignity and self-respect of gentlemen, with what is due from yourselves to yourselves, being the men you are, and especially the men you are determined to become, to drink a glass of liquor at a bar. Be far too much of the gentleman ever to enter a bar- room. You do not pursue your careers in safety unless you stand firmly upon this ground. Adhere to it and you have escaped danger from the deadliest of yoiu- foes. The next greatest danger to a yoimg business man in this community I believe to be that of speculation. When I was a telegraph operator here we had no Exchanges in the City, but the men or firms who speculated upon the Eastern Exchanges were neces- sarily known to the operators. They could be counted on the fingers of one hand. These men were not our citizens of first repute: they were regarded with sus- picion. I have lived to see all of these speculators irreparably ruined men, bankrupt in money and bank- rupt in character. There is scarcely an instance of THE ROAD TO BUSINESS SUCCESS a man who has made a fortime by speculation and kept it. Gamesters die poor, and there is certainly not an instance of a speculator who has lived a life creditable to himself, or advantageous to *he commu- nity. The man who grasps the morning paper to see first how liis speculative ventures upon the Exchanges are likely to result, unfits himself for the calm consider- ation and proper solution of business problems, with which he has to deal later in the day, and saps the sources of that persistent and concentrated energy upon which depend the permanent success, and often the very safety, of his main business. The speculator and the business man tread diverg- ing lines. The former depends upon the sudden turn of fortune's wheel; he is a millionnaire to-day, a bank- rupt to-morrow. But the man of business knows that only by years of patient, tmremitting attention to affairs can he earn his reward, which is the result, not of chance, but of well-devised means for the at- tainment of ends. During all these years his is the cheering thought that by no possibility can he benefit himself without carrying prosperity to others. The speculator on the other hand had better never have lived so far as the good of others or the good of the com- munity is concerned. Hundreds of young men were tempted in this city not long since to gamble in oil, and many were ruined ; all were injured whether they lost or won. You may be, nay, you are certain to be m 8 THE EMPIRE OF BUSINESS amilarly tempted; but when so tempted I hope you wUl remember this advice. Say to the tempter who asks you to risk your small savings, that if ever you decide to speculate you are determined to go to e. regular and well-conducted house where they cheat fair. You can get fair play and about an equal chance upon the red and black in such a place; upon the Ex- change you have neither. You might as weU try your luck with the three-card-monte man. There is another point involved in speculation. Nothing is more essential to young business men than untar- nished credit, credit begotten of confidence in their prudence, principles and stability of character. Well, believe me, nothing kills credit sooner in any Bank Board than the knowledge that either firms or men engage in speculation. It matters not a whit whether gains or losses be the temporary result of these oper- ations. The moment a man is known to speculate, his credit is impaired, and soon thereafter it is gone.' How can a man be credited whose resources may be swept away in one hour by a panic among gamesters? Who can tell how he stands among them? except that this is certain: he has given due notice that he may stand to lose all, so that those who credit him have themselves to blame. Resolvo to be business men, but speculators never. The third and last danger against which I shall warn you is one which has wrecked many a fair craft which 1 I THE ROAD TO BUSINESS SUCCESS 9 started weU and gave promise of a prosperous vovage. It is the perilous habit of indorsing— all the more dangerous", inasmuch as it assails one generally in the garb of friendship. It appeals to your generous in- stincts, and you say. "How can I refuse to lend my name only, to assist a '-iend?" It is because there is so much that is true and commendable in that view that the practice h so dangerous. Let me endeavor to put you upon -.afe honourable grounds in regard to it. I would say to you to make it a rule now, never indorse: but this is too much like never taste wine, or never smoke, or any other of the "nevers." They generally result in exceptions. You will as business men now and then probably become security for friends. Now, here is the line at which regard for the success of friends should cease and regard for your own honour begins. If you owe anything, all your capital and all your effects are a solemn trust in your hands to be held in- violate for the security of those who have trusted you. Nothing can be done by you with honour which jeop- ardizes these first claims upon you. When a nun in debt indorses for another, it is not his own credit or his own capital he risks, it is that of his own creditors. He violates a trust. Mark you then, never indorse until you have cash means not required for your own debts, and never indorse beyond those means. Before you indorse at all, consider indorsements ■ i^l u\ t 10 THE EMPIRE OF BUSINESS as gifts, and ask yourselves whether you wish to make the gift to your friend and whether the money is reaUy yours to give and not a trust for your creditors. You are not safe, gentlemen, unless you stand firmly upon this as the only ground which an honest business man can occupy. I beseech you avoid Kquor, speculation and in- dorsement. Do not fail in either, for Hquor and speculation are the Scylla and Charybdis of the young man's business sea, and indorsement his rock ahead. Assuming you are safe in regard to these your gravest dangers, the question now is how to rise from the subordinate position we have imagined you in, through the successive grades to the position for which you are, in my opinion, and, I trust, in your own, evi- dently intended. I can give you the secret. It lies mainly in this. Instead of the question, " What must I do for my employer?" substitute "What can I do.?" Faithful and conscientious discharge of the duties as- signed you is all very well, but the verdict in such cases generally is that you perform your present duties so well that you had better continue perform- ing them. Now, young gentlemen, this will not do. It will not do for the coming partners. There must be something beyond this. We make Clerks, Book- keepers, Treasurers, Bank Tellers of this class, and there they remain to the end of the chapter. The rising man must do something exceptional, and be- THE ROAD TO BUSINESS SUCCESS ii yond the range of his special department. He must ATTRACT ATTENTION. A shipping clerk, he may do so by discovering in an invoice an error with which he has nothing to do, and which has escaped the atten- tion of the proper party. If a weighing clerk, he may save for the firm by doubting the adjustment of the scales and having them corrected, even if this be the province of the master mechanic. If a messenger boy, even he can lay the seed of promotion by going beyond the letter of his instructions in order to secure the desired reply. There is no service so low and simple, neither any so high, in which the young man of ability and willing disposition cannot readily and almost daily prove himself capable of greater trust and usefuhiess, and, what is equally important, show his invincible determination to rise. Some day, in your own department, you will be directed to do or say something which you know will prove disadvan- tageous to the interest of the firm. Here is your chance. Stand up like a man and say so. Say it boldly, and give your reasons, and thus prove to your employer that, while his thoughts have been engaged upon other matters, you have been studying during hours when perhaps he thought you asleep, how to advance his interests. You may be right or you may be wrong, but in either case you have gained the first condition of success. You have attracted attention, lour employer has found that he has not a mere m : " THE EMPIRE OF BUSINESS hireling in his service, but a man; not one who is con- tent to give so many hours of work for so many dollars in return, but one who devotes his spare houre and constant thoughts to the business. Such an employe must perforce be thought of, and thought of kindly and weU. It wiU not be long before his advice is asked in his special branch, and if the advJce given be sound, it will soon be asked and taken upon questions of broader bearing. This means partnership; if not with present employers then with others. Your foot, in such a case, is upon the ladder; the amount of climbing done depends entirely upon yourself. One false axiom you wiU often hear, which I wish to guard you against: "Obey orders if you break owners." Don't you do it. This is no rule for you to follow. Always break orders to save owners. There never was a great character who did not some- times smash the routine regulations and make new ones for himself. The rule is only suitable for such as have no aspirations, and you have not forgotten tliat you are destined to be owners and to make orders and break orders. Do not hesitate to do it whenever you are sure the interests of your employer wiU be thereby promoted and when you are so sure of the result that you are wiUing to take the responsiblKty. You WiU never be a partner unless you know the business of your department far better than the owners possibly can. When called to account for your in- THE ROAD TO BUSINESS SUCCESS 13 dependent action, show him the result of your genius, and tell him that you knew that it would be so; show him how mistaken the orders were. Boss your boss just. as soon as you can; try it on early. There is nothing he will like so weU if he is the right kind of boss; if he is not, he is not the man for you to remain with— leave him whenever you can, even at a present sacrifice, and find one capable of discerning genius. Our young partners in the Carnegie firm have won their spurs by showing that we did not know half as well what was wanted as they did. Some of them have acted upon occasion with me as if they owned the firm and I was but some airy New Yorker presuming to advise upon what 1 knew very Uttle about. Well, they are not interfered with much now. They were the true bosses— the very men we were looking for. There is one sure mark of the coming partner, the future millionnaire; his revenues always exceed his ex- penditures. He begins to save early, almost as soon as he begins to earn. No matter how little it may be possible to save, save ihat little. Invest it securely, not necessarily in bonus, but in anything which you have good reason to believe will be profitable, but no gambling with it, remember. A rare chance will soon present itself for investment. The little you have saved will prove the basis for an amount of credit utterly surprising to you. Capitalists trust the saving young man. For every hundred dollars you can pro- P m ■ 14 THE EMPIRE OF BUSINESS duce as the result of hard-won savings, Midas, in search of a partner, will lend or credit a thousand; for every thousand, fifty thousand. It is not capital that your seniors require, it is the man who has proved that he has the business habits which create capital, and to create it in the best of aU possible ways, as far as self-discipline is concerned, is, by adjusting his habits to his means. Gentlemen, it is the first hun- dred dollars saved which teUs. Begin at once to lay up something. The bee predominates in the future millionnaire. Of course there are better, higher aims chan saving. As an end, the acquisition of wealth is ignoble in the extreme; I assume that you save and long for wealth only as a means of enabling you the better to do some good in your day and generation. Make a note of this essential rule : Expenditure always within income. You may grow impatient, or become discouraged when year by year you float on in subordinate posi- tions. There is no doubt that it is becoming harder and harder as business gravitates more and more to immense concerns, for a young man without capital to get a start for himself, and in this city especiaUy, where lai:ge capital is essential, it is unusuaUy difficult. Still, let me tell you for your encouragement, that there is no country in the world, where able and en- ergetic young men can so readily rise as ^his, nor any city where there is more room at the top. It has THE ROAD TO BUSINESS SUCCESS 15 been impossible to meet the demand for capable, first- class bookkeepers (mark the adjectives) the supply has never been equal to the demand. Young men give aU kinds of reasons why in their cases failure was clearly at- tributable to exceptional circumstances which render success impossible. Some never had a chance, ac- cording to their own story. This is simply nonsense. No young man ever lived who had not a chance, and a splendid chance, too, if he ever was employed at all. He is assayed in the mind of his immediate superior, from the day he begins work, and, after a time, if he has merit, he is assayed in the council chamber of the firm. His ability, honesty, habits, associations, temper, disposition, all these are weighed and analysed. The young man who never had a chance is the same young man who has been canvassed over and over again by his superiors, and found destitute of neces- sary qualifications, or is deemed unworthy of closer relations with the firm, owing to some objectionable act, habit, or association, of which he thought his employfers ignorant. Another class of young men attribute their failure to employers having relations or favourites whom they advanced unfairly. They also insist that their em- ployers disliked brighter inteUigences than their own, and were disposed to discourage aspiring genius, and delighted in keeping young men down. The is nothing in this. On the contrary, there is no one i6 THE EMPIRE OF BUSINESS suffering so much for lack of the right man in the right place, nor so anxious to find him as the owner. There is not a firm in Pittsburg to-day which is not in the constant search for business ability, and every one of them will tell you that there is no article in the market at aU times so scarce. There is always a boom in brains, cultivate that crop, for if you grow any amount of that commodity, here is yojr best market and you cannot overstock it, and the more brains you have to sell, the higher price you can exact. They are not quite so sure a crop as wild oats, which never fail to produce a bountiful harvest, but they have the advantage over these in always finding a market. Do not hesitate to engage in any legitimate business, for there is no business in America, I do not care what, which wiU not yield a fair profit if it re- ceive the unremitting, exclusive attention, and all the capital of capable and industrious men. Every busi- ness will have its season of depression— years always come during which the manufacturers and mer- chants of the city are severely tried— years when mills must be run, not for profit, but at a loss, that the organization and men may be kept together and employed, and the concern may keep its products in the market. But on the other hand, every legitimate business producing or dealing in an article which man requires is bound in time to be fairly profitable, if properly conducted. THE ROAD TO BUSINESS SUCCESS 17 And here is the prime condition of success, the great secret: concentrate your enei^, thought, and capital exclusively upon the business in which you are engaged. Ha- ing begun in one line, resolve to fight it out on that line, to lead in it; adopt every im- provement, have the best machinery, and know the most about it. The concerns which fail are those which have scat- tered their capital, which means that they have scat- tered their brains also. They have investments in this, or that o- the oth»r. here, there and everywhere! "Don't put all your eggs in one basket" is all wrong. I teU you "put aU your eggs in one basket, and then watch that basket. " Look round you and t ike notice ; men who do that do not often fail. It is easy to watch and carry the one basket. It is trying to carry too many baskets that breaks most eggs in this country. He who carries three baskets must put one on his head, which is apt to tumble and trip him up. One fault of the American business man is lack of concentration. To summarize what I have said : Aim for the high- est; never enter a b&r-room; do not touch liquor, or if at all only at meals; never speculate; never indorae beyond your surplus cash fund; make the firm's in- terest yours; break orders always to save owners; concentrate; put aU your eggs in one basket, and watch that basket ; expenditure always within revenue ; lastly, be not impatient, for, as Emerson says, "no one i8 THE EMPIRE OF BUSINESS can cheat you out of ultimate success but yourselves." I congratulate poor young men upon being bom to that ancient and honourable degree which renders it necessary tli „ they should devote themselves to hard work. A basketful of bonds 3 the heaviest basket a young man ever had to carry. He generaUy gets to staggering under it. We have in this city creditable instances of such young men, who 'have pressed to the front rank of our best and most useful citizens. These deserve great credit. But the vast majority of the sons of rich men are unable to resist the temptations to which wealth subjects them, and sink to unworthy lives. I would almost as soon leave a young man a curse, as burden him with the ateiighty dollar. It is not from this class you have rivahy to fear. - The partner's sons will not trouble you much, but look out that some boys poorer, much poorer than yourselves, whose parents cannot afifoid to give them the advantages of a course in this institute, advantages which should give you a decided lead in the race- look out that such boys do not challenge you at the post and pass you at the grand stand. Look out for the boy who has to plunge into work direct from the conunon school and who begins by sweeping out the office. He is the probable dark horse that you had better watch. The A B C of Money Barter — the direct exchange of commodities. The needs and uses of money. Comparison of the two standards — gold and silver. How the money stand- dard a&ects the credit of a nation. r tl : 1 r I ?i THE A B C OF MONEY T SUPPOSE every one who has spoken to or written -l for the public has wished at times that everybody would drop everything and just listen to him for a few minutes. I feel so this morning, for I believe that a grave injury threatens the people and the progress of our country simply because the masses-the farmers and the wage-earners— do not understand the ques- tion of money. I wish therefore to explain " money " in so simple a way that all can understand it. Perhaps some one in the vast audience which I have imagined I am about to hold spellbound cries out: "Who are you— a gold-bug, a miUionnaire. an iron- baron, a beneficiary of the McKinley Bill?" Before beginning my address, let me therefore reply to that imaginary gentleman that I have not seen a thousand dollars in gold for many a year. So far as the McKin- ley Bill is concerned, I am perhaps the one man in the United States who has the best right to complain under it, for it has cut and slashed the duties upon iron and steel, reducing them ao, 25, and 30 per cent. ; and if it will recommend me to my supposed inter- From Th* North American Review, June, 1891. at aa THE EMPIRE OF BUSINESS 1 rupter, I beg to inform him that I do not greatly dis- approve of these reductions, that as an American manu- facturer I intend to struggle stiU against the foreigner for the home market, even with the lower duties fixed upon our product by that biU, and that I am not in favour of protection beyond the point necessary to allow Americans to retain their own market in a fair contest with the foreigner. It does not matter who the man is, nor what he does,— be he worker in the mine, factory, or field, farmer, labourer, merchant, manufacturer, or millionnaire,— he is deeply interested in understanding this question of money, and in having the right poUcy adopted in regard to it. Therefore I ask all to hear what I have to say, because what is good for one worker must be good for all, and what injures one must injure all, poor or rich. To get at the root of the subject, you must know, first, why money exists; secondly, what money really is. Let me try to tell you, taking a new district of our own modem country to illustrate how " money " comes. In times past, when the people only tilled the soil, and commerce and manufactures had not developed, men had law wants, and so they got along without " money" by exchanging the articles themselves when they needed something which they had not. The farmer who wanted a pair of shoes gave so many bushels of com for them, and his wife bought her sun-bonnet by THE A B C OF MONEY »i giving so many bushels of potatoes; thus all sales and purchases were made by exchanging articles— by barter. As population grew and wants extended, this plan became very inconvenient. One man in the district then started a general store and kept on hand a great many of the things which were most wanted, and took for these any of the articles which the farmer had to give in exchange. This was a great step in advance, for the farmer who wanted half a dozen different things when he went to the village had then no longer to search for half a dozen different people who wanted one or more of the things he had to offer in exchange. He could now go directly to one man, the storekeeper, and for any of his agricultural products he could get most of the articles he desired. It did not matter to the storekeeper whether he gave the farmer tea or coffee, blankets or a hayrake; nor did it matter what articles he took from the farmer, wheat or com or potatoes, so he could send them away to the city and get other articles for them which he wanted. The farmer could even pay the wages of his hired men by giving them orders for articles upon the store. No dollars appear here yet, you see; all is still barter- exchange of articles; very inconvenient and very costly, because the agricultural articles given in ex- change had to be hauled about and were always chang- ing their value. H u THE EMPIRE OF BUSINESS ' One day the storekeeper would be willing to take, say, a bushel of wheat for so many pounds of sugar; but upon the next visit of the farmer it might be im- possible for him to do so. He might require more wheat for the same amount of sugar. But if the market for wheat had risen and rot fallen, you may be sure the storekeeper didn't take less wheat as promptly as he required more. Just the same with any of the articles which the farmer had to offer. These went up and down in value; so did the tea and the coffee, and the sugar and the clothing, and the boots and the shoes which the storekeeper had for exchange. Now, it is needless to remark that in all these deal- ings the storekeeper had the advantage of the farmer- He knew the markets and their ups and downs long before the farmer did, and he knew the signs of the times better than the farmer or any of his customers could. The cute storekeeper had the inside track all the time. Just here I wish you to note particularly that the storekeeper liked to take one article from the farmer better than another; that article being always the one for which the storekeeper had the best cus- tomers—something that was most in demand. In Virginia that article came to be tobacco; over a great portion of our country it was wheat,— whence comes the saying, " As good as wheat. " It was taken every- where, because it could be most easily disposed of for anything else desired. A curious illustration about THE A B C OP MONEY 35 wheat I find in the life of my friend, Judge MeUon. of Pittsburg, who has ^-ritten one of the best biographies in the world because it is done so naturaUy. When the Judge's father bought his farm near Pittsburg, he agreed to pay, not in "dollars, " but in " sacks of whe^t " —so many sacks every year. This was not so very long ago. What we now caU " money" was not much used then in the West or South, but you see that in its absence experience had driven the people to select some one article to use for exchanging other articles, and that this was wheat in Pennsylvania and tobacco in Vir- ginia. This was done, not through any legislation, but simply because experience had proved the neces^ sity for making the one thing serve as " money" which had proved itself best as a basis in paying for a farm or for effecting any exchange of things; and. further, diffe-ent articles were found best for the purpose iii different regions. Wheat was "as good as wheat" for using as " money. " independent of any law. The people had voted for wheat and made it their " money " ; and because tobacco was the principal crop in Vir- ginia, the people there found it the best for using as "money" in that State. Please observe that in aU cases human society chooses for that basis-article we caU "money" that which fluctuates least in price, is the most generally used or desired, is in the greatest, most general, and BBM a6 THE EMPIRE OF BUSINESS most constant demand, and has value in itself. "Money" is only a word meaning the article used as the basis- article for exchanging aU other articles. An article is not first made valuable by law and then elected to be "money." The article first proves itself valuable and best suited for the purpose, and so becomes of itself and in itself the basis-article— money. It elects itself. Wheat and tobacco were just as clearly "money" when used as the basis-article as gold and silver are "money" now. We take one step further. The country becomes more and more populous, the wants of the people more and more numerous. The use of bulky products like wheat and tobacco, changeable in value, Uable to decay, and of different grades, is soon found troublesome and unsuited for the growing business of exchange of arti- cles, and they are therefore unfit to be longer used as "money." You see at once that we could not get along to-day with grain as "money." Then metals proved their superiority. These do not decay, do not change in value so rapidly, and they share with wheat and tobacco the one essential quality of also having value in themselves for other purposes than for the mere basis of exchange. People want them for per- sonal adornment or in manufactures and the arts— for a thousand uses; and it is this very fact that makes them suitable for use as " money. " Just try to count how many purposes gold is needed for. because it is THE A B C OF MONEY 3^ best suited for those purposes. It meets us every- where. We cannot even get married without the ring of gold. Now, because metals have a value in the open mar- ket, being desired for other uses than for the one use as "money," and because the supply of these is limited and cannot be increased as easily as that of wheat or tobacco, these metals are less liable to fluctuate in value than any article previously used as "money." This is of vital importance, for the one essential quahty that is needed in the article which we use as a basis for exchanging all other articles is fixity of value. The race has instinctively always sought for the one article in the world which most resembles the North Star among the other stars in the heavens, and used it as "money"— the article that changes least in value, as the North Star is the star which changes its position least in the heavens ; and what the North Star is among stars the article people elect as "money" is among articles. All other articles revolve around it, as all other stars revolve around the North Star. We have proceeded so far that we have now dropped all perishable articles and elected metals as our "money" or, rather, metals have proved them- selves better than anything else for the stand- ard of value, "money." But another great step had to be taken. When I was in China. I re- ceived as change shavings and chips cut of! a % i : a8 THE EMPIRE OF BUSINESS bar of silver and weighed before my eyes in the scales of the merchant, for the Chinese have no "coined" money. In Siam "cowries" are used— pretty little shells which the natives use as ornaments. Twelve of these represent a cent in value. But you can well see how impossible it was for me to prevent the Chinese dealer from giving me le^s than the amount of silver to which I was entitled, or the Siam dealer from giving me poor shells, of the value of which I knew nothing. Civilized nations soon felt the necessity of having theii governments take certain quantities of the metals and stamp upon them the evidence of their weight, purity, and real value. Thus came the "coinage" of metals into "money"— a great advance. People then knew at sight the exact value of each piece, and could no longer be cheated, no weighing or testing being neces- sary. Note that the government stamp did not add any value to the coin. The government did not at- tempt to "make money" out of nothing; it only told the people the market value of the metal in each coin, just what the metal— the raw material— could be sold for as metal and not as "money." But even after this much swindling occurred. Rogues cut the edges and then beat the coins out, so that many of these became very light. A clever Frenchman in- vented the " miUing" of the edges of the coins, whereby this robbery was stopped, and civilized nations had at last the coinage which stUl remains with us,the most per- THE A B C OF MONEY 39 feet ever known, because it is of high value in itself and changes least. An ideaUy-perfect article for use as " money " is one that never changes. This is essential for the protection of the workers— the fanners, me- chanics, and aU who labour; for nothing tends to make every exchange of articles a speculation so much as "money" which changes in value, and in the game of speculation the masses of the people are always sure to be beaten by the few who deal in money and know most about it. Nothing places the farmer, the wage-earner, and all those not closely connected with financial affairs at so great a disadvantage in disposing of their labour or products as changeable "money." All such are exactly in the position occupied by the farmer trading with the storekeeper as before described. You all know that fish will not rise to the fly in calm weather. It is when the wind blows and the surface is ruffled that the poor victim mistakes the lure for a genuine fly. So it is with the business affairs of the world. In stormy times, when prices are going up and down, when the value of the article used as money is dancing about— up to-day and down to-morrow— and the waters are troubled, the clever speculator catches the fish and fills his bask with the victims. Hence the farmei and the mechanic, and all people having crops to sell or receiving salaries or wages, are those most deeply interested in securing and main- ly p.- mi 1 ■ : M 30 THE EMPIRE OF BUSINESS taining fixity of value in the article they have to take as "money." When the use of metals as money came, it was found that more than two metals were necessary to meet all requirements. It would not be wise to make a gold coin for any smaller sum than a dollar, for the coin would be too small; and we could not use a sUver coin for more than one dollar, because the coin would be too large. So we had to use a less valuable metal for smaU sums, and we took silver ; but it was soon found that we could not use silver for less than ten-cent coins, a dime being as small a coin as can be used in silver; and we were compelled to choose something else for smaUer coins. We had to take a metal less valuable than silver, and we took a mixture of nickel and cop- per to make five-cent pieces; but even then we found that nickel was too valuable to make one- and two- cent pieces, and so we had to take copper alone for these— the effort in regard to every coin being to put metal in it as nearly as possible to the full amount of what the government stamp said the coin was worth. Thus for one cent in copper we tried to put in a cent's worth of copper; in the "nickel" we tried to put in something Hke five cents' worth of nickel and copper; but because copper and nickel change in value from day to day, even more than silver, it is impossible to get in each coin the exact amount of value. If we put in what was one day the exact value, and copper and THE A B C OF MONEY 31 nickel rose in the market as metals, coins would be melted down by the dealers in these metals and a profit made by them, and we should have no coin left. Therefore we have to leave a margin and always p*.» a little less metal in these coins than would sell for the full amoimt they reprcFont. Hence all this small coinage is called in the history of money "token money. " It is a " token" that it will bring so much in gold. Anybody who holds twenty "nickels" must be able to get as good as one gold dollar for them in order that these may safely serve their purpose as money. Nations generally fix a limit to the use of "token money," and make it legal tender to a small amount. For instance, in Britain no one can make another take " token money" for more than ten dollars, and all silver coins there are classed as " token money." I cannot take you any more steps forward in the development of " money, " because in the coined-milled metals we have the last step of all; but I have some things yet to tell you about it. Although one would think that in coined metai pieces we had reached perfection, and that with these the masses of the people could not be cheated out of what is so essential to their well-being, — " honest money, " — yet one way was found to defraud the neople even when such coin was used. The coins have sometimes been "debased" by needy governments after exhaust- ing wars or pestilence, when countries were really too ll I; I II m n-^'^' 3a THE EMPIRE OF BUSINESS poor or too weak to recover from their misfortunes. A coin is caUed a "debased" coin when it does not possess metal enough to bring in the open market the sum stamped upon the coin by the government. There is nothing new about this practice, which always cheats the masses. It is very, very old. Fivehundr^ and seventy-four years before Christ the Greeks de- based their coinage. The Roman emperors debased theirs often when in desperate straits. England de- based hers in the year 1,300. The Scotch coin was once so debased that one dollar was worth only twelve cents. The Irish, the French. German, and Spanish governments have all tried debased coin when they could wring no more taxes directly out of their people, and had therefore to get more money from them in- directly. It was always the last resort to "debase" the coinage. These instances happened long ago Nations of the first rank in our day do not fall so low I must pause to make one exception to this statement I bow my head in shame as I write it-the republic of the United States. Every one of its silver dollar, is a 'debased coin." When a government issues "de- based coin," it takes leave of all that experience has proved to be sound in regard to money. Sound finance requires the government only to certify to the real value possessed by each coin issued from its mints so that the people may not be cheated. Every time the government stamps the woMs "One Dollar" upon THE A B C OF MONEY 33 371 1-4 grains of silver, it stamps a lie; disgraceful, but, alas ! too true, for the silver in it is worth to-day not a dollar, but only seventy-eight cents. Another delusion about money has often led na- tions into trouble— the idea that a government could "make money" simply by stamping certain words upon pieces of paper, just as any of you can "make money" by writing a note promising to pay one him- dred dollars on demand. But you know that when you do that, you are not " making money, " but mak- ing "a debt": so is any government that issues its promise to pay. And there is this about both the in- dividual and the government who take to issuing such notes upon a large scale: they seldom pay them. The French did this during their Revolution, and more recently the Confederate States "made money" at a great pace, and issued bonds which are now scarcely worth the paper they are printed upon. Every ex- periment of this kind has proved that there can be no money "made" where there is not value behind it. Our own country issued bonds, and the people of other nations bought them for forty cents upon the doUar, although they bore and paid interest at 6 per cent, in gold, so great was the fear that even the bonds jof this country would not prove an exception to the usual fate of such securities issued during trying times. Only because the government kept strict faith and paid the interest and principal of these bonds in gold, 34 THE EMPIRE OF BUSINESS and never in silver or in any depreciated currency, has the value of its bonds advanced, and the ct«iit of the United States become the highest in the world ex- ceeding that even of Great Britain. There has never been a better illustration of the truth that in dealing with "money." as in everything else, "honesty is the best policy. •• Our government also issued some notes known as "greenbacks. " But the wise men who did this took care to provide a fund of one hundred miUions of dollars in gold to redeem them, so that any man having a greenback can march to the Treasury and receive for it one dollar in gold. But I am now to tell you another quality which this basis-article of metal has proved itself to possess, which you will find it very difficult to believe. The whole world has such confidence in its fixity of value that there has been built upon it. as upon a sure founda- tion. a tower of "credit" so high, so vast, that all the silver and gold in the United States, and all the green- backs and notes issued by the government, only per- form 8 per cent, of the exchanges of the country. Go into any bank, trust company, mill, factory, store, or place of business, and you will find that for every one hundred thousand dollars of business transacted only about eight thousand dollars of "money" is used, and this only for petty purchases and payments Nmety-two per cent, of the business is done with little bits of paper-cheques, drafts. Upon this basis also THE A B C OP MONEY 35 rests aU the government bonds, aU State, county, and city bonds, and the thousands of milUons of bonds the sale of which has enabled our great railway sys- tems to be built, and also the thousands of miUions of the earnings of the masses deposited in savings- banks, which have been lent by these banks, to various parties, and which must be returned in "good money" or the poor depositor's savings will be partially or wholly lost. The business and exchanges of the country, there- fore, are not done now with "money"— with the ar- ticle itself. Just as in former days the articles them- selves ceased to be exchanged, and a metal caUed "money" was used to effect the exchanges, so to-day the metal itself— the " money "—is no longer used. The cheque or draft of the buyer of articles upon a store of gold deposited in a bank— a little bit of paper— is all that passes between the buyer and the seller. Why is this bit of paper taken by the seller or the one to whom there is a debt due? Because the taker is confident that if he really needed the article itself that it calls for— the gold— he could get it. He is confident alro that he will not need the article itself, and why? Be- cause for what he wishes to buy the seller or any man whom he owes will take his cheque, a similar little bit of paper, instead of gold itself; and then, most vital of all, every one is confident that the basis-article cannot change in value. For remember it would be H'l k 36 THE EMPIRE OF BUSINESS almost as bad if it rose in value as if it feU; steadiness of value being one essential quality in "money" for the masses of the people. When, therefore, people clamour for more "money" to be put in circulation.-that is. for more of the ar- tide which we use to eflfect an exchange of articles.- you see that more "money" is not so much what is needed. Nobody who has had wheat or tobacco or any article to sell has ever found any trouble for want of money" in the hands of the buyer to effect the exchange. We had a very severe fo^cial disturb- ance m this country only three months ago. " Money " It was said, could not be had for business purpose; b^t was not the metal itself that was lacking, but credit, confidence, for upon that, as you have seen, aU busmess is done except smaU purchases and pay- ments which can scarcely be caUed "business" at aU ToKiay the business man cannot walk the street with^ out bemg approached by people begging him to take this credit" at very low mtes of interest: at 2 per cent, per amium "money" (credit) can be had day by day. There has been no considerable difference m the amount of "money" in existence during the mnety days. There was about as much money in the country in January as there is in March It was not the want of money, then, that caused the trouble ^e foundation had been shaken upon which stood the nmety-two thousand of every one hundred thou- THE A B C OF MONEY 37 sand dollars of business. The metal itself and notes- real "money," as we have seen— only apply to the eight thousand dollars. Here comes the gravest of aU dangers in tampering with the basis. You shake directly the foundation upon which rests 92 per cent, of all the business exchanges of the country,— con- fidence, credit,— and indirectly the trifling 8 per cent, as weU which is transacted by the exchange of the metal itself or by government notes; for the standard ar- ticle is the foundation for every exchange, both the ninety-two thousand and the eight thousand dollars. So, you see, if that be undermined, the vast structure, comprising all business, built upon it, must totter. I have finished telling you about "money." We come now to apply the facts to the present situation, and here we enter at once upon the silver question; and I am sure you are all attention, for it is the most pressing of all questions now before you. You see that the race, in its progress, has used various articles as "money," and discarded them when better articles were found, and that it has finally reached coined pieces of valuable metal as the most perfect article. Only two metals are used among civilized nations as the standard metal— gold in some countries, silver in others. No country can have two standards. Centuries ago silver was adopted as the standard in China, India, and Japan, and more recently in the South American republics; and it still is the standard SP" 38 THE EMPIRE OF BUSINESS in these countries. When adopted it was a wise choice ; silver had nearly double its present value, and was' then steady, and it answered all the needs of a rural people. The principal nations of Europe and our own coun- try, being further advanced and having much greater business transactions, found the necessity for using as a standard a more valuable metal than silver, and gold was adopted ; but as silver was used as money in many parts of the world as the standard, and used in these gold-basis countries for "small change," it was ad- visable for these nations to agree upon the value in gold which would be accorded to silver, and this was fixed at fifteen and one-half ounces of silver to one of gold. Please note that this was then as nearly as possible the market value of silver as a metal com- pared with gold as a metal. The nations did not at- tempt to give to silver any fictitious value, but only its own inherent value. And, more than this, each of these nations agreed, when the agree- ment came to an end, to redeem all the silver coin it had issued in gold at the value fixed. Every- thing went well under this arrangement for a long time. The more advanced nations were upon a gold basis, the less advanced nations upon a silver basis, and both were equally well served. What, then, has raised this silver question which everybody is discussing? Just this fact: that while THE A B C OF MONEY 39 the supply, and therefore the value, of gold remained about the same, great deposits of sUver were discov- ered, wonderful improvements made in mining ma- chinery, and still more wonderful in the machinery for refining silver ore; and as more and more silver was produced at less cost, its value naturally fell more and more; one ounce of it, worth $1.33 in 1872, being worth to-day only $1.04. It has fallen as low as 93 cents. It has danced up and down; it has lost fixity of value. To all countries upon a silver basis there have come confusion and disaster in consequence. The question in India, with its two hundred and eighty-five millions of people, is most serious; and you see how our South American republics are troubled from this fall in the value of their basis-article, by which aU other articles are measured. Even the European nations which are upon a gold basis are troubled by this "silver question," for under the agreement to rate fifteen and a half ounces of silver as worth an ounce of gold some of these nations have had enormous amounts of silver thrust upon them. Most of them saw what was coming many years ago. and ceased to increase their silver: some disposed of a great deal of what they had, and placed themselves strictly upon the gold basis; but there are still in European countries eleven hundred millions of dollars of silver legal-tender coins, not counting the amount of "token" silver money used for small change. It is not safe to say that less m Tlj 40 THE EMPIRE OF BUSINESS than twenty-five ounces of it would be found equal to one ounce of gold if put in the market, instead of the fifteen-and-a-half-ounce basis upon which these coun- tries have obtained it. All European countries have been, and are stiU, trying hard to escape from silver. In 1878 those com- prising the Latin Union, which fixed the price of sil- ver,— France, Belgium, Italy, Switzerland, and Greece, — finaUy closed their mints to legal-tender sUver. Norway, Sweden and Denmark in 1873 and 1875 ran out from under the silver avalanche, and now stand firmly upon a gold basis. Holland also, in 1875. took its .stand practically upon gold. Austria-Hungary has not coined silver since 1870, except a smai: .mount of " Levant sUver thalers" for a special trade purpose. Even half-civilized Russia took the alarm, and ran as fast as she could out of the silver danger, for in 1876 she shut her mints to the further coinage of the dan- gerous metal, except such small amount as China wished to take promptly from her. So you see that all those countries that have tried siJver and found out the evils which it produces, and its dangers, have been, and are now, using every means to rid themselves of it. For thirteen years it has been cast out of their mints, for during this long period no full legal-tender silver coins have been issued in Europe. Only our repubKc, among nations, is boldly plunging deeper and deeper into the dangers of silver coinage. When i 1 , ii I THE A B C OF MONEY 41 we have had the experience of older nations as to its operations, we may and, I think, surely will wish, like them, to retrace our steps when it is too late. So you see, there is trouble wherever there is silver. What to do with their sUver, which has fallen so low in value, is a serious problem in all these countries. It hangs like a dark cloud over their future. So much has silver fallen in all parts of the world and disturbed everything that several conferences have been called by the nations in recent years, to which the United States has sent delegates. The ob- ject of these was to see whether the chief commercial nations could not agree again upon a new gold value for silver. But the conclusion has always been that it was too dangerous to attempt to fix a new value for silver until it could be more cleariy seen what the future was to show about its supply and value, for perhaps it might fall so low that twenty-five or thirty ounces of it would not be worth more than an ounce of gold; no one can tell. As our country has already gone so far into the danger as to have four hundred and eighty-two millions of dollars in depreciated silver, we had to confer with our neighbours in misfortune,' and appear as creditors have to appear at meeting^ held to try to support the bad business of a failing debtor. Perhaps you are asking yourselves why, when I spoke of all the European countries in relation to sil- iktJ^ 43 THE EMPIRE OF BUSINESS ver. I did not state the amount of sUver held in re- serve by our principal rival, Gieat Britain. Listen one moment, and then ponder over the reply. Not one dollar. France has no less than six htondred and fifty millions of dollars in silver in her bank; but every dollar of Britain's reserves is in the one steady, un- changeable basis-article-^old. Wise old biiti. the dear mother-land sits upon her perch, whistling away out of all danger from this silver trouble. She has made London the financial centre of the world. If any- thing be bought or sold in foreign lands, a draft upon London is demanded; because everyone knows that come what may, it will be paid in the best article' which cannot faU in value-«old. No draft upon Paris or Vienna or New York for wise men. Why? Because the nations represented by these cities have become involved in great possible losses by their huge piles of silver, and may attempt by legislation to make drafts payable in that metal, which fluctuates so in value. I wish the people of the United States would watch Britain carefully. She is keeping her own counsel- she is treating the silver-loaded nations with cool polite- ness in the conferences, which she graciously conde- scends to attend only because India, over which she rules, is unfortunately upon a silver basis; if it wens not for that, she would probably politely decline. When they talk about fixing a gold value upon silver. {< THE A B C OF MONEY 43 she says that she reaUy does not know what she wiU decide upon in the matter. What she is praying for is that the United States will continue to go deeper and deeper into silver until retreat is impossible, and she will keep her old policy, which has made her su- preme in finance. Her only possible rival is not to be found in Europe, but here in the United States. What a grand thing for Britain if our country could be brought down to a silver basis-forced to reUnquish the one standard which can alone give a nation front rank in the financial world ! Silver for the republic, Gold for the monarchy: this is what great Britain is hoping may come to pass, and what every American should resolve never shaU. Governments may pass what laws they please about silver: the world heeds them not. Every business transaction between nations continues to be based on gold exclusively-nothing but gold-and will so continue. Britain knows this and acts accordingly. I think I hear you ask indignantly: "How came our country to have three hundred and twelve millions of silver dollars in its vaults, like France, instead of having its reserves in the sure gold, like our rival, Britain, when, like Britain, we have gold as our basis ? '' That is a question every farmer and every toiler should ask, and demand an answer to. from his representa- tive in Congress. The reason is easily given. Here is the history. Silver, as we have seen, had fallen in i ' ■ I Hi I 44 THE EMPIRE OP BUSINESS value, and was likely to fall stUl more. Euit>pean nations were loaded down with many hundreds of milUons of dollars, and aU anxious to get rid of if owners of silver and of silver mines were alarmed;' what was to be done to prop the falling metal ? Evi-' dently the government was the only power which could undertake the task; and towards that end all the in- fluence and resources of the silver power were bent- alas f with eminent success; for the masses of the peo- ple were represented as in favour of sUver. If true they were going with the speculators against their owti interests, in the most direct way possible. The first act which aimed to give by legislation a value to silver was passed in 1878. It required our government to buy at least two million ounces of silver every month, while all other governments had stopped commg it. because it had become dangerously erratic m value. The silver men insisted that these pur- chases would raise its value; but were they right.? No It did not advance in price. What was to be done then? "Ah!" said these silver-tongued specula- tors, "the trouble is. the government has not gone far enough; only increase the amount ; let the gov- emment buy four and a half milUon ounces per month of our silver instead of two million per month, and this wxU take all that the country's mines yield, and more too, and so silver must advance in value. " They were right in stating that four and a half millions per month THE A B C OF MONEY 45 are more than the total yield of the United States sil ver mines; and then eight to ten mUlions of silver are taken and used every year for other purposes than commgmto "money," leaving not more than. say. four mdhons per month for coinage. Many people were persuaded that if the govemment bought so much sU- ver per month the value of silver must advance The pnce did advance, because many of these mistaken people bought it upon speculation before the bill passed. Silver rose from 96 to x«-aknost to its old rate m gold. But what has been the result since the passage of he new bill? The answer is found in the quotation for sdver to^y. It is back from »x to 97. and here we are again. So. instead of being free from the sUver trouble, as Britain is and we should have been, these men have succeeded in unloading upon the govern- ment aheady three hundred and ninety millions of dollars of their silver, and we are getting ahnost as badly off as France; but with this difference: France and other nations prudently stopped adding to their bur- dens of silver thirteen years ago. while our govern- ment IS adding to its store four and one-half millions of ounces every month, costing a little more than that amount of dollars. The United States is trying to Ignore the changed position of silver, and to make it equal to gold, against the judgment of all other fir^t- class nations. To succeed, we shall have to buy not 1 * 46 THE EMPIRE OF BUSINESS only what our own mines produce, but a great deal of what all other mines produce throughout the world the total yield of silver being enough to make one hun ' dred and sixty-eight miUions of our silver dollars every year; and then we must, in addition, be prepared to buy the eleven hundred miUions of dollars' worth with which European governments are now loaded down and which they are anxious to seU. So far from the government purchases of si?ver huv- mg raised its ^-alue. the government could not to-day sell the three hundred and thirteen millions of dollars' worth in its vaults without losing some millions upon the price it has paid the silver-owners for it You will scarcely believe that the accounts of the treasury state that the government has made, so far. sixty- seven millions of profit upon its silver purchases This IS clamied because for the amount of silver put in a dollar It has paid only about eighty cents. AU this "profit" is fictitious. You see. the nation has been led mto very foolish purchases of silver. Fonr and a half millions of your earnings are taken through taxes every month, not for the constitutional purposes of government, but in an effort to bolster a metal by paying prices for it far higher than it otherwise would command. Your government is being used as a tool to ennch the owners of silver and silver mines This IS bad indeed, but hardly worth mentioning compared with the danger of panic and disaster it brings with THE A B C OF MONEY 47 it through the probable banishment of the steady gold basis and the introduction of theunsteadybasis of silver. The republic had the disgrace of slavery, and abol- ished it. Until this year it was disgraced in the eyes of the world because it had no law which ^.^cured to others than its own citizens the right to their hterary productions. That disgrace has passed away also; but there has come upon it the disgrace of "debased coinage." The great repubUc issues dishonest col and it is the only nation in the world which does so, except Mexico, which still coins a Kttle silver. But while the disgrace is upon us. the financial evils of "de- based" coinage are yet to come ; for, although the gov- ernment issues debased coin, it agrees to receive it as worth a dollar in payment of duties and taxes, and makes it legal tender, and so it passes from hand to hand for the present as worth dollars. In this way the government has been able so far to prevent its de- preciation. How long it can continue issuing four and a half milUons more of these notes or coins every month and keep them equal to gold nobody can teU. But one thing is clear: ultimately the load must be- come too heavy, and, unless silver rises in value, or enough is put into the dollars to represent their value in gold, or the purchase of silver by the government IS stopped, we must sooner or later fall from the gold basis to the condition of the Argentine and other South American republics. i!,: 48 THE EMPIRE OF BUSINESS This is how these silver dollars willact which have not metal enough to seU for dollars when the world begms to lose confidence in the abihty of the govern- ment issuing them to pay gold for them when asked. Suppose a number of you had decided to carry a huge log from the woods, and you aU got under, and. bend- ing your necks, took its weight upon your shoulders, and then some doubted whether you reaUy could stagger on under the load ; and suppose two or three of you. after casting timid glances at each other, con- cluded you had better get from under: what would be the result? The lack of confidence would probably result in killing those who were foolish enough to re- main. It is just so with this delicate question of the measure of values. A few speculators or "gold-bugs" wiU resolve that, come what may, they wiU make themselves safe and get from under. Even in the mind of the most rer^kless there will be some doubt whether the United States alone can take the load of the world upon its shoulders and carry it when aU the other nations together are afraid to trjj It. and when no nation in the history of the world has ever succeeded in giving permanent value, as a stand- ard for money, to a metal that did not in itself possess that value. Mark this: that ovr government has only succeeded so far in doing this with its silver dollars because it has issued only a Umited quantity, and has been able to redeem them in gold-jnst as you could THE A B C OF MONEY 49 take a piece of paper and write on it. " This is good for one dollar, and I promise to pay it. " That would be your •' fiat •' money. The question is, How long could you get people to take these slips for dollars? How soon would some suspicious man suggest that you were issuing too many? And then these slips would lose reputation; people would begin to doubt whether you could really pay all the dollars promised if caUed upon ; and from that moment you could issue no more. Just so with governments: aU can keep their small change afloat, although it may not contain metal equal to its face value; and it is a poor government which cannot go a Uttle further and get the world to take something from it in the shape of "money" which is only par- tiaUy so. But then, remember.any government will soon exhaust its credit if it continues to issue as "money" anything but what has intrinsic value as metal all the world over. Every nation has had eventually to re- coin its "debased" coin or repudiate its obligations, and go through the perils and disgrace of loss of credit and position. In many instances the "debased " coin never was redeemed, the poor people who held it being compelled to stand the loss. There is, however, one valuable feature of the present silver law which, if not changed, may stop the issue of many more "debased silver dollars." It requires that two millions of the four and a half millions of ounces of silver purchased each month shall be coined iH^ so THE EMPIRE OF BUSINESS into money for one year. After that, only such amounts are to be coined as are found necessary to redeem the silver notes issued. As people prefer the notes to the silver, little or no coinage of silver dollars will be necessary, and only silver notes will be issued. When the government ceases to coin silver dollare. it will stand forth in its true character before the pLo- ple-that of a huge speculator in silver, or, rather, as the tool of silver speculators, piUng up in its vaults every month four and a half milHons of ounces, not in the form of " money, " but in bars. Surely this can- not fail to awaken the people to the true state of affaire and cause them to demand that the reckless specula' tion shall cease. It is in every respect much less dangerous, however to keep the silver purchased in bullion than to coin it in "debased dollare," because it rendere it easier at some future day to begin the coinage of honest silver dollare-that is, coins containing the amount of silver metal that commands a dollar as metal; instead of 37, grains of silver, 450, or 460, or more or less, should be used. This is just about the amount the government gets for each dollar. No possible act of legislation that I know of would produce such lasting benefit to the masses of the people of this country. But beyond material benefit something much higher is involved- the honour of the republic. The stamp of its govem- ment should certify only that which is true. THE A B C OF MONEY 51 I do not suppose that there are many men in the United States, except owners of silver, who would vote that silver take the place of gold as the standard of value. If the people understood that the question was whether the one metal or the other— silver or gold— should be elected as the standard, the vote would be ahnost unanimous for gold, its superiority is so manifest. Yet such is surely the issue, although the advocates of silver disclaim any intention to disturb the gold standard, saying they only desire to elevate silver and give it the position which gold has as money. But you might as well try to have two horses come in "first " in a race or to have two " best " of anything. You might as well argue for two national flags in one coun- try. Just as surely as the citizen has to elect the ban- ner under which he stands or falls, so surely must he elect gold or silver for his financial standard. The standard article cannot be made to share its throne with anything else, any more than the stars-and- stripes can be made to share its sovereignty with any other fiag in its own country ; for there is this law about "money": the worst drives the best from the field. The reason for this is very clear. Suppose you get in change a five-dollar gold piece and five dollars in silver, and there is some doubt whether an act of Congress will really prove effective in keeping silver equal to gold in value forever: ninety- nine people out of a hundred may think that the law 53 THE EMPIRE OP BUSINESS wm give this permanent value to silver, which the article itself does not possess; but one man in a hun- dred may have doubts upon the subject. I think the more a man knows about "money." the more doubts he will have; and. although you may have no doubts still the fact that I have doubts, for instance, wiU lead you to say: "Well, he may be ri (ht; it is possible I may be wrong. I guess I will give Pnith this silver for my groceries to-morrow, and pVe tne old lady this beautiful bright golden piece to put by; it needs no acts of Congress-all the acts of Congress in the world cannot lessen its value; the metal in it is worth five dollars anywhere in the world, independent of the gov- ernment stamp; these five pieces of silver are worth only three dollars and seventy-five cents as metal Yes. I shall let Smith have the silver-gold is good enough for me." And you may be sure Smith unloads the silver as soon as he can upon Jones. And many people wiU believe and act so. and the gold in the country will disappear from business, and silver alone will be seen and circulate ; every man that gets it giving it to another as soon as he can. and so keeping it in active circula- tion; and every man that gets a bit of gold holding It. and thus keeping it out of circulation. So instead of having more money, if we go in for trying by law to foree an artificial value upon silver in order to use it as money, we shall really soon have less money in cir- THE A B C OP MONEY 53 cuktion. The seven hundred milUons of gold which is now in circulation, and which is the basis of every- thing, v-nll speedily vanish, the vast structure of credit built upon it be shaken, and the masses of the people compeUed to receive silver dollars worth only seventy- eight cents, instead of being, as now, redeemable in gold and always worth one hundred cents. For, re- member, as I have told you, 92 per cent, of all opera- tions conducted by "money" depends upon people having absolute confidence in the "money" being of imchangeable value. Issue one hundred dollars of "debased" coin more than all men are sure can be kept of unchangeable value with gold— panic and financial revolution are upon you. More "money, " you see, which could only be used in 8 per cent, of our smallest financial trans- actions, can easily be so issued as to overwhelm aU the important business of the country by shaking "con- fidence, " upon which 92 per cent, rests. To be always free from danger is to issue only such "money" as in itself has all the value certified by the stamp upon it. So jealously does Britain, our only rival, adhere to this that she is spending two millions of dollars just now to recoin gold coins which have lost a few cents of their value by wear. Her government stamp must always tell the truth. The republic should not be less jealous of its honor. As you have seen, the silver-men were disappointed m t.' ftl m i 54 THE EMPIRE OF BUSINESS i at the failure of acts of Congress to advance the value of their silver. Twice the government has been in- duced to do as they asked, under assurances that com- pliance would surely get the country out of its danger- ous position as the owner of silver; twice it has been deceived. You would think the silver-owners would now admit their error and help the government to get back to safe ground with as httle loss as possible. Far from it; instead of this they have taken the boldest step of all, and urged upon Congress what you have heard a great deal about— the " free coinage of silver. " Now, what does that mean ? It means that our gov- ernment is to be compelled by law to open its mints and take all the silver with which European govern- ments are loaded down, and part of all the silver mined in the world, and give for every seventy-eight cents' worth of it one of these coins, which you are compelled to take as a full dollar for your labour or products. It means that the European merchant will send silver over here, get it coined at our mints or get a silver- dollar note for it, and then buy a full dollar's worth of your wheat or com, or anything he wants, for the silver he could get only seventy-eight cents for in Europe or anywhere else in the world. Europe is doing this every day just now with India, the Argen- tine Republic, and other coimtries upon a silver basis. The British merchant buys wheat in India upon the depreciated silver basis, takes it to Europe, and sells it 1 THE A B C OF MONEY 55 upon the gold basis. He has thus to pay so Uttle for Indian wheat that it has become a dangerous com- petitor to our own in Europe, which it could not be except that by the fall in silver the Indian farmer gets so little value for his products. It is only a few months since the new Silver Bill was passed requiring the government to more than double its purchases, and already eight milUons of dollars of silver more than we have exported has been sent into this country from abroad— somethiixg unknown for fifteen years, for we have always exported more silver than we have imported. Now we are buying all our own mines furnish, and being burdened with some from Europe, for which we should have received gold. In eighteen days of the month of April we have sent abroad nine millions of dollars in gold; so that under our present Silver Law you see Europe has already begun to send us her depreciated silver and rob us of our pure gold— a perilous exchange for our country and one which should fill our legislators with shame. Understand, please, that hitherto, under both bills compelling the government to buy sUver, bad as these were, yet the government has got the metal at the market price, now about seventy-eight cents for 371 1-4 grains; and only this amount the government has put into the so-called dollar. Under "free coinage" all this will change. The owner of the silver will then get the dollar for seventy-eight cents' worth of silver. 1 ;