ESCRIPTIVE 
 
 JCONOMICS 
 
 I
 
 LIBRARY 
 
 OF 
 CAUPOKNIA 
 
 SAN DIEGO
 
 WILLIAMS & ROGERS SERIES 
 
 DESCRIPTIVE 
 
 :CONOMICS 
 
 AN 
 
 LNTKODUCTIOlSr 
 
 TO 
 
 ECONOMIC SCIENCE 
 
 FOR USE IN 
 
 ACADEMIES HIGH AND NORMAL SCHOOLS 
 
 AND 
 
 BUSINESS COLLEGES 
 
 MYRON T. BLY, ESQ., 
 
 OP THE ROCHESTEB (N. T. ) BAB, AUTHOE Of BUSINESS LAW 
 
 NEW YORK : CINCINNATI : CHICAGO 
 
 AMERICAN BOOK COMPANY
 
 Entered according to Act of Congress, in the year 1893, 
 
 BY WILLIAMS & ROGERS, 
 In the Office of the Librarian of Congress, at Washington, D. C. 
 
 w. P. 4
 
 PEEFAOE. 
 
 This work has-been prepared on the theory : 
 
 1, That the subject of Economics does not necessarily involve 
 all the abstract and deductive reasoning commonly attributed 
 to it. 
 
 2, That it bears an exceedingly close relation to the prac- 
 tical affairs of every-day life in all stages of social and political 
 development. 
 
 3, That this practical relation may be cogently and easily 
 represented by reference to the actual movements of people in 
 the various stages of economic development. 
 
 4, That delineation of economic activity, commencing with 
 that connected with the lower economic stages and passing on 
 to the higher, not only brings out the practical side of the 
 subject, but also compels interest in it. 
 
 5, That the wants of the highest civilization are, after all, 
 merely amplifications of and superadditions to the three origi- 
 nal and necessary wants of savagery, viz: wants of food, cloth- 
 ing, and shelter. All modern wants are but differentiations 
 of these. Their development, therefore, together with the 
 development of the processes by which their satisfaction is 
 secured, furnishes a proper and natural basis for study. 
 
 The work is a wide departure from the ordinary plan of most 
 elementary works on Political Economy, or, as it is preferably 
 called, Economics. These works generally commence with an 
 abstract discussion of wealth or value. In the following pages 
 the terms wealth and value are nowhere used in a technical 
 sense, and the same is true of most of the technical terms of 
 Economics. At the same time, however, the theories to which 
 these terms give rise, are indirectly discussed and all the well 
 known propositions of Economics are clearly and fully set forth. 
 
 It is hoped that the student and reader will tind here the 
 collection of economic phenomena, classified and arranged as 
 required for the more abstract reasoning and generalizations 
 relating to the higher branches of the subject.
 
 CONTENTS. 
 
 INTRODUCTION. 
 
 CHAPTEK I. THE ART OF GETTING A LIVING 7 
 
 CHAPTER II. THE POPULAR NEED OF ECONOMIC KNOWLEDGE. . 14 
 
 CHAPTER III. THE STRUGGLE OF LIFE 19 
 
 CHAPTER IV. MAN'S WANTS AND THEIR SATISFACTION 23 
 
 PART I. 
 ECONOMICS OF THE FAMILY. 
 
 CHAPTER I. THE BEGINNING OF INDUSTRIAL SOCIETY 29 
 
 CHAPTER II. THE FRUIT AND NUT GATHERER 35 
 
 CHAPTER III. THE FISHER AND HUNTER 37 
 
 CHAPTER IV. THE HERDSMAN 40 
 
 CHAPTER V. WANTS AND EMPLOYMENTS IN FAMILY ECONOMICS 47 
 
 CHAPTER VI. THE CAPITAL OF THE FAMILY 51 
 
 CHAPTER VII. PRIMITIVE BARTERING AND MANUFACTURING 55 
 
 CHAPTER VIII. SUMMARY OF THE CHARACTERISTICS OF FAMILY 
 
 ECONOMICS. 59 
 
 PART II. 
 
 ECONOMICS OF THE VILLAGE. 
 
 CHAPTER I. THE AGRICULTURIST. 63 
 
 CHAPTER II. THE VILLAGE COMMUNITY 73 
 
 CHAPTER III. THE LAND AND THE LABORER 79 
 
 CHAPTER IV. VILLAGE HOUSEKEEPING 87 
 
 CHAPTER V. THE FIRST FORMS OF MONEY 93 
 
 CHAPTER VI. A REVIEW OF THE ECONOMIC PROGRESS 97 
 
 PART III. 
 
 ECONOMICS OF THE CITY. 
 
 CHAPTER I. THE TRADER 101 
 
 CHAPTER II. THE CRAFTSMAN 117 
 
 CHAPTER III. THE RISE OF ECONOMIC CLASSES 121 
 
 CHAPTER IV. MONEY THE MEDIUM OF EXCHANGE 127 
 
 V
 
 VI CONTENTS. 
 
 PART IV. 
 ECONOMICS OF THE NATION. 
 
 CHAPTER . I. THE INDUSTRIAL STAGE OF ECONOMICS 135 
 
 CHAPTER II. LAND, LABOR AND CAPITAL 140 
 
 CHAPTER III. THE DIVISION OP EMPLOYMENTS 170 
 
 CHAPTER IV. THE ECONOMICS OP POPULATION ... 174 
 
 CHAPTER V. GROWTH OP THE INDUSTRIAL REVOLUTION 180 
 
 CHAPTER VI. THE MONEY OF THE NATION. .. 185 
 
 PART V. 
 INTERNATIONAL ECONOMICS. 
 
 CHAPTER I. INTERNATIONAL COMMERCE 207 
 
 CHAPTER II. INTERNATIONAL ECONOMIC PROBLEMS 223 
 
 CHAPTER III. A WORLD ECONOMY.. . 229
 
 DESCRIPTIVE ECONOMICS. 
 
 LNTKODUOTIOIsT. 
 
 CHAPTER I. 
 THE ART OF GETTING A LIVING. 
 
 A Bird's-eye View of the Subject. Visitors to the Pars 
 Exposition were advised to ascend the Eiffel Tower and secure 
 a bird's-eye view of the grounds and buildings. 
 
 This was to be the first act of the first visit. It was urged 
 that a general conception of the whole exposition would enable 
 one to comprehend and classify the parts. For the same reason 
 it will be well to commence our study of economics with a bird's- 
 eye view of the subject. Having had a general view we can 
 enter upon the classification and study of the parts. 
 
 A Point of View. Place yourself, during the morning 
 hours, on any of the great streets of the great cities of the 
 world; on Fricdrichstrasse, on. the Strand or on Broadway. A 
 tide of human beings pours out of the by-streets and surges 
 along the main channel. How were they all sheltered last 
 night? How did they breakfast? How will they dine? How 
 will they be fed and sheltered to-night and to-morrow? How 
 did they procure the clothing of such varied cost and of such 
 various stuffs? How will they be clothed in the future? If 
 you choose Broadway, commence early at the corner of Grand 
 street. The scene reminds you of the exit of bees from a hive 
 when the sun has dispersed the dew. Saunter down until, 
 between ten and eleven, you are at the corner of Wall street. 
 There is another hurrying throng, but the people may be a 
 
 7
 
 8 DESCRIPTIVE ECONOMICS. 
 
 little better dressed than at Grand street. Like the bees, how- 
 ever, going forth from the hive in the morning, everyone seems 
 to have some absorbing purpose. 
 
 Another Point of View. Cross Broadway and ascend 
 the spire of Trinity Church. The stream of anxious faces is 
 lost to view, but in its place there are the roofs of the city, in- 
 tersected by the streets, like the paths of an ant hill. Away 
 on the Jersey and Connecticut shores and up the Hudson are 
 the outlines of other cities, and of towns and villages, with many 
 fields and farm houses between. Down below no one is culti- 
 vating or herding. How will they get bread and meat? Out 
 on the farms no one is trading or manufacturing. How will 
 they get clothing and utensils? No one is quarrying or lum- 
 bering in the cities. How do they get materials for the build- 
 ings? How are the lumbermen and quarrymen supported in 
 the distant forests and quarries where they are hewing and 
 quarrying instead of sowing and reaping? Very few of the 
 people whose homes come within the view are engaged in 
 making things for their own use. They are not doing any- 
 thing toward the direct satisfaction of their own wants. They 
 make clothes which they will never wear. They are baking 
 bread which they will not eat, and building carriages in which 
 they will never ride. Many are doing something which does 
 not satisfy hunger or thirst, nor produce clothing or shelter. 
 How will they all get what they want and what they need? 
 How are their wants satisfied? How are your wants and my 
 wants satisfied? In some of those distant towns most of the 
 inhabitants are engaged in making a single class of articles. 
 It may be shoes, and perhaps men's coarse shoes at that. They 
 must have ladies' shoes and children's shoes, besides other 
 clothing and food. How will they get these things? 
 
 Economic Knowledge. The person who knows that such 
 questions exist and can answer them has some economic knowl- 
 edge. It is economic knowledge in a restricted sense. All 
 these toilers of the cities, the villages and the farms; all human 
 beings in fact, have wants. We all want the necessities of life. 
 We not only want them, but we must have them. " Man must 
 eat or die." In the next place we want the comforts of life.
 
 THE ART OF GETTING A LIVING. 9 
 
 We want them in order to live as we were designed to live, 
 above the brute creation. We must all be doing something 
 towards supplying these wants. Even if a constant supply of 
 manna were rained down, we would have to gather it. We are 
 born to work, and in the ordinary course of things every man 
 and woman does something toward procuring the wants of life. 
 In addition to the comforts of life many men want its luxuries. 
 We have, therefore, three classes of wants which mankind is 
 striving to procure, (1) necessities, (2) comforts and (3) luxuries. 
 
 In a more general sense economic knowledge is knowledge 
 of the ways and means practiced or employed by man to satisfy 
 these wants. In the language of a German economist, it is 
 knowledge of activity "directed to the acquisition of material 
 things for the satisfaction of human wants." This activity 
 constitutes our economic life. 
 
 Industrial Society. When men try to procure the neces- 
 sities of life and satisfy their wants, they soon find that they 
 must come in contact with other men. The hermit life exists, 
 in modern times, only in imagination. The hermit discovers 
 that unless he enters into his hermitage with a large stock 
 of the articles which the labor of other men has helped to pro- 
 duce, he is soon in the direst want. In all places and under 
 all circumstances, men are dependent upon each other. Among 
 modern nations in particular, they find that getting a living 
 brings them into close contact with each other. There is less 
 of this mutual dependence among savages. Even in the rudest 
 times of which history gives any account, however, there has 
 always been some kind of social dependence. There has always 
 been the society of the family. Man has never existed in a 
 perfectly isolated state. This mutual relationship and depend- 
 ence among men, in the process of getting a living, constitutes 
 the foundation of industrial society. Industrial society has 
 come to be that harmonious system, "operating as a piece of 
 mechanism," whereby the wants of each individual are supplied 
 for him, and brought to him from the various parts of the world; 
 and as every man has wants, so every one is a member of indus- 
 trial society. If each individual was sufficient unto himself; if 
 each one raised his own wheat, and made his own flour; pas-
 
 10 DESCRIPTIVE ECONOMICS. 
 
 tured and slaughtered his cattle; sheared his sheep and made 
 his own clothes; in fact, satisfied all his wants by his personal 
 efforts, there would be no such thing as industrial society. 
 
 Its Extensiveness. Among savage peoples, industrial so- 
 ciety does not extend beyond the family circle. The family 
 provides its simple wants by the labor of its own members. As 
 civilization advances, a larger body of individuals are brought 
 into contact with each other. Our wants become greater and 
 more varied as civilization advances. When they become as 
 numerous as pertain to highly cultivated life, we may be de- 
 pendent on many men located in distant parts of the world. 
 If you want a sealskin garment instead of a woolen garment, 
 you may be dependent upon the sealer in Alaska, the dyer in 
 London, and the furrier somewhere else. Industrial society, 
 therefore, is not confined within government boundary lines. 
 It is not like political society, governed and directed by a con- 
 stituted centralized authority. It knows no tongue and no 
 kinship. It is the sum of all the individuals who, directly or 
 indirectly, depend upon each other in the struggle of life. Set 
 down in a vertical column all the occupations and employments 
 of men, commencing in alphabetical order with abacist, a man 
 who gets a living by casting accounts, to zymologist, the man 
 who devotes his time to the fermenting of liquors, and in- 
 cluding most of the women under the head of cooks or house- 
 keepers, add up the list and the sum would represent industrial 
 society. 
 
 Economics. When we understand what economic know- 
 ledge is, it is not difficult to understand what "economics" 
 means. It pertains first of all to the arrangement of economic 
 knowledge in a classified and systematic form. This book is 
 an attempt to arrange economic knowledge for the purpose of 
 study, and the work as a whole, therefore, may be called a 
 definition of economics. There have been many definitions 
 of the subject. Some of them are not difficult to compre- 
 hend. Others involve the consideration of the principles of 
 economic science and require a large range of economic know- 
 ledge. It would answer, at this stage of our study, to define 
 it as the art of getting a living. If we stopped there, however,
 
 THE ART OF GETTING A LIVING. 11 
 
 we would find that our definition lacked exactness. We will 
 go a little further and call economics a study of men in their 
 relations to industrial society. We may say that its aim is to 
 show us how men are conditioned in the struggle of life by their 
 necessary connection with industrial society, and the member- 
 ship which they necessarily have in it. After all, any definition 
 which we might adopt would be open to criticism, because it 
 has already been said that the whole work is the definition. 
 We are not studying an exact science in which exactness of 
 definition is possible or necessary. 
 
 Economic Activity. During the progress of our study we 
 shall have frequent occasion to refer to the economic activity 
 of individuals and of peoples. We often ask of an individual: 
 "What is he doing for a living ?" The answer to that ques- 
 tion is, practically, a statement of the man's economic activity. 
 It means his economic life; what he does toward satisfying 
 his wants and what his relations are to those with whom he is 
 directly in contact and what his relations are to industrial so- 
 ciety at large. If we deferred strictly to the writings of the 
 best economists we should have to add largely to our definition 
 of economic activity. We will make the additions in the course 
 of the study, however, and for the present consider a man's 
 economic activity, and which is the same thing, his economic 
 life, to consist of all that he does for a living both the seen 
 and the unseen. That is to say, if he drives a street car for a 
 dollar and a half a day, his economic activity consists of his 
 day's work, which we see him do, and of all the minor things 
 connected with the spending of the money, some of them seen 
 but most of them unseen. The economic activity of a nation 
 or a people, or its economic life, is the aggregate of the activity 
 of the individuals. 
 
 Political Economy. This is the term hitherto most used in- 
 stead of Economics. We may consider the two terms as mean- 
 ing the same thing. French writers claim that one of their 
 number, M. de Watteville, first used the term political econ- 
 omy at the head of one of his works in 1615. It has been used 
 ever since, and centuries of usage stand in the way of substi- 
 tuting the term economics. The time will doubtless come,
 
 12 DESCRIPTIVE ECONOMICS. 
 
 however, when the greater definiteness and convenience of the 
 word economics, will overcome the prejudice of usage, and it 
 will supplant the term, political economy. 
 
 Descriptive Economics, pertains to the simple statement 
 and narration of economic facts. There are supposed to be 
 economic laws which regulate industrial affairs, and the 
 material welfare of men. It would be the province of the 
 science of economics to ascertain these laws; to state them; to 
 discuss the theories pertaining to them, and upon which they 
 are founded. Descriptive economics would have little to do 
 with these laws or theories, although it would call them to its 
 aid whenever necessary. It would preferably be limited to the 
 description or statement of the manner in which men obtained a 
 living and satisfied their material wants in all the past, and how 
 they satisfy them to-day. We shall see that industrial society 
 has passed through certain well defined stages. They are called 
 the economic stages. Descriptive economics would describe 
 these stages, stating the facts, just as a historian would narrate 
 the history of a city. It would follow their sequence and de- 
 scribe the economic activity characterizing each stage. It is 
 the province of the theoretical economist to draw conclusions. 
 But before he can draw conclusions the economist must have, 
 or at least he should have, a stock of economic facts, just as 
 the biologist must have systematic descriptions of the structure 
 and functions of different types of animals, before he^an form 
 generalizations concerning the various types. Descriptive eco- 
 nomics would gather and classify economic facts relating to the 
 various stages of economic evolution by the use of which you 
 can draw general conclusions as to economic phenomena, or test 
 those you have already drawn. 
 
 Relation to Other Studies. Economics is usually classed 
 among the social sciences. It is a subdivision of sociology. 
 Sociology is itself a subdivision of the larger branch of knowl- 
 edge, anthropology or the science of man. In looking over a 
 work on anthropology we find one part devoted to ethnography, 
 describing the various races of men and their different char- 
 acteristics and habits. After passing other parts we come to a 
 part on sociology, which treats of man as living in society.
 
 THE ART OF GETTING A LIVING. 13 
 
 Under sociology we find a chapter entitled " The Arts of Life." 
 Descriptive economics has to do with the arts of life. The 
 study of economics is still in its infancy, and much economic 
 knowledge still remains to be made certain and definite. 
 There is much that is unsettled, and therefore much difference 
 of opinion among writers on economics. This difference of 
 opinion relates more to the so called economic "laws," to the- 
 ories and general conclusions than to descriptive economics 
 such as we propose to study. 
 
 The Art of Getting a Living 1 . Having surveyed the 
 subject we see that it pertains to the art of getting a living. 
 It will appear, at the first glance, that many subjects to be 
 discussed have nothing to do with getting a living. Careful 
 examination of them, however, will show that they all relate to 
 the material welfare of mankind, and by "living" is meant 
 not only man's wants of necessity those which he must have 
 in order to live at all but the comforts of life, those which 
 he must have in order to live worthily. The ultimate aim of 
 all economic study, therefore, is to show how men obtain a liv- 
 ing in the various stages of industrial society, and how the 
 getting of a living is effected by their membership in, and rela- 
 tions to that society.
 
 14 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER II. 
 
 THE NEED OF ECONOMIC KNOWLEDGE. 
 
 Its Practical Nature. Economics under the old title of 
 Political Economy has been called "the dismal science." The 
 reason for this lies in the fact that the study has usually been 
 confined to the study of theories, and also because the text 
 books on economics have been prepared largely with the view 
 of teaching theories. Economic theories have their place, 
 and their study would be more popular if economic facts were 
 first studied and understood. The facts we are to study are 
 the facts of daily life. How men got a living in the ages of the 
 past; how they get a living to-day. How we get our income 
 and how we spend it. We have seen that this is economic 
 knowledge. It is so closely related to our welfare to our very 
 being in fact that its rudiments ought to be a part of the 
 public school course of study. There ought to be a wide dif- 
 fusion of economic knowledge, (1) everywhere, (2) at all times. 
 There are, however, some special reasons why there ought to 
 be a wide diffusion of economic knowledge, (1) in the United 
 States, (2) at the present time. 
 
 Our Political Growth, is one of these reasons. There is 
 said to be an army of persons in the employ of the government. 
 The population of the country is increasing, and the machin- 
 ery of the post-office, the internal revenue, and other govern- 
 ment bureaus and departments, must be extended accordingly. 
 The number of people, directly and indirectly employed by the 
 government is increasing from year to year with great rapidity. 
 The temptation of political parties to control these offices and 
 name this army of government employees is greater than party 
 honor can withstand. This temptation is not likely to be less 
 than it is to-day. The first trap which a demagogue sets to 
 catch votes, relates to some question of economics. People 
 cannot be deceived as to purely political questions. Political 
 knowledge is too widely diffused. As to economic questions ?
 
 THE NEED OF ECONOMIC KNOWLEDGE. 15 
 
 however, many voters are at the mercy of party leaders and 
 the party press. Here we have an illustration of the wisdom 
 of Dr. Arnold's saying : " A faulty political economy is the 
 fruitful parent of evil." 
 
 Great Aggregations of Capital. Great corporations and 
 large firms, controlling vast capital and directing great indus- 
 tries, are common features of the business of the day. Their ex- 
 istence is a reason why there should be a wide diffusion of eco- 
 nomic knowledge. It is no longer the railroad corporations 
 solely Trhich represent great aggregations of capital, although, 
 by a number of them combining, practically under one manage- 
 ment, the concentration of capital is greater than ever before. 
 Great manufacturing concerns control manufactures. When 
 they begin to conflict and harm each other, they form themselves 
 into a still greater and more far reaching combination of energy 
 and management the trust. There has recently been a marked 
 tendency toward the formation of great trading combinations, 
 for the purpose of controlling larger trade in manufactured 
 articles. You can study this subject by observing how in your 
 own town or city, this or that mercantile business which was 
 formerly conducted by an individual or a firm, has been " cap- 
 italized." The business has been transferred to a stock corpo- 
 ration for the purpose of procuring more capital and enlarging 
 its trade. Carpets, groceries, dry goods, are sold by corpora- 
 rations. This means fewer merchants conducting an individual 
 busirfess and more men who must seek employment in the ser- 
 vice of others. The change is going on in manufactures which 
 has already taken place in mercantile industry. Not long ago 
 there were many little shops where the proprietors, assisted by 
 one or two workmen, in much the same relations as existed be- 
 tween the medieval master-workman and his journeymen, car- 
 ried on limited manufacturing enterprises. These individual 
 shops have been closed. The proprietors and assistants have 
 gone into the service of large manufacturing concerns. These 
 changes in business methods involve changes in the industrial 
 life of many individuals and affect the aggregate industrial life 
 of the nation. A wide diffusion of economic knowledge will 
 allow of the occurrence of such changes with less individual
 
 16 DESCRIPTIVE ECONOMICS. 
 
 hardships and with less chance of harm to the industrial life 
 of the nation. We shall look further into these changes when 
 we come to discuss what is called in economics the division of 
 employments. The principle involved may be illustrated in 
 this way : Our grandfathers brought in the wool from the barn 
 and our grandmothers wrought out the finished homespun. 
 The man made the loom, reared the sheep and sheared the 
 wool. The woman carded, spun and wove it, and if need be 
 dyed it also, even with home-made dyes. She made the coat 
 also. Two persons produced the garment ready for wear. In 
 our times hundreds of persons labor to produce a single 
 coat. Let us look at some of the steps involved. There is: 
 1, the raising of the sheep; 2, the transportation of the wool; 
 3, its manipulation in the factory; 4, the building of the intri- 
 cate machinery of the factory; 5, the grinding of the dyes; 
 6, their transportation; 7, dyeing of the cloth; 8, the trans- 
 portation of the cloth; 9, the cutting by the cutter; 10, the 
 sewing by the tailor. These are some of the direct steps in- 
 volving the direct application of labor. There are many indi- 
 rect steps involving indirectly the application of the labor of 
 many other people. What is true of a coat is true of a pair of 
 shoes, of a carriage, and of all the articles of common use. 
 
 Great Labor Organizations, suggest another reason why 
 economics should be studied. The vastness of our territory 
 and resources seems to have breathed the spirit of development 
 into the organization of labor as well as of capital. At any 
 rate, the organization of labor, from the local trades union into 
 the district union, the district union into the state federation, 
 and the state federation into the national federation, has grown, 
 side by side, with the growth of the aggregation of capital. 
 The aggregation of capital, under a single head and manage- 
 ment, controlling a great number of employees and their daily 
 bread, is likely to beget discontent among the employees. 
 Organization of labor will meet organization of capital, and will 
 grow for the purpose of meeting it. 
 
 Diversity of Climate. Our territory extends from the 
 climate of the arctics to that of the semi-tropics. Our natural 
 productions are such as belong to these and all intermediate
 
 THE NEED OF ECONOMIC KNOWLEDGE. 17 
 
 zones of climate. This diversity of productions gives rise to 
 widely diverse pursuits, industries and interests. The 
 whole country, however, is to be governed as a political unit. 
 All industries must be prospered. The occasion demands the 
 wisest statesmanship. No nation ever presented a finer field 
 for the application of economic knowledge. It should be dif- 
 fused s<5 that it may be used. 
 
 The Economic Undertakings of Government. Men. in 
 public life are beginning to recognize the importance of correct 
 economic regulations in public affairs. Good economics in 
 governmental matters is seen to promote the aggregate industrial 
 welfare of the people, and when the aggregate industrial con- 
 dition of the people nourishes, the nation flourishes. Govern- 
 ment, therefore, tends to step in and look after economic 
 matters which were formerly in charge of private individuals, 
 or else entirely neglected. Compare the annual messages 
 transmitted in 1893 by the President and by the Governors of 
 the various States, with those of a period of ten or fifteen years 
 earlier. Out of fifty subjects, separately discussed by President 
 Harrison, one half were economic questions; out of twenty-one 
 subjects discussed by Governor Flower of New York, sixteen 
 were economic subjects. Unwise legislation on economic mat- 
 ters is worse than no legislation. Better the " Laisser faire," 
 or let alone principle of Colbert. Nothing short of a wide 
 diffusion of economic knowledge will ensure correct economic 
 legislation. 
 
 Industrial Growth. The recent industrial growth in the 
 United States is the last of the subjects which might be named 
 as bearing on a wide diffusion of economic knowledge. This 
 growth has not been greater than in other countries, but, when 
 industrial conditions are compared, it has been more marked. 
 This industrial growth has given rise to increased and more 
 varied wants and greater diversity of employments. Economic 
 knowledge must be wide spread, so that men may know the 
 new conditions of getting a living. Some of these new indus- 
 trial conditions have been mentioned under the head of "great 
 aggregations of capital," and might be profitably repeated to 
 illustrate the social economics of industrial growth. The 

 
 18 DESCRIPTIVE ECONOMICS. 
 
 concentration of capital, however, is only a phase of the recent 
 industrial growth of the nation. It was only about twenty-five 
 years ago when Emerson noted that it appeared to him as though 
 the inventions of the fifty years prior to his time were equal to 
 all the inventions of the fifty centuries before them. To-day, 
 however, looking back over the quarter of a century since Em- 
 erson wrote, it appears to us that its discoveries and inven- 
 tions and new and improved industrial methods are far more 
 important than those of the previous half century.
 
 THE STRUGGLE OF LIFE. 19 
 
 CHAPTER III. 
 
 THE STRUGGLE OF LIFE. 
 
 Man's Three Necessities. There are three necessary wants 
 which men must satisfy in order to exist. They must have food, 
 clothing and shelter. Other wants can be dispensed with, but if 
 nourishment fails, and protection from the storm and cold and 
 night fails, disease ensues, and starvation and exposure put 
 an end to "being. Most animals can get along without artificial 
 clothing or shelter. Nature, however, has failed to provide 
 man with the bodily covering and protection which he requires 
 in rigorous climates. Man's necessary wants, therefore, are 
 more than those of the horse or the dog or the bear. 
 
 The Struggle for Food. The one necessary want of all 
 animal creation is food. The structural organization of men 
 and animals is constantly decaying, and as constantly being 
 renewed. The organs of motion, respiration and digestion are 
 constantly subject to waste. The renewal must be provided 
 for. The vital processes of life require the presence of animal 
 heat. There must be fuel in the shape of food to keep the fire 
 burning. 
 
 Carnivorous Plants. Man has an easy time in life com- 
 pared to the struggle which is going on among the lower ani- 
 mals. The difficulty of obtaining the requisite supply of food 
 increases descending from the higher structural organizations 
 to the lower. Among the lowest forms of animal life, like the 
 carnivorous plants, the struggle becomes pitiful. A sponge has 
 been likened by a fanciful writer to a city where the inhabi- 
 tants line the sides of the streets and take their food as it passes 
 by. It is a very pretty fancy, but cruelly unreal. The sponges, 
 like the sea lily and other fixed carnivorous plants, are at the 
 beck and nod of the slightest current. If a current does not 
 happen to bring infusorians their way, they starve. It is true 
 they may reach out their tentacles for a little way about, catch- 
 ing wildly at the drifting food, but most often it sweeps by
 
 20 DESCRIPTIVE ECONOMICS. 
 
 them. The oyster can crane its neck a little distance, and the 
 clam a little farther, but ordinarily they must lie helplessly by 
 and see, or feel, their food drift away. 
 
 Economic Struggles of Animals. Ascending the scale of 
 animal life we find the struggle almost as constant and as 
 fierce. It has been aptly divided into two forms having eco- 
 nomic aspects. There is first the struggle between fellows 
 "between animals of the same kind which compete for similar 
 food and other necessaries of life." They can go and seek it, 
 to be sure, but if nature does not provide it, what then? Or, 
 if there is not enough to go round and fill all mouths in peace? 
 Then it must be wrenched away with tooth and claw. After 
 the struggle between fellows for the same food, comes the strug- 
 gle between natural foes between animals of different kinds. 
 It is the struggle between carnivores and herbivores. The 
 struggle is now two-fold. It is between one kind between 
 carnivores for the same food, and the other kind, the herbivores, 
 to escape their natural foes. The herbivores must not only look 
 out for their food, but must also look out for themselves. 
 Naturalists differ as to which form of the struggle is keenest. 
 Mr. Grant Allen thinks it is the struggle between fellows 
 between animals of the same kind for similar food. He proves 
 his theory by saying that " the baker does not fear the compe- 
 tition of the butcher in the struggle for life; it is the Competi- 
 tion of the other bakers that sometimes inexorably crushes him 
 out of existence. In this way the great enemies of the indi- 
 vidual herbivores are not the carnivores, but the other herbiv- 
 ores. It is not so much the battle between the tiger and the 
 antelope, between the wolf and the bison, between the snake 
 and the bird, that ultimately results in natural selection or 
 survival of the fittest, as the struggle between tiger and tiger, 
 between bison and bison, between snake and snake. * * * 
 The struggle is fierce between allied kinds, and fiercest of all 
 between individual members of the same species." 
 
 Mr. J. Arthur Thompson, whose book, The Study of Animal 
 Life, contains many illustrations of the social and industrial 
 life of animals, doubts the truth of Mr. Allen's statements, 
 holding that the evidence upon which they are based is very
 
 THE STRUGGLE OF LIFE. 21 
 
 unsatisfactory. Mr. Thompson finds that there are many peace- 
 ful devices by which animals have discovered a way out of a 
 situation in which a life and death struggle might seem in- 
 evitable such as separation into bands and migration. 
 
 Changeful Surroundings. There is a third kind of strug- 
 gle among animals which has an economic point also. It is 
 the struggle with changeful surroundings. It is the struggle 
 to adapt themselves to the changing condition of physical en- 
 vironment, and as physical nature is careless of life, it is some- 
 times called the struggle with Fate. " Changes of medium, 
 temperature and moisture continually occur, and the animals 
 flee for their lives, adapt themselves to new conditions, or 
 perish." But man must also adapt himself to changing physi- 
 cal conditions. His necessary want of clothing, already re- 
 ferred to, means that he must adapt himself to the changes of 
 the season and of temperature. Primitive people readily yield 
 to the struggle with fate as it comes upon them in some forms 
 of physical environment. The savage fisherman sees a line of 
 shell fish fringing the beach. The mollusks have been hurled 
 up by the surf and left to die by the receding tide. Even so, he 
 thinks, nature may have a fate in store for him against which it 
 is useless to resist, and he gives way to fatalism. As we proceed 
 with our study we shall see that economic progress is the con- 
 quest of nature by man. Man's victory over fateful conditions 
 has been gradual but sure, until nature now rarely presents 
 them and man laughs at the old terrors of physical environment. 
 
 The Food of Animals. Billions of inf usorians upon which 
 acres of carnivorous plants could fatten for years, would make 
 a scant mouthful for a whale. If they made a mouthful they 
 would afford but little nourishment. The food of the higher 
 animals is more nourishing than that of the lower. The sources 
 of supply become more numerous and the character of the sup- 
 ply more varied as the structural organization ascends. De- 
 scending the scale, however, we find the art of subsistence 
 becoming more simple. The carnivorous plants imprison food 
 within their petals and assimilate it by a process of absorp- 
 tion. If we descend the scale of organization until we reach 
 the vegetable kingdom, the mystery of subsistence vanishes.
 
 22 DESCRIPTIVE ECONOMICS. 
 
 Moreover, the lower the structural organization the greater the 
 dependence. The carnivorous plants must take what nature 
 brings to their mouths. The herbivores are able to forage 
 for themselves and decrease the chances of starvation. The 
 structural organization of the carnivores, together with the 
 character of their food, fit them to survive on a meal now and 
 then, and periodical famine produces no great discomfort. The 
 omnivore usually demands its daily bread, and it is reasonably 
 sure of a breakfast, dinner and supper. The higher the struct- 
 ural organization, therefore, the more stated must be the sup. 
 ply of food and the more nourishing its character. What is 
 true as to structural organization is true also as to economic 
 development. The higher the economic state, the more regu- 
 lar must be the food supply. Domestic animals cannot endure 
 hunger and thirst as long as wild animals of the same species, 
 and the greater the facility with which food is obtained the 
 more dependent all animals become upon a stated supply. 
 
 The American Indians, in their aboriginal state, required 
 but little food as compared with the wants of highly civilized 
 men. They could go without nourishment for astonishing 
 periods and at the same time maintain all the appearances of 
 normal health. One full meal a day was the usual allowance, 
 and if that should fail it caused no great inconvenience. We 
 may say generally, therefore, that man's necessary wants, so 
 far as food is concerned, require a more certain and regular 
 supply of a more nourishing quality than is required by other 
 animals. The supply must also be greater, more regular, and 
 of a finer quality as his economic condition develops and assumes 
 a higher character. This thought is further discussed in the 
 next chapter. One of the purposes which descriptive economics 
 has in view, however, is to show that men are better nourished, 
 clothed and sheltered as their economic condition progresses, 
 and, therefore, we may expect iterations of the thought as we 
 proceed. 
 
 Clothing and Shelter. The fire which is said to be burn- 
 ing within the body, or the chemical action going on there, 
 must ordinarily, in the case of man, be protected from without. 
 Few of the lower animals require more than the garb in which
 
 THE STRUGGLE OF LIFE, 23 
 
 nature has dressed them. In tropical climates man can get 
 along without much artificial covering. It is " getting along," 
 however, not living. When ill health, and disease come, arti- 
 ficial clothing and protection must come with them. With- 
 out artificial clothing and shelter we would be obliged to live 
 in the tropics. Man appears to be born for all climates, and 
 to be endowed with the faculty of preserving his life and health 
 in all climates by supplying what nature has failed to provide 
 for him.
 
 24 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER IV. 
 
 MAN'S WANTS AND THEIR SATISFACTION. 
 
 Man Distinguished From Other Animals. The title of 
 the last chapter, "The Struggle of Life," indicated that the 
 struggle is to a certain extent universal. The struggle for 
 food is not only a constant struggle by man, but also by all 
 other animals and by all animal life. Naturalists have tried 
 many times to construct a definition which would distinguish 
 man from other animals. They used to say that man was the 
 reasoning animal, but the more they studied and understood 
 animal life, the more they were compelled to admit that some 
 animals seem to reason. Out of all the traits and character- 
 istics of man, it is hard to find one which is not slightly 
 imitated in some degree by the higher forms of the brute cre- 
 ation. It would not be strange, therefore, if we should find 
 among the more intelligent brutes, signs of a desire for the 
 comforts of life, in addition to necessary wants. These desires 
 are not instinctive, however. They are the results of an unnat- 
 ural environment imposed by man. The lower animals have 
 no wants in the sense that man has wants. Animal instinct 
 demands only necessities. Man alone demands something be- 
 sides necessities. The number and character of man's wants 
 are subject to indefinite increase and extension. The aggregate 
 want of the lower animals remains the same from generation to 
 generation. This fact brings us to: 
 
 Another Class of Wants. The wants which were discussed 
 in the last chapter were necessary wants. The wants of food, 
 clothing and shelter which man must have in order to live at all. 
 We come now to a class of wants which man must have in order 
 to live worthily. They are popularly denominated comforts. 
 They are the peculiar wants of man, distinguishing him from 
 brutes. Economics considers man in the light of his divine 
 origin. It treats of him as having a purpose on earth greater and 
 nobler than that of other animals. It considers that he would
 
 MAN'S WANTS AND THEIR SATISFACTION. 25 
 
 not accomplish his purposes, if he did not develop wants dis- 
 tinguishing him from the beast. To-day the horse is a thing 
 of beauty and symmetry. Its wants are the same, no greater, 
 no less, than at the time when it was a scrawny digitigrade, 
 walking on five fingers and toes; centuries of domestication, 
 breeding and natural selection have not increased its wants. 
 During the same time man's wants have increased infinitely. 
 They increase from age to age, from one stage of civilization 
 to another. With each successive stage of advancement they 
 become more numerous, more varied and of a higher quality. 
 Many necessities of the present day were the luxuries of our 
 grandfathers. The tallow candle was once a great comfort. 
 The electric light is a necessity of modern civilization. 
 
 The Satisfaction of Increasing Wants. This is the great 
 problem of economics. It being conceded that man ought 
 to have more wants than other animals, that he ought to 
 want more than the bare necessities of life; that his wants 
 ought to keep growing in number and quality, and that men 
 ought to desire comforts in order to become what they are des- 
 tined to become, then the problem is: How shall these com- 
 forts be procured ? How shall these increasing wants be sat- 
 isfied ? Philanthropists talk of the poor growing poorer. 
 They refer to the difficulty of procuring the increased wants 
 of advancing civilization of keeping pace with economic pro- 
 gress. It is just as easy for the inhabitants of Western New 
 York to obtain the bare necessities of life as it was for the 
 Senecas. It is easier, in fact. The necessities of life are ob- 
 tained with greater facility now than when Hudson sailed past 
 Manhattan Island. The comforts of life are more abundant 
 and more widely distributed. Non-satisfaction of wants results 
 in the condition which we call poverty. But when the poor 
 grow poorer, it is not because of the non-satisfaction of neces- 
 sary wants. It is because they fail to procure the comforts 
 which others enjoy. It is relative poverty rather than absolute 
 poverty. 
 
 Increasing wants are satisfied and the comforts of advancing 
 civilization are procured by means of the organism which is 
 called Industrial Society. It is that "harmonious system"
 
 26 DESCRIPTIVE ECONOMICS. 
 
 which brings our wants from all parts of the world; which pro- 
 duces them here and there, in all parts of the earth, and dis- 
 tributes them from hand to hand. To know what that har- 
 monious system is; how it has grown with the growth of popu- 
 lation; how it has adapted itself to the changes and exigencies 
 of growing civilization is part of the work in hand. We 
 shall see as we proceed that as civilization advances men 
 forsake the partially isolated economic life, characteristic of 
 very primitive peoples, and work together. They find it to 
 their advantage to cooperate in the work of satisfying their 
 wants. This cooperation becomes the system which was re- 
 ferred to in the paragraph on Industrial Society, in chapter 
 one. In proportion as wants become more numerous and higher 
 in character, the more necessary it is for men to depend upon 
 this organism of industrial society for their satisfaction. At 
 the beginning of our study we cannot over-rate the importance 
 of industrial cooperation as a factor in economics. Not indus- 
 trial cooperation in some specific undertaking, by particular 
 individuals of a local community, but industrial cooperation of 
 mankind in general of the race. It is that cooperation of the 
 clock makers of the Black Forest, and the wheat growers of 
 Dakota, and the coffee planters of Honduras, who work together 
 each according to his special economic advantages and condi- 
 tions, for the satisfaction of the aggregate want. 
 
 The Comforts of Food, Clothing and Shelter. In look- 
 ing around to see what we have and use at the present time, 
 we find that nearly everything is an improvement simply, upon 
 the original necessary wants of food, clothing and shelter. 
 We want now a greater variety of food than the savage man. 
 We want variety in the cooking of it, and we want it better in 
 quality. The innumerable varieties and delicacies of modern 
 food aim at the satisfaction of these increased wants. The 
 same thing is true with regard to the comforts of clothing and 
 shelter. The clothing of the Fuegian consists of a bit of seal 
 skin hung by a string from the neck. It is shifted about ac- 
 cording to the direction of the blast, so that only the windward 
 side of the man is protected. His hut is of the same character. 
 It is simply a temporary shelter, sufficient for the hour. It
 
 MAN'S WANTS AND THEIR SATISFACTION. 27 
 
 has no stated entrance. He goes in on the leeward side and 
 closes up the gaps to windward. His sole aim in life is to sat- 
 isfy the purely animal wants, those which will preserve and 
 prolong existence. The wants of the higher stages of industrial 
 society demand something more than the necessaries of life. 
 They demand roast capon; terrapin; broad cloth; furs; houses 
 of many rooms, and many gables, comfortably appointed. All 
 through the ages, from historic times, the number of man's 
 wants, their character and quality, have been the thermometer 
 of his progress. They have indicated the stage of industrial 
 society and measured the diffusion of human culture. 
 
 Therefore, in all ages and at all times, the struggle of man- 
 kind has been and is, to satisfy, (1) necessary wants; (2) wants 
 of comfort. The means which men adopt to satisfy the wants 
 of both classes; the persistence with which they seek to satisfy 
 the wants of the second class, and the extent to which they 
 succeed, is the measure of their separation from the lower ani- 
 mals. Well meaning people sometimes say we must learn to 
 be content, that we must set a limit to our wants and not be 
 striving for something more. They quote Paul's words: "For 
 I have learned in whatsoever state I am, therewith to be con- 
 tent," just as though Paul meant to say that it is wrong to 
 make our state as comfortable and as satisfactory as possible. 
 Perhaps we should not want more than it is in our power to 
 properly satisfy, but the real benefit arising from the existence 
 of wants lies in the fact that it sets us to work satisfying them. 
 Life is enlarged and economic activity extended. Our eco- 
 nomic capacities are developed by our trying to keep pace with 
 increasing wants. 
 
 We have now finished the four introductory chapters de- 
 signed to give a general view of the purposes of our study. We 
 are now in position to better understand those purposes. It is 
 not necessary to make another definition of economics, nor need 
 we enlarge upon the definition already attempted. The pro- 
 gress of the work will be an unfolding and an enlargement. 
 We may profitably reiterate, however. In some studies itera- 
 tion is always profitable. We shall find that to be particularly 
 true of the study of descriptive economics. We shall find occa-
 
 28 DESCRIPTIVE ECONOMICS. 
 
 sion, therefore, in our progress, to reiterate designedly and for 
 the purpose of obtaining clear conceptions. In chapter one, 
 economics was defined as the study of men in their relations to 
 industrial society. At the end of the same chapter it was said 
 that the ultimate aim of economic study is to show how men 
 get a living in the various stages of industrial society, and how 
 their membership in industrial society conditions them in the 
 struggle. A reiteration of the same thought, in slightly dif- 
 erent language, would read like this: " Economics inquires how 
 the various wants of the people of a country, especially the 
 wants of food, clothing, fuel, shelter, may be satisfied; how the 
 satisfaction of these wants influences the aggregate industrial 
 life, and how in turn they are influenced by the industrial life." 
 We are now ready to commence that inquiry.
 
 PART I. 
 
 ECONOMICS OF THE FAMILY. 
 
 CHAPTER I. 
 
 THE BEGINNING OF INDUSTRIAL SOCIETY. 
 
 Gregariousness. Very few members of the animal king- 
 dom live strictly isolated lives. The rapacious animals usually 
 lurk alone in forest and jungle, although some fellows of their 
 kind are frequently found not far away. The lower forms 
 of animal life, endowed with but little sensation, drag out a 
 miserable, solitary existence. The higher forms, although not 
 classed among the gregarious animals, rarely live entirely alone. 
 Solitary life is but for short periods at the most. Union and 
 association with their fellows come sooner or later. Isolation 
 is the exception; gregarious life is the rule. The hoofed animals 
 are seldom found alone. The carnivores are less gregarious 
 than the herbivores. The hunter who finds one squirrel in a 
 piece of timber is sure that another squirrel is not far off. 
 When Aristotle wrote that man is a social animal, it was one 
 way of expressing the fact that man lives gregariously, and is to 
 be classed among the gregarious animals. 
 
 Family Life among Animals. Naturalists profess to have 
 discovered among animals indications of the existence of the 
 institution of the family. The signs may be slight, but at 
 least they are far off prophecies of the condition of things which 
 we may expect to find among men. There is the love of mates, 
 almost universal in its existence. We find animals entering 
 into relations of mutual helpfulness, rendering mutual aid to 
 each other and their offspring, rearing and breeding with all 
 
 29
 
 30 DESCRIPTIVE ECONOMICS. 
 
 the tender solicitude of humanity. If you have watched the 
 selfsame robins, nesting year after year in the same old spot 
 beneath the porch, and year after year exhibiting the same 
 touching anxiety for the welfare of their young> you have seen 
 signs of the family life. A little closer attention and study 
 show that "the sociality and helpfulness of animals are flowers 
 whose roots are in kinship." 
 
 Industrial Society of Animals. By living gregariously, 
 animals advance their material interests in two ways. In the 
 first place their association becomes a combination for purposes 
 of defense. In the second place their gregarious association is 
 an advantage in procuring subsistence. In all cases of animal 
 sociality they seem to get some good out of society and associ- 
 ation. Association for defense is the more primitive and the 
 more widespread. Cliff swallows enter into combination and 
 render mutual assistance in warding off intruders. King birds 
 unite in defending their nests against crows. The herbivores 
 associate in defending themselves against carnivores. Many 
 of the hoofed animals, naturally of a timid disposition, would 
 be practically defenseless against the attacks of rapacious ani- 
 mals, did they not exercise mutual helpfulness. A herd of 
 deer will frequently ward off the attack of a whole pack of 
 wolves. Association for the purpose of procuring subsistence 
 is perhaps a little higher type of animal society than association 
 for defense. In its most primitive form it is simply association 
 and combination in attacking or hunting prey. In this form 
 it is represented by the pack hunting animals; by vultures, 
 kites and some eagles, which unite in pursuing their quarry; 
 by pelicans which form a semi-circle at the sea shore and grad- 
 ually advance the circle to the beach, driving the fish before 
 them. Then comes association in which there seems to be a 
 mutuality of labor beyond that involved in mere combination 
 for attack. Himadryad baboons have been known to unite to 
 turn over large stones and divide the spoils found beneath them. 
 Beavers, bees and ants live in a fairly well organized industrial 
 society, sharing all the labors connected with getting a living. 
 The ants are said to take their turn in going up the trees "to 
 milk their cows." The reference is to their habit of procuring
 
 THE BEGINNING OF INDUSTRIAL SOCIETY. 31 
 
 subsistence from the Aphides, as related by Linneus. They 
 tickle the Aphides with their antennae and the resulting irrita- 
 tion causes an exudation from the pores upon which the ants 
 feed. The colony forming animals perfectly illustrate the 
 essence of industrial society. They illustrate its progress as 
 association for attack and defense illustrates its beginning. 
 
 The Human Family. We have seen what has been called 
 its far-off prophecies. That which is found to exist in a crude 
 state, with crude relations, among the lower animals, we would 
 naturally expect to exist in a more sublime form with higher 
 relations and affections among men. In man the attraction of 
 mates is deepened into love, and he is born into the family. 
 That is his condition without his assent. Geologists and eth- 
 nologists dig into the earth and tell us that they find evidence 
 of a time when man was a solitary brute, living alone in caves. 
 But that time is prehistoric. History and the remotest explor- 
 ations of travelers tell us of no such time and no such men. 
 Men are everywhere found living in the family, and society has 
 everywhere been found far enough advanced to embrace the 
 family as one of its institutions. It is certainly not necessary 
 for our present purposes to study the state of things prior to 
 the institution of the family. 
 
 And even those prehistoric men must have felt the desire 
 for mutual relationships, and practiced the sociality existing 
 among the lower animals. The relations and affections of social 
 life must certainly have assisted in the struggle for material 
 subsistence. They must have lessened the intensity of the 
 struggle and ennobled its character, because they guaranteed 
 existence and progress. The struggle itself must have attained 
 higher conditions and reached the real affection of kinship. 
 Then, too, we can hardly conceive of a time when men did not 
 know that they were social animals. It is knowledge of their 
 nature which distinguishes them from other animals. Our 
 study, therefore, commences with society, and man in society. 
 It begins with the family as the earliest and most primitive 
 form of society, and regards man as a member of the family and 
 a member of society. It regards the family as the very begin- 
 ning of industrial society, and as that form of industrial society
 
 32 DESCRIPTIVE ECONOMICS. 
 
 which has existed everywhere and among all men at some time, 
 and through which all peoples have passed. The machinery 
 whereby economic wants are supplied to individuals is first set 
 in motion in the family itself. The machinery is operated by 
 the members of the family, independent of all other families 
 and individuals. 
 
 The Isolated Family. Dr. Kane, the Arctic explorer, tells 
 in his journal how Hans and Morton, two of his lieutenants, 
 went out from the ice-bound brig on an exploring expedition. 
 When about seventy-five miles from the ship they found two 
 huts containing two families. The spot was thousands of 
 miles from civilization, and from a stated source of supplies. 
 The frost-bitten travelers were taken in and treated to the 
 comforts of home. Everything was home-made. The simple 
 utensils with which the huts had been built, whereby they 
 were warmed, and with which the daily food was prepared, and 
 the food itself, had its origin in the labor of each family. 
 Each family was sufficient unto itself. Each provided itself 
 with all the wants of life. It is true that these wants were few 
 and simple. They were necessarily so. Each family was its 
 own carpenter and builder, tanner and leather worker, hunter 
 and fisher, sleigh-maker and cook, and the productions of the 
 family labor must necessarily, therefore, be crude and simple. 
 The study of family activities as illustrated by such examples; 
 the study of means and methods by which an economically 
 isolated family provides itself with food, clothing and shelter, 
 is the beginning of the study of economics. It is not often 
 that families are found in a more isolated state than those 
 discovered by Dr. Kane's men. Among the rudest people dis- 
 covered by travelers or described by ethnologists, it is found 
 that families congregate. It is not a normal condition of 
 things when a family goes off into the forest or waste and lives 
 by itself. The fact that two or more families live in the same 
 neighborhood, however, does not preclude the idea of economic 
 isolation the state in which each family produces all its wants, 
 by the labor of the members of its immediate circle. Eco- 
 nomics of the family relates to the getting of a living by an 
 isolated family.
 
 THE BEGINNING OF INDUSTRIAL SOCIETY. 33 
 
 Territorial and Economic Isolation. Care must be 
 taken to distinguish mere territorial isolation from economic 
 isolation. "When the isolated family is referred to as the 
 beginning of industrial society, it is the economically iso- 
 lated family which is meant, and not the territorially isolated 
 family. There is a certain territorial isolation about all pio- 
 neer life. There may also be a partial economic isolation. 
 Let us illustrate: When a pioneer walked from the head 
 of navigation on the Hudson up through the valley of the Mo- 
 hawk into the far Genesee country with a pack slung from his 
 axe handle, and cut down some of the huge sugar maples and 
 beeches, making room for a log cabin, he became territorially 
 isolated. His nearest neighbor rarely heard his rifle-crack. 
 There was a partial economic isolation also. His own labor, 
 united with that of his help-mate, produced nearly all the fam- 
 ily wants fish from the river, game from the woods, the prod- 
 uct of the first little garden patch which was cleared. He tanned 
 deer skins for various articles of clothing, and later on spun 
 wool from the sheep, or flax from the field. And so we might 
 go on naming the wants which he supplied by his own exertions 
 without calling upon the outside world. So it has been from 
 the time of the Pilgrim Fathers to the time when their children 
 pushed out west and north, a'nd their children's children built 
 cabins in the forests and on the plains of the great West. 
 Theirs was a territorial isolation. At the most it was only a par- 
 tial economic isolation. If we compare it with the condition of 
 things at the beginning of industrial society it was a very slight 
 economic isolation indeed. Our pioneer ancestors brought with 
 them their axes and their clothing. These were the visible signs 
 of an advanced economic life and a highly developed industrial 
 society which existed elsewhere, and which they had left behind. 
 These things, moreover, exerted but a slight effect toward re- 
 ducing their economic isolation compared with the effect of all 
 the arts of life which they brought with them. They brought 
 from ' the economic life which they left behind knowledge of 
 fire, of the use and construction of tools, of the various pro- 
 cesses of tillage and the cultivation of plants and seeds, of the 
 domestication of animals, of improved methods of taking fish 
 3
 
 34 DESCRIPTIVE ECONOMICS. 
 
 and the wild animals, of weaving and building, and mining and 
 pottery making. The real economic isolation and the real be- 
 ginning of industrial society commences with the discovery of 
 the very earliest of these arts of life with the families which 
 began their practice after a rude fashion. Industrial society 
 grows with the development of these arts, and it is a very slow 
 growth. From the discovery of one art to the discovery of the 
 next means, frequently, the lapse of ages.
 
 THE FRUIT AND NUT GATHERER. 35 
 
 CHAPTER II. 
 
 THE FRUIT AND NUT GATHERER. 
 
 Food Resources of the Family Stage. Bearing in mind 
 that we are now studying that period of industrial society when 
 the isolated family is its unit and its highest development, our 
 first inquiry naturally relates to the sources of food supply. 
 These sources must necessarily be restricted and limited. There 
 is no cooperation among men, outside of the membership of 
 each immediate family circle. All the necessities of the family 
 must be supplied by the labor of its own members. Each man 
 is a " jack of all trades," good at none and having but little 
 time for any. It is a state of savagery in which men have not 
 the means of systematically engaging in the production of food. 
 They must dispute with the wild beasts for possession of the 
 woods and common feeding grounds. During the family stage 
 of industrial society we find three principal sources of food. 
 This chapter will describe briefly the first and most primitive 
 method of getting a living. It belongs to the earliest and most 
 primitive stage of isolated family life. We will afterward pro- 
 ceed to ascertain the progressive methods of enlarging the 
 sources of subsistence. " The great epochs of human progress 
 have been identified, more or less directly, with the enlarge- 
 ment of the sources of subsistence." This is a fact of such 
 pronounced importance that much attention must be given to 
 it. A large part of the discussion in descriptive economics is 
 properly devoted to it. 
 
 The Frugiferous Subsistence. Men were first of all fruit 
 and nut gatherers. They were like the wild animals, living on 
 the spontaneous fruits of the earth. It was a precarious sub- 
 sistence upon berries, wild fruits and nuts, such as the bounty 
 of nature afforded. It was a more bitter struggle for existence 
 than we can now comprehend. Each member of the family, 
 must necessarily have entered into it. The young as well as 
 the old took a part, just as the young of animals are turned 
 adrift to seek a living.
 
 36 DESCRIPTIVE ECONOMICS. 
 
 A Prehistoric State. Few, if any, evidences of peoples in 
 this state have been found within historic times. The savage 
 races discovered by travelers have usually passed to a higher eco- 
 nomic plane. The structural organization of men is omnivorous, 
 and the strictly frugiferous subsistence is unnatural. Several 
 tribes of savages exist, however, which nearly approach the con- 
 dition of frugiferous subsistence. A French traveler, M. Chaf- 
 faujou, discovered near the sources of the Orinoco a tribe of Gua- 
 haribo Indians whom he described as living without clothing, 
 houses or tents, " feeding on large worms which they scraped 
 up with their nails, and on seeds and palm shoots which they 
 severed with their teeth." There are savages roaming the virgin 
 forests of Central Borneo much after the manner of wild ani- 
 mals. "At night they take shelter under some large tree where 
 they light a fire to keep off the wild beasts; the children are 
 hung up amongst the branches." The Curumbus of the Neil- 
 gherry Hills, one of the hill tribes of India, are described as 
 living mainly on such vegetable subsistence as nature throws in 
 their way, and lacking sufficient skill and intelligence to pro- 
 cure anything else. 
 
 A Restricted Habitat. The portion of the earth's surface 
 which could be occupied by men subsisting in this way is neces- 
 sarily small. Only a tropical climate and a country richly en- 
 dowed with vegetable life would admit of it. The body is 
 usually deformed, and the period of life is short owing to the 
 ravages of disease. Were it not so, death must come in the 
 more horrible form of starvation. There must necessarily in 
 all climates be periods when spontaneous fruits are scarce, 
 and at such times the edible roots which can be procured, with 
 plants and fungi thrown in, will barely provide sufficient nour- 
 ishment to sustain life. As population grows, the supply will 
 fall short. There are many savage tribes of the present day, 
 however, who are at times obliged to resort to this subsistence. 
 When animal food fails, Fuegians and some American Indians 
 are glad to resort to berries, bark and bulbs.
 
 THE FISHER AND HUNTER. 37 
 
 CHAPTER III. 
 
 THE FISHER AND HUNTER. 
 
 The Second Economic State. We have just seen that in 
 relation to subsistence, the first economic state of mankind is 
 one in which sole reliance is placed upon the spontaneous pro- 
 ducts of nature. It is a natural subsistence upon fruits and 
 nuts. Men starved on its parsimony, or feasted on its bounty, 
 as the case might be. This is the first stage of industrial 
 society in so far as the source of subsistence and the means of 
 procuring it are concerned. In the second economic state men 
 are not wholly dependent upon the fickleness of nature. They 
 have gained some slight conquest over it and have learned to 
 use some skill and some force in procuring what is not spon- 
 taneously brought to hand. It is the fisher and hunter state 
 and represents that stage of industrial society in which men 
 have added to their food resources, the products of the chase. 
 They still use the spontaneous fruits of nature, as in the first 
 state, but now they add to them, by the use of skill and force, 
 and the larder is increased accordingly. The idea of conscious 
 labor commences to play a part in daily life. 
 
 The Fisher First. It is of no sort of consequence whether 
 men first enhanced their material welfare and enlarged the 
 sources of subsistence, by fishing or by hunting. In some places 
 perhaps the art of hunting was first practiced, and in other places 
 it was the art of fishing. The seas and rivers, however, were the 
 "first avenues for the progress of civilization and industry" 
 and the early centers of population were about the sea shores. 
 It is a natural conjecture that shell fish were largely a source 
 of subsistence before land game became a factor in getting a 
 living. Kitchen middens, or shell mounds are found along all 
 the coasts of the world. They are also found in the interior of 
 the continents along the shores of the prehistoric inland seas. 
 Shells are frequently found, along with the remains of prehis- 
 toric man. The shell fish is easy of capture, and in primitive
 
 38 DESCRIPTIVE ECONOMICS. 
 
 times was abundant in quantity. But little skill was required 
 to procure this form of subsistence. Shell fishing does not re- 
 quire the exercise of the hunter's craft, and it is not difficult 
 to understand that primitive men were first attracted to it when 
 fruits and nuts failed. It is still the principal source of subsist- 
 ence of the Fuegians and also of some of the Australian tribes. 
 
 Small and Large Game. The true hunter state doubtless 
 began with the conquest of small game, such as birds and the 
 smaller mammals. The club which was used to knock down 
 nuts from the tree could easily have been used to knock down 
 a bird, although it may have taken ages for primitive man to 
 attain to the second occupation from the first. The capture 
 of large game presupposes quite a victory over the forces of 
 nature. It is the result of years of effort. The hunter must 
 know the habits of his game, the species of food which it de- 
 sires, its feeding grounds and all its characteristics. To acquire 
 this knowledge required patient observation of the ways and 
 means adopted by the carnivorous and rapacious animals in 
 their pursuit of the art of hunting. 
 
 Greater Certainty of the Hunter's Subsistence. The 
 subsistence of the hunter is much more stated and sure than 
 that of the fruit and nut gatherer. The hunter state is a 
 marked economic step in advance of the frugiferous state. 
 The hunter while following his avocation can procure frugi- 
 ferous subsistence also. His game goes to make up the entrees 
 and extras of his bill of fare, and between them starvation is 
 less likely to occur. His subsistence, moreover, is not only 
 more stated and varied, but more nourishing. Physical endur- 
 ance is increased, and the physique is developed. 
 
 Enlargement of Habitat. The fruit and nut gatherer re- 
 lying wholly upon a natural subsistence of fruits and nuts, to 
 be had for the gathering, was limited as to the place of his 
 habitation, by climate and physical environment. He could 
 not live in the temperate or northern climates, but must con- 
 fine himself to tropical zones where nature is prodigal. But 
 when he had acquired the art of hunting and fishing, the ter- 
 ritory over which he could roam and find a living was greatly 
 enlarged. He could follow the seas and rivers where he would
 
 THE FISHER AND HUNTER. 39 
 
 always be near the fish. He could go wherever game abounded, 
 although fruit and vegetables suitable for consumption might 
 be scarce. The winter season especially was robbed of some of 
 the terrors which characterize it when the source of subsistence 
 is frugiferous. 
 
 Recurring Famines. Notwithstanding the decided better- 
 ment of the condition of mankind upon entering the hunter 
 and fisher state, there is oft and constantly recurring famine. 
 There are times when game and other food fail. Dr. Kane's 
 description of the result of a famine at Etah is an illustration. 
 Instead of " plump, greasy children, and round cheeked mat- 
 rons," the explorer saw "lean figures of misery" and men who 
 looked hard and bony. In the whole community there was 
 only the skin of a young sea unicorn left. All the dogs but 
 four had been eaten. There were no lights, for the blubber 
 had been used. Those who know it best, know that the hunter 
 state is a struggle for food of the keenest kind. Often a squirrel 
 or bird will answer to "qualify or season a gallon of soup." 
 The Indian hunter, in order to provide sustenance for himself 
 and family, arose at daybreak and tramped the forest until 
 dusk. If he was unsuccessful he returned to his couch of cedar 
 branches and rush mats, only to rise at dawn and commence 
 the weary tramp again. Instances are related where the head 
 of the Indian family has patiently hunted day after day until 
 he has fallen in the forest and died of starvation. He dreams 
 of the happy hunting ground because there he will no longer 
 know the acute pangs of hunger. The missionary Lejeune, 
 sitting around a camp-fire on the present site of Montreal, 
 heard an Indian legend about a young brave who climbed a 
 great tree and went hunting in Heaven. The legend illus- 
 trates the state of the hunter mind stamped with the impress 
 of chronic hunger.
 
 40 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER VII. 
 
 THE HERDSMAN. 
 
 Animal Domestication. Following the hunter and fisher 
 state, the next great movement in the economic progress of 
 mankind relates to the domestication of animals. It is quite a 
 step in advance when men pass out of the frugiferous into the 
 hunting and fishing state, but the economic transition involved 
 is not as important as that connected with the advance from 
 the hunter state to the pastoral state. 
 
 The Shepherding of Animals. Reference has already been 
 made to the practice of the ant of procuring subsistence from 
 the Aphides. According to the naturalist Espinas, the industry 
 of the ants amounts almost to the systematic breeding of the 
 Aphis. The Aphides are either coaxed or forced into the 
 nests of the ants where they are fed and sheltered, and where 
 they lay their eggs. The ants take care of the eggs, -licking 
 them as tenderly as they do those of their own kind. We are 
 not to assume that animal industries of this kind, or of the 
 character referred to in previous chapters, are on a footing with 
 human industries. They simply furnish food for thought, and 
 while much animal industry may be, and probably is, the result 
 of instinct and not of forethought and consciousness, yet we 
 may expect to find in it the prototype of human industry, or, 
 as we have already called it, the far-off prophecy of economic 
 conditions existing among mankind. 
 
 The Beginning of Animal Domestication. The hunter 
 slays the dam and spares the offspring. At first the young one 
 may be saved and reared, more as a pet and companion, 
 than for any material use. It is not likely that the idea of 
 advancing material welfare by domesticating animals came into 
 the minds of primitive men until long after domestication be- 
 came an accomplished fact. The first economic use of animals 
 doubtless related to assistance in hunting. That being the 
 chief avocation of the time, any new art or discovery would 
 likely refer to it. Some of the Australian tribes, when first
 
 THE HERDSMAN. 41 
 
 described, had tamed the wild dogs of the country and trained 
 them to assist in the chase. The American Indians at the time 
 of the discovery had their hunting dogs. Travelers who have 
 visited the Fuegians have found it worthy of remark that the 
 people use a race of dogs trained to dive in the water and catch 
 fish. The Tartars have taught the falcon to hover over the 
 heads of the wild horses of the Steppes, and by fluttering their 
 wings in the eyes so confuse the poor brutes as to allow of the 
 hunter's approach. These illustrations serve to show how suc- 
 cess in the chase is greatly enhanced when the hunter has called 
 the brute creation to his aid. His labor becomes more efficient 
 and the hunting ground more productive. 
 
 Domestication for Food. Having once acquired the art 
 of domesticating animals for their assistance in the chase, it 
 would not be a great step in advance when men domesticate 
 them for food. The idea would be suggested if it were found 
 when famine has come upon the hunter family, that the brutes 
 which had been trained to help in the hunt would answer to 
 prevent starvation. The dogs of the Fuegians are a last re- 
 source, and so it is with the Esquimaux. 
 
 Domestication for Transportation and Travel. The 
 idea of domesticating the wild animal for the purpose of utiliz- 
 ing its physical powers in daily labor would dawn very slowly. 
 It would doubtless not take shape until ages after men had 
 domesticated animals for the chase. This stage of domestica- 
 tion has recently been reached in Siberia. The reindeer is 
 found there both in the wild and in the domestic state. The 
 Laps and Siberian tribes both hunt and train it. It furnishes 
 food, clothing and shelter. It affords the only means of trans- 
 portation and communication between various parts of the 
 country, and without it, life would be almost impossible in 
 portions of northern Siberia. It is the sole source of subsist- 
 ence of the northern tribes, as the Tungas, supplying all their 
 necessary economic wants. These people are living examples 
 of the economic condition of man when he is both hunter and 
 herdsman. They are in the reindeer age. When New England 
 was still coated with the ice of the glacial epoch, its inhabitants 
 were iu the reindeer age. A higher kind of pastoral life, and
 
 42 DESCRIPTIVE ECONOMICS. 
 
 one which is a notch higher in the economic scale, is that of 
 the nomadic peoples shifting their tents on the steppes of Cen- 
 tral Asia or the deserts of Arabia, and driving their herds of 
 oxen, sheep, camels and horses before them in search of pasture. 
 It is the kind of life described in the book of Genesis. It is 
 like that lived by all eastern peoples during their infancy. 
 
 Domestication for Agricultural Purposes. The appli- 
 cation of animal strength for the purpose of tilling the soil and 
 carrying on agricultural operations, belongs to the last and 
 highest stage of animal domestication. It does not come until 
 long after men have acquired the art of putting, animals to the 
 uses of the chase, of a food supply and of transportation. It 
 relates to a more advanced economic state than we are now dis^ 
 cussing. Men were not agriculturists until long after they were 
 herdsmen. "When we come to study the economic life of the 
 agriculturist, we may think of him as having once been a hunter, 
 using the horse in the chase, instead of before the plow. 
 
 The Number of Indigenous Animals Affecting the Pas- 
 toral Life. There have been peoples who have passed from 
 the lower economic states to the higher without having prac- 
 ticed the pastoral life. Supposing the pastoral state to repre- 
 sent an economic state between that of the hunter and the 
 agriculturist, we find that some peoples have never lived in 
 this intermediate state. And again there are peoples who have 
 lived a partially pastoral life; that is, they have domesticated 
 and employed animals for perhaps only one or two of the spe- 
 cified purposes. They may have used animals as assistants in 
 the hunt, and may have used them as a permanent source of 
 food supply, but not for transportation or tillage. The number 
 and character of the animals capable of domestication, indig- 
 enous to a country, is said to produce these phenomena. The 
 use of domestic animals must depend upon their distribution. 
 This would seem to be a fair explanation of the fact that some 
 peoples have lived only a partially pastoral life. If the domestic 
 animals are not native to a country, its people cannot be expected 
 to domesticate them and employ them in economic activity. 
 The highest forms of pastoral life, from an economic stand- 
 point, have developed in the Eastern hemisphere. But the
 
 THE HERDSMAN. 43 
 
 Eastern hemisphere had nearly all the domestic animals. It 
 had the horse, cow, sheep, goat, and ox. The Western hemis- 
 phere had only the llama, turkey, and dog, and when Columbus 
 discovered it the Indians had fully domesticated them and were 
 putting them to all the economic uses of which they were 
 capable. These races may therefore be said to have attained 
 the highest pastoral life which their environment permitted. 
 The distribution of the domestic animals is not a perfectly 
 satisfactory explanation of these questions, however. It as- 
 sumes that the animals which we know as the domestic animals 
 are the only animals capable of domestication. When we find 
 a race which has lived only a partially pastoral life, or which 
 has passed from the hunter state to the agricultural state with- 
 out passing through the pastoral state, it will frequently be 
 found, on closer investigation, that it has not been left to itself 
 to work out its economic salvation and climb the economic 
 ladder in the natural way. It has been brought in contact with 
 a higher civilization, and with a bound entered into the eco- 
 nomic life and passed to the higher economic state of that 
 civilization. The possibilities of adding to the stock of known 
 domestic animals, referred to in the following paragraph, will 
 further illustrate this subject. 
 
 New Domestic Animals. The process of animal domesti- 
 cation requires ages for its development. Only long continued 
 and patient effort succeeds. There must be a constant and 
 pressing need for the aid of animal powers in order to keep 
 men to the sticking point. We need hardly expect, therefore, 
 that animals which have not been domesticated in the ages 
 of the past will be brought into a state of domestication in the 
 future, for the simple reason that the need of new domestic 
 animals is not keen and urgent, and there is little inducement 
 to make the attempt. The zebra and quagga are just as capable 
 of domestication as the horse, but the horse answers all the pur- 
 poses of man, and nothing would be gained by domesticating 
 the zebra or quagga In this connection it is interesting to 
 conjecture whether the American Indians would have domesti- 
 cated the bison if they had been left in undisturbed possession 
 of the continent. It is even of more interest to ponder on the
 
 44 DESCRIPTIVE ECONOMICS. 
 
 economic results had Columbus found the buffalo already do- 
 mesticated. It is not impossible for the animal to have become 
 an important factor in national wealth. The meat of the ox 
 was once coarser and more unpalatable than the meat of the 
 wild buffalo. Domestication would have improved the quality 
 of the meat and resulted in an increased, permanent source 
 of food supply. The buffalo would be on its native heath, and 
 the severe winters which have proved destructive to cattle ranch- 
 ing in the west would have little terror for the buffalo ranch- 
 man. We might, with profit, indulge in the same speculation 
 with reference to the higher pastoral state to be assumed by the 
 African tribes if left to themselves, for the lapse of the ages 
 required to domesticate the zebra and quagga and bring them 
 to the stature and perfection of the horse. The profit of such 
 speculation consists of the side light thrown upon our study. 
 It gives us a clearer appreciation of what we once were and 
 what our economic condition was when the race was in its 
 infancy how we have become what we are and how we have 
 reached our present economic life. 
 
 The Second Triumph over Nature. The first marked 
 triumph which man achieved over the forces of nature con- 
 sisted in his acquisition of the art of hunting. We have seen 
 how his material welfare and economic conditions were bet- 
 tered when he entered the hunter state. How much greater 
 was the betterment when he entered the pastoral state ! He 
 has now achieved his second triumph. 
 
 Milk and Meat Subsistence. As hunters, men added the 
 products of the chase to the spontaneous fruits of nature as a 
 source of subsistence, but even with such addition, subsistence 
 was scanty and uncertain. In the pastoral state, however, 
 there is the further addition of a stated supply of meat and 
 milk. It is reasonably sure. If natural fruits fail and game 
 is scarce one of the herd can be slaughtered. The domestic 
 animal can forage and preserve existence where wild game does 
 not abound, and where there are no vegetable productions 
 suitable for man. 
 
 Enlargement of Habitat. In the pastoral state there is 
 only a small part of the earth's surface which man cannot
 
 THE HERDSMAN. 45 
 
 inhabit. In the frugiferous age when he lived on the spon- 
 taneous fruits of nature he was limited to a very restricted 
 habitat. With the entrance upon the hunter state his habitat 
 is enlarged. Up to that time, however, subsistence abounds 
 only in a well watered, forest country. Now that he has be- 
 come a herdsman and shepherd he can spread out and occupy 
 the plains and the deserts. He can go into regions of inhos- 
 pitable climates. By the addition of meat and milk subsistence, 
 the supporting capacity of a territory is greatly enlarged. The 
 area over which one hunter must roam and be left in undis- 
 turbed pursuit of the game, in order to get a living, will sup- 
 port many men who are both hunters and herdsmen. It has 
 been claimed that the average huntsman requires fifty thousand 
 acres for his support. 
 
 Material Advancement. The advancement of man's ma- 
 terial welfare by his entrance upon the pastoral life cannot be 
 easily over-estimated. Food is not only more stated and sure, 
 but so also are clothing and shelter. There are many peoples 
 who still dress in sheepskins and goatskins, and make their 
 tents of raw hide. When the Spaniards colonized the western 
 hemisphere and introduced the horse, the Patagonians were in 
 the rudest hunter state. Within thirty years afterwards they 
 made use of the horse which the Spaniards had brought, and 
 being mounted for the chase they were enabled to capture the 
 native guanacho in quantities entirely sufficient for food. The 
 average stature and longevity immediately increased and they 
 became a fairly well to do race. 
 
 Famines Still. It appears that the pastoral life is not 
 without its times of scarcity. The multiplication of the herds 
 which must keep pace with the growth of population over- 
 crowds the pasture. The time comes when the people can- 
 not be fed "by the mere pasturage of land." Prior to that 
 time, moreover, diseases which the rude intelligence of the time 
 cannot successfully combat, thins out the flocks, and recurring 
 droughts leave the animals without sustenance. Herdsmen are 
 early and often acquainted with famine. They must separate, 
 as bees at swarming time, and be keenly alive to provide fresh 
 grass and water for the wants of their animals. The pastoral
 
 46 DESCRIPTIVE ECONOMICS. 
 
 life, with its milk and meat subsistence, superadded to all the 
 forms of subsistence which have preceded it in the order of 
 development, will not support a nation and satisfy its economic 
 wants without frequent famines.
 
 WANTS AND EMPLOYMENTS OF FAMILY ECONOMICS. 47 
 
 CHAPTER V. 
 
 WANTS AND EMPLOYMENTS OF FAMILY 
 ECONOMICS. 
 
 A Nomadic Life. A marked feature of the stage of indus- 
 trial society which we are studying that stage in which the 
 economically isolated family is the highest type is the nomadic 
 state in which men live. They are nomads, wandering hither 
 and thither in search of subsistence. They have no permanent 
 and fixed abode. It is camp life, and the camp is a temporary 
 rendezvous. It is occupied as long as the berries or game of 
 the neighborhood last, or until the pasturage gives out. 
 
 The Wants of Food. The food which the nomad wants is 
 simply that which will fill the stomach and satisfy his hunger. 
 So long as there is enough of it to sustain life, little objection 
 is made to quality. It is true that while the comforts of a 
 stated sufficiency, and of the increasing nutritive quality as- 
 cending from the frugiferous state to the pastoral state, may 
 be appreciated, yet the wants of food in the family stage of 
 economics relate mainly to the necessities of life. The eco- 
 nomic activity of the nomad seeks to satisfy necessary wants. 
 Comforts of food come into demand at a later economic stage. 
 
 Nomadic Cookery. We have noticed that a distinguishing 
 feature between man and the lower animals is the development 
 by man of increasing wants with increasing civilization. Ani- 
 mals have the same wants in all stages of evolution. Another 
 distinction lies in the fact that man is a cooking animal. 
 Economics has little to do with the prehistoric times when men 
 did not know the art of fire making and the art of cooking. 
 Of course, in the beginning, cookery is in a very rude state. It 
 begins with roasting before the fire. The next step is roasting 
 in the ashes or hot earth; finally a hole is excavated and filled 
 with hot stones, and a fire built over it. A primitive oven is 
 a hollow tree in which the Andaman Islanders build a fire and 
 roast wild pigs. A better oven is an ant hill, from which the
 
 48 DESCRIPTIVE ECONOMICS. 
 
 Bushmen drive out the ants. Boiling comes comparatively late 
 in life. It is first performed by putting hot stones into a vessel 
 of water. The Assiniboines got their name because they were 
 boilers. They took the paunch from the game, filled it with 
 water and put in hot stones. With the introduction of the art 
 of boiling, the available food supply is greatly increased, be- 
 cause many articles which will serve for food if properly cooked 
 can not be cooked in any other way. All nomadic cookery, 
 however, is crude. It is extremely wasteful, and a large por- 
 tion of the food is necessarily spoiled in the cooking. As the 
 economic condition of mankind develops, it is interesting to 
 note how health is preserved, life prolonged and material wel- 
 fare promoted by the evolution of cookery. 
 
 Wants of Clothing and Shelter. They are even more 
 simple than the wants of food. Anything will answer which 
 will ward off cold and the blast. The clothing of the hunter is 
 better than the clothing of the man who lived on the spontan- 
 eous fruits of nature, and the hunter is more sure of getting his 
 clothing. With the advent of the pastoral life, clothing of a 
 still better quality is to be had. As to shelter, nomads rarely 
 want a permanent structure for habitation the year round. 
 In tropical countries the structure is simply some bushes thrown 
 together, or leaves spread on an awning of poles. Some skins 
 hung on the bushes to windward may answer. In the pastoral 
 life tents come into vogue. They are readily made from the 
 hides of the slaughtered animals. In climates where the win- 
 ters are severe, some more permanent habitation must be con- 
 structed to be occupied during the winter season and aban- 
 doned with the advent of spring. As a rule, however, the nomad 
 spends but little labor in house building. Game or pasture is 
 liable to fail at any time, and he must move on. Sometimes, 
 as among the Klmkaths of the northwest coast, house posts are 
 erected and left standing at different places, and when the peo- 
 ple are obliged to migrate they simply take the covering. It is 
 a great step in advance, however, from the time when men lived 
 in caves, as animals burrow. The state of house architecture 
 among a people is a fair criterion of their economic condition. 
 We would expect a people living in huts to be in a state of sav-
 
 WANTS AND EMPLOYMENTS OF FAMILY ECONOMICS. 49 
 
 agery, just as we suppose that well appointed and comfortable 
 houses belong to a people having attained a high economic state. 
 
 Avocations of Nomadic Life. It is sometimes said that 
 in the family stage of economics there are two employments, 
 and they are such as belong to the two sexes. In other words, 
 that the men do everything but the cooking. This is hardly 
 true, because among all rude peoples the women perform almost 
 as much general labor as the men. An Australian traveler tells 
 how he saw a group of women taking turns in diving from a 
 rock after mussels. After they had gathered a small basketful, 
 they carried them to the camp fire around which the men were 
 lying. The labor performed by the Indian squaws was such as 
 is now performed by men. On the other hand, men also were 
 cooks. The fact is, every person was berry picker, hunter or 
 herdsman, as necessity demanded. We have not yet reached the 
 time when a person followed one avocation. In the family stage 
 of economics, each member of the family is "jack of all trades." 
 Each member takes his turn in all the activities which go to 
 make up the aggregate economic activity of the family. There 
 is no division of employments. There is no dependence of man 
 upon man, nor is one family dependent for any portion of its 
 wants upon another family, or upon the economic activity of 
 others. 
 
 The Lack of Wants. Each family consumes within its own 
 family circle what it can produce, and that is not always enough 
 for its necessities; and although we may presume that men have 
 always had some wants of a higher character than wants of 
 necessity, yet the chief wants of the isolated family are primitive 
 and easily satisfied. Men labor in order to obtain necessities. 
 They do not labor to procure comforts. There is little associated 
 effort among men to overcome the forces of nature. So long 
 as this state of things continues, there is little progress toward 
 the higher economic stages. Savagery perpetuates itself in the 
 heart of Africa, because the people have few wants. This per- 
 petuation of savagery is a violation of nature, not a conformity 
 to it. It is not a natural condition nor an illustration of a law 
 of nature, because the law of nature is to grow out of the state 
 
 where there is a lack of wants, to a state where there is a con- 
 4
 
 50 DESCRIPTIVE ECONOMICS. 
 
 stant increase of wants. A modern-day illustration in our own 
 land is found in the low economic condition of the freedmen 
 in the South. There is a lack of wants among them. They 
 are too easily satisfied with the bare wants of necessity. Let 
 one of them get the notion that he wants comforts that he 
 wants better food, a comfortable house and modern conven- 
 iences, and he is sure to rise rapidly in the economic scale. 
 " Man shall not live by bread alone." The mind as well as the 
 stomach must be fed, and must have wants.
 
 THE CAPITAL OF THE FAMILY. 51 
 
 CHAPTER VI. 
 
 THE CAPITAL OF THE FAMILY. 
 
 Hoarding by Animals. Many animals hoard their savings 
 and store a surplus. They get together a fund of supplies for 
 use in time of want. Squirrels are exceedingly industrious 
 when food is plentiful. There are species of ants which gnaw 
 off plumule and radicle, and stop the germination of seeds after 
 it has commenced, so that they may be kept for future use. 
 Like a thrifty housewife, they preserve food for the winter. 
 Ants and bees store for their offspring. The burrowing beetles 
 unite in digging a hole for a bit of captured food of which there 
 is no present need, just as a dog buries a piece of meat which 
 he cannot eat. A remarkable instance of the hoarding habit 
 of animals is given by a writer on animal life, who describes 
 how the sphex-wasp paralyzes a cricket or other insect by a 
 sting, and puts it in the chamber with her eggs where it may 
 "remain alive as fresh meat for the sphex larva when that is 
 hatched." Examine a web of the common spider and you will 
 find a magazine of house flies. 
 
 The Capital of the Nomad. "A rolling stone gathers no 
 moss," and nomadic man gathers few goods. The habits of 
 nomadic life preclude storing or hoarding for future use and 
 consumption. Everything must be carried about. For a large 
 portion of the year camp is broken daily, and the fewer the be- 
 longings, the less hindrance to travel. Sir Henry Drummond 
 states that in the heart of Africa he saw a savage buried with all 
 his capital. It consisted of a pipe, a rude knife, a mud bowl, 
 some arrows and a bow with its string cut in twain; and the 
 author adds: "We were so once; they may be what we are." 
 
 Weapons. We come to another distinction between men 
 and the lower animals. Man is a tool making animal, Of late 
 years, however, it is claimed that this distinction is not con- 
 clusive, because some of the anthropoid apes get hold of a fa- 
 vorite club or bludgeon and use it in the arts of life for a
 
 52 DESCRIPTIVE ECONOMICS. 
 
 considerable length of time before throwing it away. But man 
 alone evinces forethought, skill and deliberation in the con- 
 struction and use of tools. Weapons, both for offensive and 
 defensive warfare and for use in the chase, are the first forms of 
 capital. They are the investments of primitive man the pro- 
 duct of his labor designed for future use, at a time when he is 
 not as forehanded as those animals which store up food. 
 
 Progressive Forms of Capital. After weapons come sim- 
 ple utensils used in preparing food. The storing of food itself, 
 for future consumption, does not come until long afterwards. 
 In the family stage of economics it exists only in a very rude 
 form. When men attempt to live in northern climates, how- 
 ever, they must, to a certain extent, gather together a supply 
 of food for winter use unless they are in a pastoral state. Few 
 of the North American tribes made other than rude attempts 
 toward accumulating supplies, and consequently the winter 
 season was one of extreme hardship and suffering. These tribes 
 illustrate the family stage of industrial society. At this stage, 
 flocks and herds are the highest form of capital. As a rule 
 everything is produced for immediate use and consumption, 
 and everything must be transportable. Men preserve and breed 
 the domestic animals because the animals can transport and 
 take care of themselves. 
 
 Community of Capital. These are the days of communism 
 pure and simple. Letourneau in his work, The Origin and 
 Development of Property, advances the idea that even the 
 weapons of primitive men are the common property of the 
 family. In the hunter state, the game is common property and 
 there are strict rules and regulations for its division among 
 the members of the family. Most of the Indian tribes had 
 well defined rules for the division of the various parts of an 
 animal killed in the chase, or, if more than one animal was 
 killed, for a division of the whole. Among some of the 
 Australian tribes the principal hunter, when the forequarters 
 of a kangaroo fall to his lot, must take "the head and neck, 
 with another joint, cutlet and fillet, and hand it over to his 
 father-in-law." The rest must go to his father; but these in 
 turn must make a final division of the meat among the other
 
 THE CAPITAL OF THE FAMILY. 53 
 
 members of the family. If the hunter spears a large fish, the 
 tail end belongs to himself, and goes to his branch of the 
 family. The other part falls to his wife, and she divides that 
 among her relations. The flocks are always the common prop- 
 erty of the family. House structures were also common 
 property. The long house of the Iroquois was sometimes from 
 twenty to thirty feet broad, and eighty to one hundred feet 
 long, and was subdivided into apartments. It belonged, how- 
 ever, to the gens or clan, which was an economic family, and 
 each member had an interest in it. There was not only com- 
 mon property in the house, but also common property in all 
 such provisions as might be on hand. 
 
 A Good Reason for Community of Capital. In the early 
 'economic stages there is ample reason for community of property 
 and family ownership of the various articles which have to do 
 with the family subsistence. Private ownership of property is 
 not yet established. We are not to understand that peoples 
 living in a state of savagery and barbarism object to private 
 ownership of property on any of the so-called moral grounds 
 commonly advanced by modern thinkers. They don't say it is 
 wrong. They say a man may have what he can retain in his 
 possession. But the struggle for subsistence which men are 
 waging with wild beasts is not calculated to create respect for 
 the weaker or to cultivate distinctions between mine and thine. 
 It is rarely, therefore, that a man can retain property in his 
 possession without the assistance of the members of his family. 
 That which requires the united strength of the family to retain 
 will naturally be the property of the family, and each member 
 will have a proprietary interest in it. In the early economic 
 stages there is community of property, therefore, because right 
 of property is founded simply upon possession, and it is a con- 
 stant conflict between family and family, tribe and tribe, horde 
 and horde, for the retention of possession. 
 
 The Number of the Family. Just here it will be well for 
 us to see that we have a clear conception of the scope of the 
 term " family," as viewed from an economic standpoint. In 
 another chapter enough was said to make clear the meaning of 
 the term "economic isolation." Something may still be un-
 
 54 DESORIPTIVE ECONOMICS. 
 
 said, however, to make clear the economic meaning of the 
 term "family." It may include only the father, mother, 
 and children. As a rule, however, it includes many others. 
 Moreover, it may not be composed wholly of related individuals. 
 Ethnology recognizes the Consanguine family, the Punaluan, 
 the Syndyasmian, the Patriarchical and the Monogamian fam- 
 ilies. The Economic family is none of these. It is composed 
 of a number of individuals who, irrespective of any ties of con- 
 sanguinity, unitedly engage in the struggle for a living. The 
 union is a strictly economic one, without reference to social 
 or political institutions. The economic activity of each mem- 
 ber is co-extensive with and of the precise nature of that of 
 every other member. There may be few or many members. 
 The economic family, therefore, includes the tribe and the no- 
 madic horde. It includes any aggregation of individuals, closely 
 uniting their economic activities in the art of getting a living, 
 and pursuing them independently of all other individuals or 
 aggregations of individuals. Each nomadic band, group, tribe 
 or horde produces within its immediate circle and exclusively 
 by the labor of its members all the things which satisfy its 
 economic wants. Whatever its political or social ties or insti- 
 tutions, therefore, it is an economic family. The division is 
 made solely on economic lines and irrespective of ethnical or 
 political considerations.
 
 PRIMITIVE BARTERING AND MANUFACTURING. 55 
 
 CHAPTER VII. 
 
 PRIMITIVE BARTERING AND MANUFACTURING. 
 
 Another Human Characteristic. We have from time to 
 time noticed that there are economic characteristics common to 
 all animals, including man. It is quite the rule to find some evi- 
 dences, though they may be slight, of the existence of nearly all 
 the primary economic conditions among the brute creation. 
 Now and then, however, we study animal life in vain to find 
 signs of some of those conditions. The matter of bartering or 
 exchanging commodity for commodity, is one of the instances. 
 Honey laden bees are known to divide their spoil with hungry 
 comrades. There are some species of ants which do the same 
 thing, and do it habitually and consistently. The process is 
 thus described : "The ant who feels the need of food begins 
 by tapping her two antennae with a very rapid movement upon 
 the antennae of the ant from whom she expects succor. 
 Immediately they may be seen approaching each other with 
 open mouths and extended tongues, for the communication of 
 the liquid which one possesses, to the other. During this 
 operation the ant who receives nourishment does not cease to 
 caress the friend who is feeding her, continuing to move her 
 antennae with singular activity." These instances and others 
 of like character are sometimes cited to prove that animals 
 make exchanges. It is not, however, an illustration of barter- 
 ing, or exchanging. It rather illustrates community of prop- 
 erty, and common ownership in the fruits of labor. Adam 
 Smith long ago said that man is the only animal which makes 
 exchanges. Subsequent investigation has disclosed no fact 
 tending to throw doubt upon the correctness of his statement. 
 
 Barter in Game. Food is the first article of barter. The 
 territory occupied by one nomadic band may be better supplied 
 with some article of subsistence, than contiguous territory 
 occupied by another band. A change of diet is the first incen- 
 tive to barter. A market in Africa may be wherever two bands 
 meet beneath the trees, each having a surplus of food of differ-
 
 56 DESCRIPTIVE ECONOMICS. 
 
 ent kinds. A band of Ashangoes, for instance, who live mainly 
 upon fruits, and are poor hunters, may meet a band of Obon- 
 goes, a forest tribe of hunters, and a bunch of plantains may 
 be exchanged for a monkey. It is almost a rule, however, that 
 barter of this character, as well as all barter which may be car- 
 ried on in the early stages of economics, is an exchange of the 
 surplus of the spontaneous fruits of nature, or of good fortune 
 in the hunt. Primitive men do not gather fruits, or labor in 
 the chase, to procure a surplus for the purpose of barter. 
 
 Barter in Weapons. After barter in food products comes 
 barter in weapons weapons of the hunt or of war. In this 
 case also, the natural productions of a territory have something 
 to do with the acquisition of a surplus. One tribe, by reason 
 of the existence of more appropriate materials in its territory, is 
 enabled to produce a more effective weapon than its neighbors. 
 Some of the South American tribes have become noted for their 
 make of blow gun. Others have almost a monopoly of the 
 manufacture of the poison with which the blow gun arrows are 
 tipped. It is a tribal secret. Exchange of various commodities 
 in return for this poison extends nearly across the continent. 
 
 Barter in Domestic Animals. Passing from the hunter 
 state to the pastoral state, men have a largely increased stock 
 of ready capital with which to barter. They no longer depend 
 upon the fortuitous bounty of nature for a supply of com- 
 modities which can be exchanged for something which they 
 want and do not have. Just as the pastoral life gave them a 
 sure and certain meat and milk subsistence, so it gave them a 
 greater variety of articles of diet, because animal possessions 
 were ever at hand to barter for other things. In the state of 
 industrial society, however, which we are now studying, barter 
 was usually in food or in utensils with which to obtain food. 
 Barter in ornaments belongs to a later stage and is between sav- 
 ages on the one hand and civilized or semi-civilized men on the 
 other. 
 
 A Family Matter. Economics of the family has to do 
 only with barter between families. The term family, however, 
 includes, as stated in the last chapter, the anarchic band or 
 unorganized horde which, economically speaking, is only an
 
 PRIMITIVE BARTERING AND MANUFACTURING. 57 
 
 enlarged household or family. Barter is controlled by the band, 
 and it is a matter of which the band takes cognizance. It is 
 transacted with more or less ceremony and formality. The 
 historian Bancroft tells that among the Indians of the north- 
 west, when one tribe desires to carry on barter with another, 
 the commodities which it desires to exchange are left on the 
 river bank. The other party to the transaction comes and sur- 
 veys them. If they are desired and are satisfactory they are 
 taken away, and commodities which would make a fair exchange 
 are left in their place. Among the Nubians when two bands 
 determine to trade, each side is drawn up in battle array and 
 individuals selected by the several bands carry out the transac- 
 tion between the lines. 
 
 Discouragements of Barter. It took centuries for men 
 to acquire the art of bartering, just as it took them centuries 
 to acquire the other arts which have marked their economic 
 growth. Bartering is not brought to a system until a higher 
 and later economic stage is reached. There are several reasons 
 why bartering among primitive people is uncertain and desul- 
 tory. Chief among them is the fact that all property is owned 
 in common by the family or band. Each member has a pro- 
 prietary interest in all the productions of the family and in all 
 the possessions of the family. This common ownership extends 
 to the game and the flocks, and even to the weapons. The in- 
 dividual members of the band, therefore, can have nothing to 
 say, and are not concerned in the matter of bartering. This 
 explains why the whole band or horde regulates trade. Another 
 reason is because of the lack of security in the possession of 
 property. There is mutual distrust between family and family, 
 and between band and band. Might makes right, and pos- 
 ession is "nine points of the law." The individual has no 
 private property, because he can not hold on to it and defend 
 it, and for this reason the band owns the property in common. 
 Again, barter is limited, because transportation is limited. 
 There is a lack of what has been called transmissibility the 
 ability and power to transport and transmit goods and com- 
 modities from hand to hand. There is also a lack of diversity 
 of commodities for exchange,
 
 58 DESCRIPTIVE ECONOMICS. 
 
 The Beginning of Manufactures. The time comes in the 
 history of every people when they acquire more or less skill in 
 some one direction. When the tribe comes to be known for its 
 brand of weapons, barter in them arises. But among the mem- 
 bers of the band certain individuals possess greater deftness and 
 skill in manufacturing than their fellows. By continued ap- 
 plication they develop their native skill. Their manufactures 
 come into demand, not only in neighboring bands, but in their 
 own band, and the industry of weapon making comes to exist. 
 Longfellow's "ancient arrow maker" is the type of the tribal 
 artisan. He is represented by the poet as: 
 
 "Thinking of the great war-parties, 
 How they came to buy his arrows, 
 Could not fight without his arrows." 
 
 Judged by his first attempt at manufacturing, man seems to 
 be but little higher in the scale than the beaver, the ant and 
 the bee, which labor in common and own the fruit of their labor 
 in common. When we see, however, that man has in him the 
 germs of something better the propensity to manufacture, and 
 to barter his manufactures for other wants, then we see that he is 
 far higher than the beaver, the ant and the bee. Theirs is in- 
 stinct. It enables them to produce a perfect manufacture and a 
 mechanism most suitable for its purpose at the first trial. Man's 
 art is the result of intelligent reasoning, and when he puts his 
 propensity into operation there is no comparison. Having once 
 exercised this propensity for tool making and manufacturing, 
 men discover that it is easier for some of them to get a living 
 by bartering the results of their skillful labor, for food and 
 game, with those who are better hunters and shepherds. When 
 the Dutch and English traders opened communication with 
 the tribes of the western continent, the Indian quickly found 
 that it was better for him to barter his furs for a ready-made 
 coat, blanket and leggings, than for him to make them.
 
 CHARACTERISTICS OF FAMILY ECONOMICS. 59 
 
 CHAPTER VIII. 
 
 A SUMMARY OF THE CHARACTERISTICS OF 
 FAMILY ECONOMICS. 
 
 Reasons for a Resume. Some of the economic character- 
 istics relating to the first stage of economics, which have been 
 under discussion in part one of this book, are worth reiterating. 
 They lie at the foundation of all economic study, and a clear 
 understanding of them will be necessary in order to render 
 pleasant and interesting the succeeding and more difficult parts 
 of the book, relating to the successive and higher economic 
 stages. There are some characteristics worthy of mention, 
 which have not yet been discussed. 
 
 The Resistance of Nature. One of the principal factors 
 determining the economics of the family is the resistance of 
 nature. Primitive men are bewildered in the presence of 
 natural forces. They have not the knowledge, the skill nor 
 the unity to overcome these forces. In the ecouomic stage to 
 which we have thus far progressed in our study, the highest art 
 which men practice in their struggle for a living is the domes- 
 tication of animals. Animal domestication, it is true, places 
 the men who follow it, far in advance of the men who depend 
 upon the spontaneous productions of nature, yet the shepherd 
 and herdsman know what it is to hunger and famish. The 
 field, the forest, and the mine are rich with treasures, but men 
 do not know how to find and use them. The cotton grows 
 wild, but they go unclothed. The mine contains fuel, but they 
 are cold. The means of subsistence are scanty. They bear an 
 exceedingly close relation to the necessities of life. It is a hand 
 tb mouth- existence an existence of poverty, isolation and 
 lawlessness. 
 
 Lack of Association. Men have not learned to associate 
 their intelligence, skill and strength. It is an age of distrust. 
 Violence rules,and warfare is followed as consistently as the hunt. 
 
 Community of Living. One man is too weak to face the 
 struggle of life alone and protect his wife and children, and
 
 60 DESCRIPTIVE ECONOMICS. 
 
 therefore men band together in large households, usually of 
 related families. So far as economics is concerned, the whole 
 band may be considered as an economic unit an enlarged 
 family. It is not only community of house life, but com- 
 munity of labor, and absolute community of ownership in all 
 the products of labor in all the supplies and possessions of 
 the band. In the beginning man has no greater control over 
 the production of food than other animals, but when a number 
 of them have united to form the anarchic horde, their power 
 to increase the sources of subsistence is enlarged. The growth 
 of this power as we shall follow it, determines the growth and 
 existence of men upon the earth. 
 
 Centers of Population. A region rich in natural produc- 
 tions became a center of population. The existence of fruits, of 
 game and of pasture were the conditions demanded. A center 
 of population required running streams and forests, interspersed 
 with fertile valleys and plains or openings. There were hardly 
 more than three such places on the western continent. One 
 was the' Columbia Eiver valley; another was the lower penin- 
 sula of Michigan, including the lake region of Minnesota; 
 and the third was the valley of Mexico. Each of these regions 
 afforded many natural advantages for the existence of a primi- 
 tive and nomadic population, and from each of them the popu- 
 lation spread out. When the relation of the necessities of life 
 to the means of subsistence became too close, a band wandered 
 away and pushed out in search of food. When it found a suit- 
 able territory over which it could roam, it proceeded to occupy 
 it until there again subsistence became scanty, and then it sub- 
 divided. This has been the process the world over. The west- 
 ern hemisphere is selected simply for an illustration. On the 
 eastern hemisphere we can trace the original seats of popula- 
 tion to valleys like those of the Nile, of the Euphrates, and of 
 the Ganges. Eegions of this character have been aptly termed 
 the "nurseries of the race." 
 
 The Possession of Land. Land plays only a minor part 
 in the economics of the family. A nomadic horde or tribe, by 
 force of might, laid claim, it is true, to certain territory as its 
 hunting, fishing and pasture ground, but the limits of that
 
 CHARACTERISTICS OF FAMILY ECONOMICS. 61 
 
 territory were loosely drawn and ill defined. It was like the 
 territory which the lion or tiger claims for his own and from 
 which all other beasts must keep out. Nevertheless, it repre- 
 sented the beginning of the ownership of land. 
 
 The Beginning of Invention. We are quite apt to asso- 
 ciate invention with historic or modern times, and economic 
 writers, by common consent, have selected a certain period fol- 
 lowing the middle ages as that which is characterized by what 
 is called " the industrial revolution." It is true that there have 
 been specific periods when the progress of invention and indus- 
 try has been more marked than at others when human culture 
 and the amelioration of the condition of the race have made 
 great strides. Invention and the industrial revolution, how- 
 ever, really begin with the economics of the family. The in- 
 vention of the fish hook must have resulted in great material 
 advancement of the people who employed it. Who will say 
 that the invention of the bow and arrow did not produce as 
 great a revolution in the economic condition of men as any in- 
 vention since? The art of pottery revolutionized the manner 
 of living. " Man commenced at the bottom and worked up." 
 He has gone from higher to higher arts of subsistence as he 
 progressed. With each successive stage he has increased his 
 power over the forces of nature. 
 
 The Saturnian Age. The economics of the family relates 
 to the Saturnian age. The wild freedom of the nomadic life 
 is a fit subject for the fancies of poets. According to poetic 
 notions it is a time when: 
 
 " Efe the base laws of servitude began, 
 When wild in woods the noble savage ran." 
 
 The poetic idea is misleading so far as the economic condition 
 of mankind is concerned. There was a certain civil freedom, 
 to be sure, but it was accompanied by poverty, hunger, cold 
 and wretchedness. There was a certain independence of sub- 
 sistence, an independence in which each family looked out for 
 itself an economic isolation. Frequently, however, it failed 
 to bring the necessities and it never provided the comforts of 
 life. The best provisioned and most luxuriously appointed 
 American indian wigwam never had half the comforts com- 
 mon to the most wretched Bowery tenement.
 
 PART II. 
 ECONOMICS OF THE TILLAGE. 
 
 CHAPTER I. 
 THE AGRICULTURIST. 
 
 Economic Significance of the Agricultural Life. 
 
 There is a Scandinavian legend of a giantess who saw a man 
 plowing with a yoke of oxen. She picked him up, together 
 with his plow and oxen, and putting him squirming into her 
 apron, ran to her mother, saying : " Mother, what sort of a 
 beetle is this that I found wriggling in the sand ?" The 
 mother cried out : " Put it away, my child. We must be 
 gone out of this land, for these people will dwell in it." The 
 plowman stands for a new and higher economic stage. The 
 giantess and her child belong to an older and a lower stage. 
 The representatives of the lower economy must give way to the 
 representatives of the higher. The legend is intended to illus- 
 trate the inexorable rule that lower forms of economic activity 
 are displaced by and subjected to the higher forms, whenever 
 they come in contact. The working of the rule is especially 
 noticeable when the newer agricultural life springs up beside 
 the older pastoral life. The herdsmen cling tenaciously to 
 their old ways of getting a living, but without avail. Tillage 
 of the soil is sure to displace pasturage, because it is more pro- 
 ductive and efficient. The contest which commenced about 
 twenty years ago on the trans-Missouri plains, between the 
 " cow-boy " who was pasturing the land, and the " granger " 
 who would till it, has slowly but surely progressed in favor of 
 the tiller of the soil. 
 
 63
 
 64 DESCRIPTIVE ECONOMICS. 
 
 The First and Second Economic Stages Compared. 
 
 The outline of the study of family economics is nearly com- 
 pleted. The economies of the family has been represented . 
 as being the first of the economic stages through which 
 mankind passes. It relates to the beginning of industrial 
 society. The term " Economics of the Family" is employed, 
 because the family is both the unit and at the same time the 
 highest form of industrial society. From an economic stand- 
 point the household, the anarchic group, the nomadic band, 
 tribe or horde, are families. Their economic life is isolated. 
 There is no economic dependence of family upon family ; of 
 one domestic group upon another ; of horde upon horde. As 
 to sources of subsistence, the stage begins with a subsistence 
 upon the spontaneous fruits of nature. Next a subsistence 
 of wild game and fish is superadded. The stage ends with the 
 milk and meat subsistence of the pastoral life. The struggle 
 for subsistence for the necessary wants of food is the main 
 feature of the first economic stage, and therefore, the economy 
 of the family relates mainly to the sources of subsistence. 
 
 The second of the economic stages is called " Economics of 
 the Village." The family or domestic group ceases to be the 
 economic unit. Industrial society assumes the higher form of 
 the village community. Economic dependence of domestic 
 groups begins, and a larger body of individuals practice a 
 mutual economy. The tillage of land begins to be the chief 
 source of subsistence. No particular form of economic activity 
 distinguishes the stages, or marks the transition from one to 
 the other. The transition is by slow degrees, so gradual as to 
 be imperceptible. There is no exact date when a people leaves 
 one stage and enters another and higher stage. And then, too, 
 certain features of family economy remain in the second, and 
 even in the third of the economic stages. The last vestige of 
 the family system disappears only when towns and cities have 
 arisen, when merchants follow trading as an industrial occu- 
 pation, and artisans devote themselves to manufacturing. Not 
 until then does the family become wholly dependent upon the 
 labor of persons not members of its immediate circle. 
 
 The Rude Beginnings of Agriculture. Tillage had its
 
 THE AGRICULTURIST. 65 
 
 origin during the period of the hunter life. When game was 
 scarce the hunter gathered the fruitage of plants. Chance 
 seeds were dropped about the camp. Eeturning at a later sea- 
 son to the old camp ground, the hunter finds that the seeds 
 have germinated and produced a "volunteer" crop. Most of 
 the farinaceous plants grew wild in their native haunte, 
 although in a very undeveloped state. For instance, in the 
 shallow waters of American rivers and lakes north of the for- 
 tieth parallel, the zizania palustris, or wild rice, is found in 
 the wild state. It once flourished in such quantities as to form 
 an important source of Indian subsistence. It ripens in Sep- 
 tember, and with each returning autumn it was the duty of 
 the Indian women to set out in their canoes, and paddling into 
 the rice fields, 'gather boat loads of grain. It has been sug- 
 gested that, if left to the course of nature, the Indians might 
 have domesticated the bison and thus have added to the stock 
 of domestic animals. So they might have reduced the wild 
 rice to a state of cultivation and produced another farinaceous 
 plant. In the course of time some of the grains would cer- 
 tainly have been scattered about a camp ground beside a lake 
 or river. They would have rooted there, and the savage mind, 
 so constantly in touch with nature, would have noticed the 
 growth and profited by it. 
 
 Ages of Cultivation. It might have taken the Indians 
 centuries to develop a profitable agricultural plant from the 
 wild rice plant. All of the farinaceous plants, and perhaps all 
 of the plants propagated for food, have required centuries of 
 cultivation to bring them to a perfected state. The maize or 
 Indian corn, the chief of the food plants of the western hemi- 
 sphere, is supposed to have originated in Mexico and thence 
 spread northward. It was not found growing in the wild state 
 with two or three fully formed ears to the stalk. Like the other 
 farinaceous plants, it belongs to the family of grasses, and its 
 progenitor was doubtless a rude grass bearing little fruit. 
 
 Indigenous Plants. The order in which peoples have 
 
 entered the agricultural life, and the extent to which they have 
 
 engaged in agriculture, have depended upon the distribution 
 
 of the food plants. Just as the eastern hemisphere was most 
 
 5
 
 66 DESCRIPTIVE ECONOMICS. 
 
 richly endowed with those animals which have proven useful 
 and profitable for domestication, so it was most richly endowed 
 with farinaceous plants. The western hemisphere had only 
 one of those plants the maize, or Indian corn. That one, 
 however, as Mr. Lewis Morgan has remarked, was the best of 
 all for primitive agricultural purposes, if only one was to be 
 had. It grows in hills or with detached stalks strong enough 
 to withstand the vicissitudes to which it will be subjected 
 under a rude system of husbandry. Hill culture is best 
 adapted to the character of primitive cultivation. When the 
 western hemisphere was discovered, however, there were found 
 under cultivation, besides maize, certain species of beans and 
 squashes, and one or two minor vegetable plants. The distri- 
 bution of the animals adapted to domestication has also some 
 significance with reference to the introduction of agriculture. 
 Where these animals were wanting, the inhabitants frequently 
 passed directly from the hunter state to a rude agricultural 
 state, without passing through the intervening pastoral state. 
 Most of the North American hunting tribes were partially 
 agricultural. They never pursued pastoral occupations. The 
 horse breeding developed among the plains Indians was not a 
 native industry, as the horse had become extinct at the time of 
 the discovery. The Indians simply applied to their domestic 
 uses the horse which the Spaniards brought among them, and 
 the art of rearing was doubtless taught them by their visitors. 
 Nascent Agriculture. The early practice of agriculture 
 is rude and simple in the extreme. An open patch of alluvial 
 soil is pricked with a stick hardened in the fire. The seeds 
 are planted in a spirit of frolicsomeness and gayety. Anxiety 
 for the welfare of the little crop is dismissed. If it weathers 
 the drought and surmounts the weeds, it is gathered in the 
 same spirit of playfulness. The main dependence of life is 
 still on the herds and the hunt. A tourist who has been wont 
 to camp in the summer, on the northern shore of Georgian 
 Bay, has described the nascent Indian agriculture which he 
 observed there. On the sheltered shore of a little cove, not fur 
 from the camp ground, an Indian had built a hut in an open- 
 ing in the forest. The hut was never occupied during the
 
 THE AGRICULTURIST. 67 
 
 summer. Back of the house was a little garden, where in the 
 rich black soil, the man, or more likely his wife, planted each 
 spring time, a few garden seeds. There were two or three 
 rows of beets, some onions, beans, a few hills of potatoes and 
 corn. The fertility of the soil allowed them to hold their own 
 against the rank growth of weeds. With the advent of sum- 
 mer the allurements of the nomadic life overcame the home 
 desires of the planters. They evidently entered their canoe 
 and followed the game northward, to return in the fall. This 
 is the beginning of agriculture everywhere. It is not entered 
 upon with a definite purpose of gaining a livelihood, but to eke 
 out subsistence. It is the agriculture of the nomad. 
 
 The Growth of Agriculture. Agriculture commences 
 with the cultivation of an open patch of alluvial soil. It 
 then extends to the cultivation of an enclosed space or gar- 
 den. Up to this point the process of tillage is rude and inef- 
 fective. The agricultural implement is a sharpened stick or 
 spud, with a fire hardened point. It develops finally into a 
 sapling with protruding arms where the branches have been 
 cut off. This is dragged over the ground by the cultivators 
 themselves. Field agriculture, by means of a plow drawn by 
 animal power, is a comparatively modern art. Sometimes the 
 necessities of the domestic animals encourages cultivation. 
 Such would be the case, however, only in those instances 
 where the pastoral life reaches a high degree of perfection. 
 
 The Agricultural Stages. We may here state in their 
 order the various agricultural stages, down to the present. 
 Although such statement involves matters not properly con- 
 nected with the economic stage which we are now studying, 
 yet the desirability of presenting the subject connectedly will 
 offset an objection of that character. Economic facts of this 
 kind, moreover, will bear repetition and may be mentioned 
 again when reached in their proper place. The agricultural 
 stages are as follows: 
 
 1. For want of a more expressive term the first stage may be 
 called the tentative stage. In this stage men do not plant and 
 till with a preconceived design of procuring a stated addition to 
 their food supply. They employ no method and practice no
 
 68 DESCRIPTIVE ECONOMICS. 
 
 art by rule. The tillage is desultory. The location and extent 
 of the ground which is cultivated depends upon the existence of 
 open patches of soil, usually alluvial. It may be on the moun- 
 tain side, in the wash of streams, at the mouths of rivers. The 
 shape of the cultivated patch is irregular following the contour 
 of the forest opening. It is cultivation in hills or groups. The 
 hills are planted here and there, without order, wherever the 
 savage thinks the plants will grow. The utter absence 
 of any plan reminds one of the early native Florida orange 
 groves, in which the trees are found growing without reference 
 to order, as though the seeds had been dropped, or the young 
 trees set, by chance. The planting is done as a byplay or 
 diversion at the beginning of the season of vegetation and the 
 plants are left to care for themselves until the approach of a 
 time of need drives the planters to an examination of the crop. 
 The crop is the common property of the community and is 
 harvested, if there is a harvest, into a common granary. 
 
 2. The second stage is the open field culture. We have 
 leaped over centuries in passing from the. first stage. They 
 are the centuries during which men have been acquiring knowl- 
 edge of the fact that by systematic agriculture, they can pro- 
 cure a stated and sufficient food supply. The quantity of land 
 tilled, as compared with the population of the community, has 
 been gradually enlarged. By slow degrees, method has been 
 introduced and husbandry developed. Very irregular method 
 we should call it when placed beside our modern standard, but 
 a great improvement upon the absolute lack of method in the 
 first stage. The cultivated land is the common property of the 
 village community. Stretching away from the village, sometimes 
 from all sides, are the common fields. At first they are worked 
 in common. Afterwards they are parceled out in equal shares 
 among the members of the village. Custom regulates the 
 allotment from year to year. In case more than one kind of 
 crop is raised, custom determines the particular kind of crop 
 to which each allotment shall be applied. The hitherto undi- 
 vided, though irregular fields, are now subdivided into unen- 
 closed patches or segments corresponding to the allotments. 
 Often the chief or lord of the village gradually comes to get a
 
 THE AGRICULTURIST. 69 
 
 larger allotment than the others and becomes entitled to have 
 his ground worked by them, or to receive a portion of their 
 crops, in return for the privilege of the holding. The time 
 comes when the members of the village have a proprietary 
 interest in their patches of soil and the right to sell their 
 improvements. Allotments cease. The pasturage is still com- 
 mon however. It is on the other side of the village, or beyond 
 the cultivated fields. Each villager is entitled to pasture so 
 many beasts on the common pasture. Common pasturage 
 exists for centuries after the cultivated lands have become pri- 
 vate property. It is "the commons" of our day. There are 
 still "commons" of pasturage and of meadow land on the east- 
 ern end of Long Island and in parts of New England. 
 
 3. The chief feature of the third agricultural stage is the 
 enclosed field. Of course, prior to this, small patches have 
 been enclosed, adjacent to the villages, for horticultural and 
 gardening purposes. The enclosures are to keep out the cattle 
 when they are driven in from the pastures. There are frequent 
 instances, moreover, of enclosures being made to keep out wild 
 beasts, long before the community has reached the stage of 
 field agriculture. Field agriculture is sometimes, in its begin- 
 ning, a system of alternate cropping and pasturing, similar to 
 the "convertible husbandry" which attended the agrarian 
 revolution in England. It marks a breaking away from the one 
 crop system and the introduction of varied agriculture. Where 
 land is held by tenure, as is case of conquest, the cultivation 
 is similar to that of the third stage. 
 
 4. The fourth and present agricultural stage is the rotation 
 of crops stage. It includes the raising of many different kinds 
 of crops by the tiller as well as their annual rotation from 
 field to field. Pasturing for a season or two, at intervals of two 
 or three years between crops, is usually a part of the system. 
 This system of agriculture is such a matter of course with us 
 that we are apt to lose sight of its economic importance. It 
 delays that exhaustion of the soil which would speedily ensue 
 with continued one crop tillage. It increases the average pro- 
 ductivity of cultivated land. It ensures the agriculturist some 
 returns in seasons when climatic and atmospheric influences
 
 70 DESCRIPTIVE ECONOMICS. 
 
 prevent some kinds of crops from maturing. In other ways it 
 enlarges the stated food supply of the world. "We can hardly 
 understand the present economic condition of mankind and 
 appreciate its superiority, without knowing what it has been 
 and how it has come from inferior beginnings. To this end 
 the plan we are pursuing has its advantages. 
 
 Thus in a general way, the various stages in agriculture 
 have been presented. The descriptions which have been given 
 are intended to apply to the average so as to be good the world 
 over. If we were to state and describe, for instance, the agri- 
 cultural stages through which England and its people have 
 passed, without reference to other parts of the earth, more 
 details would be necessary and the statements could not be so 
 general. 
 
 The Second Victory over Nature. We have called the 
 domestication of animals the first pronounced victory of man 
 over the forces of nature. The cultivation of plants for food 
 is his second great victory. Until he has become an agricul- 
 turist, man never realizes the possibility in store for him, of a 
 certain and unlimited supply of food. When he finds that he 
 can till the earth and grow the cereals and cultivate plants, to 
 an extent limited only by the existence of the arable soil, there 
 dawns upon him the idea that he is no longer the slave of 
 natural forces, to be baffled by drought killing the pasture, by 
 winter, destroying game and the herds. He looks at mother- 
 earth and sees the possibility of a great and sure food supply. 
 He ta'kes naw heart, and thenceforth commences a career of 
 real material prosperity. 
 
 Enlargement of Habitat. When men enter the pastoral 
 state, the sphere of their economic activity, as compared with 
 that of the hunter state, is indefinitely enlarged. With 
 the advent of the agricultural life the whole earth becomes 
 man's dominion. He has then finally solved the question of 
 his supremacy on the earth. His control over the production 
 of food, so far as the enlargement of source is concerned, has 
 reached its practical climax. It is easy to find illustrations of 
 the relative high economic condition of a people living in the 
 agricultural state, as compared with a people living in the lower
 
 THE AGRICULTURIST. 71 
 
 hunter state. The Navajos and Mohaves have the same ethnic 
 origin as the Apaches. They are traced back to a common 
 ancestry. The Navajos and Mohaves are in the hunter state. 
 They are brutish, stunted and degraded. They are arrant, lazy 
 cowards. The Apaches have a nascent agriculture, and do not 
 depend wholly upon the chase. They have a varied diet and a 
 source of supply when natural sources fail. They are of well 
 developed physique and are active and brave, as bravery goes 
 there. The privations described by Stanley in his march through 
 the great central African forest are of periodical occurrence 
 among non-agricultural and nomadic people. Of such is their 
 daily history. When Stanley and the remnant of his band 
 passed out of the forest into the open, however, and came in 
 sight of the fields of maize, good cheer and plenty were assured. 
 Increase of Population. So far, the existence of men 
 has been precarious. That fact has been constantly kept in 
 view and reiterated. The growth of population has pressed so 
 closely upon the means of subsistence that hunger and want 
 are common and ordinary conditions. Getting a living is 
 fraught with so much toil and uncertainty, and so connected 
 with privation and hardship, that only the strong and the 
 robust can survive. The death rate is high and the period of 
 life is short. Artificial means are employed to check the 
 growth of population and reduce the numbers of the com- 
 munity. Among many peoples, as soon as age or disease 
 renders a member of the community incompetent to take care 
 of himself and help the others, it is considered, that as a matter 
 of course, his sphere of activity is ended. Among the 
 Esquimaux, a snow hut is constructed at a distance from the 
 family habitation and there the sufferer is taken. A litttle 
 food is placed beside him and the entrance to the hut is blocked 
 up. There is one less mouth in the community to feed. The 
 victim faces death stoically because to him it appears to come 
 in the natural order of events. Lack of subsistence and the 
 difficulty of procuring it are doubtless the original incentives 
 for the common practice among savage and barbarous peoples 
 of exposing the sick and aged to death. Cannibalism and 
 infanticide may be attributed to poverty of food supply. They
 
 72 DESCRIPTIVE ECONOMICS. 
 
 have existed in all primitive societies. With the advent of the 
 agricultural life and with it the cultivation of cereals and 
 plants, savage practices become less frequent, and the condition 
 of savagery is ameliorated. The capacity of a given territory, 
 to support population, is indefinitely enlarged. The land 
 required by the hunter to sustain himself and family is meas- 
 ured by square leagues ; that of the herdsman by square miles ; 
 with the agriculturist it is measured by acres, and where inten- 
 sive agriculture is practiced, as in some portions of India and 
 China, it is measured by square rods.
 
 THE VILLAGE COMMUNITY. 73 
 
 CHAPTER II. 
 THE VILLAGE COMMUNITY. 
 
 Home Making. The Scandanavian legend, with which 
 the last chapter opened, indicated that the agricultural life 
 introduces an economic activity higher than any which exists 
 previously. It denotes a higher civilization, and the higher 
 civilization drives out the lower civilization which precedes it. 
 Pastoral life and a pastoral people disappear before the advance 
 of the agricultural life. But the beginning of the agricultural 
 life represents the beginning of a still more important economic 
 movement. It ushers out the nomadic life and introduces the 
 fixed community life. From the moment when the herdsmen 
 and hunters begin to till the soil, they begin to settle down 
 and enter upon the process of home making. They commence 
 to have an abode. Economic activity becomes localized and 
 fixed. Having once habituated themselves to a chosen spot, 
 the associations connected with it give rise to pleasures in the 
 minds of men which are lastingly felt and which develop into 
 ties of exceeding strength. The result is a nobler mental 
 activity and a tremendous effort to advance the material wel- 
 fare. The house is no longer a temporary hut. It becomes a 
 summer and winter residence. It gives its owner a sense of his 
 own importance. " The effect of a framed or stone house is 
 immense on the tranquility, power, and refinement of the 
 builder." It conveys to him a sense of personal security and 
 guarantees' him the enjoyment of his private property, and 
 security in the enjoyment of person and in the possession of 
 property are the first requisites of growth into the higher 
 economic stages out of the lower. 
 
 Economic Dependence in the Community Life. It is 
 no longer simply that community of living which prevails in 
 the nomadic life. It is not only community of living but 
 much more. It involves some mutual economic interdepend-
 
 74 DESCRIPTIVE ECONOMICS. 
 
 ence. The time has come when each family ceases to be 
 economically sufficient unto itself. It ceases to be the economic 
 unit. There is some dependence of each family of a commu- 
 nity upon the other families. The family has now come to be 
 the small household of closely related individuals. The mem- 
 bers become dependent upon members of other families for the 
 satisfaction of their economic wants. The community itself 
 may Ue isolated from all other communities but the economic 
 isolation of the families or domestic groups, begins to disappear. 
 The village itself is the economic unit. Its economic condition 
 is similar to that of the nomadic band, or to the enlarged 
 household common to nomadic life. The agricultural life may 
 not be solely responsible for the village community life, but 
 when the nomadic life is found to be disappearing and the fixed 
 community life succeeding it, accompanied by tillage as a 
 source of subsistence, it is fair to say that in such cases the intro- 
 duction of the art of cultivation is the primary and controlling 
 cause for the assumption of the fixed abode. The purposes of 
 mutual protection, however, are frequently present and operate 
 to encourage fixed community life. 
 
 The Selection of Village Sites. The hunter and the 
 herdsman know where the richest virgin soil prevails. They 
 know where vegetation is the rankest ; where the pasture is 
 always the greenest and where the herbivores prefer to roam 
 because the fare is best. They observe topography in their 
 wanderings and when the time arrives, in the course of nature, 
 for the band to settle down and commence a rude cultivation 
 of the soil, it is easy to select the most favorable and desirable 
 spot. The first settlements, therefore, are upon the most 
 favorable locations. The rich alluvial soil yields the best 
 returns and requires the least manipulation in the . process of 
 cultivation. It is often said that the poorest land is first culti- 
 vated and that the mountain sides and tops offer the best 
 inducements to the first cultivators, who have neither the tools 
 or the strength to clear forests. This is only partially true. 
 The mountain dwellers and the inhabitants of the barrens are 
 usually the last to practice agriculture. The deltas of rivers, 
 especially in the eastern hemisphere, have been the scenes of
 
 THE VILLAGE COMMUNITY. 75 
 
 agricultural beginnings. Even weak beginners in agriculture 
 do not hesitate to attack a forest, if soil and location are favor- 
 able. The early Florida settlers found that they would make 
 no mistake in locating upon the abandoned Indian fields. 
 These fields are scattered throughout the entire southern por- 
 tion of the state. They are covered with second growth timber 
 which has sprung up' since they were abandoned. They are 
 sure to embrace the richest soil and to occupy the most advan- 
 tageous locations, topographically, for agricultural pursuits. If 
 there is any spot in a neighborhood likely to be free from 
 frost, it is an old Indian field. 
 
 The Village Community. Nearly the whole of Europe 
 has at various periods been dotted by agricultural village com- 
 munities, and all European people have passed through the 
 village community stage of economies. It is one of the steps 
 in the development of political, as well as of industrial society. 
 In the natural course of events the village community life has 
 superseded the nomadic life in all parts of the world. The 
 nomadic band settles down and commences to till the soil. 
 A village community is a group of families living in neighboring 
 abodes and uniting their forces for mutual protection and sub- 
 sistence. In the earlier periods of village organization the 
 homes are frequently of a communal character, accommodat- 
 ing a number of families or domestic groups of related individ- 
 uals. At the beginning of the village community life the 
 land is owned and cultivated in common. The crops are har- 
 vested in common and placed in a common storehouse. Later 
 on the fields which stretch away from the village are subdivided 
 and each family is given its alloted parcel or holding. The 
 allotments are changed or re-allotment takes place at stated 
 intervals. After the allotment of holdings each family may 
 have the result of its own cultivation, although frequently 
 obliged to turn a specific portion into a common storehouse. 
 
 Village Communities of the Bast. The last paragraph 
 contains a brief outline of the average village community. 
 The community life, however, has assumed various forms in 
 different places, among different people. Among Monarchic 
 tribes there is a tendency on the part of some of the villagers
 
 76 DESCRIPTIVE ECONOMICS. 
 
 to become serfs subject to the will of the chief or lord. As serfs 
 they lose their original proprietory interest in the soil. It 
 becomes the property of the lord and the serfs are attached 
 to it. Among republican tribes there is a counter tendency 
 on the part of the villagers to become freemen and to become 
 owners in severalty of a portion of the surrounding land. 
 Originally free communities are frequently the subject of con- 
 quest. The members are allowed to remain on the land by 
 their conquerors but subject to the will of the latter. The 
 allotment of the laud in such cases is made by the conquerors 
 instead of being regulated by the will of the community. This 
 condition of things will be referred Jo in the next chapter. 
 
 Where the villagers are freemen occupying the surrounding 
 lands in common, as among the Germanic tribes, it is the Mark 
 system. Where, as in England, in Anglo-Saxon times, a large 
 portion of the surrounding land is cultivated, not as the prop- 
 erty of the cultivators but of the lord, it is the Manor system. 
 By reason of a tendency for a people to grow out of the condi- 
 tion of serfdom, after a time the serfs come to recover a 
 proprietary interest in their holdings of land and the manor 
 gradually assumes the character of the later village community 
 with a population of freemen. Many tribes in the Eastern 
 hemisphere are in the village community stage of development. 
 This fact is specially noticable in parts of Oceanica. In Russia 
 the village community life is now at its perfection. The Rus- 
 sian Mir has all the elements of the universal type. 
 
 Village Communities of the West. The Western Hem- 
 isphere furnishes good illustrations of all the economic states 
 and conditions which have been so far discussed. All things 
 considered, they are the best illustrations for our purpose. 
 The Indian villages of Zuni or Acoma, as they exist to-day and 
 will doubtless exist for many years to come, are admirable 
 illustrations of the typical village community of the period of 
 development to which they belong. There are the overgrown 
 communal habitations. There are the flocks and herds, for 
 the most part, owned in common, driven out to the common 
 pastures in the morning and tended by herdsmen who have 
 assumed the employment. Around the villages are the little
 
 THE VILLAGE COMMUNITY. 77 
 
 yards and corrals where the goats and sheep are penned at night. 
 Upon the outskirts are many little gardens devoted to hor- 
 ticulture and vegetable growing. There are paths leading 
 away to the horizon where are the common fields. The heads 
 of families receive an allotment for purposes of cultivation, and 
 they may dispose of their improvements, but the land itself is 
 the property of the village. While the agricultural products 
 may be the individual property of the cultivator, yet they are 
 of common interest to all, and no family will want when there 
 are provisions in the village. 
 
 These Indian villages have not the long, rambling street 
 which characterized the village community of Europe. House 
 architecture must conform to local circumstances and these 
 relate largely to the question of security from marauders. The 
 villager must everywhere protect himself from his nomadic 
 neighbors who are prone to harass him and harry his stores of 
 provisions. The village Indians of America have always been 
 subject to the attacks of the more warlike and less provi- 
 dent nomadic Indians. The locations of the villages have 
 therefore been selected with an eye to lines of defense, and 
 architecture has been shaped to the same ends. Otherwise the 
 economic activity of the villagers is not far different from that 
 which existed in Europe. 
 
 Among the village Indians we find the simple crafts which 
 the demands of village economics call into existence. There 
 is the potter whose art it is to fashion, glaze and adorn the 
 village pottery. There is the hand weaver, weaving from wool 
 or the fiber of the maguey. There is the wheelwright who 
 carries on his occupation rudely, in the open air. Within the 
 houses are the stone hand-mills where the grain is pulverized 
 by the women. It appears to be an enormous stride in advance 
 when the agriculturist has developed these arts and industries. 
 We must remember, however, that it took ages for the village 
 Indians to develop the economic stage of the village. If they 
 should progress according to the course of nature, the lapse of 
 ages would be required for the development of the succeeding 
 stage. The Indian village of Acoma is to-day almost precisely 
 what it was when the first Spanish explorer saw it in 1540. Its
 
 78 DESCRIPTIVE ECONOMICS. 
 
 people have added to their stock of domestic animals the 
 varieties brought by the new civilization, but otherwise three 
 and a half centuries have not changed its main economic char- 
 acteristics. The men go about with the same boomerangs 
 sticking in their belts. They kill hares with a club to-day just 
 as of yore. The women weave and wear the same clothing of 
 maguey fibre. The stranger is feasted on venison, pumpkins 
 and maize bread prepared in no different manner. Each village 
 is as sufficiently self supporting and as economically isolated, 
 as when Cabeza de Vaca visited the Pueblos in 1535. Their 
 authentic history, irrespective of the evidences of antiquity 
 preserved in folk lore, furnishes excellent proof of the slow 
 development of the economic stages.
 
 THE LAND AND THE LABOR. 79 
 
 CHAPTER III. 
 THE LAND AND THE LABORER. 
 
 The Landed Property of Animals. Some animals com- 
 monly assert exclusive rights to the possession of specific 
 territory. The lion selects his hunting ground and defends 
 it against intruders. " He puts up the sign ' no poaching,' and 
 if the warning is not heeded a battle takes place." The terri- 
 tory claimed is, of course, ill-defined. It is not described by 
 metes or bounds. Some of the bird family are a little more 
 definite in their claims. There are fishing birds which, having 
 chosen a good fishing ground, drive off all who intrude within 
 a short flight of the perch. Pack-hunting animals frequently 
 claim territory in common. The wandering dogs of Egypt 
 unite in defending the favorite haunts of the band. The 
 Pariah dogs of the East Indian cities join their forces and take 
 up their residence in a certain quarter of the city. In case a 
 stray cur comes into their territory they make common cause 
 in driving him out. More intelligent assertions of proprietary 
 rights in land seem to exist among the anthropoid apes. 
 
 The Landed Property of the Nomad. The assertion of 
 exclusive rights of occupancy and possession by nomadic tribes 
 is of a higher nature than the instinctive assertions of animals. 
 Nomadic tribes develop a vague notion of tribal possessions 
 at an early economic stage. At first it means the exclusive 
 right to roam and hunt within certain customary limits. Usage 
 finally establishes a right to the spontaneous fruits of the 
 territory and an exclusive right of pasturage. In the end the 
 arable soil becomes the property of the tribe. The boundaries 
 of the tribal territory depend at first on the extent to which 
 the band roams. This in turn is affected by its numbers 
 and the quantity of subsistence required. The tribal posses- 
 sions are finally circumscribed by mountain chains, valleys, 
 rivers and the edges of plains. Imaginary boundary lines are
 
 80 DESCRIPTIVE ECONOMICS. 
 
 not yet in vogue. Possession is retained only at the point of 
 the spear and lines of demarcation are selected wholly with 
 reference to their strategic advantages. 
 
 Land for its Own Sake. In the last chapter there was an 
 attempt to show how the advent of the agricultural life produces a 
 demand for the arable soil. The introduction of tillage marks 
 the beginning of property in land according to the modern 
 meaning of property. Property in land gives rise to a fruitful 
 theme of economic discussion. Eeference was made to the 
 development of landed property in the discussion of the agricul- 
 tural stages, and it will be again referred to. At this time it 
 is important to observe that up to the period when the cultiva- 
 tion of cereals and plants gives rise to a demand for the soil, 
 for what it can produce by tillage rather than for its spontane- 
 ous fruits or its game, economic activity is almost wholly 
 determined by natural forces. But now men have learned to 
 train natural forces into ways that contribute to their support. 
 The spontaneous productions of nature become secondary 
 sources of subsistence when men turn hunters. After a while 
 game becomes secondary to the milk and meat subsistence of 
 the pastoral life. Finally the milk and meat subsistence 
 become subordinate to the farinaceous subsistence. With each 
 step, necessity for the application of systematized labor be- 
 comes more imperative. The berry picker and. nut gatherer 
 are obliged to expend only such effort as may be required to 
 harvest the spontaneous fruits of the soil. The hunter and 
 fisher finds his labors increased. He must put forth more 
 muscular effort and use more craft. Still greater exertion is 
 required of the herdsman. The flocks and cattle require 
 stated attention. Labor assumes the character of regular daily 
 toil. 
 
 Systematized Labor. Coming down to the agricultural 
 life it is found that the man who relies wholly or partially upon 
 the cultivation of plants for subsistence, is bound to engage in 
 systematic labor. Mankind has already discovered that in 
 order to satisfy the necessities of existence, a certain amount 
 of work is required. It is a principle applicable to all living 
 things. " The seed has to toil to raise its covering, the hard-
 
 THE LAND AND THE LABOR. 81 
 
 ened crust of the earth, and then breathe the air and feel the 
 light. While clinging to its bed the oyster opens and closes in 
 order to draw from the surrounding water the first elements of 
 nourishment. The spider spins its web, the fox and wolf 
 labor while they hunt their prey. Man is not exempt from this 
 universal and voluntary law." The labor of man, however, is a 
 conscious and voluntary act. That of animals is unconscious 
 and instinctive. 
 
 The agriculturist is obliged to do more than those who have 
 preceded him in the order of economic development, because 
 he must reclaim the wild land. In most cases it is necessary 
 for him to clear away the forests. He must plant his seeds 
 with the season, and must exercise intelligent patience while 
 he is working and waiting for the harvest. He must hoe and 
 irrigate and in many ways seek to control nature's subtle forces 
 in order to secure their co-operation and procure a crop. 
 
 A Division of Employments, is one of the important 
 results of the agricultural life. The daily duties have become 
 diverse and complicated, and require skill and training. Some 
 of the agricultural operations require man's undivided atten- 
 tion. There are so many "irons in the fire," that one mind 
 cannot care for them all. One man, therefore, looks after the 
 crops, and another tends the herds. The distinctions of occu- 
 pation, slight at first, gradually become pronounced. The 
 advantage of a division of employments relates first of all to 
 the skill in one direction which is acquired by the man who 
 devotes himself to one kind of labor. The herder acquires 
 some technical knowledge of the structural organization of the 
 various domestic animals and is better prepared to treat their 
 diseases and give them the special care which emergencies may 
 require. The farmer learns the peculiarities of different seeds 
 and acquires special knowledge of the conditions of germina- 
 tion. 
 
 The Service of Others. The village life and pursuit of 
 agriculture give rise to another important change. Hitherto 
 all men have been under equal obligations to labor. Each man 
 has performed his share in the common industries. The 
 material condition of each of the members of the family and of 
 6
 
 82 DESCRIPTIVE ECONOMICS. 
 
 the tribe, was precisely the same. The time comes when some 
 members of the community have more work to be done than 
 they can do themselves. Thay require the service of others as 
 one of their economic wants. On the other hand, there are a 
 few members whose share of property is so small that the utili- 
 zation of it, by their personal labor, will not suffice to support 
 them. They must enter into the service of the more fortunate 
 members. Possession or non-possession of land appears to 
 give rise to the primary distinctions of class. There is a limit 
 to the quantity of land which may be the subject of use and 
 ownership and unless it is divided into smaller holdings as 
 population grows, some must go without. There are many 
 theories in explanation of the fact that one part of mankind 
 gets the land and accumulates more upon it than can be per- 
 sonally managed, and another part is landless, fails to accumu- 
 late and is obliged to serve the fortunate part for wages. As 
 one of the facts of economics, further reference will be made 
 to it in the chapter on the Rise of Economic Classes. 
 
 The Evolution of Landed Property. Something was. 
 said in a preceding chapter about the growth of landed prop- 
 erty incident to the enumeration of the various agricultural 
 stages. The subject may now be discussed upon its merits, 
 and with reference to its own economic character. An excel- 
 lent review of the historical evolution of landed property has 
 been prepared by Gide. It appears in his Principles of Politi- 
 cal Economy, and will be closely followed. 
 
 Five Stages of Evolution.- There are five stages or phases 
 of development of private property in land. Each has 
 appeared in sufficiently numerous instances to warrant men- 
 tion, although it does not follow that the succession of stages 
 has invariably occurred. It sometimes happens that some one 
 phase has never appeared in the land economy of a country. 
 
 1. Communal or Collective Ownership. In the first stage the 
 land belongs to the tribe or community. At the beginning of 
 the stage it is cultivated in common, and every man expends 
 an equal amount of labor in the common cultivation, and the 
 products are owned and used in common. 
 
 2. Periodical Allotment of Use and Possession. In the sec-
 
 THE LAND AND THE LABOR. 83 
 
 ond stage 'the population has ceased to be nomadic, and has 
 assumed the character of a fixed community. The soil having 
 been made arable and "brought under cultivation, is no longer 
 abandoned to suit a change of location, but its cultivation is 
 continued according to customary and more productive meth- 
 ods. The arable soil belonging to the community is subdi- 
 vided, and the temporary possession of a portion is given to 
 each head of a family. The land itself is the property of the 
 community at large, and the various subdivisions are changed 
 by allotment at stated periods. The temporary possession is 
 perhaps at first for a single season the time embraced in the 
 ordinary cycle of agricultural operations. The process of cul- 
 tivation is regulated also by custom which fixes the character 
 of the crop to which each holder shall apply his allotment. 
 The plan of periodical division among the heads of families is 
 still practiced in the Mir, the village community of Eussia. 
 The distribution has there become biennial. The portion of 
 the common territory upon which the houses are built, together 
 with the gardens connected with them, is the hereditary prop- 
 erty of the village and not subject to division. The meadow 
 land is parceled out along with the crop land. The pasture 
 land remains the common property of the community, each 
 member being entitled to a certain quantity of pasturage. 
 
 3. Permanent Possession without Right of Disposal. The 
 realloting of the land becomes less frequent. The possession 
 of the householder lasts for a longer period. The more skill- 
 ful cultivators of the community bring their allotments into a 
 higher state of cultivation than the others and endeavor to 
 postpone the re-allotment as long as possible. Finally the 
 periodical division falls into disuse, and the householder and 
 his family as a unit, become entitled to the permanent use and 
 possession of their last allotment. The title to the soil, how- 
 ever, for a long time afterward is vested in the community at 
 large, and the right of disposal does not pass with the perma- 
 nent right of possession. This system exists among the family 
 communities of eastern Europe, especially in Bulgaria and 
 Croatia. 
 
 4, TJie Tenure Holding. The fourth stage has been ascribed
 
 84 DESCRIPTIVE ECONOMICS. 
 
 to accident, rather than to evolution. It is an accident, how- 
 ever, which has occurred so uniformly among all human socie- 
 ties, as to become a phase of the evolution of landed property. 
 It relates to the conquest of one people by another. The con- 
 querers appropriate the land of the conquered territory and 
 assert the legal ownership of the soil. The conquered are left 
 in possession by what is called tenure. The tenure is more or 
 less akin to actual ownership, but is limited by such conces- 
 sions as the conquerors may make to the cultivators, and is 
 burdened by the servitudes which the conquerors impose. The 
 condition of the original inhabitants is that of serfdom, which 
 is described in a succeeding part of this chapter. 
 
 5. The Freehold. The fifth stage witnesses the full develop- 
 ment of private ownership. It becomes a freehold, alienable 
 by the owner at will. In this stage the old feudal system of 
 tenure disappears, and with it also communal or collective 
 ownership. Individualism completely supersedes communism. 
 It comes to pass by the end of the city stage of economics, 
 although the transfer of land is hampered by many restrictions 
 which are cleared away in the succeeding stages. 
 
 A Sixth Stage is claimed to be necessary in order to complete 
 the process of evolution. The required condition of things 
 relates more to the transfer of land from hand to hand, from 
 one owner to another, than to its ownership. In this stage 
 landed property will be disposed of as easily as any article of 
 personal property. It is claimed that the Torrens land system 
 adopted in the Australian colonies, is a realization of this final 
 step. By the Torrens system "the owner of real estate is able as 
 it were to docket his land in the shape of a sheet of paper, and 
 to transfer it from one person to another with the same ease as 
 if it were a banknote, or at least a bill of exchange." 
 
 Communal Versus Individual Ownership. The discus- 
 sion of communism belongs to a later part of the work. While 
 the subject of the development of property is so fresh in mind 
 however, it is possible to picture in a few words the basis of the 
 doctrine of communism, or collectivism as its teachers now 
 prefer to call it. The word property has become so intimately 
 associated with the idea of land that the term "development
 
 THE LAND AND THE LABOR. 85 
 
 of property" usually stands for the development of private 
 ownership of land. The communistic theory denies that any 
 individual has the right to appropriate a part of the domain of 
 nature which was created for all men alike. Therefore the 
 land should be held and used for the common benefit of all, 
 and the primitive ownership by the community is the only just 
 organization. The subject narrows down to these questions: 
 Is the course of landed property, resulting in its becoming the 
 free and exclusive property of individuals, a just and natural 
 course, or has it been due to coercive and iniquitous human 
 institutions, perverting the course of nature? Is it just that 
 individuals should seize upon what was originally common and 
 make it the subject of private ownership? Is private owner- 
 ship right? Should the primitive collective ownership of the 
 community at large be reinstituted by society and how? 
 
 Slavery. It is necessary to go back a little now, for in the 
 order of development, slavery precedes the hiring of service. 
 It usually begins with the fixed community life. Nomads 
 cannot conveniently carry slaves about with them, and neither 
 the hunting or the pastoral tribe has much for a slave to do. 
 To the agriculturist, however, with whom labor assumes such 
 importance, an able-bodied laborer is an object of interest. 
 After having settled down into a fixed community life men can 
 look after slaves and find daily use for them. At first, like 
 other objects which are the subject of ownership in early times, 
 the slaves are the common property of the community. They 
 labor for the community at large. The villager with his com- 
 mon interest in the lands, provisions, and slaves becomes a 
 capitalist, and the slave the laborer. There is no collision 
 between capital and labor, however, because the slave is both 
 the capital as well as the laborer. The agricultural community 
 life, then, is responsible for another great economic change. 
 Prior to it no man is master and no man is servant. Now 
 comes the slave serving a master and after him the servant in 
 the hire of an employer. 
 
 Serfdom is said to originate in two ways. First, by the 
 conquest and subjugation of the originally free inhabitants of 
 a country, and secondly, by the natural growth of mon-
 
 86 DESCRIPTIVE ECONOMICS. 
 
 archical institutions. Arising in the first way it is an 
 amelioration of the lot of slavery. When a whole country is 
 conquered the conquerors cannot well convert the entire popu- 
 lation into personal slaves. The country is parceled out among 
 the victors and as part of the spoils the original dwellers go 
 with the soil. Thenceforth they belong to it, and while not 
 considered the personal property of the lord or owner of the 
 soil, yet they are under his authority and cannot leave his 
 domain without his consent. 
 
 Originating in the second way, serfdom is a natural growth 
 within the tribe. It is assumed that there is a time when civil 
 equality prevails. The political affairs of the tribe are managed 
 by elective chiefs. The elective chiefs gradually become hered- 
 itary and the chieftainship arises not by election by the mem- 
 bers of the tribe but by descent or succession. The hereditary 
 chiefs assert unto themselves greater and greater authority 
 over the hitherto common lands until finally it is parcelled out 
 wholly according to their wills. The allotments are held at 
 their pleasure and the holding is a tenure. Whatever doubt 
 *may exist as to the true origin of serfdom, there is none as to 
 the actual condition of the serf. He is bound to the soil and 
 goes with it if it changes hands, like any fixture. The idea of 
 permanence and attachment to the soil is the controlling feat- 
 ure of serfdom. The time comes, however, when the lords 
 begin to sell liberty to the serfs. It involves, simply, permis- 
 sion to depart from the community and from the domain of 
 the lord. To go and come at will. At first, the price rests 
 wholly in the caprice of the lord. It finally becomes fixed by 
 long usage and a customary price is then set upon the serf's 
 freedom. It is paid by the performance of labor or in cattle, 
 sheep or agricultural products. Those who do not gain free- 
 dom by purchase from, or gift of, the lord acquire it in the 
 course of the natural development out of the condition of 
 serfdom.
 
 VILLAGE HOUSEKEEPING. 87 
 
 CHAPTER IV. 
 VILLAGE HOUSEKEEPING. 
 
 Derivative Meaning of " Economics." The word eco- 
 nomics is derived from two Greek words, oikos, meaning a house- 
 hold, domestic affairs or the domestic establishment, and nomos, 
 meaning law or regulation. Agreeably to its derivation, there- 
 fore, economics primarily refers to the government or regulation 
 of a household, and the art of housekeeping or regulating 
 domestic affairs. It would not be inappropriate therefore to 
 speak of the economics of the family, as family housekeeping. 
 The economics of the village would be village housekeeping. 
 Under the head of village housekeeping would come discussion 
 of the regulation of the internal or domestic affairs of the vil- 
 lage community. 
 
 Village Employments. Agriculture was at first carried 
 on jointly with the pursuits which had been followed before 
 it, and the first agriculturists were hunters, fishers and herds- 
 men, as well as tillers of the soil. Each member of the family 
 was conversant with all the rude arts of the time There was 
 little distinction of sex arising from occupation. Men took 
 longer tramps than the women when game was sought for, but 
 the women could lend a hand at hunting, and they tended the 
 flocks and looked after the little horticultural enterprises. The 
 introduction of field agriculture gave rise to employments suit- 
 able only for men. House life and its incidents becomes more 
 appropriate to women, and out-door life to men. The men 
 come to follow the bent of their minds. They begin to devote 
 themselves to different kinds of labor. Some prove to be best 
 fitted for herdsmen, while others are natural agriculturists, 
 and devote themselves to field labor. These occupations 
 gradually become distinct. The great mass of the members of 
 all village communities devote themselves to one of them. 
 Fishing and hunting become pastimes with the majority.
 
 88 DESCRIPTIVE ECONOMICS. 
 
 There are a few, however, in whom the nomadic spirit is still 
 paramount. They decline to engage in stated daily labor. 
 They are the ne'er-do-wells of the community. 
 
 Village Artisans. In the first economic stage each family 
 builds its house and makes the utensils and clothing which it 
 requires. "When men come to engage in agricultural pursuits 
 upon a large scale the necessity for a few primitive artisans is 
 felt. Some rude tools and appliances are required. The agri- 
 culturist and herdsman cannot find time to learn to use them, 
 nor can each member of the community afford to own them. 
 The artisan class commences, perhaps, with the smith and the 
 carpenter. The smith is a universal ironworker. He makes 
 and repairs plows, carts and cooking utensils. The carpenter 
 is not only house-builder, but also boat-builder, cart-maker 
 and furniture-maker. He is the universal wood-worker. They 
 possess the only knowledge of these arts. The other men 
 lose it or fail to acquire it. In the later stages of village com- 
 munity development, each village contains representatives of 
 all the crafts necessary for the daily life of the community and 
 to provide for its wants. 
 
 The Division of the Profits. It has been said that uhere 
 is yet no contest between capital and labor. The body of 
 laborers those who serve others for fixed wages is so small, 
 as compared with the rest of the population, that its voice is 
 not heard. The early villagers, therefore, are all capitalists 
 as well as laborers. They all labor in the common undertak- 
 ings and have a proprietary interest in the results of labor. 
 Each gets a share of the results of the common toil. The 
 herdsman receives so much meat and milk from the herds 
 which he tends, while the surplus goes to the agriculturist and 
 the other members of the community. They in turn pass over 
 to the herdsman some of the agricultural products. In the 
 early stages of -village community life, the smith and the car- 
 penter, and later on the wright and the miller, are elected or 
 appointed by the community, and are communal officers occu- 
 pying a relatively high rank. For their services to the com- 
 munity they receive a portion of meat and grain. The share 
 of each member of the community, according to his rank and
 
 VILLAGE HOUSEKEEPING. 89 
 
 needs, is usually fixed by immemorial custom ana usage. In 
 the latter part of the village stage, the landless class has grown 
 to such proportions as to become a hostile force in the com- 
 munity hostile to the citizens or landed class. The story of 
 the contest between the two classes is told in the chapters 
 which follow, under the head of " The Economics of the 
 City." 
 
 Pioneer Peoples. The industrial life of the village com- 
 munity is common among all pioneer peoples. In a new coun- 
 try every man must, for a time, know something about all the 
 arts and crafts. Like Saint Dunstan, who was a prelate, poli- 
 tician, "an excellent blacksmith, bell founder and designer of 
 ladies' robes," they must be able to turn the hand to meet all 
 the emergencies which may arise. So it is that they grow the 
 flax in the field, and after they have put it through the brake, 
 superintend each manipulation until it is woven into clothing. 
 
 Truck Economy. The exchange of commodities has now 
 become more comprehensive than the barter of family eco- 
 nomics. In the family stage of industrial society there is no 
 pre-concerted movement toward the production of surplus 
 commodities for the purposes of barter. Men now labor to 
 secure a surplus of one or two of the articles in common 
 demand, with the intention of exchanging it for other articles 
 which they require. The slight division of employments 
 which arises in the village community life, creates a necessity 
 for the interchange of commodities. The craftsmen and all 
 those members of the village not directly engaged in producing 
 subsistence of food, are paid in truck. They exchange their 
 labor for wheat and milk. At first there is no village store- 
 keeper or shopkeeper. When he does come to exist he is a 
 truck dealer. He pays for commodities with commodities . 
 
 The Control of Village Trade. Just as the tribe and the 
 enlarged household, in the family stage of economics, 
 controlled trade, and made it a family enterprise, so vil- 
 lage communities make it a village enterprise. In the early 
 stages of village formation, the communal life is almost as 
 complete and as perfectly organized as with the isolated family. 
 The community is interested in all that is produced and the
 
 90 DESCRIPTIVE ECONOMICS. 
 
 products are owned in common. The village, therefore, is 
 naturally interested in the exchange of the village property, 
 and, very properly, the community controls the exchange. 
 Another reason for village control is the existing lack of order 
 and respect for private possession of property. The combined 
 strength of the village is needed to enforce fair exchanges. In 
 the later stages of village formation, the idea of private owner- 
 ship has developed. Individuals own the fruits of their labor, 
 and greater security is afforded the owner. The village still 
 controls trade, however, by and among its members and within 
 its precincts, for another reason. That reason is village 
 aggrandizement. The activity of the members of the village 
 is directed toward the village welfare. Every member makes 
 the common interest his interest. At first the unwritten, and 
 later the written laws of the village demand that.no individual 
 shall trade except for the common benefit. The manner of 
 making exchanges is so regulated that the supposed common 
 benefit will be secured. Members of neighboring villages are 
 forbidden to trade. In so far as the village has a centralized 
 authority it is directed toward the control of trade for the ben- 
 efit of the immediate community composing its membership. 
 In the succeeding chapter, entitled " The Trader," it will be 
 shown how this village control of trade ripens into a far-reach- 
 ing municipal control, and trade privileges are either confined 
 solely to citizens or burgesses possessing the franchise of the 
 city, or else trade regulations are such as to give them a monop- 
 oly of trade. 
 
 The Character of Village Trade. This economic stage 
 affords no indications of systematic trade. It is not like the 
 commerce of modern times. At first it is simply an exchange 
 of commodity for commodity among the villagers, necessitated 
 by their different employments, and also by the increase of 
 their wants. Afterwards, when one village has a surplus of 
 some article, and a neighboring village experiences a dearth of 
 that article, but has a surplus of another, there is an exchange 
 of surpluses. It is inter-village trade. Geographical location 
 may secure to one village a stated surplus of one commodity 
 and keep it in want of others. The inhabitants of a fishing
 
 VILLAGE HOUSEKEEPING.. 91 
 
 village, for instance, will have made economic progress corre- 
 sponding to that of the neighboring agricultural villages. They 
 will have better fishing appliances than their ancestors of the 
 family stage of economics. They will have more and higher 
 wants wants which the catch of fish will not satisfy. They 
 will catch more fish than are required for their own support, 
 and will need to exchange the surplus to satisfy their other 
 wants. 
 
 The Increase of Capital. It has been observed that 
 among nomadic peoples there is little effort to accumulate cap- 
 ital. Nomadic life forbids the acquisition of a store of goods 
 for future consumption or use, and capital will consist of the 
 weapons of the chase, a few simple cooking utensils and the 
 flocks. There is no storing for future consumption. With 
 the advent of the fixed community life, however, comes the 
 tendency to the production of commodities for future employ- 
 ment or consumption. The instinctive propensity to store, 
 inherent in animals, develops in men and ripens into precon- 
 ceived design. The necessities of the agricultural community 
 life demand more capital. There must be agricultural imple- 
 ments of which the nomad had no need. The villager confines 
 the range of his operations to a limited territory. He does not 
 break camp when the country does not provide for its inhabit- 
 ants, as the nomad does. Therefore, he must necessarily accu- 
 mulate for certain times and seasons when agricultural opera- 
 tions are at a standstill and the earth yields no increase. The 
 population of the village would be too great for the supporting 
 capacity of its territory, if herds and flocks, combined with 
 game, were the sole reliance. Moreover, the agriculturist of 
 the fixed community has entered a stage of civilization higher 
 than that of the herdsman or hunter. His wants have 
 increased accordingly, and an increase of capital is necessary 
 to satisfy the superior and increased number of wants pertain- 
 ing to the higher civilization. Men can no longer procure 
 each day the food of that day. The fact that nature works in 
 her moods, and men living in the agricultural life on the prod- 
 uce of the soil, must abide by the seasons, must wait for the 
 seeds to germinate and fruit, presupposes some accumulations
 
 92 DESCRIPTIVE ECONOMICS. 
 
 of goods for future consumption. The fact that there is a 
 simple division of employments, also presupposes some accu- 
 mulation of goods. 
 
 Village Manufactures. From the fact that we find in the 
 village community representatives of the ruder crafts, we 
 would naturally expect to discover some signs of manufactur- 
 ing industry. The village craftsman, however; manufactures 
 to order only. He is really more of a tinker by trade. He 
 makes up the raw goods which are brought to him. Plows are 
 not made to be kept in stock until a customer calls. Articles 
 requiring much skill or expenditure of time in the manufact- 
 ure are made from time to time as they are required for imme- 
 diate use. Manufacturing to a noticeable extent is not possi- 
 ble until a considerable body of men can devote themselves to 
 something beside agriculture, and we have seen that in the vil- 
 lage community life, men are given over to agriculture and the 
 operations incident to it.
 
 THE FIRST FORMS OF MONEY". 93 
 
 CHAPTER V. 
 THE FIRST FORMS OF MONEY 
 
 Disadvantages of Truck Economy. Mr. Jevons begins 
 his book Money and the Mechanism of Exchange, by telling 
 how the prima donna Mdlle. Zelie gave a concert in the Society 
 Islands. Her remuneration was to be one-third of the pro- 
 ceeds. When the receipts of the box office were counted up, 
 the singer found that her part consisted of a lot of poultry, 
 fruit and monkeys. She could not take the property with her 
 on her travels, and had no use for it. In order to realize any 
 results from her concert, she was obliged to go about and hunt 
 up people with whom she could exchange the truck for other 
 things which she could use or transport. Cameron the African 
 explorer wanted to buy a boat in Africa and he tells of the dif- 
 ficulties he experienced in this way: "Syde's agent wished to 
 be paid in ivory of which I had none; but I found that 
 Mohammed Ibii Salib had ivory and wanted cloth. Still, as I 
 had no cloth, this did not assist me greatly until I heard that 
 Mohammed Ibu Gharib had cloth and wanted wire. This I 
 fortunately possessed. So I gave Ibu Gharib the' requisite 
 amount in wire; upon which he handed over cloth to Ibu 
 Salib, who in his turn gave Syde Ibu Halib's agent the wished- 
 for ivory. Then he allowed me to have the boat." These stories 
 illustrate the disadvantages of truck economy. It has been 
 shown that the division of employments which arises in the 
 agricultural community life necessitates some exchange of 
 commodities. When the time comes that men devote them- 
 selves to one kind of labor, it necessarily happens that they 
 must use the products of the labor of other men, engaged in 
 different kinds of labor. In order to get it they must exchange 
 the products of their own labor. There must be some distribu- 
 tion among the different members of the community, of the 
 various community products. At first this distribution is
 
 94 DESCRIPTIVE ECONOMICS. 
 
 effected by the actual exchange of commodity for commodity. 
 The smith exchanges a plow for sheep or some wheat. The 
 carpenter exchanges the result of his work for clothing and 
 provisions. The herdsman must exchange with the agricul- 
 turist and the craftsman. Observe the disadvantages of the 
 system. A number of men might wish to exchange sheep for 
 plows and the smith must keep his plows or take more sheep 
 than he needs. If he takes the sheep he must find someone 
 who wants sheep and has a surplus of flour and potatoes. So 
 it goes through the community. Every man having a surplus 
 of a commodity must find another member of the community 
 who wants that surplus and who also has a surplus of a com- 
 modity of the desired kind. A dozen exchanges may be 
 required before a man gets what he wants. 
 
 Increasing Difficulties with Increasing Wants. In the 
 early stages of industrial society, when wants are few and sim- 
 ple when each family is sufficient unto itself and each mem- 
 ber of the family joins in contributing to the common subsist- 
 ence, it can be conceived how the difficulties connected with 
 the interchange of commodities, so far as interchange is neces- 
 sary, may be overcome. As society progresses and wants 
 increase, and assume a higher character, it becomes increas- 
 ingly difficult for the members of the community to make 
 satisfactory exchanges. 
 
 Overcoming the Difficulties. The first attempts at over- 
 coming or circumventing the difficulties are rude, yet they are 
 fully abreast of the arts of life, of the period. In very early 
 times men have practiced the plan of selecting some one com- 
 modity as a measure of value and the medium of exchange. 
 The commodity selected, to be employed as money, is that 
 which is most desired by the members of the community. It 
 is that which a majority of the members want. Its adaptation 
 for the purposes of a medium of exchange, other things being 
 equal, depends upon its divisability and its value as compared 
 with its bulk. Auk feathers are universally wanted on the 
 Labrador coasts, but they are not as good a medium of 
 exchange as dried fish, because of their bulky nature and the 
 difficulty of transporting and transferring them.
 
 THE FIRST FORMS OF NONET. 95 
 
 Fur Money. One of the earliest forms of money consisted 
 of the skins of fur bearing animals. Fur would be the com- 
 modity of which the hunter would have a surplus, and the 
 hunter is likely to be the first member of industrial society 
 having need of a currency. Fur money has been in common 
 use in some parts of Eussia and Siberia for many centuries, and 
 in the latter country, as well as in the far north of North 
 America, it is still a medium of exchange. At the posts of the 
 Hudson Bay Company, the beaver skin is the unit of value. 
 For small change martin skins are used, three of them being 
 equal to one beaver skin. If an Indian trapper desires a rifle 
 he must turn over fifteen beaver skins, more or less, according 
 to the state of prices. If he wants a pair of boots, the price 
 will be measured in martin skins. The Russian word "kung" 
 means both money and fur. 
 
 Cattle Money. With the advent of pastoral life and among 
 a pastoral people cattle became a convenient commodity for 
 use in exchange. They are then more universally distributed 
 and more universally desired than any other commodity, and 
 they naturally became current commodities. The domestic 
 animals continued for centuries to be the unit of value- 
 Homeric prices are ordinarily quoted in oxen. The Latin 
 word "pecunia," meaning cattle, by the law of the association, 
 came to mean money, just as the Eussian word for skin came 
 to mean money. The commodity derives a new meaning from 
 the use which is made of it. 
 
 Grain Money. When men enter upon the agricultural life, 
 the cereals begin to be more universally distributed and desired 
 than cattle. Cattle raising then becomes a secondary occupa- 
 tion and grain raising a primary occupation. Grain either 
 supersedes the use of cattle as money or is used contemporane- 
 ously. There are many qualities about grain which fit it to be 
 the currency of a higher civilization. Every member of the 
 community without exception wants it arid can use it. It is 
 of greater durability than any form of money which precedes 
 it. In modern times it is usually classed among perishable 
 commodities, yet, as things went in the village community 
 life, it was capable of longer preservation than any food com-
 
 96 DESCRIPTIVE ECONOMICS. 
 
 modity in common use. Moreover its divisibility is an 
 important quality. For the first time men were now provided 
 with a full supply of small change. Grain could be divided 
 into pecks, half -pecks or quarts. Among the village Indians 
 of New Mexico it is still a common medium of exchange. In 
 medieval England, its use for the purpose of payment or 
 exchange was preserved even after coinage came into vogue. 
 The royal tithes were sometimes paid in wheat. Enough to 
 make flour for one hundred men counted as a shilling. 
 
 Colonial Indian Money. The Indian money of colonial 
 New England furnishes a good illustration of a primitive medi- 
 um of exchange. It was the wampum of the Narragansetts 
 and Montauks. It has been rated a very important factor in 
 New England civilization because of its use in facilitating the 
 exchange of the furs of the interior Indians for the commodi- 
 ties of the whites. It brought the furs from the North and 
 West to the New England colonies, and they in turn exchanged 
 the furs for molasses and sugar, and the stock in trade of the 
 Dutch and English trader. It represented the rude beginning 
 of coinage. Deftness, skill, and application were required to 
 make it from the inner whorl of the peri-winkle shell. It 
 required labor to grind and polish the beads upon stones and 
 pierce them with the little holes whereby they could be braided 
 and strung. Wampun gave value to the labor of the Narra- 
 gansetts, and it bought them tools and provisions of the 
 settlers. 
 
 Other Illustrations. According to Homer, "the long-haired 
 Greeks bought wine, some for brass, some for shining iron, 
 others for hides, some for the oxen themselves, and some for 
 slaves." This illustrates the use of the metals, in primitive 
 forms along with other commodities, as money. Salt bars are 
 the currency of Dahomey. Glass beads and cotton cloth are 
 current money in Central Africa.
 
 A REVIEW OF THE ECONOMIC PROGRESS. 97 
 
 CHAPTER VI. 
 A REVIEW OF THE ECONOMIC PROGRESS. 
 
 Mastery Over Nature. You have observed that subjection 
 to nature characterized the economics of the family. At first 
 men were wholly dependent upon the bounty of nature, living 
 on fruits, nuts, and bulbs. Afterward they acquired skill and 
 unity sufficient to kill wild animals. That meant a considerable 
 progress ; next they domesticated the wild animals. That 
 indicated a still greater victory over nature's forces. Now they 
 have come to regulate the course of nature by the cultivation 
 of plants for food. 
 
 The Progress Illustrated. The Todas, one of the Hill 
 Tribes of India, still live in a strictly pastoral state. Their 
 country is rich in virgin soil, full of fertile valleys and plains, 
 but their subsistence is almost solely upon buffalo meat, and 
 milk. A recent traveler among them describes their condition 
 as most filthy and wretched in the extreme. Some of the 
 neighboring tribes, which have passed out of the pastoral state, 
 and are cultivating soil of the same character as that of the 
 Toda territory, are prosperous and wealthy. The economic 
 progress of the latter is the story of man's transition from the 
 " savage's subjection to nature, to the citizen's mastery of her 
 forces." 
 
 The Increasing Sources of Subsistence. Just as the 
 seed of the cereals multiplies a hundred fold when it is given 
 a chance, so, without exaggeration, we may say that men have 
 increased their material wel fare a hundred fold when they have 
 learned to give it that chance. Ethnologists find it worthy of 
 remark that people living in the hunter or pastoral state have 
 no stated meals or meal times. When they become partially 
 agricultural, they have one prepared meal a day, as was the 
 case with the Iroquois. When they indefinitely increase their 
 sources of food supply by the systematic cultivation of the 
 7
 
 98 DESCRIPTIVE ECONOMICS. 
 
 cereals, they have at least a breakfast and a dinner, like the 
 village Indians of the Mexicos, and they are in want only at 
 rare periods. The economic condition of the isolated family 
 was ordinarily that which we call poverty-stricken. In the 
 village there was thrift, forehandedness and comfort, not com- 
 fort according to modern standards but according to the 
 standard of the preceding economic stage. 
 
 The Use of Tools. The plow drawn by an ox is a great 
 labor-saving machine as compared with the forked stick. 
 Men could not build the houses of solid foundations and sub- 
 stantial structure, which they erect in the village stage of 
 economics, without the use of various tools and appliances. 
 Following the return of the survivors of the Jeannette, Congress 
 appropriated a considerable sum of money for the purchase of 
 presents for the natives of the Lena Delta, who had rendered 
 aid and succor to the members of the expedition. The ex- 
 penditure of the money, involving the selection and purchase 
 of the articles to be distributed, was entrusted to an arctic 
 traveler who knew the native wants. He bought quantities of 
 sail needles, knives with wrought iron blades which would 
 not snap, hatchets, ice picks with long blades for the thick ice, 
 carpenters' tools, thimbles, thread, buttons, drinking cups and 
 plates of granite ware, and copper kettles, and white horse hair 
 for fish lines and nets. The entire assortment was consigned 
 to the far north and distributed among the natives of the 
 coast. They discarded their blunt bone needles and knives, 
 their stone kettles and thong fish nets and entered upon a new 
 career. It is announced that they have developed an economic 
 condition infinitely superior to the old. They have a more 
 regular and stated supply of food. They live in better and 
 warmer houses, and are more comfortably dressed. In a few 
 years they are likely to advance almost an entire ethnic period. 
 
 The Exchange of Commodities involves another important 
 economic step in advance. Instead of trying to produce every- 
 thing themselves each man for himself the members of the 
 village have learned to satisfy some of their wants by the ex- 
 change of commodities. It involves a slight division of em- 
 ployments a condition of things in which some of the villagers
 
 A REVIEW OF THE ECONOMIC PROGRESS. 99 
 
 devote themselves to one kind of labor. It involves some 
 economic dependence. The farmer depends, for a part of his 
 wants upon the labors of the carpenter, of the smith and the 
 miller. The smith depends upon the farmer, the herdsman 
 and the other workers of the village. Each must do the part 
 he has assumed or mischief results. Industrial society the 
 state of living in which each person depends, sometimes very 
 remotely, upon the labor of every other person is taking 
 shape. 
 
 The Distribution of Commodities. This is hardly appre- 
 ciable yet. If one village happens to have a dearth of a com- 
 modity which is in demand, and a neighboring village has a 
 surplus, the surplus is likely to be taken in a raw state to where 
 it is wanted, providing the distance is not great. Perhaps 
 there are a few men who make it their occupation to transfer 
 a surplus from the place where it is produced to the place where 
 it is wanted. They add to the general economic dependence 
 prevailing in the village. They must be supported while 
 attending to their business. 
 
 The Growth of Property. Not the least of the features 
 indicating economic progress is the growth of property. The 
 right of private ownership is first extended to tools, weapons 
 and domestic utensils. Finally all articles of a personal nature 
 cease to be owned in common and proprietary interest centres 
 in one person. At the end of the village stage there is private 
 property in land. It commences with the ownership of im- 
 provements and assisted by the associations arising from the 
 long possession of a certain parcel it comes to pass, that the 
 holder and user is considered to have a permanent right of 
 possession which ripens into a proprietary interest in the soil 
 itself. Of course, the possession of property is still frequently 
 disputed. There is more respect for private property than 
 when its possession depended upon the exercise of brute 
 strength, but lawlessness and disorder is a prevailing feature. 
 
 Village Isolation. Notwithstanding this economic pro- 
 gress, the village community is characterized by economic 
 isolation. It is an isolated economic unit sufficient unto itself, 
 just as before it, each family was sufficient unto itself. It sup-
 
 100 DESCRIPTIVE ECONOMICS. 
 
 plies its wants by the labor of its members and within its 
 borders. The Pueblos have no commercial intercourse. An 
 Anglo-Saxon village was independent, so far as its economic 
 life was concerned, of every other village.
 
 III. 
 
 ECONOMICS OF THE CITY. 
 
 CHAPTEK I. 
 THE TRADER. 
 
 The Rise of Cities is the next epoch marking event in 
 economic progress. The out-line study of the village and its 
 system of economy has been concluded, although frequent ref- 
 erences must be made to previous parts of the work for the 
 purpose of comparison and illustration. There is one char- 
 acteristic of village economics which should be clearly borne 
 in mind, when the outline study of the succeeding economic 
 stage and of a higher form of economy is commenced. It 
 is the economic isolation of the village. The first economic 
 unit was the family. The family merges into the higher 
 economic organization of the village, and the village becomes 
 the unit. The village is self-sufficient. The villagers have no 
 economic dependence without. The community satisfies all its 
 wants by the labor of its members. The productions of the 
 village are rarely exchanged or distributed beyond the village 
 population. Now, however, the village economy differentiates. 
 The villagers begin to rely upon adjoining or foreign villages 
 for part of their wants. In the course of growth their wants 
 have increased beyond the capacity of the village to provide. 
 This increase of wants first relates to some articles of necessity 
 which the natural productions of the community cannot pro- 
 vide. Next, it relates to articles of luxury which are not 
 found in the community and cannot be produced there, but 
 which must usually come from foreign lauds. In the third 
 
 101
 
 102 DESCRIPTIVE ECONOMICS. 
 
 place it relates to a dearth of home productions, necessi- 
 tating the use of the surplus of adjoining communities. 
 In the beginning, all of the articles intended to supply these 
 increased wants of the village are brought into it in a raw state. 
 The surplus productions of the village which go to pay for the 
 articles brought into it, are taken away in a raw state. Later 
 on, when the economy of the city has assumed form, stated 
 manufacturing commences, and manufactured articles are 
 handled. 
 
 Town and City. In olden times a town was any enclosed 
 collection of dwellings. The common use of the quick-set 
 hedge or tun, as the enclosing medium, gave a name to the 
 enclosure and it came to be called a town. As wars and 
 domestic troubles increased, the timber palisade supplemented 
 the hedge and the town finally became a fortified place. In 
 England, the terms town and city are now nearly synonymous. 
 Town is the more common and the more general term, because 
 " city " was formerly applied only to those towns which had 
 been the sees of bishops. In the United States the city is an. 
 incorporated municipality. In many states a town must have 
 a population of over 10,000 in order to become incorporated as 
 a city. Distinctions of size, rank and corporate privileges 
 have therefore come to be associated with the terms town and 
 city. The town may be incorporated, but its population is 
 small and as a body corporate it possesses less priveleges than 
 the city. In economics, the two terms may frequently be used 
 synonymously. It is better, however, to preserve the idea of 
 rank and to use the word town as a collection of houses and 
 people, larger than the village, having a market as the market 
 town for a number of neighboring villages. The city is then 
 an enlarged town, superior in size and in the volume of its 
 trade and industry. It is the entrepot of a large territory, 
 embracing not only many villages, but many market towns. 
 
 Economic Activity Concentrating. The trade which 
 results in the attempt to satisfy the increasing wants of the in- 
 creasing population of the villages, produces concentration of 
 economic activity among them. Just as the economic activity 
 of the family becomes crystalized in and concentrated in the vil-
 
 THE TRADER. 103 
 
 lage community, so that of the villages, concentrates and crys- 
 talizes about some central village. The village becomes the 
 market town of a large number of villages. Later on it is the 
 trading town of the country. In a succeeding paragraph we 
 shall mention some of the conditions determining the villages 
 which are to become towns and those which are to remain vil- 
 lages. It is a process of natural selection. 
 
 The Trader Builds the Town. While this chapter is 
 entitled " The Trader," much of the discussion is devoted to 
 the rise of cities, and that title might not improperly be given 
 to the chapter. The title employed is preferable, however, 
 because the origin of cities, from an economic standpoint, is 
 almost wholly ascribed to trade and commerce and their 
 influences. It is the trader and the prosecution of his occupa- 
 tion which makes the city ; and therefore the trader is the 
 ultimate economic factor to be studied. For convenience of 
 stud} r , however, the rise of cities as one of the facts of economic 
 history, will be first discussed. The relation of trade and the 
 trader to the origin of cities may then be examined. Trade is 
 the cause, the city is the effect. 
 
 Maritime Cities. In studying the rise of cities some slight 
 distinction will need to be made between maritime and inland 
 cities. The maritime city is the first in order of formation. 
 Eepetition may here be made of the statement in a previous 
 paragraph, entitled, "The Fisher First." It was stated that 
 the seas and rivers are the first avenues for the progress of 
 civilization and industry. Along the seacoasts, therefore, will 
 naturally be found the earliest signs of economic development 
 out of the village state. The first requisite for the formation 
 of a maritime city, is a safe and convenient harbor, with 
 facilities for the encouragement of navigation. These are the 
 conditions determining the location. The Mediterranean sep_ 
 arated continents of diffuse and varied productions. It was 
 an inland sea, with shores indented by good harbors. Those 
 shores have been the scene of the highest and best development 
 of city economics. The Mediterranean was the great highway 
 between the east and the west, and the location of the Mediter- 
 ranean cities guaranteed the highest commercial advantages.
 
 104 DESCRIPTIVE ECONOMICS. 
 
 They became the warehouses for the rare and costly products 
 of the more advanced civilization of the east. Through their 
 instrumentality those eastern products were exchanged for the 
 ruder products of the west. In discussing city economics, the 
 mind naturally turns to a contemplation of the greatness of 
 such cities as Venice and Genoa, and before them, of Athens 
 and Rome. The greatness of the medieval maritime cities was 
 more purely commercial than that of the highest type of inland 
 cities of the same period. Eecent investigation has traced 
 back the history of London to a time when it was little more 
 than an agricultural village community. It became a great 
 city, while the neighboring villages remain villages still, simply 
 because of its location with reference to commerce. London 
 may be called the beginning of city economics in England, at 
 least as compared with all other maritime cities. 
 
 Inland Cities. The formation of inland cities rests upon a 
 slightly different basis. The maritime city originated in the 
 concentration of maritime trade, which was frequently interna- 
 tional trade, or more properly, trade across the seas. It was a 
 trade between different peoples of the diverse products of 
 different countries. The inland town arises from the concen- 
 tration of the economic activity of inland villages. The first 
 manifestation is "the exchange of the surplus products of 
 neighboring villages. Afterward comes the exchange of those 
 products for foreign products in connection with the nearest 
 maritime city. The natural and geographical conditions which 
 determine the location of the inland city are as fully pro- 
 nounced as those which determine the location of the maritime 
 city. 
 
 Good Roads. The modern advocates of good roads would 
 find much assistance for their cause in the discussion of the 
 relation which the development of early communities bears to 
 the passibility of highways. The location of the site of an 
 inland town involves the question of accessibility as fully as 
 the location of the site of the maritime town. Throughout all 
 medieval Europe the location of the towns which then sprang up 
 was determined by the condition of the thoroughfares. There 
 were few good roads and the means of transportation were rude
 
 THE TRADER. 105 
 
 and inefficient. It was physicially impossible for a town to rise 
 in a location not accessible by the best of the thoroughfares of 
 the time. Where the main arteries of travel crossed, therefore, 
 other things being equal, there was a converging of good roads 
 and the making of a market town. 
 
 The Presence of Law and Order, and the prevalence of 
 lawful authority would have much to do with locating a town. 
 At the beginning of city economics, it is well to bear in mind, 
 there is no centralized authority. There is no national govern- 
 ment which looks after the preservation of order over a large 
 territory. Disorder and violence is as prevalent as peace and 
 security. The various towns are looking after their individual 
 interests, trying to increase their respective welfare, and there 
 is no widespread ruling authority. Trade goes where it is pro- 
 tected, and as a flourishing trade is mainly responsible for 
 the formation of the town, that town which preserves the 
 best order, in which the trader's wares are most secure in his 
 possession, and he is most free from robbery and violence, will 
 be most likely to grow. In medieval Europe the ruling 
 authorities of the monasteries were the first to exercise civil 
 authority and introduce tranquility. The monastery itself 
 furnished a refuge from organized bands of robbers, and be- 
 neath its walls frequently grew up the early flourishing trading 
 towns. The monks not only instilled peace and tranquility, 
 curbing the rude elements of the time, but they taught the 
 arts of industry and thus the monastery frequently became the 
 nucleus of a town. 
 
 City Economics in North America. Up to this point it 
 has been easy to find excellent illustrations of the development 
 of the various economic stages in the Western Hemisphere. 
 We shall look in vain, however, for the existence of a municipal 
 economy. There are many great cities, of course, but they are 
 parts of a larger whole. They are nationalized and belong to 
 the present stage of economics. Following the publication of 
 the discoveries of the Spanish conquerors in Mexico, and down 
 to a comparatively recent date, the Pueblo of Mexico was 
 spoken of as a city. It was described as existing in an advanced 
 economic state with pronounced municipal institutions. If
 
 106 DESCRIPTIVE ECONOMICS. 
 
 the Western Hemisphere developed municipal economics, 
 Mexico was certainly the only illustration. Better and more 
 recent investigation, however, discloses the fact that the far- 
 famed magnificence of the city was an exaggeration. The 
 palace of the Montezumas was simply an extended pattern of 
 the enlarged communal house peculiar to the village Indians. 
 While its proportions were larger and its construction of a 
 better character than the other dwellings, it appears to have 
 been an ordinary affair as compared with the vivid descriptions 
 of the Spanish explorers. The location of the Pueblo in the 
 valley of Mexico gave it important economic advantages, and 
 its population, while not as large as that stated by the Spaniards, 
 was much larger than that of any Pueblo before or since. It 
 possessed, however, all the economic characteristics of the 
 village. It was economically isolated, and it doubtless belonged 
 to the village stage of economics. It would be interesting to 
 speculate upon the economic growth to which it might have 
 been subject, and the economic stage which it might have 
 reached, had it been left unmolested. 
 
 The Sites of Cities are Natural. Generally speaking, 
 therefore, it may be said that the sites upon which cities arise 
 are natural. The locations depend upon the topographical and 
 geographical features of the surrounding territory. It has 
 always been found difficult, if not futile, to attempt a city where 
 nature did not intend that a city should be. An artificially 
 selected site cannot be made the entrepot of trade and industry. 
 There must be present the natural geographical advantages of 
 location. Men have often thought that they could lay out 
 city sites without reference to the natural conditions which 
 must be present. After they have laid out their streets and 
 mapped the site of the coming metropolis, reserving the lots 
 for the city hall, the railway stations and principal public 
 buildings, it always remains a site on paper. The influence 
 and wealth of kings, queens and nobles have failed to build 
 up a city upon an artificially selected site. Emperor Joseph II. 
 and the Empress were called upon to lay the foundation stones 
 of the projected city of Yekaterinoslav in the Taurida. The 
 map of the city was projected upon magnificent proportions.
 
 THE TRADER. 107 
 
 When the Emperor had finished his part of the ceremony, he 
 surveyed the barren plain and said : " I have finished a vast 
 enterprise in one day with the Empress of Eussia ; she has 
 laid the first stone of a town and I the last." All this has been 
 frequently illustrated by the attempts to build cities in the West. 
 They cannot be built on paper. Their location must be such 
 as will encourage commerce to bring raw products for manu- 
 factures and take away and distribute the manufactured com- 
 modities. In a word, the trader, the artisan and the agricul- 
 turist must all be encouraged to make the place a center of 
 economic activity, otherwise it will have no excuse for being a 
 city. Without a location of the character specified one village 
 will always remain a village, and with it a neighboring village 
 will become a town and then a city. 
 
 The Early Maritime Trader has three characteristics 
 
 (1.) He is a traveler, an explorer, an adventurer, a person of 
 note like Marco Polo. At the beginning of the occupation he 
 goes coastwise and visits the towns of the neighboring coast. 
 He takes away the surplus products of his own town and 
 exchanges them for the surplus of the ports at which he 
 touches. He does not have to go far to see strange sights and 
 procure strange commodities. Each voyage is extended a little 
 farther than the preceding one. He finally sails boldly out 
 over unknown seas to unknown shores. If he ever returns it 
 is with the hold of his vessel filled with the rare objects of 
 unknown lands which become the luxuries of his own. 
 
 (2.) He goes in force. His ship is armed. He trades by 
 wile and strategy. When he cannot make a fair exchange, 
 according to his own notions, he seizes by force. Trade by 
 fraud and violence, which characterizes barter between adjoin- 
 ing tribes of savages in the family stage of economics, still 
 exists. 
 
 (3.) He deals in luxuries. At first the products of his own 
 country are luxuries to the foreigners with whom he trades, 
 and the strange commodities which he brings back are luxuries 
 to his countrymen. Salt has frequently been one of the first 
 commodities to be the subject of foreign commerce. It is 
 then a great luxury. At a later period of the maritime
 
 108 DESCRIPTIVE ECONOMICS. 
 
 trader's career he handles luxuries of a different kind. They 
 are commodities which minister to vanity and pleasure. The 
 Italian city republics, at the height of their prosperity, were 
 the intrepot of luxuries, the rare and costly products of India. 
 
 The Inland Trader, like the maritime trader, at first, goes 
 in force. He must be armed to protect himself from that 
 large portion of the community which exists by violence. He 
 must have a retinue of followers to protect his goods. He 
 makes his way "through a wilderness of taxes." If he goes no 
 farther than the market town nearest to his own, he finds that 
 he must pay a tax in order to trade there. He finds the towns- 
 people banded together to control trade among themselves, and 
 he must do business in subjection to their rules and regula- 
 tions. He frequently goes, therefore, in company with a num- 
 ber of his own townspeople, so that unlawful exactions may 
 not be made in order to secure trading privileges. The towns 
 where the most security against robbery is furnished, and 
 where trade regulations are most liberal, are the first to feel 
 the effects of increasing domestic commerce. Other things 
 being equal, they are the first to assume the proportions of a 
 city. The first inland traders deal largely in raw products. 
 They transport the surplus of one village to an adjoining vil- 
 lage where it is needed. They are more like hawkers and 
 peddlers going from place to place with their goods. When 
 their stock in trade assumes some magnitude they are like the 
 African caravaneer. 
 
 Markets and Market Days. As the village grows in popu- 
 lation it comes to have a market place with stated market days. 
 The agricultural products of the surrounding country are 
 brought in on the market days. The farmers exchange their 
 surplus commodities among themselves and with the villagers 
 for simple manufactures. When money comes into -vogue 
 there is a sale and purchase and truck economy disappears. 
 The products which are handled in the early village markets 
 are wholly domestic and are limited in variety. Foreign goods 
 are first found at the great periodical fairs. Trade promises 
 to be extensive enough at the fairs to attract traders from the 
 distant market towns and from the maritime cities.
 
 THE TRADER. 109 
 
 Stourbridge Fair. It is worth while to take a glance at 
 one of those ancient fairs, on account of the important 
 economic features connected with them. The ancient fair at 
 Stourbridge, near Cambridge, will serve as a type. Here 
 might be seen monks from the priories of Maxtoxe and Bices- 
 ter, although it was more than one hundred good miles away 
 to either of those monasteries. With the monks came bailiffs 
 from the estates of the great lords and earls within a range of 
 fifty or seventy-five miles. They were intent on laying in the 
 year's supply of provisions. They passed around among the 
 various streets or alleys of the ground, each devoted to its par- 
 ticular product, and made their purchases. Perhaps the bail- 
 iffs brought with them surplus products from their estates for 
 the purpose of exchange. Each article had its own portion of 
 the grounds allotted to it. In one street were booths contain- 
 ing the pigs; in another those containing the sheep, and then 
 would come the beeves. Another portion of the grounds was 
 set off for the booths containing salt meats. Then there were 
 booths for wine, wax, wheat, malt and salt. The men from 
 each town were placed together as far as possible. They 
 endeavored to occupy adjoining booths and they worked 
 together for their common interest and protection. There 
 were quarters where the servants stationed themselves for hire, 
 each with a badge denoting his occupation. The carters with 
 their whips; the cow herds with a lock of cow's hair in the hat; 
 the farm servants with great boquets of grass and field flowers; 
 the shepherds with their crooks; bricklayers with their trowels, 
 and the various simple craftsmen with the implements of their 
 craft. There were courts of pie-powder, said to be named from 
 the expedition with which offenses were punished before the 
 dust was off the feet. Perhaps the term originated from the 
 fact that the trader of the time was a dusty foot he traveled 
 with his wares to the fair. 
 
 The Ancient Origin of Fairs. The great fairs which were 
 common to all the nations of Europe within historic times, are 
 usually ascribed to grants or charters from the kings or ruling 
 authorities. It is a fair presumption, however, that they had 
 their origin long before the existence of kingdoms or central-
 
 110 DESCRIPTIVE ECONOMICS. 
 
 ized authorities. They would naturally arise as soon as any 
 considerable number of neighboring village communities came 
 to produce a surplus of commodities. The villagers find it 
 convenient to meet at a central point and at stated intervals, 
 for the purpose of making exchanges. At the time of the con- 
 quest of Mexico, the Spaniards found a fair in operation, sim- 
 ilar in many respects to the European fairs. The Fijians, 
 when first visited by the early navigators, were in the habit of 
 meeting, at stated intervals and at fixed points, for the purposes 
 of barter. It was inter-island barter, just as the early European 
 fairs were for the purposes of inter-village barter. Each Fijian 
 island represented at the fair, corresponded to a village commu- 
 nity. The economic importance of these fairs or markets lies 
 in the fact that they are the beginning of the centralization of 
 trade and industry. They represent the decay of the domestic 
 system, when the family not only carried on agricultural 
 operations, but also manufactured by hand whatever products 
 it required, and the beginning of the commercial system, when 
 the family confined itself to one or two occupations, and 
 exchanged its few products for the handiwork of others. 
 
 Significance of the Trader's Employment. When in- 
 dustrial activity is confined to village communities, there are 
 comparatively few persons engaged in trading. The rise of 
 towns means a great growth in the number of those who devote 
 themselves to a mercantile life. But the towns exist because 
 there are a large number of traders, controlling a large volume 
 of trade. Wherever the traders find it convenient to congre- 
 gate and exchange their wares, the resulting activity produces 
 the market town for a large extent of territory. If the condi- 
 tions are such that more and more traders are attracted to the 
 town, it speedily becomes a commercial and industrial center. 
 Artisans find opportunity to exchange or sell their wares. The 
 trader or middle-man must rely largely upon the labor of 
 others for the production of his wants. Therefore, both 
 the artisan and the agriculturist of the surrounding country 
 find opportunity for making exchanges. The division of 
 employments is enlarged, not only by the addition of the 
 trader, but by the addition of the craftsman whom we shall
 
 THE TRADER. Ill 
 
 discuss in the succeeding chapter. The last vestige of individ- 
 ual, economic isolation, practically disappears. The merchant 
 procures his agricultural products by exchange. The farmer 
 procures his utensils by exchange. Those persons devoting 
 themselves to a particular kind of labor, now become depend- 
 ent for the satisfaction of the majority of their wants upon the 
 economic activity of people devoting themselves to other kinds 
 of labor. 
 
 The Modern and the Medieval City. It was said in 
 an earlier part of the chapter that no part of the western 
 hemisphere has passed through the city stage of economics. 
 Its aboriginal inhabitants were found either in the family or 
 in the village stage, and none of them progressed to ,a higher 
 stage. So far as they exist to-day, they either remain in 
 the same economic state, or else they have experienced the 
 retrogression which follows the imposition of a higher civiliza- 
 tion upon a lower. The whole country, following the discov- 
 ery and occupation by the various European nations, became 
 nationalized. Its economic life was moulded by the exercise 
 of national authority. The cities which have arisen bear no 
 resemblance to the medieval municipality. They have little 
 or no separateness of economic interests. Their manufactures 
 come from without. They sell their own manufactures with- 
 out. Their industries depend upon the prosecution of indus- 
 tries in many and distant parts of the nation. Eeference is 
 frequently made to some particular city as being enterprising 
 and nourishing. A little closer study reveals the fact that only 
 a small portion of its prosperity is due to internal causes. The 
 prosperity of the modern city depends upon the prosperity of 
 the nation as a whole. Its economic interests are closely inter- 
 woven with the economy of the nation. Whatever affects the 
 national economy, affects each city. The city is but a member 
 of the body and derives its life and health from the body. 
 
 It was not so with the medieval municipality of Europe. At 
 first its economy was wholly disconnected from that of every 
 other city, and from an economic standpoint it was no part of 
 the nation. Trade and industry were wholly controlled from 
 within. Its economy was purely local. Its trade was inter-
 
 112 DESCRIPTIVE ECONOMICS. 
 
 municipal. Even after a centralized, national authority began 
 to legislate and look after economic matters, the cities main- 
 tained their economic autonomy by charters which they secured 
 from the crown, sometimes in return for civic influence, some- 
 times as a condition of rendering civic allegiance, and some- 
 times by outright purchase. Their treasuries were full, and 
 royal treasuries were in a precarious condition. 
 
 The Medieval City the Pattern. It follows from what 
 was said in the last paragraph that discussion of city econom- 
 ics relates mainly to the condition of things which existed 
 among the towns and cities which arose in western and central 
 Europe during the middle ages. The economic conditions 
 connected with their origin and development, are known, to a 
 partial extent at least, and can be classified and analyzed. In 
 the Orient the rise of cities from an economic standpoint is 
 beyond the pale of historic research. Details, especially relat- 
 ing to economic matters, are wholly wanting and can never be 
 supplied. Inquiry, therefore, relating to the character of 
 municipal economy in the East, prior to the existence of 
 national economy and the nationalization of cities, must be 
 vague and unsatisfactory. It is understood, therefore, that 
 the illustrations of city economics relate to the medieval Euro- 
 pean cities. The language used relates to the more universal 
 economic features of the time, such as characterized the econ- 
 omy of all the towns and cities of central and western Europe. 
 If reference were made only to the English towns, a more pre- 
 cise terminology would need to be adopted, and it would be so 
 if the discussion related to the towns of Flanders or the German 
 towns. The aim is to state the economic characteristics com- 
 mon to them all, although existing in some cases in a less 
 developed state than in others. 
 
 The Right of Burgess-ship. In reading the history of 
 the cities of the middle ages frequent reference will be found 
 to the burghers and the burgess rights. The burghers or bur- 
 gesses and their rights are so closely connected with municipal 
 economy as to require brief attention. To comprehend the 
 subject it will be necessary to go back to village economics and 
 a time when the land was owned by the village community.
 
 THE TRADER. 113 
 
 At first it was cultivated by the villagers in common. Then 
 it was parceled out into holdings, and a holding was allotted to 
 each head of a family to be used and cultivated by him until a 
 re-allotment. At first, perhaps, the distributions were each 
 season. Finally the holding was used and occupied for longer 
 and longer periods of time, until the holder came to have a 
 right to make improvements and to sell them at the next re-al- 
 lotment. Finally, through many intermediate stages, each 
 member comes to hold perpetually for himself and his family 
 the last portion of land allotted to him. The last step is pri- 
 vate ownership in the holding. The practice of making allot- 
 ments is wholly abandoned. About this time, however, the 
 community has greatly increased in numbers. Newcomers 
 have appeared. There is no land to be allotted to them, how- 
 ever. It is required for the original villagers or their descend- 
 ants, or has become their private property. Connected with 
 the holding of a portion of the land there are certain civil 
 rights and economic privileges. These privileges increase and 
 become more exclusive with the growth of the village economy. 
 The original landholders and their descendants band together 
 to keep the newcomers from securing the privileges connected 
 with citizenship or membership in the community. They 
 retain unto themselves exclusive jurisdiction over the civil 
 affairs of the community. They alone have a right to appear 
 in the village assembly, and they make the holding of land and 
 that right to appear, the test of citizenship. When the village 
 becomes a trading town, they have retained all their old privi- 
 leges, and the privileges themselves have assumed a new impor- 
 tance. They become the burghers of the town. No one else 
 has the franchise, or rights of citizenship. It is a right much 
 coveted and religiously preserved among the burghers them- 
 selves. They impose restrictions on the acquisition of citizen- 
 ship, so that it cannot be easily acquired. Among the privi- 
 leges which the burghers assert for themselves, is : 
 
 The Trading Privilege. The right to carry on an inde- 
 pendent trade was connected with the right of burgesship. The 
 burghers as a body reserved to themselves a monopoly of trade. 
 They enacted market regulations by which they sought to keep
 
 114 DESCRIPTIVE ECONOMICS. 
 
 out traders from other towns. They banded together for their 
 common advantage, both in controlling the home market and 
 in procuring trading rights in other towns. Every one who 
 did not possess the rights of citizenship was, to them, a for- 
 eigner, and therefore the residents of the town who did not 
 have the franchise, as well as the inhabitants of other cities, 
 were debarred from trade, excepting under regulations which 
 were supposed to work to the advantage of the burgher class. 
 A stranger could not sell to any one except a burgher, nor buy 
 of any one except a burgher. 
 
 The Merchant Gild.- -The discussion of the rights of 
 burgess-ship and the burgess trading privileges, leads to one 
 of the most important subjects connected with the economics 
 of the city the merchant gild or hanse. It was a union for 
 economic purposes of the inhabitants of each town who pos- 
 sessed the right to trade. A numerical statement of the chief 
 economic features of the merchant gild would embrace the fol- 
 lowing: 
 
 1. Its Membership. This consisted of the burgesses and such 
 persons as were admitted to the rights of citizenship, or upon 
 whom the burgesses conferred trading privileges. Among the 
 earlier gild organizations, possession of the burgess-ship or 
 citizen franchise, was the prime requisite for admission into 
 the society. At a later date merchants from other towns were 
 admitted. Membership once acquired, usually descended to 
 heirs, and could be transferred. The membership of the early 
 gilds was not by any means composed exclusively of merchants, 
 or those who devoted their time to trading. The right of 
 burgess-ship involved the holding of land, and at first many of 
 the burgesses were agriculturists. At the same time, however, 
 their right of burgess-ship entitled them to membership in the 
 gild, and they usually took advantage of it. Indeed, they 
 were obliged to take advantage of it in order to freely sell their 
 own products and buy of others in the open market. 
 
 2. Its Objects. The main purpose of the merchant gild or 
 hanse was to obtain and maintain for the burgess members, the 
 exclusive privilege of carrying on trade in the town "A priv- 
 ilege," as Mr. Ashley says in his English Economic History,
 
 THE TRADER. 115 
 
 "which implied the possession of a monopoly of trade in each 
 town by the gild brethren as against its other inhabitants, and 
 also liberty to trade in other towns." 
 
 3. Its Organization. The body held stated meetings, which 
 in England were called "Morning Speeches." There were one 
 or two annual meetings of a more solemn nature. At these 
 meetings regulations relating to the exercise of trade by the 
 members as against non-members, were presented and adopted. 
 It was frequently ordered that no sales should be made, except- 
 ing to burgesses, and no purchases, excepting from burgesses. 
 Breaches of the rules were punished by fines, or by suspension 
 of the trading privilege. Licenses to trade were issued to non- 
 members and the tolls went into the gild treasury. 
 
 The Civic Authority of the Gild. The authority exer- 
 cised by the gilds in the enactment and enforcement of trade 
 regulations was similar to the authority exercised by modern 
 municipalities in the enactment of local municipal ordinances. 
 The possession of such authority by the gilds is explained by 
 the fact that their membership composed also the ruling class 
 of the town. The gild organization was often superior to the 
 civil organization, and the gilds had no difficulty in procuring 
 from the civil authorities the grant of such powers as they 
 desired. Even after the crown came to take a hand in legisla- 
 tion, the gilds possessed sufficient influence united with that 
 of the civil authorities, to obtain for the gild or the town, 
 charters conferring a monopoly of trade. 
 
 The Practical Lessons of the Merchant Gild System. 
 Discussion of the merchant gild system and of the control of 
 trade by the burgess class may seem to have little practical 
 value, because it represents a system that has fallen into dis- 
 use. The same criticism may be urged against much of the 
 discussion under the head of economics of the city. There are 
 practical and important lessons connected with these subjects, 
 however. While the merchant gild system has disappeared with 
 the disappearance of municipal economy, its mark is found 
 impressed upon the economy of the modern nation. The reg- 
 ulations adopted by many modern nations for the control of 
 international commerce by and in behalf of the citizens of the
 
 116 DESCRIPTIVE ECONOMICS. 
 
 nation, are the ' legitimate fruit of the regulations of the 
 medieval towns for the control of inter-municipal trade by 
 the townsmen. In the family stage of economics, trade was a 
 tribal matter. In the village stage the trading privilege of the 
 individual was slightly enlarged, but the community as a com- 
 munity regulated exchanges. We have just seen how inde- 
 pendent and exclusive trading privileges were conferred upon, 
 and asserted by, the individual in the city stage of economics, 
 subject to such restrictions as were supposed to work to the 
 advantage of the town. When the national stage of economics 
 is reached, it will be seen that while every citizen of the nation 
 is free to trade at will with every other citizen, and the trading 
 privilege becomes universal throughout the nation, yet attempts 
 are made to so regulate international trade and restrict trade 
 with citizens of other nations that the nation at large may be 
 benefited. The regulation of intermunicipal trade during the 
 stage of municipal economics should be understood therefore, 
 before a clear conception can be had of the nature and origin 
 of the regulation of international trade in the succeeding stage 
 of national economics.
 
 THE CRAFTSMAN. 11? 
 
 CHAPTER II. 
 THE CRAFTSMAN. 
 
 The Growth of Manufactures. In the village community 
 there were the smith and the carpenter and representatives of 
 such crafts as were necessary for the daily life of the com- 
 munity. The smith repaired the plows of the community, and 
 made them as they were ordered. He also made the iron work 
 which was used about the carts and the rude agricultural 
 implements. The village craftsmen manufactured as their 
 handiwork was wanted, using the materials which the customer 
 brought them. Their existence, however, implying the 
 presence in the community of a class of persons devoted to craft 
 work, brings forth another distinction between the economics of 
 the family and the economics of the village. When family 
 economics prevailed there was no artisan class, no persons who 
 devote themselves to craft work as an occupation. " Their 
 appearance marks the second stage in the history of industry, 
 the transition from the family system to the artisan system." 
 But the merchant class precedes the artisan class. The growth 
 of the merchant class, which was described in the last chapter, 
 accompanied by the rise of cities, produces a state of affairs 
 in which a large number of persons are devoting themselves to 
 trade. This means that a corresponding number of persons 
 must devote themselves to the work of transforming the raw 
 agricultural products and the raw foreign imports into manu- 
 factured commodities such as will satisfy the wants of the great 
 commercial class. Manufacturing for the open market now 
 commences in earnest. Commodities are made for the purpose of 
 supplying the wants of persons outside the town and outside the 
 immediate group to which the manufactures belong. The smith 
 differentiates into the blacksmith, the wagoumaker, the plow 
 maker and the tool maker. The weaver ceases to be tailor and
 
 118 . DESCRIPTIVE ECONOMICS. 
 
 dyer also, and two more occupations connected with cloth 
 arise. The leather merchant ceases to be butcher. So it goes 
 through all the branches of industry. 
 
 The Burghers and the Artisans. The village craftsmen 
 were members of the communal village organization that is, 
 they had the right to hold land and the right to appear in the 
 village assembly. They were everywhere the equal of the other 
 members of the community. Sometimes they occupied a 
 higher place in the community councils than other members 
 and were exofficio village officers. When the village becomes 
 a trading town they have all the rights of burgess-ship, includ- 
 ing the right to engage in trade. Trading is the most honor- 
 able, as well as the most profitable occupation of the time. 
 The burghers, possessing exclusive trading privileges, gradually 
 abandon the prosecution of their crafts and become merchants, 
 members of the merchant gilds and identified with the ruling 
 class of the towns. Their places as artisans are filled by new- 
 comers from the surrounding country, and from the neighbor- 
 ing villages which are not fortunate enough to develop into 
 trading towns. The newcomers are not citizens ; they are not 
 landholders and have not the rights of burgess-ship. They 
 cannot become merchants. They become aa artisan class and 
 in many cases there begins a struggle between this artisan class 
 on the one hand and the merchant-burgher class on the other, 
 which continues until the towns are nationalized. 
 
 The Craft Gilds. The members of the new artisan class 
 find themselves face to face with the governing body of the 
 town composed of the burgher merchants. The merchants 
 control the municipal organization, and endeavor in all ways 
 to make themselves supreme in the exercise of civil authority 
 and to preserve their monopoly of trade. It is about a century 
 after the institution of the merchant gilds. The artisans find 
 that the merchants, by means of their gilds, are perfectly 
 organized. The merchant gild system, furthermore, has 
 differentiated. Instead of one gild for all merchants and all 
 persons engaging in trade, each branch of trade now has its 
 own gild. The combination for the preservation of the old 
 rights remains unbroken. The various merchant gilds com-
 
 THE CRAFTSMAX. 119 
 
 bine for the preservation of the old merchant rights. The 
 artisans find it necessary to organize also, if they are to secure 
 either the rights of burgess-ship or the liberty to carry on their 
 crafts independently of the authority of the burghers. The 
 result is the craft gilds. 
 
 The Character of the Craft Gilds. According to the 
 definition of Ashley, they " were associations of all the artisans 
 engaged in a particular industry, in a particular town for cer- 
 tain common purposes." Briefly stated, these purposes were, 
 to wrest from the burgher-merchant oligarchy, rights of 
 burgess-ship and the right to have independent craft organiza- 
 tions or gilds. The artisans want to be citizens and they 
 want to regulate the industries with which they are connected. 
 They desire to exercise jurisdiction over their own members 
 apart from the authority of the municipality, and apart from 
 the authority of the trading monopoly. The gilds of the 
 weavers, assisted shortly by those of the bakers, led the 
 struggle. The contest was similar in character in all the 
 European towns. 
 
 The Success of the Craft Gilds. The struggle of the 
 craftsmen for civil and economic rights was a long one. The 
 time required was considerable, because it meant a great eco- 
 nomic change which would naturally occur very slowly. The 
 merchant burgesses gradually lost the exclusive rights of 
 burgess-ship which they had always asserted, and the craftsmen 
 acquired equal rights. The artisan class was admitted into the 
 councils of the municipalities upon equal terms with the 
 burghers, and procured municipal legislation in favor of the 
 craft gilds, of the same general character as that which the 
 merchant gilds had formerly procured, so that by the time 
 the municipal system of economy reached its highest develop- 
 ment, the craft gilds came to exercise jurisdiction over all 
 branches of industry. They regulated hours of work, the 
 instruction of apprentices and described minute details relating 
 to the conduct of each craft. 
 
 The Practical Lessons of the Craft Gilds. The story 
 of the development of the craft gilds has a lesson as well as 
 that of the merchant gilds. It is valuable, not only as bear-
 
 120 DESCRIPTIVE ECONOMICS. 
 
 ing upon the organization of industry during the economic 
 stage to which it relates, but as representing nascent industrial 
 organization. The craft gilds represent the beginning of the 
 organization of labor, which has attained such magnitude and 
 perfection in modern times, and a just conception of this 
 modern or national organization must include some knowledge 
 of the earlier or municipal organization. The rise of the craft 
 gilds and the organization of the crafts have a practical bear- 
 ing also upon the subject of the rise of economic classes, 
 which is discussed in the following chapter.
 
 THE RISE OF ECONOMIC CLASSES. 121 
 
 CHAPTER III. 
 THE RISE OF ECONOMIC CLASSES. 
 
 The Early Communal Life. Turning back to the chap- 
 ters on " The Capital of the Family" and "The Village Com- 
 munity" it is found that in the earlier economic stages there 
 are no distinctions of class. It is a communal life involving 
 community of living. Every member of the primitive village 
 community has an equal interest in all the produce of labor, 
 and property is held and enjoyed in common. Every man is 
 supposed to do as much for the common support and sub- 
 sistence as every other man, and all the members of the com- 
 munity are equally rich. The customary duty which devolves 
 upon each member of the community to work for the common 
 welfare, was rigidly enforced among the partially agricultural 
 Indians of America. Living in large households, the matron of 
 the house was invested by custom with considerable authority 
 over the members of the group. She made each one perform a 
 proper share of labor, and the brave who would not hunt or 
 hoe corn was soon driven out. In modern times the economy 
 of the communal life is illustrated by the economic systems of 
 some of the partially agricultural tribes of Africa and Oceanica 
 and among the indigenous tribes of Algeria. 
 
 A Landless Class, may originate (1) by conquest or (2) in 
 the orderly course of economic development. 
 
 (1.) In case of the conquest of one people by another the 
 conquerors enter into the actual occupation of the conquered 
 territory. They do not cultivate the land themselves but 
 simply assert the legal ownership. For the purpose of a divis- 
 ion of the spoils, the whole territory is apportioned among 
 them without reference to the presence of the original inhabi- 
 tants. Each victor becomes the lord of the domain apportioned 
 to him and the original dwellers are his vassals. He reserves 
 for his individual use a portion of his territory and subdivides
 
 122 DESCRIPTIVE ECONOMICS. 
 
 the balance, setting off a subdivision for the use of the vassals 
 whom he is disposed to favor. Those who receive allotments 
 render their dues to the lord by contributing to his storehouse 
 a customary portion of the produce of their holdings, or by 
 working his land. Sometimes they do both. In the Chapter, 
 " The Land and the Laborer," in connection with the dis- 
 scussion of serfdom, statement was made of these facts from 
 a slightly different point of view. Those who hold land 
 at the will of the lord or by tenure are his serfs. They 
 emerge from the condition of serfdom very gradually. 
 The basis of their growth out of the servile state is an 
 increasing proprietory interest in their holdings. The fact 
 that men have once received an allotment gives them a continu- 
 ing right to one, and finally custom decrees them a vested 
 right irrespective of the will of the lord. 
 
 Thenceforth they are factors in the community. A sharp 
 distinction is drawn between them and the men who fail to 
 receive an allotment from the lord. One is the landed class 
 and the other is the landless class. The landless class must, 
 perforce, take service with the lord or with the richer vassals. 
 Having once become serving men, they and their descendants 
 remain serving men for generations and until the economy of 
 land has taken a different form. 
 
 (2.) Assuming an early village community of freemen, each 
 member is entitled to the use of a portion of the arable land. 
 By degrees the right ripens into a right of permanent possession, 
 and finally the land becomes private property. But during 
 the time these changes in the organization of the land are 
 taking place, the village is increasing in numbers. Outsiders 
 are coming in. If the village happens to become a market 
 town the influx of newcomers is correspondingly large. It is 
 at all times, however, difficult for a newcomer to acquire 
 membership in the community. Membership is associated 
 with the right to hold land. But the land has been parcelled 
 out. Unless one of the members of the village dies, leaving 
 no heirs, there will be no opportunity for newcomers to obtain 
 a share. Most of them must remain landless. They become a 
 non-member and landless class, as opposed to the villagers prop-
 
 THE RISE OF ECONOMIC CLASSES. 123 
 
 er, who are the landholders. Of course, the body of this non- 
 member class is at first very small, as compared with the whole 
 population. 
 
 Medieval and Modern Citizenship. In modern times 
 citizenship is acquired by residence, and the rights of citizen- 
 ship have come to be associated with a man's domicile. This 
 fact is likely to beget misunderstanding of the nature of 
 medieval citizenship. A mere resident of the medieval town 
 or city was not "free of the city." He might reside there for 
 years and not become a citizen. The distinction was so clearly 
 pointed out in the discussion of the burgher-merchant class 
 that it is hardly necessary to repeat it here. The newcomers 
 in the town, referred to in the preceding paragraph, were 
 residents merely and not citizens. The body of residents, how- 
 ever, grows very fast, as compared with the growth of the 
 citizen class, and the classes begin to entertain a mutual dis- 
 trust and suspicion of each other. The old class the citizens 
 proper possessed of the rights of burgess-ship, look upon the 
 new body of non-burgesses as a hostile force. This new body 
 of residents is composed mainly of craftsmen. 
 
 The Burghers and the Craftsmen. In the last chapter, 
 the contest between the merchant-burghers and the craftsmen 
 was set forth in considerable detail for the purpose of illustrat- 
 ing the development and organization of trade and industry. 
 That contest is now worthy of careful study as illustrating the 
 rise of economic classes. It is not necessary to re-state all the 
 features of the contest. It may be now viewed in a new light 
 and for a different purpose as a contest of economic classes. It 
 was a collision " between the old trading and the new indus- 
 trial elements." The new elements organized, for the purpose 
 of not only acquiring rights of citizenship, but of protecting 
 class rights. In the end as we have seen, the new body of 
 craftsmen succeeded in acquiring equal rights with the old 
 body of burgher merchants, and in some cases they became 
 uppermost. The environment of the city is enough to instill 
 a desire for economic equality in the minds of the new class of 
 craftsmen. The saying of the time was : " City air makes 
 free." In many instances the members of the crafts come
 
 124 DESCRIPTIVE ECONOMICS. 
 
 from the rural districts where the feudal system and the hold- 
 ing of land by tenure still exists. In the city they find that 
 the citizens own the land and are freeholders. The incentive 
 to rise in the economic scale, is strong, therefore. 
 
 Differentiation among Crafts. After the craftsmen have 
 obtained the rights of citizenship equally with the 'old burgher 
 class, and manufacturing has become a stated employment, 
 there begins a differentiation of employment among the crafts- 
 men. Prior to this there is little distinction between employer 
 and employee. The master and the journeyman work side by 
 side. Each man owns his tools and toils with his hands. 
 There is no collision of interest. The journeyman may aspire 
 to the hand of the master's daughter. But now capital becomes 
 more important. It becomes impossible for every journeyman 
 to set up in business for himself, as formerly. The body of 
 craftsmen has become so large that few of them can look for- 
 ward to a time when they will be master craftsmen. Instead 
 of the raw material being brought to the artisan to be worked 
 up to order and made into such manufactured commodities as 
 the owner of the material desires, it begins to be the practice 
 for the artisan to buy his own materials and make up a supply 
 of goods for future demand. He becomes a manufacturer. 
 As a result of these things there comes into existence among 
 the craftsmen " a working class," as distinguished from the 
 employers, and with the introduction of the working class 
 comes the collision between employer and employee, and the 
 perplexing economic theme known as "the labor question." 
 
 Modern Class Divisions. In modern times possession or 
 non-possession of land has ceased to be the basis of the divis- 
 ion of classes. There is no landless class or landed class. It 
 is true that one part of the population owns land and the other 
 part is landless. It is not because of the organization of land, 
 however. There are no conditions attached to ownership 
 which render it impossible for some to obtain a portion. This 
 is especially true in the United States. Every man may be a 
 landholder. Distinctions of class now relate to the quantity 
 and the character of the capital, either land or personal prop- 
 erty, possessed by the individuals composing the class, and the 
 class divisions are as follows :
 
 THE RISE OF ECONOMIC CLASSES. 125 
 
 1. TJie Autonomous Producing Class. This division is 
 made upon the basis of the quantity of capital possessed. The 
 members of the class have sufficient capital to keep them 
 employed, and by personally managing and utilizing it, they 
 derive an income sufficient for their support. They are not 
 compelled to sell their services or to employ the services of 
 others. In many respects it is a desirable economic state and, 
 other things being equal, that nation which possesses the great- 
 est number of this class is less likely to experience civil or eco- 
 nomic revulsions. A large number of small landholders 
 peasant holders they are called in Europe in proportion to 
 the aggregate population, will tend to ensure a well rounded 
 national economy. 
 
 2. The Professional Class. Professional men, like lawyers 
 and physicians, are autonomous producers. They support 
 themselves by the personal management of their capital, which 
 consists of their technical skill and training. This capital, 
 however, is so different in character from the capital of the 
 peasant landholder, for instance, that the class may be placed 
 by itself. The division is according to the character of the 
 capital, not according to the quantity. 
 
 3. The Employer Class, includes all those who possess such 
 a quantity of capital that they cannot utilize it by their own 
 labor. They are compelled to hire the services of others to 
 assist them. Their share of the results of labor are the 
 " profits " of the undertaking. 
 
 4. The Employe Class. The employes, like the professional 
 men, are distinguished by the character of their capital, which 
 consists of their muscular and mental capacities. They have no 
 material possessions to manage and must sell their services. 
 Their share of the results of labor is wages. This class includes 
 all who serve others for fixed wages. The term " laboring class," 
 as commonly used to distinguish the employe class from the 
 other classes, is misleading. It assumes that no one else labors. 
 The employer is frequently the hardest worked, most care-worn 
 person about the establishment. Every living thing labors. 
 Labor is one of the conditions of existence. 
 
 5. The Pauper Class, is not strictly a division upon the
 
 126 DESCRIPTIVE ECONOMICS. 
 
 basis of the quantity or the character of capital possessed, but 
 it is nevertheless worthy of consideration as one of the great 
 economic classes. Much economic legislation looks toward the 
 reduction of the numbers of this class and the prevention of 
 pauperism. The class furnishes one of the great economic 
 problems. It is supported by taxation. The employer pays 
 taxes according to the amount of his capital. But in propor- 
 tion as his taxes are large, he will have less profits to distribute 
 among his employes in the shape of wages, and therefore tax- 
 ation falls upon the employe also. The pauper class therefore, 
 and the criminal class also, are supported by all the other 
 classes combined. 
 
 Classes not Castes. Every person, especially in the United 
 States, has the power to belong to either of the economic classes 
 which have been mentioned. It rests with him. The classes 
 are not like the castes of Asia. Membership in the caste is 
 determined by birth, and once a member, always a member. 
 The child belongs to the caste of its parents, and there is no 
 possibility of rising. It is an immutable social order. Class is 
 not a social order, but an economic division. The better teach- 
 ing of economics is that every man is the arbiter of his eco- 
 nomic state, and there is no "law" which relegates an indi- 
 vidual to a particular class, without hope of escape.
 
 MONET THE MEDIUM OF EXCHANGE. 127 
 
 CHAPTER IV. 
 
 MONEY THE MEDIUM OF EXCHANGE. 
 
 The Common Third Medium of Exchange. In the pre- 
 vious chapter entitled "The First Forms of Money," there was 
 a statement of the means by which exchanges were facilitated, 
 before the introduction of coinage. It consisted of the use of 
 a common third medium selected with a view to the universal- 
 ity of the demand for it combined with its divisibility, dura- 
 bility and transportability. The commodity employed as a 
 common third medium of exchange assumed a higher charac- 
 ter as industrial society developed. In the hunter state, the 
 skins of fur bearing animals formed an appropriate medium 
 of exchange. In the pastoral state, the cattle became money. 
 In the agricultural state, the cereals were used. Even the 
 very best of the methods of exchange, which could result from 
 this style of "trucking," would be inconvenient as compared 
 with modern methods. But economic activity was carried on 
 under great inconvenience as compared with the facilities of 
 to-day, and to-day the precious metals are deemed none too 
 good to form a medium of exchange. 
 
 The Rise of Trade, which takes place along with the rise 
 of towns and cities emphasizes the need of a more universal medi- 
 um of exchange. It must be a commodity for which there is 
 a more universal demand than for any commodity which pre- 
 cedes the age of commerce. It must be more durable and bear 
 transportation better. It must be subject to greater divisibil- 
 ity. For instance, Venice was trading with the far east. 
 Venetian ships came home loaded with spices, dye stuffs, 
 precious woods and the luxuries of the east. The localities 
 where the ships were loaded and where the goods were 
 obtained, had an entirely different civilization from that of the 
 west. The wants of the eastern people differed -entirely from
 
 128 DESCRIPTIVE ECONOMICS. 
 
 the wants of the western people. The Venetian merchants 
 must procure their cargoes in exchange for commodities other 
 than the commodities in common circulation in the west. The 
 division of employments became enlarged with the rise of 
 commerce and the growth of cities. When men devote them- 
 selves to one kind of labor to the production of one class cf 
 wants, all their other wants must be procured by exchange 
 and the number of exchanges are indefinitely increased. The 
 medium of exchange must be more perfectly adapted for its 
 office. 
 
 The Higher Qualities. Furs, cattle, and grain did well 
 enough as mediums of exchange when the wants of the people 
 were few and simple in character. Wants have now become 
 more elevated. More costly mediums of exchange will natur- 
 ally be chosen, administering to the more elevated wants. The 
 commodity which will meet the demands of trade must have 
 the greatest possible circulating capacity. There must be the 
 greatest possible demand for it. It must be acceptable to all 
 persons, at all times, in all places. It must be uniform in 
 value throughout the world. The man who has this commo- 
 dity must be able to exchange it for any other commodity 
 which he may desire, at any time and at any place. Finally, 
 the commodity must have the sanction of organized civil gov- 
 ernment and it then becomes what is called money. 
 
 Advantages of the Precious Metals. They have a num- 
 ber of characteristics and qualities which give them a peculiar 
 fitness for the purposes of a medium of exchange. There is 
 their costliness and rarity combined with the amount of labor 
 necessary to produce them. There is a certain uniformity in 
 their distribution in the hemispheres. They have great trans- 
 portability, that is, they are slight in bulk as compared with 
 their exchangeable value so that large payments may be made 
 without excessive cost of transportation. Their durability and 
 pliability give them a mechanical fitness for coinage. Not the 
 least important characteristic is their uniformity of quality. 
 Gold is gold and silver is silver, wherever found. Another 
 important feature is their diversity of use, and consequent uni- 
 formity of price. Inexpensive commodities are subject to great
 
 MONEY THE MEDIUM OF EXCHANGE. 129 
 
 fluctuation in price. The fact that they are capable of being 
 employed for other purposes than for coinage, gives them both 
 a value in use and a value in exchange. 
 
 Significance of the Money Economy. The money econ- 
 omy which follows the rise of commerce is the natural out- 
 growth of the truck economy which precedes it. Money was 
 doubtless used as a common measure of value before being 
 employed in transactions as a medium of exchange. The 
 use of it brings men more directly into economic dependence 
 upon each other. The absence of it tends to isolate men in 
 their economic activity. When truck economy was prevalent 
 every commodity had two functions, it was both goods and 
 money. With the era of money economy, money and goods are 
 separated. The use of money is a great stimulant of commerce. 
 The villager is no longer obliged to exchange his products in 
 the village. He can go into the market town and sell his 
 wares for money and purchase what he wants. If he wants a 
 plow and there is none in the market, he can put his money in 
 his pocket and look for a plow elsewhere. If his goods come 
 to more than the price of a plow the surplus can be kept for 
 future purchases. 
 
 The Four Functions of Money. We are now ready to 
 state the uses or functions of money, as follows: 
 
 1. A Measure of Value. Suppose a peasant farmer of east- 
 ern Russia goes into one of his primitive markets to sell an ox 
 which he has reared. He wants a fur coat. He finds a furrier 
 with such a coat. They agree, however, that the ox is worth 
 more than the coat. In other words, the farmer has put more 
 labor into the raising of the ox than has been required of the 
 furrier to make the coat. The worth of commodities is the 
 amount of labor it has taken to produce them. It looks as 
 though the trade would be blocked. It happens however that 
 tea, pressed into little bricks, is in universal demand. Its 
 value is well known. The furrier might not want the ox, but 
 a good supply of tea would come handy for his own use and 
 for exchanging. The farmer exchanges his ox for tea bricks. 
 He then turns around and gives the furrier as many bricks as 
 will equal the value of the coat. Tea has acted as a measure 
 9
 
 130 DESCRIPTIVE ECONOMICS. 
 
 of value. It measured the value of both the coat and the ox 
 in the exchange. Whenever money is used in such a transac- 
 tion, it becomes a measure of value. 
 
 2. A Medium of Exchange. In the second place money is a 
 medium of exchange. In our illustration the tea acted as a 
 medium of exchange. It was something which all the people 
 in the market wanted. The farmer trading his ox for it might 
 get more than he could consume himself, but it is perfectly 
 divisible and he could exchange his surplus for other wants. 
 Even in very rude society, direct barter is very inconvenient. 
 It is no easy matter for a man to find someone who wants his 
 surplus of one commodity and who has a desired surplus of 
 another commodity. In a complex state of industrial society 
 direct barter is impossible. A pulpit maker might be hungry 
 for a long time before finding a man who would exchange pro- 
 visions for a pulpit. To obviate the difficulty men agree upon 
 a universally acceptable commodity which shall stand as a mid- 
 dle commodity or a medium of their exchanges. The precious 
 metals, in the form of money, have so far been found to be 
 best adapted to fill the place of this middle commodity. 
 
 3. A Standard of Value. Money is also a standard of value. 
 The tea for which the Russian farmer exchanged his ox was 
 used as money and became money because it had a natural 
 purchasing power arising from its general acceptability. The 
 same is true of the other commodities which have been used as 
 money by various peoples. Tea, however, is likely to vary in 
 price from year to year. A great crop causes its value to fall 
 and soon reduces its purchasing power. The farmer who ex- 
 changed his ox for it would have hesitated to make the 
 exchange unless he could get rid of his surplus almost immedi- 
 ately and before its price dropped. He would want a com- 
 modity which would bring him as much as he allowed for it 
 at any future time, provided he could get such a commodity. 
 Money in the shape of the precious metals would be such a 
 commodity. People who exchange their surplus for it, know 
 that they can take it whenever they get ready to purchase and 
 exchange it for other wants. If they sell on credit, they know 
 that when pay-day comes they will get a commodity in payment
 
 MONEY THE MEDIUM OF EXCHANGE. 131 
 
 having as much purchasing power as on the day of sale. Its 
 value is reasonably fixed and it thus becomes a standard of 
 value. 
 
 4. A $tore of Value. The Russian peasant who exchanges 
 his ox for tea bricks and then migrates to America with his 
 wealth in that form, would be worth much less after arriving 
 here. His tea bricks would not be in demand. The com- 
 modity which is to take the place of money must be acceptable 
 the world over, so that value may be stored up and carried 
 from one part of the globe to the other without depreciation. 
 What commodity is better adapted to be a store of value than 
 the precious metals ? 
 
 Government Coinage. The precious metals in their 
 natural state will fall short of performing the four functions 
 of money which have just been enumerated. They must be 
 coined or minted into forms of certain values under the sanc- 
 tion of government. The raw metal must be fashioned into 
 pieces of prescribed weight and fineness, and this must be done 
 by government in order to insure the proper weight and purity. 
 Government can do nothing more toward creating money than 
 lies in the regulation of the weight and fineness of its various 
 coins. It can prescribe the number of grains of gold which 
 shall go into a dollar just as it can determine how many pounds 
 of wheat shall make a bushel. It cannot take that quantity of 
 gold which cost only a dime to mine and mint and is therefore 
 worth only a dime in the market and make a dollar out of it. 
 Government may stamp it a dollar and call it a dollar, but it 
 will not pay for a dollar's worth of labor or buy anything 
 which has cost a dollar's worth of labor. You will understand 
 now what is meant by people who speak of money as a creation 
 of government. Government legalizes the coinage and declares 
 what coins we shall have, but does not create money or create 
 value. Gold and silver as well as all other commodities are 
 worth just what it costs in labor to produce them. These facts 
 have such economic importance that they will be repeated in 
 connection with the discussion of "The money of the 
 Nation." 
 
 Municipal Economy Summarized. At the end of Part I
 
 132 DESCRIPTIVE ECONOMICS. 
 
 there was a summary statement of the controlling features of 
 the economics of the family. The same plan was pursued at 
 the conclusion of Part II, and the main characteristics of 
 village economics were summarized. A brief summary of city 
 economics will now be in order. 
 
 1. Economic Supremacy of the City. Agriculture has been 
 growing all the time and the condition of the rural districts 
 has been greatly ameliorated, but the agricultural life has lost 
 its old economic importance. It comes to the front again some 
 centuries later. The city is now supreme in the land. It is 
 the highest economic factor. The industrial life of the time 
 centers toward it. It acts upon all the elements of industrial 
 society as a magnet upon a mass of iron filings. It is not only the 
 economic factor, but it is the highest political factor. Village 
 economy has differentiated and the higher city economy is the 
 result. 
 
 2. The Rise of Trade. Trade is no longer desultory as in the 
 family and village stage. It is systematically pursued by men 
 who are traders by occupation. They become the middle men 
 and go-betweens of those who have exchanges to make. In- 
 dustry is greatly facilitated because the individual producers 
 who desire to make exchanges are freed from the trouble of 
 finding each other, and a great amount of time is saved for 
 other pursuits. 
 
 3. The Control of Trade is in the hands of the citizens 
 proper the landholding class, "who imposed restrictions on 
 the acquisition of citizenship, with the object of protecting 
 the interests of those already enjoying it ; who acted together 
 by market regulation and intermunicipal negotiation to secure 
 every advantage they could over rival boroughs." 
 
 4. The Rise of Manufactures. Manufacture as a distinct 
 economic factor appears. It is another branch of industry as 
 distinguished from agriculture and trade. The interdepend- 
 ence of the three industrial factors which marks the economy of 
 the nation, is started upon its career. The craftsman or artisan 
 appears and begins to buy the raw materials on his own account, 
 and to make up a stock of commodities for future demand. 
 
 5. The Organization of Industry, commencing with the
 
 MONEY THE MEDIUM OF EXCHANGE. 133 
 
 organization of the traders and merchants for economic pur- 
 poses and by means of the merchant gild or hanse, grows 
 through the organization of the artisans as a class opposed to 
 the trading class, to the organization of each craft. Every 
 occupation that furnishes employment to a few men has its 
 organization, and every branch of industry has its mystery, 
 craft or art. Monopoly of industry is the object in each case. 
 The town system is identical with industrial organization. 
 
 6. Class Distinctions are Fixed, First, by the rise of the 
 artisan class as opposed to the burgher-merchant class. 
 Secondly, by the differentiation of the artisan class into greater 
 and lesser crafts and the appearance of employers who do not 
 work alongside of their employes as was customary with 
 masters, journeyman and apprentice. This means the labor 
 question and the beginning of the quarrel between capital and 
 labor over the division of the profits. 
 
 7. A Money Economy. Coinage is introduced. Before the 
 institution of national coinage, each city has frequently its 
 own monetary system. Without money, "the market" is local 
 and truck economy must be practiced. By the use of money 
 the market includes a wide area. A world market is now 
 possible.
 
 PART IV. 
 
 ECONOMICS OF THE NATION. 
 
 CHAPTER I. 
 THE INDUSTRIAL STAGE OF ECONOMICS. 
 
 The Nation. It may consist of three conceptions, accord- 
 ing to the standpoint from which it is viewed. Geographically, 
 a nation is a people speaking one language, living under one 
 government, independent of other peoples and occupying a 
 continuous area. Politically, it is an organizatiou of the whole 
 people for the purposes of mutual assistance from foreign inter- 
 ference, and for the promotion of justice among themselves. 
 From an ethical point of view, the nation is said to be a 
 "moral personality vested with responsibility and authority, 
 and endowed with a peculiar national life." It is a life not 
 possessed by the individuals composing it. 
 
 The Economic Nation. These are the historical concep- 
 tions of the nation. Economics is more directly concerned 
 with the economic nation with that body of people which 
 might meet the conditions of either or all of the foregoing 
 definitions and possess still other characteristics. The idea of a 
 union of people is involved in either of the historical concep- 
 tions. The economic nation may be a union upon the 
 geographical, the political or the ethical basis, but in addition 
 it is a union upon an economic basis. It is an industrial 
 union, with a centralized authority which regulates economic 
 action throughout the whole territory. There is great 
 diversity of individual pursuits and interests, and at the same 
 time a close economic interdependence of the individuals. The 
 
 135
 
 136 DESCRIPTIVE ECONOMICS. 
 
 aggregate economic activity of the people constitutes the 
 economy of the nation. The great commercial city of the 
 middle ages was, in many instances, a politically independent 
 state, and to that extent it had a basis for a national economy. 
 But its economic life was wholly controlled and directed from 
 within. It was a nation composed of a single economic unit, 
 and its economy was municipal. The economic nation is com- 
 posed of a number of economic units, controlled as one by a 
 widespread national authority. 
 
 Significance of the Industrial Stage. The economy of 
 the modern nation is frequently called industrial, because it 
 marks the full and final co-operation of the three great factors 
 of all economic activity the co-operation of (1) external 
 nature or land, (2) labor and (3) capital, accompanied by a 
 minute division of employments and organization of industry. 
 This co-operation originated with the municipal economy when 
 manufacturing began to play a part in daily life. With the 
 growth of manufacturing came the growth of capital. Capital 
 then assumed a new importance. We hear a great deal about 
 capital and labor, much less about labor and capital, although 
 labor becomes an important economic factor before capital. 
 Labor is the original factor and capital is its product in con- 
 junction with nature. By labor is meant not simply muscular 
 strength. It includes all the qualities of mind and the skill of 
 intellect. 
 
 External Nature. In the earlier stages of economics, ex- 
 ternal nature has everything to do with getting a living, and 
 labor and capital very little to do with it. In the family stage 
 the gifts of nature are the prime source of subsistence. At first, 
 as in the frugiferous state, the only labor involved is akin to 
 berry picking. The capital may be a rude bark basket for 
 holding the berries. As men learn to direct nature for the 
 purpose of increasing subsistence and satisfying increasing 
 wants, labor becomes more systematic and capital more 
 necessary. As population grows the greater is the necessity of 
 controlling external nature which includes the things without 
 value, as air and light, and those with value, like the soil, the 
 trees, the mines and wild animals. Nature has never been
 
 THE INDUSTRIAL STAGE OF ECONOMICS. 137 
 
 more lavish with her gifts at one period than at another. In 
 modern times they are more extensively utilized and the utili- 
 zation of them fn getting a living depends upon the employ- 
 ment ef labor and capital. 
 
 Capital includes all the things which men gather together 
 with the possibility of using them for the purposes of further 
 production. It may be the rude basket of the savage berry 
 picker, to which reference has been made, or it may be a 
 wonderfully constructed machine used in the arts. " Land and 
 labor are primitive forces. Capital is |the result of human in- 
 dustry." It is an accumulation of the results of labor stored up 
 for future use. 
 
 Co-operation of the Factors. The three factors, con- 
 sisting of nature, or, as it may now be termed, land, labor and 
 capital, have always co-existed since life began. Getting a liv- 
 ing has involved a co-operation of the three forces in all stages 
 of industrial society. When co-operation is referred to as having 
 commenced with the city stage of economics, it is for the pur- 
 pose of calling attention to the fact that the three factors then 
 began to exercise an equality of force. Prior to the existence 
 of a municipal economy, there was a marked difference in their 
 importance. In the family stage, nature is dominant. In the 
 village stage, labor begins to play a more important part. In 
 the city stage, capital assumes a new importance. This predomi- 
 nation of one of the factors shapes the economic life of the 
 various stages. Having now reached the economics of the 
 nation, we find a mutual co-operation and an equal importance 
 of all the factors. Nature, in the shape of the agricultural 
 soil, of the forests and of the mines, co-operates equally with 
 labor and capital in the processes of satisfying our wants. For 
 instance, there are fishermen to-day, as there were in the 
 hunter stage. The modern fisherman, however, employs 
 large capital in the shape of nets, appliances and ships. Fish- 
 ing is no longer a by-employment. It is a stated occupation, 
 involving systematic labor, and the fisherman relies on the 
 activity of others for the satisfaction of his other wants. There 
 are herdsmen to-day as of old, but compare the Hebrew pas- 
 toral patriarchs with the modern breeder of Jerseys. The
 
 138 DESCRIPTIVE ECONOMICS. 
 
 Jersey breeder does not migrate with his herds in search of 
 pasture. He employs capital in the shape of stores of food. 
 He expends much labor in the direction of his enterprise. 
 This state of things emphasizes the progress of man in his con- 
 test with nature. Natural agents are appropriated in order to 
 satisfy progressive wants. The utilization of natural agents 
 by means of large capital directed by systematic, conscious 
 labor marks the progress of mankind to the highest of the 
 economic stages. 
 
 Nature and the Economy of the Nation. The physical 
 character of the national territory, relating to soil, water 
 privileges and temperature, is to be taken into account in study- 
 ing the economy of a nation. The importance of the soil as an 
 economic factor relates to its desirability for agricultural pur- 
 poses, as well as for the mineral deposits which may be beneath 
 the surface. If it is a purely agricultural territory, agricul- 
 tural pursuits will predominate. If there are large mineral 
 deposits, together with resources of lumber, manufacturing 
 interests will be encouraged. Extended water privileges, with 
 sea coasts, bays and harbors, will encourage commerce. The 
 temperature and climate will govern the character of the 
 agricultural productions, and these combined will frequently 
 determine the distribution of land into small or large holdings. 
 The best territory is one made up of an elevated table land, 
 sloping toward the sea. It would have the pasturage of 
 Switzerland, the agricultural plains of the Mississippi Valley, 
 the mineral deposits of Pennsylvania and Tennessee, the forests 
 of Michigan and Wisconsin, and the harbors of our sea coasts. 
 Large rivers for inland navigation would be quite an item. 
 
 Jural Organization. Economic organization cannot always 
 be studied apart from jural or civil organization. Economic 
 activity is affected by legislation and administration. The 
 political organization which will best encourage the economic 
 activity of the individual citizen and direct it toward the 
 aggregate well being, will produce the highest national economy. 
 There must be a well organized political state in order to 
 ensure the possession of private property under peaceful and 
 orderly conditions. Without guaranty of the. rights of 
 property, economic progress is impossible.
 
 THE INDUSTRIAL STAGE OF ECONOMICS. 139 
 
 Agriculture, Commerce and Manufactures, are terms 
 frequently used in connection with the industrial stage of 
 economics. They go hand in hand to make up the economy of 
 the modern nation. Where they are found most evenly balanced, 
 there is apt to be found the highest and best economic activity, 
 and the most widely distributed state of well being. Agricul- 
 ture begins in the village stage, commerce in the city stage, and 
 manufacture, in the modern sense, commences in- the national 
 stage. It is progress, from the isolated economic life, in which 
 activity is chiefly directed to the acquisition of the things 
 which will satisfy wants of necessity, through the prosecution 
 of a single, dominant industry, to the social economic life, in 
 which activity combines direct acquisition, through the prose- 
 cution of all the industries, with the employment, as a means, 
 of material things already acquired. Cities become nationalized, 
 in that they depend upon the economic activity of each other. 
 One city manufactures one thing that is wanted, another manu- 
 factures another. Commerce evens up by distributing the manu- 
 factures. The cities depend upon the agricultural country, and 
 the agricultural country depends upon the manufactures of the 
 cities. Each depends upon the commerce which distributes 
 their several productions. The family economic life was for 
 self. The village economic life was for the immediate commu- 
 nity of the village. The national economic life is not for self, 
 nor for the immediate community, nor for the nation. It is 
 for others, although "others" may comprehend all the citi- 
 zens of the nation. The more prosperous a city, the more 
 prosperous are the neighboring towns. The more flourishing 
 the towns, the more flourishing the adjacent village hamlets, 
 and wide-awake hamlets are sure to belong to thriving farming 
 communities. Franklin is credited with saying that there are 
 three ways for a nation to acquire wealth : " The first is by 
 war. This is robbery. The second is by commerce, which is 
 generally cheating. The third is by agriculture, the only hon- 
 est way." He would not have used that language in this day. 
 It is too well established that an equilibrium of the three indus- 
 tries means the highest national welfare, and neither of them 
 is blameworthy.
 
 140 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER II. 
 L*AND, LABOR AND CAPITAL. 
 
 The Subject-Matter of this Chapter. In the preceding 
 chapter it was stated that we have arrived at a period when the 
 three factors of economic activity land, labor and capital 
 assume an equal importance. Their mutual relations are the 
 source of the main economic problems of the modern nation. 
 These relations furnish not only the economic problems but 
 the social problems also. In combination, they are the social- 
 economic problems. The connection between economics and 
 social economy is so close that one cannot be studied independ- 
 ently of the other. The object of this chapter is to outline 
 the social-economic problems. The expression " organization 
 of the factors," may be used to refer to the mutual relations 
 which they sustain. 
 
 What is Involved. There is involved, first, the growth of 
 these relations from the simplicity which existed in the early 
 economic stages, when every man was land owner, capitalist 
 and laborer, to the complexity of modern times, when one man 
 furnishes the land, another the labor, and a third the capital. 
 This growth needs only incidental discussion, since it has been 
 referred to in the chapters " The Land and the Laborer," and 
 " The Rise of Economic Classes." More attention is required 
 to an examination of the part which each factor plays in the 
 production of all the wants of humanity and to the division of 
 the joint product between labor and capital. 
 
 Land and Labor without Capital. In order to see what 
 the result would be if there were only land and labor, without 
 proportionate capital, it will be necessary to refer to an earlier 
 economic stage. When the Spaniards discovered Peru, they 
 found a landed system similar to that which has been described 
 as existing in the village community. The land was owned in 
 common by all the inhabitants, and was cultivated in common.
 
 LAND, LABOR AND CAPITAL. 141 
 
 There was a yearly division of the arable soil among all the 
 people, according to rank. The division was made by formal 
 ceremonies, and "to the sound of music." But the poor Peru- 
 vians had no draft animals, no plows, no farm machinery, no 
 " fixed capital," as it is called, and could only produce the 
 necessities required from day to day. They could never be 
 a rich nation without a more even distribution of the three 
 factors. 
 
 The Ownership of the Land. This subject introduces 
 one of the social economic problems. Stripped of verbiage, 
 the problem resolves itself to this : Should the community 
 own the land, as it did in the family and in the village stage of 
 economics, or is private ownership best ? There are many 
 good and honest-minded men who believe that private owner- 
 ship is morally wrong. They say that land is the source of all 
 capital, and is the one thing which makes labor productive; 
 that it is a natural gift to all men alike. They further point 
 out that common ownership, as it existed in the village com- 
 munity, is the state of nature, and private ownership has arisen 
 by the arrogant assumptions of monarchical chiefs, who have 
 robbed and despoiled the people of their common proprietary 
 interests. Let us return, they say, to the system under which 
 each member of the community has a usufruct in the soil, and 
 is entitled to a chance to make his labor productive. Let us 
 do away with free trade in land, which is immoral and con- 
 trary to the plan of nature. Let the state own the land and 
 regulate its distribution. 
 
 Land Nationalization, is the name given to one of the pro- 
 jects looking toward a wider distribution of the "natural 
 opportunities" included in the term land. It involves the in- 
 direct control of ownership by the government through the 
 imposition of taxation upon the land. The machinery of gov- 
 ernment and all expenses connected with the social mechanism 
 would, according to this scheme, be procured from the revenue 
 of the land. The state would collect the annual rental value 
 of land in itself, apart from improvements. The private owner 
 would be allowed to collect such additional rental value as 
 might arise from the improvements which he has put upon the
 
 142 DESCRIPTIVE ECONOMICS. 
 
 land. The propriety of the scheme is founded on the supposed 
 fact that the rental value of land apart from improvements is 
 due mainly to the exertions of the whole community to the 
 institutions of civil and industrial society. This, substan- 
 tially, is the land nationalization scheme originating with Henry 
 George. There are some who decline to accept it in its entire- 
 ty, but who think that land municipalization is worthy of con- 
 sideration. The rental value of a vacant city lot, they would 
 say, is ten times as great as the same quantity of land ten miles 
 away in the country. The work of the community at large in 
 building and maintaining the city makes the difference, and 
 therefore the community ought to reap some of the increased 
 benefit, by the municipalization of land. That is to say, the 
 scheme may properly be applied in respect to city land but not 
 in .respect to agricultural land. 
 
 Private Ownership is Best. Those who advocate the 
 common ownership and control of the land, must claim for 
 their scheme an advantage to the community. It is main- 
 tained, however, that private ownership is best for the com- 
 munity; that common ownership never resulted in profitable 
 cultivation and in modern times when each acre must support 
 a much greater population than in the village community stage 
 of industrial society, the improvident methods of the olden 
 time would never answer. It was not a difficult matter for a 
 village community of a few souls to cultivate its land in com- 
 mon and divide the product, or to distribute holdings among 
 the heads of families. When the community contains say ten 
 thousand souls and each man is entitled to one ten thousandth 
 part of the product or the usufruct of one ten thousandth part of 
 the land, "selfishness would exhaust itself," in the scramble 
 for shares and no civil government known to modern times 
 would be equal to the task of controlling the allotment. Bet- 
 ter the "evils of landlordism," which are small compared with 
 the public benefits of private ownership. 
 
 Free Trade in Land, is increasing rather than diminishing. 
 The world is going away from community of ownership, very 
 surely. The return to it would mean an economic revolution 
 of almost inconceivable magnitude. One of the problems in-
 
 LAND, LABOR AND CAPITAL. 143 
 
 volved is the distribution among private owners. It is usually 
 conceded that a distribution among a large number of autono- 
 mous producers, or, as it is called in Europe, peasant proprie- 
 torship, produces a desirable economy and guarantees the 
 permanence of civil institutions. Will free trade in land, such 
 as may be expected within a few generations, increase or di- 
 minish the division into separate holdings? On one hand it is 
 claimed that the future organization of land will involve the 
 control of large areas by single individuals. The advocates of 
 communal ownership favor such control because they see in it 
 the germs of their project. It is an approach toward the cen- 
 tralization of ownership in the state as the final owner. On 
 the other hand it is claimed that free trade in land, the utmost 
 freedom of transfer from hand to hand, will result in a multi- 
 plication of division. 
 
 The Economy of Nature. It is said that there are places 
 on the earth's surface, as in some of the Mexican valleys for 
 instance, where one man's labor for one or two days each week, 
 will support an average family. For instance, an acre of 
 bananas affords the nutriment of ten acres of wheat for the 
 purpose of supporting life. The productivness of labor as con- 
 trolled by physical environment, will beget varying relations 
 between the three factors. With the Mexican Indian who sup- 
 ports his family by working one or two days per week, the ele- 
 ment of labor is unimportant. Neither is he required to store 
 capital like the Dakota farmer. There is no impetus toward 
 the accumulation of capital, however, since it is not necessary 
 to store for a time of scarcity. 
 
 Allowing for Physical Environment. Any statement of 
 the economy of the modern nation, therefore, which does not 
 take into account natural conditions of geographical location, 
 of soil and climate, of the character and number of the indig- 
 enous food plants, of the resources of forest and mine, is likely 
 to come out wrong in the end. If the productivness of labor is 
 increased by reason of the peculiar physical environment, there 
 is not only less incentive to accumulate capital, but capital 
 will take the form of fixed and stated means, like utensils, of 
 acquiring food and clothing for immediate use, while under
 
 144 DESCRIPTIVE ECONOMICS. 
 
 other conditions it will consist of a storing and accumulation 
 of commodities for future use. When the two factors of land 
 and labor are controlling without the intervention of capital, 
 there is a lack of wants. Wants do not increase so as to pro- 
 duce the economic progress which always attends the increase 
 of wants. Population itself fails to grow. The nations of 
 antiquity rarely advanced to the industrial or national stage of 
 economics because, it is said, the growth of capital did not 
 keep pace with the growth of the other factors. 
 
 Modern Aggregations of Capital. Historians tell of the 
 great riches of the potentates of ancient nations. The lords 
 and barons of medieval Europe are referred to as the possessors 
 of great estates. The riches of these, however, were paltry, 
 compared with the accumulations of some of the modern 
 millionaires. The capitalists of old were relatively rich, rather 
 than absolutely rich. Their riches stood out with prominence 
 because of the paucity of the accumulations of the great mass of 
 the people. The modern capitalists are absolutely rich. There 
 are so many of them, however, and there are so many men 
 who are nearly as rich, so many millionaires, and so few, com- 
 paratively, who are absolutely without any accumulations 
 whatever that the contrast is not striking. The evil con- 
 nected with the great accumulation of capital is not so much 
 in the possession of it, as in the foolish and vain display of it. 
 It is the shoddy aristocracy rather than the real aristocracy 
 that breeds discontent. 
 
 The Organization of Capital. In the earlier economic 
 stages, there is so little accumulation of capital that each man 
 has no difficulty in looking after the investment and manage- 
 ment of his own estate. In the rural villages of to-day, for 
 instance, there are few men who cannot directly supervise the 
 management of their interests. They can invest in various 
 business enterprises, subject to their individual control, all the 
 capital they possess. In the larger towns and in the cities, the 
 number of men possessing large capital increases so rapidly, 
 and business interests become so extensive and far-reaching, 
 that one man's mind and one man's capital are insufficient. 
 This leads to certain organizations for the better investment,
 
 LAND, LABOR AND CAPITAL. 145 
 
 regulation and control of the capital of many men. Further- 
 more, the enterprises of the national period are so vast that 
 one man's capital is insufficient to conduct them. We must 
 consent to the organization of capital or go without railways. 
 
 Corporations are illustrations of the organization of 
 capital contributed by many men for a common purpose. A 
 few years ago it was the practice to create corporations from 
 time to time, by special charter. A corporation was then more 
 directly the creature of the state. In recent times statutes 
 began to be enacted by various states, authorizing the formation 
 of corporations for certain specified purposes. A corporation 
 for the purpose of transacting a business specified in one of 
 these statutes might be formed without resort to the legislature, 
 but if the business to be transacted was not enumerated, then 
 recourse was had to the old form of special charter. It was 
 progress, however, toward general legislation. We have come 
 now to a time when many states have general corporation laws, 
 whereby a corporation may be formed to transact any lawful 
 business whatever. The generalization of legislation has 
 become complete. 
 
 Corporation Evils. The economic evils of corporate ag- 
 grandizement are, first of all, the crowding out of the small 
 capitalist. The capital of many men is placed under the con- 
 trol of perhaps two or three master minds. The single-handed 
 capitalist finds it difficult to survive. There is a growing 
 tendency to incorporate this and that business enterprise in 
 order to transact a larger volume of business and enlist outside 
 capital in favor of those who actually attend to the business 
 and draw the salaries. The result is frequent over-capitaliza- 
 tion and the formation of "bubble" companies. The aggre- 
 gation of capital is not without its advantages, however. It 
 frequently decreases the cost of prod uction. By means of the 
 great sugar refining plants of modern times, sugar can be 
 refined at a profit of one-eighth of a cent per pound. 
 
 Trusts and Syndicates. The trust is a comparatively 
 
 modern invention. The controlling feature of the trust is the 
 
 pooling of the interests of a number of firms or corporations 
 
 engaged in the same line of business. The object of the pool 
 
 10
 
 146 DESCRIPTIVE ECONOMICS. 
 
 is to control the market, raise the price of the commodity 
 dealt in, and increase the profits of the interested parties. 
 There are various modes of forming the trust. The methods 
 may be generalized as follows : Several corporations, individ- 
 uals or firms, engaged, we will say, in manufacturing tobacco, 
 desire to form a trust. An inventory is taken and a valuation 
 placed upon each plant and business to be put into the trust. 
 According to the simplest plan an agreement may then be 
 entered into by all the parties to the transaction, whereby each 
 one shall render an account of the business transacted at stated 
 intervals. The aggregate profits are divided upon the basis of 
 the valuation which has been placed upon each business. A 
 more formal plan involves the choice, usually from the number 
 of those who enter the pool, of a certain number who act as 
 trustees for the whole. The pooling agreement is made between 
 the trustees and each member of the pool individually. The 
 various businesses entering the pool may be conveyed to the 
 trustees absolutely for the benefit of all. The trustees have 
 power to restrict the output of each establishment, and they 
 divide the profits. The valuation to be employed as a basis for 
 the division of profits is agreed upon at the. time of the forma- 
 tion of the trust and the figures are incorporated in the deed 
 of trust. Very recently the formation of trusts by means of 
 voluntary agreements in writing and through the medium of 
 trustees, has fallen into disuse, and the method is employed 
 which is referred to in a succeeding paragraph on Statutes 
 against Trusts. 
 
 A Premium on Idle Plants. The trustees having power 
 to regulate the course of manufacture in each establishment, 
 may at will, order any one establishment closed and the plant 
 shut down. Professor Ely, in Problems of To-Day, says this 
 was the result when the elevators at Buffalo were put into a 
 trust. A number of them were lying idle the year round, but 
 the proprietors drew just as great a proportion of the aggregate 
 profits of the whole number of elevators as though their own 
 plants were in operation. The result was that elevators 
 were built, not with the idea of being used, but with the idea 
 of compelling the trust to take them in and give them a portion
 
 LAND, LABOR AKD CAPITAL. 147 
 
 of the profits. The operation of the tobacco, sugar and cordage 
 trusts, produces similar results. 
 
 Freedom of Capital. The discussion of corporations and 
 trusts brings out the fact that in modern times great freedom 
 is accorded to capital. Formerly, there were various legislative 
 restrictions which stood in the way when a man wanted to start 
 a business. The regulations of trade and industry inaugurated 
 by the medieval cities were continued into the national period. 
 In the modern nation there is scarcely any restriction placed 
 upon industrial enterprises, excepting such as the police power 
 of the State exercises. By police power is meant the authority 
 of the State to regulate business industries for the welfare and 
 health of the people. It is rarely exercised for the sole design 
 of regulating the use and investment of capital. 
 
 Statutes against Trusts. The baneful effects of trusts 
 upon trade and commerce have resulted in the enactment by 
 Congress and by the legislatures of many States of statutes 
 whereby trust combinations are illegal. There are spasmodic 
 attempts on the part of public prosecutors to enforce the law 
 when its violation becomes flagrantly public. To escape the 
 ban of the law it is common for several firms or incorporations 
 to incorporate. Instead of a secret trust there is a pretense of 
 openly incorporating under the laws of a state where general 
 corporation laws are favorable. The business to be incorpo- 
 rated may be in several states, but as corporations are allowed 
 to carry on business outside of the state where incorporated, 
 this does not stand in the way. Each business entering into 
 the combination is turned over to the amalgamated corporation 
 something as in case of the trust. The several owners receive 
 capital stock of the corporation equal to the agreed value of 
 their business. The profits of the combination are distributed 
 in the shape of dividends upon the capital stock. 
 
 Monopolies are frequently confounded with the aggrega- 
 tions of capital represented by trusts and corporations. They 
 are radically distinguished. A monopoly may be owned and 
 conducted by a corporation, and it usually is, but corporate 
 ownership does not necessarily cause a business to be a monop- 
 oly. The purpose of trusts is to create monopolies, but
 
 148 DESCRIPTIVE ECONOMICS. 
 
 monopolies are not always trusts. They are not determined by 
 the extent of the business or the amount of capital engaged. 
 Their popular connection with trusts and corporations arises 
 perhaps from the fact that they are usually owned and con- 
 ducted by corporations. 
 
 Kinds of Monopolies. There are two kinds of monopolies 
 with reference to their control and ownership and they are also 
 divided into two. classes with reference to their inherent 
 qualities. With reference to control, monopolies are public or 
 private. With reference to inherent quality they are artificial 
 or natural. 
 
 Public Monopolies are owned and managed by Govern- 
 ment for the public use and benefit. The postoffice is a 
 public monopoly. The government does not allow private 
 parties to carry letters. The army and navy are public mo- 
 nopolies. The government reserves to itself the exclusive right 
 to maintain armed forces. The opponents of the Pinkerton 
 system of armed guards, object to it mainly on the ground that 
 it is an infringment of the public monopoly of that business 
 as owned and controlled by Government. Coinage systems are 
 public monopolies. Every State reserves the right of coinage. 
 Monopolies of these kinds are of great public benefit. They 
 illustrate the necessity of discrimination. Men who talk the 
 loudest in condemnation of all monopolies are usually those 
 who make the most ado when the province of a public mo- 
 nopoly is usurped by private individuals. 
 
 Private Monopolies are owned and controlled by private 
 individuals for private ends and gains. Private capital is in- 
 vested for the profit there is in the business. A great deal of 
 economic discussion relates to questions of this character; 
 which industries shall be taken out of private hands and made 
 public monopolies ? Ought the telegraph, a private monopoly 
 in this country, to be made a public monopoly ? Would it be 
 for the welfare of the people if the government owned and 
 operated all the railroads and kept private parties out of the 
 business? Simple reference to these questions is all that is 
 possible within the limits of this work. They are worthy of 
 additional thought and examination.
 
 LAND, LABOR AND CAPITAL. 149 
 
 Natural Monopolies. The division of artificial monopolies 
 is independent of the previous division of public and private 
 monopolies. Private monopolies may be either natural or 
 artificial monopolies. An enterprise which partakes of the 
 character of a monopoly by reason of the very nature of the 
 article with which it has to do, or the manner in which it is 
 controlled, is a natural monopoly. Its own inherent character- 
 istics causes it to become a monopoly. Common illustrations of 
 natural monopolies are toll-roads, canals, wharves, ferrys, 
 railroads and the water, gas, and electric light supplies of cities. 
 The very nature of these enterprises is such that there must be 
 a limit to the number of them. Street railways in cities are 
 strictly natural monopolies. When one company has secured 
 the franchise all others are practically barred out. There is a 
 natural limitation to the number of companies which can 
 occupy a street. Natural monopolies usually supply public 
 necessaries. They are confined to particular territory. What 
 they supply is subject to increase, without proportionate in- 
 crease of cost, when the producing plant has once been set in 
 operation. 
 
 Public Control of Monopolies. The turning of private 
 monopolies into public monopolies is peculiarly appropriate 
 with reference to natural monopolies. Men who do not go to 
 the length of saying that they should be owned by govern- 
 ment, will admit that they should be subjected to greater 
 governmental control by the imposition of greater legal 
 restrictions. Their frequency is one of the arguments of 
 socialism which demands the absorption by the state of all 
 natural monopolies at least, and the interposition of restric- 
 tions upon their establishment. In many American cities the 
 water works and gas works are the subjects of municipal 
 ownership or control. Public benefit has resulted almost as a 
 rule. Facts of this character furnish grounds for public 
 ownership of all private, natural monopolies. Land is a 
 natural monopoly. It is limited in quantity. There is no way 
 of increasing the quantity. Should it be made a public mo- 
 nopoly? Should Government control its use and distribution? 
 
 Artificial Monopolies are those created by charter or
 
 150 DESCRIPTIVE ECONOMICS. 
 
 legislative enactment. They are not monopolies by reason of 
 their inherent peculiar qualities. The Hudson's Bay Company 
 was an artificial monopoly. Its charter from the Crown gave 
 it the exclusive commerce in furs in North America. The bank- 
 ing business is sometimes a monopoly. The Bank of France is 
 a monopoly. No other bank can issue notes. The Bank of 
 England is a partial monopoly. It has the monopoly of is- 
 suing notes in London. In the United States free com- 
 petition upon lines prescribed by government is the rule. The 
 colonial history of America abounds with illustrations of 
 artificial monopolies granted by charters issuing from various 
 European courts which had, or claimed to have, territorial 
 rights in the Western Hemisphere. When a hue and cry is 
 raised against monopolies in general, it is well to remember 
 that there has never been a time in the history of modern 
 nations when fewer artificial monopolies existed than at 
 the present day. In place of the medieval restrictions upon 
 industry the tendency is toward freedom of industry. The 
 growth of corporate franchise from the grant by special charter 
 to the general authorization by corporation laws, illustrates the 
 tendency. The medieval gilds were artificial monopolies. 
 They regulated commerce and manufactures with an iron 
 hand. It has taken centuries to leave behind the restrictive 
 system which they represented and reach the modern freedom 
 of industry. 
 
 Competition of Natural Monopolies. The inhabitants 
 of a city often express longings for another street railway 
 company in order that there may be competition in the business. 
 When another company has organized and entered the field, 
 competition seldom results in any continued public benefit. 
 Competition does not compete. The service may be temporarily 
 bettered. There is frequently a permanent improvement upon 
 the old order. It is not by reason of competition, however, 
 because that rarely continues long. One company is sure to 
 absorb the other and there is a natural monopoly still. The 
 improvement is due to the differentiation following the disuse 
 of the old system. On the theory that " competition is the 
 life of trade," legislatures have passed laws forbidding con-
 
 LAND, LABOR AND CAPITAL. 151 
 
 solidation between railroad companies, gas companies, and 
 telegraph companies. Just as though a statute could over- 
 come the inherent tendency of natural monopolies to combine 
 and form a greater monopoly. There cannot be and there 
 never will be competition between them. 
 
 Municipal Ownership of Monopolies. There are many 
 advantages in municipal ownership of water works, gas works, 
 and electric lighting works. It is claimed that the city should 
 own the various industries which affect the community at 
 large, and for which its streets are utilized, just as much as it 
 should own and does own the sewers. As a matter of fact the 
 water works of most cities are now owned by the cities them- 
 selves. Private ownership of public works of that nature, is 
 out of date. The tendency now is toward the ownership of 
 gas works and electric lighting works. Statistics show that 
 municipal ownership results in economy. In other words, 
 that gas and electricity can be sold cheaper by the city than 
 the prices charged by private monopolies. If the public busi- 
 ness were transacted according to the methods by which in- 
 dividuals conduct a successful private business, the last 
 argument against municipal ownership would fail. It cannot 
 be said, however, that public business is thus transacted. It 
 is too frequently under the management and control of in- 
 competent politicians, prone to improvident methods which no 
 prudent business man would introduce into his own business. 
 
 The Organization of Labor. Having outlined the organ- 
 ization of capital, we are prepared to trace the organization of 
 labor and its relation to the other factors. The organization 
 referred to is that of the present or national stage of economics. 
 The early growth of these factors has been set forth in previous 
 chapters, as " The Capital of the Family," " The Land and 
 the Laborer," "The Craftsman," and "The Rise of Economic 
 Classes." The highest organization of labor, hitherto, was the 
 craft gild. The craft gild, however, was not a labor organiza- 
 tion in the modern sense. It embraced both employer and 
 employe both the master and the journeyman. The modern 
 labor organization is for the employes, as distinguished from 
 the employers. It is more expressive, therefore, to speak of
 
 152 DESCRIPTIVE ECONOMICS. 
 
 the organization of the employes. It is the organization of an 
 economic class, composed of those without capital of their own, 
 who serve, for fixed wages, that other class, the employers, who 
 have more capital than they can personally utilize. The term 
 "laborer," used in this connection, is misleading, as already 
 stated, because it gives rise to the inference, which is false, that 
 the employe is the only one who labors. 
 
 Labor in the Industrial Stage. The economy of the 
 modern nation in its relation to labor has certain fixed, distin- 
 guishing characteristics. One of them is the legal footing of 
 employe and employer. They may move in different social 
 circles, but the law recognizes no distinctions. In the previous 
 economic stages, legislation has been so framed or so construed 
 as to create or tend to create some legal inequality. Another 
 characteristic is the freedom of movement accorded to the 
 employe. Formerly he could rise only by meeting and over- 
 coming various legal restrictions relating to the place of his 
 employment or the nature of the occupation in which he might 
 engage. In modern times, the employe of to-day may be the 
 employer of to-morrow. It is a common occurrence for the 
 employer to become the employe of his former servant. The 
 ditch digger may become a lawyer. There is no legal bar in 
 the way of a man's entering upon any occupation for which he 
 has the requisite ability and will. Under the modern system 
 the employe has freedom of contract as well as freedom of resi- 
 dence. The condition is illustrated by comparing it with that 
 of the slave, the first of the laboring class, bound to his master; 
 that of the serf, bound to the soil ; the condition of the agri- 
 cultural laborer of the middle ages, little better than that of 
 serfdom, and the condition of the craftsman in the city stage, 
 bound to pursue the particular craft of his gild, in the manner 
 prescribed by the minute regulations of his gild and in the 
 town were his gild membership located him. 
 
 Efficiency Grows with Freedom. Following the pro- 
 gression of labor, from slavery to freedom, it is easy to 
 see how much more efficient labor has become, with each 
 advancing step. The man who is his own master feels 
 that he is working for himself and not in the service of others.
 
 LAND, LABOR AND CAPITAL. 153 
 
 The thought ennobles the work. He knows that if he is dissat- 
 isfied with one service he is free to enter another. If there is 
 an overplus of labor in one locality, he is free to go to another. 
 When one occupation becomes distasteful, he is free to choose 
 and follow another. This state of affairs dates only a little 
 back of the French Revolution. One does not realize the eco- 
 nomic progress in relation to labor until it is seen what the 
 condition of labor very recently was. 
 
 The Labor Question. Notwithstanding the modern, amel- 
 iorated condition of labor, arising from the freedom of move- 
 ment, the legal equality and the increased efficiency of labor, 
 there is a " labor question." Like the poor, it is always Avith 
 us. Legal equality does not seem to bring economic equality. 
 It is true, as Professor Brentano says, that " the course of 
 ideas since the eighteenth century has recognized the equal 
 right of all social classes to a participation in civilization and 
 its progress," but the employes complain that they do not par- 
 ticipate equally with the employers. Of what good is the in- 
 creased efficiency of our labor, they say, if we are kept from 
 sharing in the increased results ? 
 
 Lasalle's Iron Law of Wages. Ferdinand Lasalle was 
 the leader of the Social Democrats of Germany from 1862 
 until his death in a duel in 1864. As a social agitator he 
 schemed to better the condition of the working classes. There 
 was then a school of English economists whose doctrine con- 
 cerning the wages of labor was widely propagated. This doc- 
 trine taught that there was a natural and necessary rate of dis- 
 tribution of the product of labor and capital between the 
 employer and the employe. In other words, it was maintained 
 that there is a natural rate of wages which the employer can- 
 not lower and the employe cannot raise. Following the En- 
 glish doctrine, Lasalle stated the rule determining the rate of 
 wages in this way : " The limitation of the average wages of 
 labor to the necessaries of life requisite among a people, accord- 
 ing to custom, for the prolongation of the existence of the 
 individual and for the perpetuation of the species this is the 
 iron and cruel law which controls the wages of labor under the 
 relations of to-day." The very force which Lasalle threw into
 
 154 DESCRIPTIVE ECONOMICS. 
 
 the statement attracted attention, and his name came to be 
 associated with the so-called law, although it did not originate 
 with him. His use of the word "iron," furnished a con- 
 venient descriptive phrase. 
 
 The " Wage Fund " Theory, is an outgrowth of Lasalle's 
 "Iron Law." It also involves a natural rate of wages. It 
 assumes that there is a certain amount of money in every coun- 
 try which is available for the payment of labor. This amount 
 is the "wage fund" of the country. Its size is determined 
 by the amount of capital in circulation. As it is to be divided 
 among all the employes in the country, the rate of distribution 
 or the wages each will receive, depends upon their number. 
 They cannot increase the fund, and the only way to increase 
 the distribution or raise wages is by limiting the number of 
 those dependent upon the division. The theories of the wage 
 fund and Lasalle's law are not stated here as representing eco- 
 nomic facts. As theories, they belong to the theoretical domain 
 of economics, and it has been said that Descriptive Economics 
 has very little to do with that domain. They are stated, how- 
 ever, to show what economists have thought and what the 
 sequence of thought has been. Even exploded theories have a 
 place in economic history. 
 
 The Growth of Organization. The organization of the 
 employes has grown to meet the growth of the organization of 
 capital. When the time comes that a gigantic trust, like the 
 Sugar Trust, for instance, brings the entire nation within the 
 circle of its operations, the employes conclude that they must 
 expand their organization accordingly. Modern labor organi- 
 zation, therefore, amalgamates local coalitions into district 
 associations. Districts finally cover states, and state organiza- 
 tions have expanded into national organizations. The Knights 
 of Labor have their stated National Assemblies. The Trades 
 Unions are represented by the American Federation of Labor, 
 which is an affiliated body, composed of the International, Na- 
 tional and local Trade Unions, the Federal Labor Unions, 
 State Federations, Central Labor Unions and Trades Assem- 
 blies of towns and cities. The parts of the Federation are 
 not as closely united as with the Knights. Great combina-
 
 LAND, LABOR AND CAPITAL. 155 
 
 tions of capital, employing a vast number of workmen, have 
 tended to systemize the growth of labor organizations, and 
 have also increased, or at least preserved, the coalition of the 
 employes. Certain advantages of the organization of the sepa- 
 rate crafts into unions or assemblies have been discovered. 
 This form of organization is fast prevailing. The Knights of 
 Labor have come to recognize it to a certain extent. The 
 employes of large concerns frequently have an organization of 
 their own number, affiliated to the Knights of Labor or the 
 Federation of Labor. An organization or union of that char- 
 acter frequently accomplishes the most. The employes can 
 unitedly communicate with the employer, and he is most likely 
 to meet them half way because they represent his own employes, 
 and outsiders do not appear to be dictating to him regarding 
 the conduct of his business. 
 
 Coalitions of Employers began with the early organiza- 
 tion of Trades Unions in England. At first they were designed 
 to meet some local and momentary emergency to oppose a 
 local strike. When the Unions became permanently and per- 
 fectly organized associations, the employers' associations be- 
 came more of a fixed institution. In the United States several 
 industries have state organizations of the employers, and city 
 organizations are very common. Among the well organized 
 industries are the builders and the publishers. The object is 
 mutual support in strikes, the regulation of wages, and the 
 indemnification of members against loss from strikes. The 
 employers' Trades Unions retaliate for strikes by inaugurating 
 lock-outs, and so the feud goes on. 
 
 The Division of the Product. The distribution between 
 the employer and the employe of the product of the joint 
 application of labor and capital, is the foundation of "the 
 labor question." "Of the net product of the joint application 
 of labor and capital, what proportion shall fall to labor and 
 what to capital ? " The question had its origin back in the 
 stage of the municipal economy. When we left the craftsmen 
 and their gilds they had succeeded in their struggle with the 
 burghers or landholding citizen class, and had acquired equal 
 municipal and industrial rights. About the time they ac-
 
 156 DESCRIPTIVE ECONOMICS. 
 
 quired such rights, a "progressive degeneration" commenced. 
 The journeymen and the masters ceased to work side by side 
 upon terms of equality. Capital assumed a new importance in 
 industry and the masters began to form a class by themselves 
 apart from the journeymen. There was speedily developed an 
 employer class composed of the masters, and an employe class 
 composed of the journeymen. According to some accounts 
 the employer class was fully as arrogant and grasping as any 
 employer class known since. The quarrel about the division 
 of the product between employer and employe commenced 
 then, and it has been waged ever since. This industrial age is 
 full of the strife. 
 
 The Quarrel Illustrated. Suppose the case of an employer, 
 a man who has more capital than he can profitably utilize by 
 his own labor, who embarks in a manufacturing enterprise. 
 He requires a certain number of employes. If he is successful, 
 the industry will yield some profitable returns. How shall the 
 returns be divided between the employer and his employes ? 
 That is the question. The division is usually made in this 
 way. After paying for his rent and allowing for interest on 
 the capital invested, and after paying the wages of the em- 
 ployes, the balance is the employer's share or the profits of the 
 business. But this division does not indicate the share of the 
 employe in wages. The employe claims that he has been com- 
 pelled to receive the lowest possible amount which will prolong 
 life according to "the standard of living." As Lasalle put it : 
 "From the proceeds of production so much is taken and dis- 
 tributed among laborers in the form of wages as is requisite 
 for the perpetuation of life. The entire surplus of production 
 the proceeds of labor falls to the employer," and the human 
 condition of the laborer is "always to dance round under the 
 lowest rim of the necessaries of life, customarily requisite in 
 every age, to stand now a little above this, now a little below 
 it." 
 
 The Employe's Share. The employe claims that by rights 
 he should receive something more than customary wages 
 something more than will provide the bare necessities of life 
 and prolong existence according to custom or the standard of
 
 LAND, LABOR AND CAPITAL. 157 
 
 living. In substance the claim of the employe is this : The 
 employer should be allowed his rent, interest on the capital 
 which he has invested, and as his profits a fair share of the 
 balance for the risk of the business and his management and 
 supervision. The rest should fall to the lot of the employe. 
 This, in substance, is the subject of the quarrel between capital 
 and labor. It is usually and popularly referred to as a question 
 of wages, but to prove that the real question concerns the 
 division of the profits, you have but to notice that in nine 
 cases out of ten when a body of employes demands an increase 
 of wages, the demand is backed up by a showing of the em- 
 ployer's profits. On the other hand, the employer invariably 
 fortifies himself by showing that the profits of the business are 
 not sufficient to warrant an increase of wages. 
 
 The Organization of the Employes. Following close 
 upon the degeneration of the gild system and the rise of the 
 employer class composed of the master workmen, and the em- 
 ploye class composed of the journeymen, coalitions among 
 employes became frequent. This was toward the close of the 
 eighteenth century. Customary industrial regulations which 
 had hitherto prevailed, and especially during the sway of the 
 gild system, began to fall into disuse. The main object of the 
 coalitions was to preserve the old rights in a legal way. The 
 associations of the employes endeavored to obtain legal redress 
 by petitioning parliament. A secondary object was to support 
 fellow workmen during the many strikes of the period. The 
 employers began to take steps to combat the coalitions of the 
 employes and succeeded in getting parliament to enact a law 
 against them. This solidified the employes and the result 
 of the agitation was the organization of the English Trades 
 Unions. 
 
 Development of the Unions. At first the associations of 
 the employes were ephemeral. The employes united for a 
 temporary purpose and with the object of securing some specific 
 local amelioration. As soon as they had accomplished their ends, 
 the coalition ceased, only to be formed again when there was 
 further use for them. By and by they became permanent 
 organizations. They were merely local societies, including, at
 
 158 DESCRIPTIVE ECONOMICS. 
 
 first, all employes of an industry in a particular locality. The 
 early organization was imperfect. Strikes were frequent and 
 rarely successful. Gradually the unions began to be extended 
 so as to include several places. The members- of a union upon 
 going to another place would establish a branch union there, 
 until all the places of the country in which the respective 
 industry was carried on, came within the pale of the organiza- 
 tion, and there were very few industries in England which 
 were not organized. 
 
 The Object of the Unions. The English Trades Unions 
 sought to maintain the interests of the various industries as a 
 whole, and to care for the individual interests of the members. 
 In this they resembled the old gilds, whose chief purpose was 
 the preservation of the interests of each craft, and to care for 
 the private interests of the separate craftsmen. They were a 
 natural outgrowth of the gild system by which each craft was 
 organized into its own gild. 
 
 Trades Unions in the United States. When the idea of 
 the organization of each industry by itself was transplanted in 
 the United States, the purposes were enlarged. The purpose 
 of the union included not only a care for the welfare of the 
 whole industry and of the individual needs of each member, 
 but there was a special aim to increase the rate of wages. This 
 was sought to be gained, either by securing a raise in the wages, 
 or by limiting the number of employes through the restriction 
 of apprenticeship. The American Trades Unions, moreover, 
 introduced some social features into their organization. It 
 was sought to elevate the employe class socially and intellectu- 
 ally. Eegulations respecting self-help were introduced. 
 
 The Knights of Labor. This is a modern organization as 
 compared with the Trades Union,, It differs radically from 
 the Trades Union in that it does not insist upon each craft 
 being organized by itself. It admits to membership all who 
 come within its definition of workingmen. The Trades Unions 
 have been conservative as to old traditions, and have proceeded 
 as though there were an inevitable fight between employer and 
 employes with no prospect of peace. The theory upon which 
 the Knights of Labor is based recognizes a joint interest of
 
 LAND, LABOR AND CAPITAL. 159 
 
 capital and labor, with the hope of greater amelioration of the 
 workingman's lot by the means of closer industrial union 
 between the two forces. 
 
 Advantages of Organization. An enumeration of the 
 advantages of the organization of the employes, would be based 
 on what it may do when properly directed, rather than on what 
 it has done. Organization has often failed, and on the other 
 hand, it has frequently produced the following results: 
 
 (1) On the theory that the employe has a commodity la- 
 bor to sell, organization may enable him to make the sale on 
 the same basis as other wares are sold. 
 
 (2) It may place him in as good a position to sell, because it 
 enables him by mutual contributions to withhold his commo- 
 dity from the market when there is no demand. 
 
 (3) Because it may enable him to regulate the supply of la- 
 bor, by distributing the employes, and assisting them in pro- 
 curing employment. The difficulty of procuring stated 
 employment, increases with each succeeding economic stage, 
 and organization must provide for the difficulty. 
 
 (4) It may raise wages by united demand, when the demand 
 of a single individual would go unheeded. 
 
 (5) It may enable the employe to make a better contract 
 with the employer than could be done single handed. The 
 contract ceases to be individual and becomes collective. 
 
 (6) It may shorten the hours of labor. 
 
 (7) It may secure legislation in favor of the employe and in 
 protection of his equal rights to "participate in the advantages 
 of civilization." The Factory laws are instances of legislation 
 procured through labor organizations. 
 
 (8) Organizations may act as relief societies, or as insurance 
 associations, and distribute funds collected from the healthy, 
 among the indigent and sick. 
 
 (9) Not least, united association can attract attention. It 
 will be heard. It will bring the condition of the unfortunate 
 those who are born with lesser intellectual capacities per- 
 haps, or still worse, have been burdened with vicious parent- 
 age to the notice of the more fortunate, and it will keep the 
 attention in its direction.
 
 160 DESCRIPTIVE ECONOMICS. 
 
 Evils of Organization. The sense of might aroused by 
 combination may sometimes lead to unwise and imprudent 
 demands. Such demands would doubtless be more frequent 
 were it not for the influence of public opinion, which quickly 
 perceives when the demands of the labor organizations are just, 
 and when they are unjust. An impolitic course is perhaps 
 due more to the influence of unwise leadership, than to the 
 desires of the rank and file, so that a fundamental evil lies in 
 the danger of bad leadership, and it is often said that the 
 greatest foe to the organization of labor, is the professional 
 agitator, who imbues his comrades with a spirit of unrest, and 
 abuses his authority by inciting strikes and boycotts which are 
 not wanted by the great mass of employes. This evil can be 
 readily studied in the United States by tracing the history of 
 some of the craft organizations whose councils have been di- 
 rected by prudent and conservative men, and comparing that 
 history with the history of organizations which have fallen into 
 the clutch of the professional agitator. Organizations some- 
 times handicap the individual members by imposing restrictions 
 upon the conduct of industry, relating to wages, hours of work 
 and the manner of working. The organization then reflects 
 the vices which preceded the degeneration of the medieval gild 
 system. The oppression of the workmen by the master under 
 the gild system has been thus described by Yves Guyot: "Each 
 gild formed a little feudal state, ruled by masters, who aimed 
 and aimed successfully at making themselves an hereditary 
 caste, and enforcing on every one not of their own order a host 
 of almost impossible conditions as the price of entering it. 
 Each master became a petty baron, to whom the workman was 
 no better than a serf. Under the pretext of protection, the 
 master exercised the most absolute despotism over the appren- 
 tices and journeymen. The unfortunate who aspired to the 
 freedom of his craft, had first to serve a long apprenticeship to 
 one master. The masters made the rules and in every gild they 
 squeezed the very last farthing of profit out of the young work- 
 man. * * * Handed over powerless to his master, subject to all 
 his requirements and all his caprices, the apprentice had no 
 appeal. If driven by want and ill usage he ran away, no one
 
 LAND, LABOR AND CAPITAL. 161 
 
 might offer him an asylum. Like a serf he could be treated as 
 an article of commerce, and sold by one master to another." 
 
 The Union of Labor and Capital. It is often said that 
 the interests of capital and labor are identical. The interests 
 of two hungry lions dining on a kid are identical. It is to the 
 interest of each to get as large a mouthful as possible. There 
 was a time when capital and labor were united. In the family 
 stage of economics, each person was a joint owner in all the 
 capital of the family and performed a share 'of all the family 
 labor. There was a similar union in the village stage, although 
 capital began to be felt. The laborers, those who served 
 others, were mainly slaves or serfs, and there could be no di- 
 vision of interests. In the city stage capital began to assume 
 a new importance. The master craftsmen were those who had 
 acquired sufficient capital to buy the raw materials and manu- 
 facture for the general market and for a future demand. Then 
 they became the employer of the journeyman without capital, 
 and the interests of the two classes began to part. In this 
 national stage, the importance of capital as compared with 
 labor has become more marked. A very little capital, com- 
 pared with modern standards, would enable the medieval crafts- 
 men to become a master and set up for himself. In our times 
 the possessor of a little capital has no chance in competition 
 with great corporations and the modern modes of capitalistic 
 production. In the language of Professor Ely: "As a sepa- 
 rate, distinct and mighty force, capital as it exists to-day, is 
 something new." Its interests can never be identical with 
 those of labor under the present order. The employer will 
 ever strive to appropriate as large a share of the joint product 
 as possible, and the employe must ever strive to get his share. 
 
 Schemes for Lessening the Strife. Many plans have been 
 suggested or tried for uniting labor and capital. Some are 
 visionary and some have worked practical results. Many of 
 the projects aim to make the employe a capitalist. Some seek 
 to introduce stated rules for the government of the relations 
 between the employer and the employe. 
 
 (1.) Labor Legislation. To the latter class belong the so- 
 called labor laws. The State steps in by means of legislation 
 11
 
 162 DESCRIPTIVE ECONOMICS. 
 
 and seeks to regulate employment and control the relations of 
 the employer and employe. Labor legislation, as such, began 
 in Queen Elizabeth's time by the enactment of the Law of 
 Apprentices. The gild system under which the industrial 
 system of all Europe had been organized was undergoing a 
 process of disintegration, and the labor question was becoming 
 troublesome by reason of the rise of an employer class as dis- 
 tinguished from the employe class. The Law of Apprentices 
 sought to codify and continue the regulations of the gild 
 system. This legislation was followed up by the factory legis- 
 lation which began at the opening of the present century. 
 Arkwright's newly invented loom was revolutionizing the tex- 
 tile industry. Spinning in cottages and homes fell into disuse 
 and the spinners began to be massed in large factories under 
 the direct supervision of employers. The first factory law was 
 designed to meet the resulting evils. Additional laws were 
 framed from time to time looking to the regulation of the 
 factory system connected with each industry. Finally a gen- 
 eral law is enacted applicable to all large manufacturing 
 establishments, and the special acts relating to particular in- 
 dustries, are repealed. Legislation becomes general instead of 
 special. This process is illustrated in the growth of the 
 factory legislation of many States of the union. The principle 
 is still at work, and we must study its past workings and 
 observe its future developments. 
 
 2. Courts of Arbitration. This plan for settling the dif- 
 ferences between employer and employe was first put into definite 
 shape in Nottingham at about the time of the close of our civil 
 war. A stocking manufacturer, named Mundella, was instru- 
 mental in introducing the system for the settlement of differ- 
 ences between employers and employes engaged in the stocking 
 weaving and glove industry. The main feature of the plan 
 was the institution of courts of arbitration consisting of nine 
 employes chosen by the trades unions of the employes and nine 
 employers chosen by a general assembly of the employers. All 
 disputes must first be brought before a committee of reconcilia- 
 tion, consisting of four members of the court. If the commit- 
 tee could not make adjustment then the matter came before
 
 LAND, LABOR AND CAPITAL. 163 
 
 the whole court for final decision. The system rested wholly 
 upon the voluntary consent and agreement of the parties. 
 Shortly after Mundella's " Kules of the Courts of Arbitration 
 in the Stocking Weaving and Glove Industry of Nottingham " 
 were formulated, another system was set up at Wolverhampton 
 by Rupert Kettle, and developed into what is known as Kettle's 
 Courts of Arbitration. They differed from Mundella's in that 
 provision was made for the enforcement of the decision of the 
 court. The agreement which the parties formed raised a legal 
 obligation to obey the decision of the arbitrators and the court 
 might in this way enforce execution of its sentences. 
 
 In the United States the various legislative enactments 
 instituting boards of arbitration and mediation have been 
 founded upon the English system of arbitration by agreement. 
 The statutes impose in the courts compulsory power of investiga- 
 tion, without authority to execute sentences. The success of 
 arbitration through legislation has been but little, if any, 
 greater than that by agreement instituted by Mundella and 
 Kettle. 
 
 Three steps may be traced then in the development of 
 arbitration between employe and employer. 
 
 (a. ) Submission to arbitration by voluntary agreement with- 
 out power to enforce decision. 
 
 (b. ) Submission to arbitration by voluntary agreement, with 
 a legal obligation to abide by the decision of the court of 
 arbitration. 
 
 (c.) Enforced arbitration or more properly investigation by 
 courts or boards of arbitration instituted by statute, without 
 power to enforce decision. 
 
 The fourth step is being agitated. It is compulsory arbitra- 
 tion by legislation instituting boards or courts of arbitration, 
 with power to compel either side to submit to investigation and 
 to abide by the decision. 
 
 3. Profit Sharing between employer and employe is a third 
 plan for lessing the strife. It has been tried both in Europe 
 and the United States. It has sometimes worked marvelously 
 well, and forthwith has been declared to be the panacea for the 
 social-economic malady which we are now discussing. On the
 
 164 DESCRIPTIVE ECONOMICS. 
 
 other hand, it has sometimes failed, and failed dismally. In 
 its more general form, the employe receives fixed wages and 
 in addition a portion of the net profits of the business, dis- 
 tributed in proportion to the employe's salary. In other words, 
 after paying his employes the wages agreed upon, and after 
 deducting rent and interest on the capital invested, the 
 employer is willing to distribute a part of the residue or profits 
 among the employes. The joint industry is supposed to be 
 bettered by the increased interest which the employe takes in 
 the business. Machinery is better handled, and more carefully 
 used, and duties are performed more faithfully. In some 
 cases the profit sharing is effected by means of the joint stock 
 company, the employes holding shares in the capital stock, and 
 to that extent becoming capitalists, and in either case the 
 employes are supposed to be directly interested in the results of 
 their own labor, and therefore will make that labor as efficient 
 as possible. 
 
 4. Co-operation. Co-operation among employes has fre- 
 quently been advanced as the scheme which would work in- 
 dustrial transformation and solve the labor question. Co- 
 operation is either compulsory or voluntary. The joint stock 
 company referred to in the preceding paragraph, is an instance 
 of co-operation. The employes combine their capital and 
 manage the joint industry in their own way, sharing the profit 
 and loss according to the amount of capital which each has 
 invested. In England and France, co-operation has been at 
 times extremely successful. The system there frequently takes 
 the form of co-operative societies for the purchase and dis- 
 tribution among the employes of the various wants of life. 
 The co-operative store is a familiar example. 
 
 5. Piece Work does much toward avoiding disputes between 
 employer and employe. It is an expression of free labor. The 
 employe feels himself free. The employer furnishes him raw 
 materials, tools and motive power, and the employe is at liberty 
 to .deliver the results of his work whenever he may choose. 
 " Piece work maintains the distinction between the man and 
 the thing ; the human individual and the utility he produces. 
 It specifies the function of the human who owes a fixed service
 
 LAND, LABOR AND CAPITAL. 165 
 
 in return for a fixed price. Piece work is one of the progressive 
 forms of organization of labor. In large undertakings it begins 
 to be the substitute for other modes of labor wherever it can be 
 applied." 
 
 6. The Scale System. This is practically the payment of the 
 employes according to the profits. It is best known by its 
 application in the payment of the employes engaged in the iron 
 industry in the'United States. From the fact that it originated 
 with the Amalgamated Association of Iron Workers, its best 
 known form is the "amalgamated scale." As applied in the 
 iron industry, the employes are paid according to the selling 
 price of iron. This would work injustice, however, to manu- 
 facturers in districts less conveniently located with reference to 
 transportation than others, because while the selling price of 
 iron is fixed for the whole country, one manufacturer must 
 sometimes pay more for transportation than another, and 
 therefore make less profit. To meet this objection the iron 
 producing territory is divided into districts, with reference to 
 distance from, and cost of transportation to, tide water, for 
 instance, and a 1 uniform scale is agreed upon between the em- 
 ployers and employes of each district. The scale of the several 
 districts is modulated to meet the several differences in cost 
 of putting the iron on the market. In practice, the employers 
 at different points are thus placed on an equal footing. The 
 scale is fixed by agreement, at stated intervals, upon the basis 
 of an assumed price of iron. If iron rises during the interval, 
 the employes receive a proportionate advance in wages. If 
 iron falls, they must submit to a proportionate reduction in 
 wages. If each side would invariably present and accept a fair 
 scale, the system must certainly be advantageous. When the 
 stated intervals for " signing the scale " come around, however, 
 there is frequently haggling about the ratio, resulting in an 
 uncertainty injurious to both the employers and employes. 
 Business is at a standstill, until the scale is signed. This 
 system, like all others of its nature, involves, first of all, a 
 question of education and ethics. The employer must be 
 ready to accept a division that is fair, and the employe must 
 understand when a fair division is offered, and not demand one 
 that is unfair.
 
 166 DESCRIPTIVE ECONOMICS. 
 
 Socialism and Communism, are intimately connected 
 with the subjects which have just been discussed. The advo- 
 cates of socialism desire the perfect union of capital and labor, 
 or in other words they seek the complete industrial union of 
 the three factors, land, labor, capital. The English language 
 is the usage of the best writers. So it may be said that the 
 true theories of socialism are those proposed by the leaders of 
 socialistic thought. If socialism were what every agitator 
 proclaims it to be, systematic study of it would be wholly un- 
 profitable. There have been various schools of socialistic 
 thinkers, at various times, in various parts of the world. Their 
 theories and plans have differed in respect to details, -but there 
 is a connecting thread through the whole. It will suffice our 
 present purposes to follow that thread. It will not be necessary 
 to speak of socialism and communism under separate heads. 
 While a different meaning is still attached to those terms in 
 some countries, they are frequently used synonymously in the 
 United States. Communism is the elder term and socialism 
 the newer. A still more recent term is collectivism. It is 
 sanctioned by the best of recent writers. Our purpose being 
 simply to observe the controlling ideas of the socialistic school, 
 it will be unnecessary and impossible to trace the shades of 
 thought which distinguish communism, socialism and collect- 
 ivism in Europe. 
 
 What Socialism Means. "We must remember that we 
 cannot be very exact when we attempt to sum up in a few 
 paragraphs the substance of many volumes by many great 
 thinkers. Language must be general. The simplest illustra- 
 tions of the meaning of socialism will be the best for our 
 purpose, and perhaps we can find that by going back to a stage 
 in economics which we have passed. For instance, it has been 
 stated that in the family stage of economics property is owned 
 in common. The statement applies also to the economy of the 
 primitive village community. The early village is an economic 
 unit. Each member of the community labors in the common 
 field. The harvests are gathered into a common storehouse 
 whence they are parceled out to each family. In the enlarged 
 households of partially agricultural tribes, there are communal
 
 LAND, LABOR AND CAPITAL. 167 
 
 dwellings owned in common by the members of the house- 
 hold, like the long-houses of the Iroquois. Subsistence is in 
 common. In all these instances there is perfect community of 
 living and all property is collective. This community of living 
 which characterizes the primitive economic stages forms the 
 basis of socialism as advocated at the present day. It aims at 
 collective ownership, by the community or state, of all property 
 used in productive industry. Property is to be nationalized. 
 It demands that all industry shall be carried on under the 
 direction of the state. Free competition is to cease. There 
 shall be neither a laboring class nor a capitalistic class. Every 
 member of the community shall devote himself to some pro- 
 ductive work and he shall receive in return, as the result of his 
 own labor, according to some socialists, (1) a distribution of 
 the profits in proportion to his needs. According to others 
 there must be (2) a perfect equality of distribution without 
 reference to needs, and without reference to merit of service of 
 the individual. Still others advocate that each individual of 
 the community is to be rewarded (3) according to the service 
 which he renders the community. A fourth class say that 
 distribution of the good things of life is to be (4) according to 
 the capacity of each individual. The prime distinction 
 between the various socialistic schools is founded on adherence 
 or non-adherence to some one of these plans of distributing or 
 sharing the products of the common labor. 
 
 Industrial Democracy, is the end of socialism. In itself 
 industrial democracy has few objective features, but all who 
 desire it are not socialists. Some believe that it may be attained 
 by voluntary co-operation. In the state of industrial democ- 
 racy there is to be a common ownership of the means of pro- 
 duction under the common management, but with private 
 ownership and enjoyment of income. To establish this 
 industrial state, as it exists in theory, a far-reaching trans- 
 formation must take place in the organization of society. 
 Property must be transformed and pass from private ownership 
 to public ownership. Industry must be transformed so that 
 the state will command it, whatever the disposition of the 
 individual members. The state loses its political character.
 
 168 DESCRIPTIVE ECONOMICS. 
 
 It becomes an economic organization, "analogous to the admin- 
 istrative council of a huge co-operative society embracing the 
 entire country." Money as a medium of exchange will 
 disappear because there will be no use for it. No man will'be 
 obliged to sell his labor or buy his wants, because the state will 
 furnish him employment and look after his wants. 
 
 Beautiful in Theory. As a theory, socialism has many 
 attractive sides. It appears to be a perfect solution of the 
 struggle for a living, and from that point of view, it is lovely 
 to the eye of the shiftless and improvident. It would mean 
 the abolition of all trusts and monopolies monopolies of soil 
 or monopolies of capital. It would prevent aggregation and 
 concentration of wealth. There would be no impoverishment 
 of the employe classes, because every man would be as rich as 
 every other man, and the state would be the only employer. It 
 would put an end to the irrepressible collision between capital 
 and labor. It is, therefore, favored by philanthropists and 
 humanitarians who have real, genuine sympathy for the less 
 fortunate classes. Socialistic discussion is worthy of encour- 
 agement if for no other purpose than to draw attention to 
 social reform and social problems. 
 
 Theory and Practice. The theory of Socialism is one 
 thing ; the practice of it, including the plans by which society, 
 as now constituted, is to be transformed, is quite a different 
 thing. It is in regard to the practice the putting into effect 
 of socialistic theories that the greatest diversity of opinion 
 exists. Socialism looks well and reads well on paper, but the 
 problem of carrying it into effect is still to be solved. It is 
 more than likely that ages must elapse before it will be possible 
 of practice, just as ages have been required for the evolution of 
 the existing state of industrial society. Industrial democracy 
 being the goal, the means by which it is hoped to be attained 
 are two-fold. (1) Voluntary co-operation. (2) Coercive co- 
 operation or socialism. The latter involves the use of the 
 power of the state to compel co-operation and regulate industry. 
 The manner of applying coercion and of using the State gives 
 rise to various schools of socialism and shades of socialistic 
 thought.
 
 LAND, LABOR AND CAPITAL. 169 
 
 Other ** Isms." Socialism, as a theory, has rested under a 
 cloud because of the various "isms" which have from time to 
 time become connected with it. They are such as Anarchism, 
 Materialism, Nihilism, Atheism, Free Love, and other 
 schemes of both evil and well-meaning dreamers. Keal social- 
 ism, as we have seen, is none of these. 
 
 Anarchism Is important enough to deserve a word by 
 itself. Socialism, in so far as it seeks the establishment of 
 industrial democracy by peaceful and orderly means, is not 
 morally blameworthy. It involves nothing contrary to justice 
 and good morals. Anarchism, however, is morally blame 
 worthy. It is bad in theory and worse in the plans by which 
 it is sought to be put into effect. The socialists ask that all 
 industries shall be pursued in common and under the manage- 
 ment of the state. The anarchists demand that the state itself 
 shall be abolished ; that there shall be no government, but each 
 individual shall exercise authority for himself. Anarchists 
 deny the right of society to organize government which shall 
 exercise authority over individuals. In place of government, 
 they claim that each individual shall have the right to federate 
 himself with others as he may see fit, and each federated com- 
 munity thereupon make its own laws according to its might.
 
 170 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER III. 
 
 THE DIVISION OF EMPLOYMENTS. 
 
 The Growth of the Division. The study of the econom- 
 ics of the family showed us that it concerns a stage of indus- 
 trial society without division of employments. The members 
 of the economic family do not divide up their work and each 
 one devote himself to some particular kind of labor. Each 
 man employs himself indiscriminately in gathering wild fruits, 
 in hunting or fishing. Even the distinctions of sex rarely 
 produce a division of labor. When the village community is 
 developed, one man becomes a herdsman, another works a-field 
 and another becomes a carpenter. The increased wants of life 
 necessitate an increase in the means of satisfying them, and 
 the time comes when a man cannot be a "jack of all trades." 
 The result is that each man is set free to devote himself to a 
 more limited number of pursuits. City economics produces a 
 still more minute division of employments. The agriculturist 
 is now set free to devote himself wholly to tillage, while the 
 craftsman can give his undivided attention to working up raw 
 materials into utensils and clothing. 
 
 The Present Division. The development of the indus- 
 trial stage of economics brings with it a corresponding devel- 
 opment of division of employments. Every advance of indus- 
 trial society sees a corresponding diversity of occupation. In 
 this regard the growth of industrial society is likened to the 
 growth of a tree which first puts out large main branches. 
 They represent the simple employments of the village life. 
 These branches sub-divide as occupations sub-divide, with the 
 beginning of the city life. The full grown tree with its many 
 shoots and twigs, is the division of employments in the national 
 stage of economics. The process is like the growth of com- 
 plexity in the structural organization of animals, ascending 
 from the lower to the higher orders.
 
 THE DIVISION OF EMPLOYMENTS. T71 
 
 Incidental Duties becoming Occupations. In the early 
 stages of industrial organization there are many duties incident 
 to every man's daily life. No one of these duties composes his 
 occupation. They are all simply incidents. As wants in- 
 crease with the advent of higher industrial organization, that 
 which was an incidental duty becomes a livelihood. Many of 
 the industries in which men now engage for stated employment 
 were part of the domestic duties a few years ago, and were car- 
 ried on in the household for the benefit of the family. 
 
 Divisions in Manufacturing. The various manufacturing 
 processes afford good illustrations of the progress in the divis- 
 ion of employments. Let us take one of the most ordinary 
 occupations, that of the shoemaker, for instance. The village 
 shoemaker was both cobbler and shoemaker proper. His bun- 
 dle of leather for repairs as well as for a complete shoe, came 
 to him on the village stage coach. He took the raw product, 
 cut it out and by slow manipulation turned it into a shoe. In 
 this day there are hardly any shoemakers left. The shoemak- 
 er's shop has become simply a cobbler's shop. Men are now 
 cobblers, cutters, vampers or lasters. They follow some one of 
 the forty or fifty occupations connected with a modern shoe 
 factory. 
 
 The Gain to Industrial Society. There are many ways 
 in which the division of employments works a real gain to 
 industrial society. There is a saving in the amount of capital 
 invested in tools. If all the shoes worn by the people of the 
 United States were made after the practice of the village shoe- 
 maker, and each manufacturer had the full kit of tools with 
 which he must be provided, a large portion of the capital in- 
 vested would be lying idle much of the time. Each man could 
 use only one of his tools at a time. One shoemaker's awl does 
 not involve the investment of much capital, but the tens of 
 thousands and even millions of awls that would be required, 
 and which would be lying idle while their owners were cutting 
 uppers or polishing, would mean a large amount of idle capi- 
 tal. There was a time when nearly every family possessed a 
 buckskin needle, but most people now live and die without 
 seeing one. The capital required by the family is just so much
 
 172 DESCRIPTIVE ECONOMICS. 
 
 less. Again, there is the increased efficiency of labor, by rea- 
 son of the increased skill which a man acquires, when he 
 devotes himself to a single occupation. The modern artisan 
 accomplishes more and does better work than the artisan of 
 the olden times, because he gives his attention to one class of 
 work. Better and more costly tools and utensils of labor are 
 possible, because they can always be in use and producing a 
 revenue. The village smith cannot afford a great lathe, cost- 
 ing hundreds of dollars, because he has not steady work for it. 
 Another important gain lies in the fact that, by reason of the 
 multiplication of employments, men can find occupations 
 suited to their natural aptitudes. Every man can find some- 
 thing for which he has a native bent, and in choosing his occu- 
 pation he can take into account his physical characteristics. 
 A keen sense of touch, of taste or of smell, may cause him to 
 be peculiarly adapted to a particular occupation. There are 
 gains in other ways than those enumerated. They are all 
 summed up, however, by stating that the division of employ- 
 ments increases the efficiency of labor. The struggle of the 
 day demands that each man shall make his labor as efficient as 
 possible. 
 
 Disadvantages of the Division. It tends to make men 
 one-sided. It is apt to develop certain faculties at the expense 
 of others. It produces ill-balanced minds, and we hear the 
 complaint that there are so few "all-around" men, as they are 
 termed men who are versed in many arts and sciences. It 
 takes what is called "life" out of an occupation. It renders 
 a man's pursuits soul-less. The watchmaker who makes a 
 whole watch takes interest in his work, because he observes 
 progress in the construction and adaptation of the various 
 parts. The mechanism becomes a thing of life and awakens 
 his sympathies. On the other hand, the employe of a watch 
 factory who makes a single part, such as wheels of one kind, 
 day after day, is liable to beget a sluggish intellect. He be- 
 comes a mere machine. 
 
 The Dependence following the Division. When em- 
 ployments become highly divided, and the various processes 
 of production are apportioned into many forms of labor, men
 
 THE DIVISION OF EMPLOYMENTS. 173 
 
 increase their dependence upon each other correspondingly. 
 When there are only half a dozen different employments, as in 
 the primitive village community, there is but little interde- 
 pendence*. Economic dependence commences then, however, 
 and it grows with each successive economic stage, until the 
 time comes when every man places some reliance upon the 
 labor of other men, for the satisfaction of his wants. In the 
 modern shoe factory all the workers depend, first of all, upon 
 the cutters, who take the hides and cut out the various parts 
 of the shoe. The stitchers, the lasters and the finishers must 
 perform their various parts. If one set fails, all hands must 
 stop work. This dependence is slight compared with that 
 which the whole body of operatives places upon those engaged 
 in other departments of activity upon the farmer who sup- 
 plies them with meat and bread, the cloth manufacturer and 
 tailor for a supply of clothing, and the trader who brings the 
 produce of the farm and factory to where it is wanted. The 
 farmer, in turn, must depend upon the workers in the shoe 
 factory for his boots and shoes, and upon other artisans for the 
 various utensils of husbandry. The town or city where one 
 class of manufacturers predominates, must depend upon other 
 towns and cities where other manufactures are produced. 
 Village depends upon village, villages depend upon towns, 
 towns upon cities, and cities upon the economic activity of the 
 world at large. Each individual possesses a certain private 
 economy which goes to make up the economy of the whole. 
 Every man in the nation has his place. While this book is in 
 preparation, the author, the publisher, the compositor, the 
 proof-reader and the pressman, and indirectly many persons 
 engaged in other occupations, must rely on the performance by 
 other persons of their part in the organism of industrial society.
 
 174 DESCRIPTIVE ECONOMICS. 
 
 CHAPTER IV. 
 
 THE ECONOMICS OF POPULATION. 
 
 Malthusianism. It was in the year of our Lord seventeen 
 hundred and ninety-eight, just about a century ago, that 
 Thomas A. Malthus, a clergyman of Surrey, published what he 
 called, An Essay On Population. There was great discontent 
 throughout the whole of Great Britain as well as on the Con- 
 tinent. Malthus began a study of politics and endeavored to 
 find the causes of the discontent. He started out with the 
 purpose of proving that the Governments of Europe, which 
 were charged with the prevailing hard times, had nothing to 
 do with it. He was endeavoring to find natural causes for the 
 condition of things, beyond the power of the ruling classes to 
 produce. The result of his study was the discovery of what he 
 called the "law of population." In substance, his law is that 
 population increases in a geometrical ratio, as 2, 4, 8, 16, 32, 
 while the food supply increases only in an arithmetical ratio, 
 as 2, 4, 6, 8, 10. 
 
 What if Malthus were Right? If the theory which 
 Malthus advanced concerning the growth of population were 
 correct, the number of the people on the face of the earth 
 would soon exceed the supply of food. In two centuries the 
 population would be to the means of subsistence as 256 is to 9, 
 and long before that time people would be starving to death. 
 For instance, in the United States, the population doubles at 
 least once in twenty-five years. If it continued to increase in 
 a geometrical ratio, in two' hundred and fifty years it would be 
 more than sixty thousand millions. Professor Ely illustrates 
 the increase in this way: "Let us suppose that there are only 
 two people on the face of the earth and population doubles 
 once in fifty years. At the expiration of three thousand years 
 the whole surface of the earth, land and sea, would be covered 
 with people piled one on top of the other eight hundred deep,"
 
 THE ECONOMICS OF POPULATION. 175 
 
 Increase of the Animal World. We may have recourse 
 to the animal world again for more emphatic, as well as for 
 more interesting illustrations bearing upon this subject. Some 
 of the lower forms of animals increase with startling rapidity, 
 and were it not for the checks upon increase, the earth would 
 be overrun with them. Men would stand but little chance of 
 subsisting. A single Infusorian, for instance, may be the an- 
 cestor of millions within a week. It is said that the female of 
 some species of the Aphis often produces one offspring per 
 hour, for many days consecutively. At this rate, in a single 
 season, a progeny would be produced which would "weigh down 
 five hundred millions of stout men." A startling example of 
 animal increase, is that of the cod fish. "The roe of a cod 
 contains sometimes nearly ten millions of eggs, and supposing 
 each of these produced a young fish which arrived at maturity, 
 the whole sea would forthwith become a solid mass of closely 
 packed cod fish." Only a small proportion of the progeny of 
 the lower animals, however, attains maturity. The struggle 
 of life with them, is such, that very few survive it. Their 
 propagation has been likened to the fable of Mirza's Bridge 
 few get across. In the light of these facts the mistake which 
 Malthas made is more evident. It is as though he had started 
 out to picture the catastrophe which was about to ensue by the 
 ocean becoming overstocked with cod-fish, basing his calcula- 
 tion upon the assumption that every egg produces a full grown 
 fish. 
 
 The Downfall of Malthus. Nearly a century having 
 passed since Malthus announced his discovery, we ought to 
 see some signs of this appalling increase of population, as com- 
 pared with the means of subsistence. The fact that there are 
 still no signs of it, proves that he was wrong. His law was no 
 law. His deductions were incorrect. Population does not in- 
 crease in the geometrical ratio. The growth of population as 
 compared with the increase of the means of subsistence, is not 
 as disproportionate as Malthus believed, and as a great many 
 learned men of his day believed, when they read his essay. 
 
 Checks on Population. Malthus' chief error consisted in 
 failing to allow for the various checks on the growth of popu-
 
 176 DESCRIPTIVE ECONOMICS. 
 
 lation. He did not allow for positive checks like plagues, in- 
 temperance, crime and war. There may be localities where for 
 short periods the population increases in the ratio proposed by 
 Malthus. Sooner or later, however, these checks upon increase 
 come into play. When the growth of population presses 
 closely upon the means of subsistence, vice, disease and pesti- 
 lence are more active and effective and the birth rate decreases. 
 There are negative checks which Malthus may be excused for 
 having overlooked at the time. It is now pretty well ascer- 
 tained that as civilization advances and takes on a higher char- 
 acter and wants become more numerous and of a more costly 
 nature, the growth of population is less rapid. In all depart- 
 ments of the world of life, increase becomes less, ascending 
 from the lower structural organization to the higher. A grain 
 of wheat multiplies at the rate of two-hundred fold annually. 
 The rate of propagation in the vegetable is much greater than in 
 the animal world. The lower forms of animal life propagate 
 faster than the higher forms. 
 
 The Increase of Subsistence. A little investigation will 
 show that Malthus must have been wrong also in his statement 
 of the increase of food supply. Instead, of becoming less in 
 proportion to the increase of population, it becomes greater. 
 The food supply in the present or industrial stage of economics, 
 is greater in proportion to population, and of a better quality, 
 than ever before. The subject may be illustrated by compar- 
 ing the condition of the inhabitants, of what is now the Empire 
 State, at the landing of Columbus, with the condition of the 
 present population of the same territory. That state never 
 contained within its boundaries more than twenty-five thousand 
 Indians. Existence, among them, was a desperate struggle for 
 the necessary wants. Hunger was almost a daily sensation. 
 Famines came with regularity and starvation stared them in the 
 face for a large portion of the year. Where twenty-five thousand 
 of 'them, or, one to every one hundred and twenty-one acres, were 
 engaged in a constant search for food, over-feeding when 
 game was abundant and when the corn was ripe, starving when 
 the game was scarce and the corn was gone, six millions of 
 people, or about one to every five acres, live in peace and 
 plenty.
 
 THE ECONOMICS OF POPULATION. 177 
 
 Food and Civilization. The rule for New York is good 
 the world over. As civilization advances and population in- 
 creases, subsistence becomes more certain and more adequate to 
 meet the" wants of the population. In the early stages of 
 economics when men have little command over the forces of 
 nature, the sources of subsistence are limited accordingly. As 
 population increases and begins to press upon the means of 
 subsistence, men begin to overcome natural forces and increase 
 the sources of food supply. They first add wild game to the 
 frugiferous subsistence. Then they introduce animal domes- 
 tication. Next they cultivate the farinaceous plants. In the 
 present stage of economics, when all the factors in production, 
 agriculture, commerce and manufactures, go hand in hand, 
 the possibilities of food resources are almost incalculable. The 
 evolution of industrial society is accompanied by evolution of 
 food supply food of a more varied character and better 
 quality. 
 
 Efficiency of Labor. One of the causes of the increase of 
 subsistence, is the increasing efficiency of labor, ascending 
 from the lower of the industrial stages to the higher. The 
 labor of a single inhabitant of the Empire State is more pro- 
 ductive than the labor of ten Senecas. Agriculture is more 
 productive and agricultural labor more efficient. Modern 
 machinery and mechanical appliances frequently enable one 
 man to accomplish more than scores of men could accomplish 
 in the age of Malthus. The forces of steam and electricity 
 have revolutionized the ways of getting a living. Malthus 
 would not have promulgated his law of population had he 
 dreamed of the " broom stick train." 
 
 The More the Better. We have wholly lost the signif- 
 icance of descriptive economics, if we have not, by this time, 
 discovered that the greater the number of people inhabitating 
 a territory and uniting their industries, the greater will be 
 their mastery over nature, and the greater will be the number 
 of the good things of life which they will possess. "Progress 
 and poverty " is false in name and false in fact. Economics 
 has yet to teach us that there has been anything but progress 
 from poverty and barbarism to wealth and civilization. 
 12
 
 178 DESCRIPTIVE ECONOMICS. 
 
 The Power of Nature Limited. While it is true that 
 the growth of population has, in our time, been attended with 
 an amelioration of the material welfare of the race, because of 
 the increased means of satisfying wants through the enlarge- 
 ment of the productive powers of nature, there must be 
 recognition of the fact that nature's powers are limited. There 
 must of necessity be a limit. The time must come when the 
 earth shall have been utilized to its utmost capacity ; when the 
 fields, the forest and the mine can do no better. A point will 
 be reached in tillage, when an increased application of labor 
 and capital will not result in a corresponding increase of pro- 
 duct. In other words, there is a limit to the profitable ex- 
 penditure of labor and capital. This is called the law of 
 diminishing returns. It assumes that intensive agriculture 
 will not be profitable after a certain point, and when that point 
 is reached, increased energy applied to cultivation will not sup- 
 port a corresponding increase of population. The rule holds 
 good as to all industries directly connected with the production 
 of commodities designed for the satisfaction of material wants, 
 from natural sources. Thus the silver miners of Montana find 
 that there is a limit to the depth which they can delve in the 
 earth and profitably bring forth silver ore. Lumbermen have 
 utilized great labor saving conveniences, so that, although the 
 forests have become thin and scattered, yet they have been 
 able to manufacture lumber so much more cheaply than our 
 forefathers, as to continue to manufacture it at a profit. They 
 find, however, that the time comes when the timber becomes 
 so sparse and scattered that even the very best methods of mak- 
 ing lumber will not enable them to do it profitably. 
 
 Not Worth Our Worry. While all these things are true 
 enough, it is scarcely worth while for us to worry about the 
 approach of the time when the earth can support no greater 
 population. When we are told that if it were not for the law 
 of diminishing returns, thousands of millions of men might 
 live in the United States as comfortably as tens of millions, it 
 is an economic fact of which we recognize the truth, but it 
 need not give us great concern. It is doubtful whether any 
 country, even the most densely populated part of Asia, has
 
 THE ECONOMICS OF POPULATION. 179 
 
 yet utilized all its natural capacities so that it cannot profitably 
 produce more and support a larger population. If China 
 should proceed to practice the economics of the United States, 
 to adopt all our labor saving appliances, and make labor as 
 effective and productive as with us, there is no telling the ex- 
 tent to which her population might increase without starvation 
 ensuing. The saying is that "a franc's worth of coal does the 
 work of a laborer for twenty days." We use coal but China 
 does not. We make our labor twenty times as productive as 
 labor in China. Therefore, poor land, the barren hill-side, 
 can be profitably tilled, marsh lands can be drained and the 
 productive area enlarged. In these ways the point of diminish- 
 ing returns seems to be set back a thousand years by the in- 
 ventions of a single year. We certainly need not worry over 
 the prospect of starvation for the race until a large portion of 
 the earth's surface has reached the point of diminishing returns. 
 The youngest reader of this book will barely see the great, 
 prolific, central table land of Africa fairly well populated, and 
 its resources fairly developed. That table land has the soil, 
 climate and natural resources capable of supporting millions 
 of people in health and comfort. There are other portions of 
 the earth's surface which must yet be brought beneath the 
 husbandman's sway. When a beginning has been made toward 
 the reduction of these unoccupied, fertile spots of earth, to a 
 productive state, then we may commence to feel discomfort, 
 because the world may sometime be unable to support her 
 inhabitants.
 
 180 DESCRIPTl VE ECONOMICS. 
 
 CHAPTER V. 
 
 GROWTH OF THE INDUSTRIAL REVOLUTION. 
 
 Its Historical Meaning-. The term, industrial revolution, 
 is frequently applied to certain economic changes which took 
 place at the close of the middle ages. Medieval customary 
 regulations which had previously controlled industry gave place 
 to modern regulations. Free competition took the place of 
 custom. From the point of view of descriptive economics, 
 however, it is preferable to consider that there has always been 
 an industrial revolution ; that it commenced with the inven- 
 tion of the fishhook and the bow and arrow, and has continued 
 with the spinning-jenny, the cotton-gin and the telegraph. 
 According to this view the industrial revolution is the continual 
 progress of mankind through discoveries and inventions. 
 This progress has not always been uniform. Certain periods 
 can be pointed out when advancement has been particularly 
 marked and there are other periods when the progress has been 
 hardly appreciable. 
 
 Progress Intermittent. A few inventions or changes in 
 economic methods, which are in themselves very important, 
 are sometimes pointed out by economists as the accompaniments 
 of the industrial revolution. Such suggestions derive force 
 from the fact, already referred to, that progress through inven- 
 tions and discoveries is by great leaps. Each leap includes a 
 period of considerable duration. After each leap there is a 
 period of rest. 
 
 The Seen and the Unseen. Some discoveries appear to us 
 to have played an important part in the industrial revolution, 
 because we can see and directly measure their results. In 
 other instances the results are not seen because they are 
 indirect. For instance, the discovery of the uses of steam will 
 be set down as one of the inventions producing great ameliora- 
 tion in the material condition of man. We can see the results.
 
 GROWTH OF THE INDUSTRIAL REVOLUTION. 181 
 
 The same suggestions may be made regarding the invention of 
 the fishhook. We see and understand how the lot of the 
 primitive fisherman was bettered by its discovery. The 
 Fuegians still fish with the bait tied to the end of a string and 
 depend for success upon dexterity in landing the fish before it 
 can disgorge the bait. We can see how much better would be 
 their condition had they good fishing appliances. We do not 
 see how electric street cars facilitate our getting a living. We 
 observe that they are great conveniences, but we cannot sit 
 down and compute their industrial utility. We do not see how 
 they enable us to save time ; to get to our work quicker ; to 
 have more hours for recreation ; how they set us free for other 
 activities. 
 
 The Modern Industrial Revolution. What is the char- 
 acter of the industrial revolution of this industrial stage of 
 economics ? The subject of this chapter cannot be dismissed 
 without some reference to the far-reaching changes in methods 
 of getting a living which have taken place in recent times. 
 
 The Revolution in Farming. We are accustomed to con- 
 nect improvements in agriculture with better and more scientific 
 methods of tillage, with more intensive and less extensive 
 farming. These subjects suggest only one phase of the revolu- 
 tion. Another phase relates to the improvement of the 
 domestic animals. It was only about a century ago that the 
 Southdown weighed forty pounds or less and sheared two or 
 three pounds of woolly hair. To-day it weighs three or four 
 times as much and shears from six to ten pounds of pure wool. 
 Similar improvement has taken place in the stock of cattle and 
 horses. All the domestic animals receive better care and are cor- 
 respondingly more profitable. A considerable portion of the 
 revenue of the average American farmer comes from his stock 
 raising, and this fact gives significance to the industrial revolu- 
 tion in agricultural life. American agriculture, it is said, is 
 about to experience a further revolution. What the trans- 
 formation will be is yet uncertain. Some say that farms will 
 be sub-divided and will consist of small holdings, highly 
 cultivated. There is no doubt that the average farm is not 
 cultivated to the best advantage. Many a farmer would be
 
 182 DESCRIPTIVE ECONOMICS. 
 
 better off if he would abandon one-half of his farm, decrease 
 the outlay for improvements accordingly, and work the other 
 half intensively. Another class of writers express the opinion 
 that the farming of the future will be on a large scale. Small 
 farms will be merged into large farms, conducted with large 
 capital upon systematic business lines, just as great corporations 
 conduct great manufacturing industries. 
 
 The Revolution in Manufacturing. Man has acquired 
 such control over natural forces, that one man's labor will 
 accomplish fifty per cent, in many cases, and frequently seventy 
 or eighty per cent., more, in a given time, with less effort than 
 ever before. Our daily bread is turned out by machinery. It 
 is estimated that the labor of every three bakers annually turns 
 into loaves one thousand barrels of flour. Adam Smith tells 
 what evidently appeared to him to be a marvelous story. It is 
 to the effect that ten persons, by the use of mechanical appli- 
 ances used in his time, could make forty-eight thousand pins a 
 day. The story did appear a little marvelous comparing the 
 number of pins with the output of ten workmen, each ham- 
 mering out pin after pin, from a piece of wire on an anvil. 
 Three men, however, can make seven million five hundred 
 thousand pins to-day, and make them much better than they 
 could be made in Adam Smith's time. 
 
 Credit Economy. Commerce and industry have been rev- 
 olutionized by the credit system. It is the day of credit 
 economy rather than of money economy. By means of the 
 banks and the banking system, vast commercial enterprises are 
 transacted without the actual transfer of any money. The 
 function of the bank is no longer that of money keeper and 
 changer. It is to buy and sell instruments of credit. It is 
 said that in large cities the average bank handles over forty 
 dollars in checks, drafts, and other instruments of credit to 
 one dollar in actual money. Bank notes, and "greenbacks" 
 are instruments of credit. They are simply promises to pay 
 by the bank issuing them, or by the government as the case 
 may be. 
 
 Commercial Credit. This represents the principal phase 
 of the existing credit economy. A manufacturer of shoes, we
 
 GROWTH OF THE INDUSTRIAL REVOLUTION. 183 
 
 will say, buys his hides of the leather merchant on sixty or 
 ninety days credit. Before the credit period expires he is able to 
 make the leather into shoes and sell them. He takes the cash 
 received and pays on account to the leather merchant. But he 
 has been obliged to give credit on the sale of many of his 
 shoes. He may satisfy the leather merchant by giving notes, or 
 notes of his customers, for the balance, and thus both the 
 manufacturer and the dealer become parties to the credit 
 transaction. The leather merchant may have procured credit 
 of the tanner and the tanner of the dealer in raw hides. It is 
 hard to trace the transaction back to the original creditor. 
 They all owe more than the cash on hand will pay. The 
 original creditor may be the stock raiser, but he may have 
 borrowed from the bank until he can realize cash from the sale 
 of his cattle. Perhaps the manufacturer gave the leather 
 merchant a note in the first instance. The leather merchant 
 discounts it and uses the proceeds and the bank is the creditor. 
 In this way either of the parties to the transaction is able to 
 transact an enormous volume of business as compared with the 
 amount of capital invested. 
 
 Summing- up the Industrial Revolution. The struggle 
 of man with nature has practically ceased. Now and then she 
 is able to inflict a little hardship upon him, but it is only local 
 and it furthermore is only temporary. Too much rain or too 
 little rain may cause a failure of crops over a considerable area, 
 yet there is no famine as of old. Communication and transpor- 
 tation are such that a sufficient supply comes from where there 
 is a surplus. For instance, we cannot think of a famine in any 
 part of the United States. The idea itself is incomprehensible. 
 Agricultural, commercial and manufacturing industry are so 
 closely united, there is such widespread co-operation between 
 the factors of the economy of the modern nation that we are 
 prone to consider nature as utterly routed. There is much to 
 be accomplished, however. There is a wide field for the in- 
 dustrial revolution. We should expect that it will progress as 
 in the past, and produce still better economic methods. Of 
 the many great inventions which are in process of development, 
 any one may be selected to illustrate the economic changes to
 
 184 DESCRIPTIVE ECONOMICS. 
 
 be effected. Marine telegraphy, for instance, would revolu- 
 tionize navigation. Vessels at sea being able to communicate 
 with each other or with points on land, the perils of the sea 
 would be minimized. Ocean travel would become almost as 
 safe as travel on land. A disabled ship could send out its 
 warning signals and an ocean ambulance hurry to its aid. 
 Marine insurance rates would be lower. The risks of loss 
 being less, more money would be invested and more ships built. 
 Marine freight and passsenger rates would be cheaper.
 
 THE MONEY OF THE NATION. 185 
 
 CHAPTER VI. 
 
 THE MONEY OF THE NATION. 
 
 Introductory. At the beginning of the study of this im- 
 portant branch of economics, it will be well to have clearly in 
 mind some of the first principles relating to the money of a 
 nation. Popular conceptions of money and coinage are apt to 
 be foggy. There are many errors current. Some of them are 
 due to the tricks of the politician's trade. For instance, you 
 may have heard in political harangues the declaration that 
 money is worth nothing in itself; that it is simply the seal of 
 the government which makes the dollar worth a dollar. Some 
 of the things of which we must have a clear conception may be 
 enumerated as follows: 
 
 (1) Money has four functions: It is a measure of value; a 
 medium of exchange; a standard of value, and a store of value. 
 
 (2) It is a commodity, an article of commerce, capable of 
 being bartered and exchanged like other commodities. 
 
 (3) It is a product of labor, and is worth the amount of la- 
 bor necessary to produce it, that is to mine it, smelt, and mint 
 it into the shape of the desired coin. It costs a dollar's worth 
 of labor to get a dollar's worth of gold out of the earth, and 
 coin it into the shape of the dollar. The amount of labor de- 
 termines the degree of value. 
 
 (4) It has general acceptability, or as is sometimes said 
 utility. This utility furnishes a basis for value. The utility 
 of the precious metals, however, for the purposes of money, is 
 conditioned by the fact that they cannot be obtained without 
 labor. 
 
 (5) Gold is not wealth any more than potatoes or corn. It 
 simply facilitates exchanges, and for that purpose is more suit- 
 able and convenient than potatoes or corn. When it is coming 
 into the country by every steamer from Europe, it does not 
 follow that the country is becoming wealthier. When it is
 
 186 DESCRIPTIVE ECONOMICS. 
 
 going out there is no call for mourning on the ground that the 
 country is becoming so much poorer. 
 
 The Amount of Money Needed. Economic writers fre- 
 quently devote much space to a discussion of the question. 
 How much money does a nation need? The answers which 
 have been given have varied according to the economic stage 
 at which they were formulated. The answers have varied also 
 according as those who have attempted them have kept in view 
 the elementary principles of finance stated in the preceding 
 paragraph. It is true that this question is somewhat perplex- 
 ing. Perhaps we shall best study it by observing some of the 
 answers. 
 
 The More the Better. This is a common answer. People 
 are prone to think that money is the measure of wealth, be- 
 cause it will procure all the material good things which they 
 want. It naturally occurs to us that the more a nation has of 
 it, the more prosperous the nation will be. The argument 
 runs further, that money is a tool of trade; that it is a part of 
 every individual's capital and of every nation's capital, just as 
 the tools of a carpenter are a part of his capital, and therefore, 
 the more money a nation has, the more capital it will have, 
 and the better off it will be. In this connection, it is interest- 
 ing to observe some of the comparisons which have been made 
 by different writers, at various periods of economic history, to 
 illustrate the place of money in the economic activity of a na- 
 tion. It has been compared to a large wheel by means of 
 which a due share of the means of subsistence and of enjoy- 
 ment is distributed to each member of society. It has been 
 compared to the streets and roads by which commerce is pos- 
 sible and is carried on. Another comparison likens it to oil 
 which greases the wheels of circulation. Again, money is said to 
 be to commerce what railways are to locomotion a contrivance 
 to diminish friction. Still another writer holds that money 
 bears the same relation to other commodities that the written 
 language of a people's literature bears to their dialects. 
 
 The Amount of Money is Immaterial. Another view of 
 the matter holds that it makes no difference how much money 
 a nation has. In other words, it is wholly immaterial how
 
 THE MONET OF THE NATION. 187 
 
 much gold and silver there is in the world. It is a matter of 
 no consequence so far as the welfare of nations is concerned. 
 Those who hold this view reason that because gold is a com- 
 modity, when it is more abundant than other commodities, its 
 value will simply be less than other commodities and the price 
 of other commodities will rise. When it is scarce prices will 
 fall. An abundance of money will not enable a man to pro- 
 cure a greater quantity of the means of subsistence in exchange 
 for his labor, nor will a scarcity of money lessen the quantity 
 which he can procure for the same amount of labor. There- 
 fore, it is immaterial to him whether prices are high or low. 
 If money is abundant then in proportion as the prices of other 
 commodities rise, he has more money to use in making pur- 
 chases. It would be said for instance, that the fact that boots 
 were one hundred dollars a pair in the Confederate states dur- 
 ing the civil war was of no great consequence to a citizen of 
 one of those states, because his pockets were overflowing with 
 Confederate scrip. 
 
 The Amount Depends upon Economic Conditions. 
 This is a third view of the question. Those who accept it say 
 that it is nonsense to give a general answer to the question, one 
 that will be applicable to all nations at all times; that it is folly 
 to try to figure out the exact amount of money, in dollars and 
 cents, which a nation ought to have for each inhabitant. 
 They say that the amount of money which a nation needs will 
 vary according to the volume of its commerce, according to 
 the rapidity of the circulation of goods and money; in a word, 
 according to the economic stage in which the nation happens 
 to be. If a nation has little trade it will need only a few in- 
 struments of trade, and but little money will be required to 
 effect exchanges. On the other hand, if commerce is large, 
 exchanges frequent and of large amount, there must be money 
 enough to meet the necessities of the case. According to this 
 view, if the economy of the nation is developing, the volume 
 of its money must grow and keep pace with its economic 
 growth. It is a matter of history that the money of modern 
 nations constantly tends to augment. A village community, 
 living in the stage of Tillage economics, has little use for money
 
 188 DESCRIPTIVE ECONOMICS. 
 
 and in the primitive village community, as a matter of fact, there 
 is no money at all. Exchanges are made by bartering, not 
 through the medium of money. When villages have grown 
 out of the stage of village economics, and developed a munici- 
 pal economy, with the various economic classes, with manu- 
 factures and commerce, the volume of money must increase 
 accordingly. When the cities become part of a nation and the 
 national stage of economics is reached, the amount of money 
 must again be increased, because all exchanges are now made 
 through the medium of money. Wages are paid in money. 
 Domestic servants instead of receiving provisions or other com- 
 modities for their service, now receive money payments. If 
 piece work is common instead of monthly service, payments 
 are necessarily more frequent, and more money is required. 
 In other words it is a change from the barter economy of the 
 Middle Ages, to the money economy of modern times; from 
 the feudal system to the commercial system. Eapidity of cir- 
 culation also, affects the amount of money a nation requires. 
 For instance, the trade between Europe and the United States 
 does not depend wholly upon the number of ships engaged in 
 the trade, but also upon the number of trips which they make. 
 If one dollar circulates ten times a year, it is as good as ten 
 dollars circulating once a year. The presence of law and order 
 in the nation, or the legal security of capital and private prop- 
 erty, will affect circulation. Eapidity of circulation is also 
 affected by a lack of security and confidence, tending to cause 
 money to be buried or hoarded. 
 
 Credit Economy as a Factor. It has just been said that, 
 in the natural order of things, the amount of money which a 
 nation requires increases with its economic growth, and that 
 the nation needs more money, per capita, than the village. 
 While economic history shows this to be true, yet we now come 
 to a point where it is necessary to limit the statement. In the 
 last chapter there was a discussion of modern credit economy, 
 showing how commercial transactions are carried on without 
 the use of money. Bearing in mind the statements then made, 
 we see that a nation practicing credit economy on a large scale 
 requires much less money than a nation which does not use the
 
 THE MONEY OF THE NATIOX. 189 
 
 credit system. Among modern nations, therefore, the volume 
 of money does not always augment so as to correspond to the 
 economic growth. The amount, to be sure, does increase and 
 should increase, yet by reason of the practice of credit econ- 
 omy, the increase is not in a ratio corresponding to economic 
 growth. In Great Britain, the Bank of England is the banker 
 of all the other banks. It is their common clearing house, 
 where debits and credits are offset. Checks and drafts from 
 all parts of the United Kingdom are set off against each other. 
 These checks and drafts take the place of actual money in 
 commercial transactions, and the volume of money needed is 
 so much the less. If the people of the United States, for in- 
 stance, could all use a single bank, very little money would be 
 required for circulation. It is estimated that nine-tenths of 
 the payments of Great Britain are effected without the aid of 
 money. Checks and bills of exchange, which are employed 
 instead of money, are sometimes erroneously classed as paper 
 money. They are not paper money, but rather money-paper. 
 The Amount of Money Self-Regulating. As trade in- 
 creases and more sales are made, and more money is needed 
 with which to make payments, the required amount seems to 
 find its way into the nation and into circulation. The demands 
 of trade cause it to flow and reflow to meet trade exigencies. 
 When gold is exported from the United States there is apt to 
 be popular mourning for the wealth that is said to be flying 
 away from us. When it is being imported there is great pop- 
 ular elation. People would not give much attention to the 
 question if they did not entertain the erroneous idea that gold 
 is wealth in a sense in which corn is not wealth. When gold 
 is coming into the country, it is said that the balance of trade 
 is in our favor ; in other words, that we are selling more goods 
 abroad than we are buying there, and the gold is coming to 
 pay the difference. If there is any reasonable excuse for glad- 
 ness because gold is being imported, it is because of the favor- 
 able balance of trade. This presupposes, however, that one of 
 the conditions of national prosperity is a favorable balance of 
 trade. When we come to discuss the balance of trade theory, 
 however, we shall see that wise men hold it to be no great
 
 190 DESCRIPTIVE ECONOMICS. 
 
 thing, after all, for a nation to have a favorable balance of 
 trade ; that while it is desirable, other things being equal, it is 
 not the one thing which ensures national prosperity. 
 
 Money for Wages. A new criterion of the amount of 
 money required by a nation has recently been set up. It does 
 not pretend to be the crucial test, but simply one of the mat- 
 ters to be taken into consideration. It is to the effect that 
 there should be money enough for the payment of wages by the 
 day. In other words, "the day's labor of an ordinary laborer 
 should not be inferior to the value of a piece of legal tender 
 coin which could be conveniently carried. We need, then, 
 enough money, so that the value of a coin of convenient size 
 should not exceed a day's wages of an unskilled laborer." The 
 whole subject concerning the amount of the money of the 
 nation may, therefore, be summed up in this way : a nation 
 wants as much money as it has use for, and no more. 
 
 Paper Money. Up to this point in the chapter we may 
 have had paper money in mind as often as we have had coin 
 in mind. Let us have a clear conception of the character of 
 paper money. In the first place, it is not money, but the rep- 
 resentative or symbol of money. It is sometimes called token 
 money. "We call it money, and it passes from hand to hand as 
 money, because it will buy our wants just as much as gold and 
 silver. Let us illustrate its use. The Carthagenians had a 
 leather money made in this way : They took any object, either 
 of wood or metal, the size of the coin which they proposed to 
 represent, enclosed it in a little leather sack or bag, and stamped 
 the leather with the great seal of the state. The object inside 
 of the leather might be a real piece of gold or silver, or it 
 might be a bit of iron or copper. No one could tell. On the 
 outside, however, it was stamped as though it contained a coin 
 of a specific denomination. This leather money circulated 
 from hand to hand as readily as the real money so long as the 
 people had confidence in the state. 
 
 Promises to Pay. If you take out your purse now and 
 examine your paper money, you find that most of it con- 
 sists of promises to pay. The national bank notes are prom- 
 ises to pay, (1,) by the banks which issue them, (2,) the num-
 
 THE MONEY OF TffE NATION. 191 
 
 her of dollars expressed upon their face, (3,) upon demand. 
 In the case of " greenbacks," you find that they are promises 
 to pay on the part of the government. Promises to pay what ? 
 They are promises to pay money, the real money which they 
 represent. On the treasury notes there is a promise by the 
 government to pay the bearer so many dollars in coin. If you 
 happen to have a silver certificate, you will find that to be 
 more truly a representative of money, than any of the other 
 bills. The certificate represents so many dollars in coin on 
 deposit in the Treasury at Washington, and the holder of it is 
 entitled to go there at any time, present the certificate and get 
 the coin money. 
 
 The Element of Confidence. We naturally want to know 
 how it comes that this paper money, which is not money at all, 
 but merely a promise to pay money, comes to circulate as 
 money. In the first place it is because we have confidence in 
 the government. We believe that the government will keep 
 its promises to pay. In other words, the money is redeemable 
 in coin. In the case of the national bank notes we find, more- 
 over, on the face of the note a statement that the payment of 
 the note is secured by United States bonds deposited with the 
 Treasurer of the United States. We have confidence that the 
 government will make each bank keep on deposit sufficient 
 bonds to redeem its various notes which have been issued and 
 put in circulation. When we get a note of this kind we do not 
 take it to the bank where it is payable, as we would a promissory 
 note of an individual, for payment, but we pass it over to a 
 creditor, and so it passes on from hand to hand as long as peo- 
 ple are satisfied that the real money would be forthcoming if 
 the bills were presented. If doubt arises whether the promise 
 to pay will be kept, then people are loth to take the paper 
 money. If they do take it, they take it at a discount sufficient 
 to offset the risk of its beiug paid. When this occurs paper 
 money is said to be at a discount, and coin at a premium. 
 
 The Creation of Government. The fact that paper 
 money answers all the purposes of money, frequently leads 
 people to believe that money is the creation of government, 
 and that the government can make as much money as it desires
 
 1 92 D ESC RIP TI VE ECONOMICS. 
 
 and put it in circulation. It is a common and popular error. 
 The fact is the government can not create money any more 
 than it can create corn and potatoes. Suppose Congress should 
 enact a law like this : ' ' It is hereby enacted that there shall be 
 5,000 bushels of corn for the uses of government and of the 
 people," would that produce the corn ? No. If the govern- 
 ment wants corn it must raise it by hiring laborers and tilling 
 land, just as a farmer must raise it. Government can order 
 that gold and silver shall be fashioned into pieces of specific 
 weight and fineness and of specific proportions, arid it can, if 
 it chooses, issue paper promises to pay, representing this real 
 money. That, however, is the extent of its power. The 
 answer to the fallacy is a repetition of what has already been 
 said, to wit : the value of money, the value of a gold dollar, is 
 determined just as we determine the value of a pair of boots, 
 or of a bushel of potatoes it is worth the labor expended in 
 its production. The government may say how many pounds 
 shall constitute -a bushel of potatoes. It may say how many 
 grains of gold or silver shall go into a dollar. It cannot create 
 the value of these grains of gold and silver. In the early days 
 of California, gold dust was the common form of money. 
 Every merchant had a pair of scales and weighed out for his 
 customers the requisite gold dust in payment of purchases. 
 Government saves us the trouble of weighing. It coins the 
 gold dust into ingots of certain weight and fineness. The 
 Government stamp is simply a guaranty of the weight and 
 purity of each piece. The stamp adds nothing to the worth of 
 the piece. 
 
 Advantages of Paper Money. Paper money is of great 
 convenience in commercial transactions. It is lighter than 
 coin. A man can carry more in his pocket. The precious 
 metals are subject to wear by use. They lose in weight and 
 that is a permanent loss. Paper money can be sent by mail or 
 transported by express more cheaply than the precious metals. 
 To do business without paper money would be like trying to 
 do business without the instruments of credit like checks and 
 bills of exchange. 
 
 Disadvantages and Dangers of Paper Money. The
 
 THE MONEY OF THE NATION. 193 
 
 precious metals are actually worth in other commodities what 
 it costs to produce them. Two dollars can always be exchanged 
 for an umbrella which has cost two dollars worth of labor, but 
 a two-dollar bill does- not by any means constitute two dollars' 
 worth of labor. The plate having once been made, thousands of 
 dollars can be printed off at the cost of operating the printing 
 press, until the issue is many times greater than the cost of the 
 labor from beginning to end. The danger, is, therefore, that 
 too much will be printed. It can be made so cheaply that gov- 
 ernment is sometimes induced to lend a willing ear to the popu- 
 lar cry for "cheap" money. The result is inflation. The paper 
 money falls below par. It passes from hand to hand only at a 
 discount and can not be exchanged on even terms for real 
 money. Citizens lose faith in it, and it soon drives out the real 
 money. Foreigners will not take it because it is not at par 
 with the precious metals, and foreign commerce soon feels the 
 result. It drives out the precious metals because creditors in 
 paying their debts will always pick out the cheapest money to 
 pay with, provided debtors can be made, or are compelled by 
 law, to receive it. In Persia once, there was a law that whoever 
 refused to receive the paper money of the country was punish- 
 able with death. In other words, the government printed the 
 paper and forced it into circulation. It was a "forced loan." 
 When wampum was current money in New England, a cheap 
 grade of poor workmanship appeared. Wampum coinage was 
 debased. Massachusetts Bay Colony had to enact a law estab- 
 lishing the grade and fixing the value of the different grades. 
 When the Connecticut farmers could, according to law, pay 
 their taxes in cows, they always picked out the poorest of the 
 herd and the legislature had to enact a law that no "lank kine 
 should be received for taxes." These things illustrate Gres- 
 ham's law which is stated a little farther on. 
 
 The "Volume of the Currency. Having admitted that 
 paper money is a good thing and that it facilitates commerce, 
 we must admit that its use is proper. The question then 
 arises, however, how much of it should be printed and issued? 
 How much will circulate, and how great an issue should the 
 government authorize ? It is a more difficult question even 
 13
 
 194 DESCRIPTIVE ECONOMICS. 
 
 than the question relating to the volume of money needed by 
 a nation. The question is : How much paper money can be 
 safely printed ? These answers have been proposed : 
 
 (1) Not more than can be redeemed in coin at any time on 
 demand. Eedeemable paper money is good. Irredeemable 
 paper money is bad and brings disaster. 
 
 (2) The amount which can be printed may depend some- 
 what on the amount of the government revenues. Laws au- 
 thorizing the issue of paper money frequently provide that it 
 shall be good in payment of government dues, and such pay- 
 ment is as good as though made in coin. The greater the 
 gross revenues of government, therefore, the greater the 
 amount of paper money which can be kept in circulation. 
 
 (3) The amount which can be printed will depend always on 
 the amount of the reserve coin which is kept ready to redeem 
 the paper. This involves the element of confidence which we 
 have already discussed. Paper money will circulate in propor- 
 tion as the people have confidence in its redemption upon 
 demand. 
 
 (4) Finally, to repeat substantially what was said under the 
 discussion of a nation's need of money, no more paper money 
 can be safely printed than the country has use for, considering 
 the state of foreign and domestic commerce. Whatever 
 amount is required to facilitate exchanges, large and small, and 
 will be absorbed in trade, may be safely printed. 
 
 Fluctuation of the Currency. When too much paper 
 money is printed, more than will circulate without discount 
 and more than is wanted, it is inflation of the currency. The 
 volume is arbitrarily and unnaturally inflated. Contraction is 
 the opposite of inflation. In the case of contraction of the 
 currency, there is too little to meet the demands of trade. In 
 practice, the terms inflation and contraction are applied to 
 the arbitrary action of the government in issuing or with- 
 drawing paper money from circulation. Both are equally bad. 
 The economics of a nation can not be suddenly changed in 
 this direction. Economic habits are not formed by arbitrary 
 laws. They grow. When a people have become accustomed 
 to transacting their affairs in certain channels and upon a cer-
 
 THE MONEY OF THE NATION. 195 
 
 tain basis, a sudden change is apt to be disastrous. "When for 
 years a bushel of wheat has been worth about a dollar, and 
 subject to rise and fall in price only as the crop is large or 
 small, the* over-issue or inflation of the currency, making 
 wheat worth two dollars a bushel, disturbs the economic life. 
 Neither the buyers nor sellers can suddenly adapt themselves to 
 the change. Moreover, under our present system of credit 
 economy, obligations and debts are contracted to be paid at 
 future times. Inflation and contraction disturbs the nature of 
 these obligations. Creditors demand that a debt to be paid 
 them in three months shall be paid in money that will buy as 
 much wheat as at the time the debt is contracted. They must 
 know that bonds, mortgages and promissory notes will be of 
 the same exchangeable value at maturity as at the time they 
 are received. 
 
 Convertible Bank Notes. The paper money thus far re- 
 ferred to is that known as convertible. It is convertible into 
 coin. It is "redeemable," because it must be redeemed in coin 
 upon demand by the holder. It represents coin, and we call 
 it the representative of money. Token money is the phrase 
 sometimes used. It can be converted into coin at the plea- 
 sure of the holder, that is, on demand. In order that it 
 may be perfectly clear that bank notes are not money, let 
 us illustrate further. You have a house and lot. It has 
 value in exchange. You can exchange it for other commodi- 
 ties, for flour, for horses, for stocks. But you have also a 
 deed of the house and lot. You cannot exchange the deed for 
 other commodities. In exchange for provisions, it is worth no 
 more than the paper upon which it is written, unless it carries 
 the house and lot with it. It is the house and lot which has 
 value, not the deed. A story is told of an Irish banker who 
 was very unpopular with the people. A riotous mob gathered 
 together all of the bank notes issued by his bank which could 
 be secured. The mob thought it a fine time to ruin the banker. 
 A bonfire was made and the bank notes went up in smoke. 
 The people danced gleefully about the fire, because, in their 
 minds, it betokened the banker's ruin. Instead of ruining him, 
 they were doing him the greatest possible service. They de-
 
 196 "DESCRIPTIVE ECONOMICS. 
 
 stroyed not his money, but his promises to pay. They put it 
 out of the power of the holders of his bank notes to demand 
 money from him. 
 
 The one Function of Paper Money. Paper money per- 
 forms only one function of money. It acts as a medium of 
 exchange, and that is all. It is not a measure of value, or a 
 standard of value, or a store of value. It performs only one 
 of the four functions of money. 
 
 Inconvertible Paper Money. A distinction is to be drawn 
 between the convertible paper money which we have been study- 
 ing, and another class of paper money which is inconvertible. 
 That is, it is not convertible into coin, nor does any one promise 
 to redeem it in coin. Convertible paper money may be issued 
 by bankers or by government. The term "bank note" is fre- 
 quently applied indiscriminately, to both bank money and 
 government money. It is a loose way of speaking. Bank notes 
 are paper money issued by banks. Paper money issued by 
 government is composed of government notes. We must make 
 the distinction now in order to distinguish convertible and in- 
 convertible money. Inconvertible money is issued by govern- 
 ment only. It would not be possible for bankers to get into 
 circulation their individual notes, which are not promises to 
 pay money on demand. Governments can do this to a limited 
 extent. Even the government can not get the people to take 
 and use as money, more than a very limited quantity of its prom- 
 ises to pay which name no day of payment, and do not promise 
 to pay money. They can not be collected by suit at law, and 
 are payable simply at the will of government. Such currency 
 is usually issued only under the stress of war, or to meet sudden 
 financial embarassments, when the ordinary revenues are in- 
 sufficient and money can not be raised quickly enough by the 
 usual methods. Inconvertible notes are debts contracted on 
 the understanding that they are to be settled when the nation's 
 finances will permit. Confidence that the government will at 
 some time pay its debts, is the only basis for their value. When 
 that confidence is lacking they will not circulate at all. Incon- 
 vertible notes are " pure credit" money. 
 
 Who Should Issue Paper Money. There are two sides to
 
 THE MONEY OF T11K XAT1OX. 197 
 
 this question. On one hand it is claimed that only the govern- 
 ment should issue paper money. On tlie other hand it is said 
 that private bankers should be allowed to issue it subject to the 
 control and regulation of government. It was just said that 
 government only can issue inconvertible notes. In the United 
 States both government and the national banks issue converti- 
 ble notes. The banks are subject to the control of government, 
 however, and are regulated, so far as their right to issue money 
 goes, by national laws. The government is, to a certain extent, 
 sponsor for their notes, by compelling them to buy government 
 bonds to secure the notes which they issue. Everyone agrees 
 that whoever may issue paper money, it should be issued so as to 
 best secure its redemption. It is argued that government, of 
 the kind existing in the United States, is not best calculated to 
 to secure the redemption of paper money for several reasons : 
 (1), government policy is likely to be dictated by party politics; 
 (2), the government can not be compelled to pay its debts, be- 
 cause it can not be sued; (3), government policy is likely to be 
 changed from time to time as various political parties prevail. 
 The change in the financial policy of the government which has 
 taken place while this book is in preparation (April 1893), 
 illustrates the force of the last argument. 
 
 For many years it has been the policy of previous adminis- 
 trations to keep in the treasury of the United States, a certain 
 amount of gold as a reserve for the redemption and security of 
 the outstanding paper money. This policy has been changed 
 and the gold reserve is treated. as so much cash in the treasury 
 with which to pay all demands whether upon notes or other- 
 wise. For these various reasons it has been urged that private 
 bankers alone should be authorized to issue paper money sub- 
 ject to government control. 
 
 Convertible Notes Self-Regulating. In the early part of 
 this chapter it was stated that the volume of a nation's money 
 is self-regulating. That is to say, the amount in circulation 
 will depend upon the demands of trade, and a country will 
 naturally have as much money as it has use for. If there is a 
 deficiency, the demand thus created will be supplied from other 
 countries. The same thing is true of convertible paper money.
 
 198 DESCRIPTIVE ECONOMICS. 
 
 Its issue is self-regulating. No more will circulate than is 
 wanted, and no more than is for the interests of government or 
 the banks to issue. If more is issued than is needed or wanted, 
 the people who do not want it, will take it to the banks or the 
 treasury and exchange it for coin. Neither the government nor 
 the banks would be benefited therefore by the overissue. The 
 term "inflation" is frequently applied to the overissue of any 
 kind of paper money. It should properly be used only in con- 
 nection with the overissue of inconvertible paper money. It 
 does not pertain to the overissue of convertible paper money, 
 because that can not be overissued. No law or power can force 
 into circulation more paper money than is wanted so long as 
 that money is redeemable in gold. Governments cannot do it, 
 nor can the banks do it. 
 
 Inconvertible Notes not Self-Regulating. With incon- 
 vertible paper money the case is different. Inconvertible notes 
 once issued stay issued. When the issue becomes greater than 
 is wanted, the holders can not take the notes and exchange them 
 for money. Each issue is cumulative, like lead poisoning. 
 Paper money of this kind must therefore be kept well within 
 the requirements of trade. Overissue of it constitutes genuine 
 inflation, and the moment the proper limit is overreached it 
 begins to depreciate. With every overissue the whole volume 
 loses its purchasing power. 
 
 The Silver Question. So far throughout this chapter, 
 little distinction has been made between gold and silver as 
 money. Both have been referred to as possessing the natural 
 qualities fitting them to perform all the functions of money. 
 Both are designated as precious metals. Both are coined and 
 governments determine the ratio of value between them. The 
 time has now come, however, when we must discuss their 
 relations. It is the "silver question" which has for many 
 years been a problem, both political and economic, in the 
 United States. The question may have seemed somewhat per- 
 plexing. That is no reason, however, why we should give it 
 up. The whole matter is very simple when once a few leading 
 principles of money coinage are clearly understood. We must 
 commence right, however, and not shut our eyes to good
 
 THE MONEY OF TtiE NATION. 199 
 
 economics. The air of perplexity which hangs around the 
 question has frequently been fostered by the specious argu- 
 ments, on the one hand, of people who have stock in gold 
 mines or who have debts owing them and want to advance the 
 interest of gold as money, and on the other hand, of people 
 who have stock in silver mines and would like to see silver go 
 higher, which is the result the more it is used as money. 
 
 Bi-metallism, means the use of both gold and silver for the 
 purposes of money and as a standard of value. Monometallism 
 consists of using only one of the metals as a standard of value. 
 If the two metals were of equal value, that is, if they were 
 equally distributed throughout the world and the cost of min- 
 ing them was the same, the question would be solved for us. 
 Silver is more widely distributed than gold. It not only 
 occurs more frequently, but where it does occur, it is fre- 
 quently found in larger deposits. More of it is mined than 
 of gold. The cost of mining it is less than the cost of mining 
 gold. It is necessary, therefore, for government to fix a ratio 
 of value between silver and gold, if both are to be used as 
 money. Government does not create the value of either of 
 them. It simply determines how many grains shall constitute 
 a dollar, just as it determines how many pounds of wheat shall 
 make a bushel. Bi-metallism is also known as the double 
 standard, because it involves the use of the two metals as a 
 standard of value. Monometallism is the single standard. 
 
 Fixing the Ratio. Before going any deeper into the 
 subject, let us see if we understand what is meant by " ratio," 
 as applied to gold and silver coinage. For the sake of illustra- 
 tion, we will suppose that a nation decides to have a unit of 
 coinage to be called a dollar, the standard to be monometallic 
 with gold as a basis. It determines how many grains of gold 
 shall constitute that dollar. It may fix upon any number of 
 grains at random. If it decides that ten grains shall be the 
 amount, then the gold dollar will exchange in the market for 
 ten grains worth of corn or potatoes or labor. If it is deter- 
 mined that the dollar shall contain one hundred grains of gold, 
 then it will buy ten times as much corn or potatoes. We will 
 suppose the government finally decides that 25.8 grains, 9-10
 
 200 DESCRIPTIVE ECONOMICS. 
 
 fine, shall be the amount to go into a dollar. Now it becomes 
 necessary to say how many grains of silver shall constitute a 
 dollar. It is a little more than that, however. The real 
 question to be determined is, how many grains of silver shall 
 be equal to 25.8 grains of gold, both being of equal fineness? 
 After much calculation suppose it appears that 412^- grains of 
 silver are just as valuable as 25.8 grains of gold. In other 
 words, either will exchange for the same quantity of other 
 commodities, the fineness being the same. The government 
 directs that 412^- grains of silver shall make a dollar, and shall 
 be equal to a gold dollar, and thus the ratio is established. 
 The coinage of the United States has been in these proportions 
 for many years. The silver dollar, coined as above, is what is 
 known as " the dollar of our fathers." 
 
 Fluctuating Ratio. It is one thing, however, for govern- 
 ment to establish a ratio value between the two metals and 
 quite another thing to maintain it. Fluctuation in the values 
 of the metals might be expected. The value of wheat fluctuates 
 from year to year, in proportion as the aggregate crop of the 
 world is greater or less than the normal. There have been 
 periodical fluctuations in the relative values of gold and silver, 
 owing to differences in the several quantities produced. There 
 are eras of silver production, when silver has been mined in 
 extraordinarily large quantities. Again there have been 
 periods when the quantity of silver mined has fallen off and 
 the production of gold has increased. These periods seem to 
 follow each other, and it is seldom that great gold production 
 has coincided with great silver production. In 1794 the 
 Federal Congress provided for the coinage of a silver dollar to 
 contain 416 grains of coin silver. This is equal to 371.25 
 grains of pure silver. It had solved the easy part of the 
 problem by arbitrarily fixing upon the number of grains of 
 silver to be put into the dollar. It then came to the hard part 
 of the problem, that is, to find how much gold should be equal 
 to 416 grains of silver, the fineness being the same. The 
 wisest financiers were employed. It was finally reported to 
 Congress that gold was worth about fifteen times as much as 
 silver, and Congress therefore established a gold dollar contain-
 
 THE MONET OF THE NATION. 201 
 
 ing one-fifteenth as many grains of pure gold as the silver con- 
 tained grains of pure silver. This caused the gold dollar to 
 contain 24.75 grains of pure gold. In other words, Congress 
 determined that 24. 75 grains of pure gold should be equal to 
 416 grains of pure silver. It was soon discovered, however^ 
 that a mistake had been made. It was supposed that Congress 
 had made the mistake, but as a matter of fact, the relative 
 value of the two metals changed and it came to pass that the 
 silver dollar was not worth as much as the gold-dollar. In 1834 
 Congress tried to remedy the matter by putting only 23.2 
 grains of pure gold into the dollar. This made the ratio 1 to 
 16. It did not help matters much, because in a short time the 
 gold dollar was found to be worth less than the silver dollar. 
 The foregoing facts with reference to United States coinage are 
 stated upon the authority of Graham Macadam, and his excel- 
 lent treatise, An Alphabet of Finance, is recommended as a 
 source of additional information. 
 
 The European Ratio. France was one of the first nations 
 to fix the European ratio between gold and silver. In 1803 a 
 law was enacted in that country declaring that every debtor 
 should have the right to pay his obligations in gold coins, or in 
 silver coins containing 15| times the quantity of silver. The 
 ratio was fixed at 15-J- to 1. Spain, Italy, Switzerland and Bel- 
 gium afterwards agreed upon the same ratio, and they joined 
 with France to form the Latin Monetary Union. The nations 
 composing the union entered into a compact to maintain the 
 ratio between gold and silver at 15^ to 1. For about seventy 
 years this ratio was maintained by the combined action of these 
 countries, and it has come to be known as the European ratio. 
 It is also referred to as the customary ratio. The ratio of 16 to 
 1 is known as the United States ratio. 
 
 Fineness in Coinage. Coins in daily use are subject to 
 abrasion. They should have the highest possible wearing 
 quality. It is found that an alloy will answer this and other 
 requirements of coinage better than the pure metal. It is usu- 
 al, therefore, to combine some copper with the fine gold and 
 silver. The gold and silver coins of France, Germany, Spain, 
 Italy, Belgium, the United States and of nearly all the modern
 
 202 DESCRIPTIVE ECONOMICS. 
 
 nations contain one part of copper to nine parts of pure gold or 
 silver. A coin nine-tenths fine, therefore, or one which con- 
 tains nine parts of pure metal and one of copper, is of the 
 standard fineness. 
 
 Effect of Difference in Values. There is a well known 
 monetary law, known as Gresham's law, because it was formu- 
 lated by Sir Thomas Gresham about three centuries ago. As 
 applied to money circulation it reads thus: "A superior and an 
 inferior money cannot circulate together. The inferior will 
 drive out the superior." Bearing this in mind, let us observe 
 the effect when the ratio which has been established by govern- 
 ment is disturbed by the rise or fall of either of the metals. 
 As long as the parity is maintained, the coins of the two 
 metals circulate indiscriminately and there is an equilibrium 
 of coinage. But suppose there comes a period of extraordinary 
 activity in silver mining when extraordinarily large quantities 
 of silver are put upon the market. The price of silver, relative 
 to gold, falls, and the ratio is broken. The silver dollar is no 
 longer worth as much as the gold dollar. Every debtor, how- 
 ever, prefers to pay his obligations in the cheapest money, in 
 coins of the cheaper metal, and so silver drives gold out. We 
 can apply here the illustration which was given in the earlier 
 part of the chapter, of the Connecticut tax payers paying taxes 
 in "lank kine." Gold is either melted or sent abroad to buy 
 foreign commodities. When silver rises above gold, then gold 
 becomes the medium of payment. The dollar of the lower 
 value is always the money in circulation, and hence, the 
 practical standard of value. Advocates of bi-metallism or of 
 the double standard, profess to find in the fluctuation between 
 the relative values of the metals, an argument in favor of their 
 theory. They say, that if both metals are used as money in the 
 shape of a double standard, although both are liable to fluctua- 
 tions in value, yet if either may be offered in liquidation of 
 debts, the one will always be chosen which is the lower in 
 value, with the result of correcting the difference. In other 
 words: "With every fluctuation in the relative values of the 
 metals, the function of money falls upon the lower metal, the
 
 THE MONEY OF THE NATION. 203 
 
 other metal flying away; but if a lower metal -comes in 
 greater demand, it must rise in value, hence the tendency is to 
 a continual return to the balance." The aim of this argument 
 is to show'that bi-metallism is self-regulating. 
 
 Free Coinage. Bi-metallism involves something more 
 than the mere setting up of a double standard. It means that 
 the nation employing it must coin all the gold and silver 
 which anybody desires to have coined. The mints of the 
 nation must be open to all owners of gold and silver bullion. 
 They are entitled to have it coined at the ratio fixed by govern- 
 ment. This is free coinage. Those who oppose bi-metallism 
 claim that the free coinage system is not practicable unless 
 adopted by all nations, because the countries which do not 
 adopt it will send their silver where coinage is free and take 
 away gold instead. 
 
 International Bi-metallism. Those who maintain that 
 bi-metallism can be successfully and permanently introduced, 
 have been gradually increasing in number for some years past. 
 They are still in a minority, however. Mono-metallism, with 
 gold as the basis, such as has been practiced in the United 
 States and Germany, is the favorite system. If, however, the 
 United States, together with the principal nations of Europe, 
 could agree upon a bi-metallic system, and thus inaugurate in- 
 ternational bi-metallism, there are indications that it would be 
 successful. The necessity of coining the silver of other 
 countries, and the consequent loss of gold, which is the bugbear 
 of free coinage, would not then exist. 
 
 The Functions of a Bank. There is a .common-place 
 error which sets a bank down as an institution for receiving 
 the money of the people and storing it in vaults for safe keep- 
 ing. If such were the case there would be no banks, because 
 no bank could live if it kept the money of its depositors lying 
 idle in its vaults. There are safe deposit companies which 
 have vaults for the safe-keeping of money and valuables, but 
 the owner has to pay for all the privileges he gets there. A 
 bank must loan out its deposits and keep the money in 
 circulation, and, therefore, the "strongest" bank in the world 
 would fail, if all its depositors demanded their money at the 
 same time.
 
 204 DESCRIPTIVE ECONOMICS. 
 
 Saving's Banks, so popular in the United States, are not 
 known in many countries. A savings bank may receive deposits 
 of money for safe keeping, but not with the intention of storing 
 them. The depositor receives interest upon his deposit. If 
 the bank puts the deposit away in a vault, how can it afford to 
 pay interest? It receives the deposit only to loan it out again 
 at a higher rate of interest than it pays the depositor. It pro- 
 ceeds on this theory and it expects that the average depositor 
 will allow his deposit to remain for a certain length of time be- 
 fore calling for it. It can safely loan out a large proportion 
 of its deposits relying upon this expectation. When there are 
 a large numbers of depositors the bank will at all times have a 
 large amount of money in its keeping waiting to be called for. 
 While savings banks are corporations, regulated and chartered 
 under State laws, in their relations to depositors, they are 
 theoretically nothing more than firms or individuals receiving 
 money in trust and for safe keeping, to be returned on demand. 
 Their control by the State creates the confidence in their ability 
 to repay, which private individuals could not command. The 
 first London bankers were private individuals performing the 
 functions of savings banks. In those times law and order 
 were not universally prevalent. Thieving and armed robbery 
 were common. The Lombard street merchants were mostly 
 jewelers who had strongly fortified places of business and 
 maintained armed guards. People who had no such places of 
 security were wont to take their valuables there for safe keep- 
 ing. The goldsmiths gave receipts for the property deposited, 
 whether of money or valuables. These receipts finally became 
 negotiable by endorsement. They were the forerunner of the 
 bank note of our day. 
 
 Banks of Deposit, or discount banks, as they are some- 
 times called, are distinguished from savings banks chiefly by 
 the fact that they allow no interest on general deposits subject 
 to check. They are called discount banks because they buy or 
 discount commercial paper, a proceeding which savings banks 
 are not usually allowed to do, by law. These banks receive very 
 little money. Instead of money, they receive checks, promis- 
 sory notes, bills of exchange and warehouse receipts. They re-
 
 THE MONEY OF THE NATION. 205 
 
 ceive evidences of debt, titles to money, and claims upon other 
 banks and other people. Sir John Lubbock, who was con- 
 nected with a London bank, made a computation of the 
 amount of money and of the amount of commercial paper 
 actually paid into the bank during a given time. He found 
 that out of a total sum of nineteen million pounds, paid into 
 the bank, only one-half of one per cent, was in coin, and there 
 was only three per cent, of coin and bank notes together. 
 Ninety-seven per cent, was composed of checks, bills and 
 various forms of commercial paper. The function of the bank 
 is not simply the collection of this paper by presenting it to 
 the debtor, receiving the money and returning it to the 
 creditor. A bank is not a collector. In fact, banks do not 
 care to receive money. They prefer to receive good com- 
 mercial paper, because experience tells them that the money 
 due from them, upon the paper, will not be called for by their 
 customers for some time. Until it is called for they may loan 
 it to others for a consideration in the shape of interest. They 
 do not know how long any particular customer will leave his 
 account with them, but experience has demonstrated the gen- 
 eral average, and therefore they know the percentage of 
 deposits which they can safely loan. A large portion of the busi- 
 ness of a modern bank and a most profitable part of the business, 
 is the discounting of promissory notes. A customer of the 
 bank receives from a debtor a promissory note payable in three 
 months, we will say. The customer has immediate use for the 
 amount of the note. He takes it to his bank where the amount 
 of the note is placed to his credit, or paid to him, less a certain 
 percentage which is agreed upon as discount. The bank 
 makes by the transaction, the amount of this discount. In 
 this way it has loaned the money of its depositors. 
 
 The Clearing House. In the course of a day's business a 
 bank receives many checks and drafts on the various other banks 
 in the same city, and upon other banks in different parts of the 
 country. It pays to its customers or credits them with the 
 amounts of these checks and drafts. It is bound to present 
 them at the place of payment and get the money due on them. 
 There was a time when it would send a messenger or officer,
 
 206 DESCRIPTIVE ECONOMICS. 
 
 daily, to each of the other banks in the city with its checks and 
 drafts for collection. In the smaller towns that practice may 
 still be followed. The larger cities have a clearing house. It 
 is an institution under the management of all the banks of the 
 city all having a voice in the choice of manager. A room is 
 secured for the common business, and each bank has a repre- 
 sentative there. The representative receives from his bank all 
 the paper which has come in during the previous business 
 day. He presents to the representatives of the other banks the 
 checks which he holds against them. To illustrate, the Bank 
 of Columbia has checks and drafts aggregating $10,000 against 
 the Empire Bank; but the Empire Bank has checks and drafts 
 against the Bank of Columbia aggregating $9,000. The 
 Empire Bank, therefore, owes ttte Bank of Columbia $1,000. 
 The Bank of Columbia receives a ticket from the clearing 
 house manager certifying to this fact. This ticket may be 
 passed into the assets of the Bank of Columbia as so much 
 cash, or it may be paid in cash by the Empire Bank. Without 
 the aid of the clearing house it would have been necessary for 
 an officer of the Empire Bank to go to the Bank of Columbia 
 and draw $9,000. An officer of the Bank of Columbia must 
 have gone to the Empire Bank to get $10,000. By using 
 the clearing house, the difference of $1,000, only, is handled in 
 cash. The clearing house then is simply an institution by 
 which the banks adjust the accounts between themselves. 
 They pay each other merely the difference of their accounts, 
 and thus avoid the labor of handling the actual amounts to 
 which they are entitled from each other.
 
 PART V. 
 
 INTEKNATIONAL ECONOMICS. 
 
 CHAPTEK I. 
 INTERNATIONAL COMMERCE. 
 
 Introductory. It is now the formative period of Interna- 
 tional Economics. The statement previously made, that much 
 economic knowledge remains to be made definite and certain, 
 applies with peculiar force to the department of international 
 economics. The nations of the earth, are slowly feeling the 
 way to a world economy, concerning which something may 
 subsequently be said. Before it can be reached, some differ- 
 entiation of the national economy will be required. It might 
 be profitable to speculate as to the forms which this differen- 
 tiation may assume, but we are dealing with descriptive eco- 
 nomics, and therefore, will pass on to the statement of the best 
 known and more important facts of international economics 
 those which we know relate to international economy, although 
 the precise relationship may yet be undetermined, owing to the 
 undeveloped condition of this branch of economic science. 
 
 Commerce between Nations, is the foremost subject of 
 international economics. The word commerce, in this connec- 
 tion, is used as conveying not only the usual and ordinary mean- 
 ing, (1) the interchange of goods and productions, by barter or 
 sale and purchase, but also (2) international intercourse and 
 dealings. We first take up the subject as expressed in the first 
 meaning, that is, the international exchange of goods. The 
 subjects connected with the second meaning, will then be dis- 
 cussed. International trade, is not merely the foremost subject 
 
 207
 
 208 D ESC RIP TI VE ECONOMICS. 
 
 of international economics, it is one of the important subjects 
 connected with all economic discussion. As Professor Gide 
 says: "There is no subject in political economy, hardly, per- 
 haps, in any sphere, which has stirred up more controversies, 
 caused the writing of more volumes, nay, even occasioned the 
 firing of more cannon balls." 
 
 The Evolution of Commerce. The steps in the develop- 
 ment of commerce, have been stated from time to time during 
 the progress of the work. The chapter entitled " The Trader," 
 contains in particular, an outline of the growth of commerce. 
 It commences with the barter, by the economic family, of a 
 surplus arising from good fortune in the chase, and extends 
 through barter in ornaments to the exchange of raw products 
 between villages. In the city stage of economics, it first as- 
 sumes the character of a stated interchange of products, both in 
 the raw and manufactured state, and a surplus is then sought to 
 be created for the purposes of the interchange. Barter breaks 
 up into sale and purchase. Commerce is intcrmunicipal, how- 
 ever. The city is the market. In the present economic stage, 
 the market is: 
 
 A World Market. The demand of the whole world fixes 
 the supply and the price. The farmer grows wheat for the world 
 market; the shoe manufacturer makes shoes for the world mar- 
 ket, not for the market of Lynn or Rochester; the merchant 
 buys and sells in the world market. There is no customary 
 price. The members of modern industrial society produce but 
 one or two things for the market. Frequently, they produce 
 only one part of a number of parts which are afterwards put 
 together to make the complete article. The parts representing 
 the labor of many different men, manufactured frequently in 
 distant portions of the world, are brought together, adapted 
 and connected to make up a whole. A great shoe factory, means 
 some hundreds of families engaged in producing a single neces- 
 sary want. It frequently happens also, that the making of shoes, 
 is the chief industry of a town. Other towns are devoted to 
 iron manufactures, and others to woolen or cotton goods. The 
 townspeople seldom use their own manufactures. Their shoes 
 and their clothing are made elsewhere. The distribution is
 
 INTERNATIONAL COMMERCE. 209 
 
 affected by that factor of industrial society, called commerce. 
 Commerce takes the shoes from Brockton and Lynn and from the 
 great shoe towns where they are manufactured, and where there 
 is a surplus of shoes, and distributes them throughout the 
 country, among cities and towns and hamlets, where they are 
 not made, and among foreign peoples. It takes back to the 
 shoe towns, leather from the tanneries, and wheat and beef 
 from the agricultural districts, which it exchanges for shoes. 
 It exchanges some of the shoes for raw hides, which it gets from 
 the tanneries. Its agents are the merchants, the railroad, the 
 ship, the telegraph, and the banks. 
 
 The Control of Trade. Economic discussion bearing upon 
 international commerce, relates mainly to the regulation and 
 control of such commerce. The historical evolution of com- 
 mercial regulations, therefore, is the proper beginning of the 
 discussion. While some of the steps in the development have 
 been mentioned from time to time, there has been no attempt 
 to state them connectedly. They may be briefly summarized 
 as follows: 
 
 I. Family Control of Trade. We commence with the earliest 
 stage of economics, that relating to the economics of the family. 
 Property is owned and enjoyed collectively, and each economic 
 family, as a unit, jealously regulates the interchange of com- 
 modities with other families. The economic family, as we have 
 seen, includes the nomadic horde or tribe. It is the domestic 
 group irrespective of number. In the part devoted to the eco- 
 nomics of the family, the regulation of interfamily commerce 
 was illustrated by reference to the custom of the Nubians, 
 according to which, when one tribe prepares to trade with 
 another, the lines are drawn up in battle array, and the inter- 
 change is affected between the lines, by individuals selected for 
 that purpose. Among monarchic tribes, the control is exer- 
 cised by the chief, primarily for his personal benefit, and second- 
 arily for the benefit of his tribe. J. G. Wood, in his Uncivil- 
 ized Races of Men, makes a statement regarding certain customs 
 existing among the Ahts of Vancouver's island, which illus- 
 trates the formalities attending tribal intercourse. His state- 
 ment is this: "Many disputes arise between tribes, on the 
 14
 
 210 'DESCRIPTIVE ECONOMICS. 
 
 finding of dead whales, near the indefinite boundaries of the 
 tribal territories. If the quarrel is serious, all intercourse ceases, 
 trade is forbidden, and war is threatened. By and by, when 
 the loss of trade is felt, negotiation is tried. An envoy is 
 selected, who is of high rank in his own tribe, and if possible, 
 connected with the other tribe, by marriage. He is usually a 
 quiet man, of fluent speech. Wearing white eagle feathers in his 
 head dress, as a mark of peace, he departs in a small canoe. 
 Only one female attendant, generally an old slave, accompanies 
 him, to assist in paddling, as the natives never risk two men on 
 such occasions. The envoy's return, is anxiously awaited. As 
 a general rule, the first proposition is rejected. Objections, 
 references and counter-proposals frequently make three or four 
 embassies necessary, before the question can be settled." 
 
 2. Village Control of Trade. When the village community 
 stage is reached, there are signs of stated interchange of com- 
 modities between villages. Many villages begin to produce a 
 surplus, and by degrees they learn to exchange the surplus with 
 other villages. But it is common property, in case of the prim- 
 ative villages, and the entire community, through its civil or- 
 ganization, controls and regulates the exchanges. There are 
 some evidences going to prove that among certain village com- 
 munities of the East, there was a communal officer, chosen at 
 birth, who had absolute authority in the matter of regulating 
 inter-village trade. The economic rivalry which culminates in 
 the stage of the municipal economy, begins to show itself and 
 villages regulate commerce in an endeavor to obtain advantage 
 over rival villages. Each community levies toll and taxes upon 
 the members of other communities, desiring to engage in trade, 
 to the end that the community, as a unit, may receive what- 
 ever benefit lies in inter-village commerce. 
 
 3. City Control of Trade, has been stated at length in the 
 chapter entitled "The Trader." Community of property has 
 long since disappeared and private ownership, at least of per- 
 sonal property, has taken its place. Inter-municipal commerce 
 is not regulated because the citizens have a common interest in 
 the commodities of exchange, but for the purpose of enhance- 
 ing the value and benefits of citizenship. Economic rivalry
 
 INTERNATIONAL COMMERCE. 211. 
 
 between cities is intense. The one absorbing purpose of each 
 city is to obtain economic supremacy and directly and indirectly 
 further the fortunes of the citizen class. 
 
 The Balance of Trade. In a preceding part of the 
 chapter the statement was made that the manufacturers of a 
 shoe town pay for the leather which they bring into the town 
 by the shoes which they ship out. All the raw products used 
 in the process of shoe manufacture and the food and clothing 
 of those engaged in the industry must be paid for by exchang- 
 ing shoes. Exportation and importation, in connection with 
 the industrial activity of the town, is constantly going on. 
 Manufactured goods are being exported and raw products and 
 necessary subsistence for the inhabitants are being imported. 
 The balance of trade is the difference between the exports and 
 the imports. If the town exports more than it imports, the 
 balance of trade is in its favor. If it imports more than it ex- 
 ports, the balance of trade is against it. 
 
 The Balance of International Trade. In the same way, 
 nations are exporting and importing. They are exporting those 
 classes of manufactures and of agricultural products of which 
 they have a surplus, and importing those classes of which they 
 have a deficiency. They pay for their imports with their ex- 
 ports. It is really a process of barter. Exports are exchanged 
 for imports. Europe does not ship to the United States the 
 cash to pay for our wheat. She offsets our account by the 
 price of the textile fabrics and other things which we get of 
 her. If we export more than we import, then the balance of 
 trade is said to be in our favor. We have a favorable balance 
 of trade, in which case Europe would be obliged to ship money 
 to us to pay this balance. The balance of trade theory began 
 with the prosperity of Venice and Genoa. For many years 
 afterwards there was a struggle among European nations to 
 acquire a favorable balance of trade. It gave rise to a school 
 of economists known as the mercantilists. In the opinion of 
 the mercantilists the one thing which would assure the 
 material welfare of a nation was a favorable balance of trade. 
 They believed that if a nation exported more goods than it im- 
 ported, and the difference came back in gold or silver, and thus
 
 212 DESCRIPTIVE ECONOMICS. 
 
 increased the supply of money, the nation couldn't help being 
 prosperous. They reasoned that the possession of money is 
 the first condition of wealth, and the nation which has 
 the most of it must be the wealthiest. They urged that 
 each nation should strive by every honorable means to obtain 
 the money of other nations by creating a favorable balance of 
 trade. Under the stimulus of these doctrines commerce was 
 unduly magnified. It came to be fostered at the expense of 
 agriculture and manufactures. This theory of the mercantilists, 
 modified to. suit the growth of economic thought, has come to 
 be known as the balance of trade theory. 
 
 The Theory Opposed. The proposition, that if a nation's 
 imports exceed its exports it will be poorer to the amount of 
 the difference and after a time the loss of money will be felt, 
 looks reasonable on its face. The balance of trade theory, 
 therefore, has never lacked for advocates since it originated. 
 It is lost to sight now and then, but only temporarily. It is 
 soon revived and there is a constant tendency to go back to it 
 as a foundation for argument relating to the expediency of 
 international trade regulations. There are those, however, 
 who deny the truth of the premises upon which the balance 
 of trade theory is based. They do not accept its conclusions 
 either. It assumes, they say, that the welfare of a nation 
 depends upon the amount of money which it has ; that if 
 nations keep money flowing toward them by keeping the balance 
 of trade in their favor they are certain to be prosperous. They 
 oppose it because it does not found national welfare upon the 
 volume of trade and industry or upon the number of people 
 who are profitably employed, but solely upon the possession of 
 money. They hold that no conclusion whatever can be drawn 
 as to national wealth or poverty from the mere fact of a favor- 
 able or unfavorable balance of trade. It is claimed that the 
 unsoundness of the theory is illustrated by the fact that many 
 countries, at various times, for periods of considerable duration, 
 have had unfavorable balances of trade and yet to all appear- 
 ance have been a prosperous and contented people. Germany, 
 France, England and Belgium, are shown to have prospered 
 during periods when balance of trade has been against them.
 
 INTERNATIONAL COMMERCE. 213 
 
 It is argued that because prosperity accompanies a favorable 
 balance of trade, it is no proof that the favorable balance 
 creates the prosperity. It is further argued that in interna- 
 tional trade, both sides better their condition, irrespective of 
 the balance of trade. 
 
 Regulation of International Commerce. The very fact 
 that this theory of the balance of trade exists, is a partial ex- 
 planation, at least, of governmental regulation of international 
 trade. It is a good excuse also for such regulation, for if a 
 favorable balance of trade has anything to do with national 
 wealth and prosperity, why shouldn't international trade be 
 regulated so as to create, to the greatest possible extent, a 
 balance of trade in favor of the nation enacting the regulations? 
 An original motive for the enactment of international trade 
 regulations then, was to secure a favorable balance of trade. 
 Another motive was to procure a national revenue. These are 
 the motives impelling action in modern times. Among the 
 nations of antiquity and among Asiatic nations until recently, 
 there was still a third motive. It was the prevention of inter- 
 national communication. In their eyes all foreigners were 
 barbarians, and the less they had to do with them the better. 
 
 The Form of the Regulations. In modern times the 
 regulation of international commerce is chiefly affected by 
 tariff or customs laws. They are laws imposing a tax upon 
 international exports or imports. Their effect is. to compel a 
 merchant desiring to ship goods abroad or bring them into the 
 country from abroad, as the case may be, to pay a tax upon 
 them at the port of shipment or entry. 
 
 Two Kinds of Tariffs. Tariff regulations may be divided 
 into two main classes, corresponding to the two purposes for 
 which they are mainly levied in modern times. Their purposes, 
 as already appears, are to create a source of government revenue 
 or to advance the industrial welfare of the nation. Tariff 
 regulations which are designed to procure revenue are Kevenue 
 Tariffs. Tariffs having the other object in view are Protective 
 Tariffs. The latter nomenclature arises from the fact that 
 protective tariffs are designed to protect home production and 
 home industries against foreign competition arising from the
 
 214 DESCRIPTIVE ECONOMICS. 
 
 importation of foreign goods. The abolition of all trade regu- 
 lations whatever, is free trade. A policy between a tariff for 
 revenue only and a protective tariff, is frequently advocated 
 and sometimes put into practice. It involves the imposition of 
 such taxes as will secure the desired government revenue and 
 at the same time protect home manufacturing industries. It 
 involves, therefore, the imposition of taxes on certain classes 
 of imports only. The imports which are free, according to 
 this half-way policy, consist mainly of raw products of other 
 countries upon which the labor of our own people can be ex- 
 pended. It is claimed that home manufacturing industries 
 are thus stimulated and home labor finds employment. Tariff 
 for revenue only is the present policy of England. Taxes are 
 imposed upon imports, luxuries mainly, solely with the view of 
 procuring a revenue for the support of the government. Tariff 
 for protection has been the policy of the United States for many 
 years. The amount of the tax imposed has fluctuated how- 
 ever, as different political parties or party leaders have con- 
 trolled the government. There have been times when the 
 duties imposed have been so low as to produce only necessary 
 government revenues. At other times they have been so high 
 as to absolutely prohibit importation of foreign goods except 
 at a loss to the importer. 
 
 Free Trade and Protection. Descriptive economics is 
 not concerned with the advocacy of theories. Its object is 
 rather to describe all theories which have appreciably affected 
 economic history. It is not interested, therefore, in seeking to 
 know whether free trade or protection is the correct theory. 
 It prefers to state the arguments for protection side by side 
 with the arguments for free trade. No inference is drawn, as 
 to the relative weight of the several arguments, from the order 
 in which they are stated. One protectionist might claim a 
 superiority in favor of some one argument over all others, while 
 another protectionist would give that argument an inferior 
 place. 
 
 Arguments for Free Trade. We will state first some 
 of the leading arguments advanced by those who advocate un- 
 restricted international commerce. When they are examined
 
 INTERNATIONAL COMMERCE. 215 
 
 it is seen that the number of those arguments which are 
 independent of each other and are of a primary nature, are 
 very limited. The same observation will apply to the pro- 
 tectionists' arguments. They dove-tail together and depend 
 upon each other. Most of them grow out of a few fundamental 
 propositions. For convenience of reference we will number 
 them, bearing in mind that the order in which they are stated 
 is not intended to indicate priority. 
 
 1. Advantages of Market. If foreign trade is unrestricted 
 t we can sell our surplus productions in the highest market, and 
 
 provide for our deficiencies in the lowest market. If foreign 
 products can be sold to us more cheaply than home products, 
 but by artificial means, like the tariff, they are kept out of 
 market, then the restriction compels us to pay an artificial 
 price. For instance, we can raise beef on our western prairies 
 more cheaply than the English farmers can produce their beef 
 supply. "We ought, therefore, to be allowed to take our beef 
 to England, and if England can make iron cheaper than we 
 can make it, we should be allowed to exchange our beef there 
 for iron and bring back the iron for use at home. We are, 
 therefore, prevented from selling in the dearest market and 
 purchasing in the cheapest, and one of the results is to make 
 our own home products dearer. 
 
 2. Procuring Exotic Products. If international trade is free 
 and unrestricted, every nation by making the proper exchanges 
 can obtain those commodities not natural to its climate, or 
 which could not be produced except at great cost. In modern 
 times various products have come into demand in every nation, 
 and have become necessities of daily Iife 3 which are non- 
 indigenous, and cannot be produced there, except at a cost far 
 in excess of the cost of production abroad. 
 
 3. The Greatest Good to the Greatest Number. The artificial 
 price which results from placing a protective tariff upon im- 
 ported goods, gives an extra profit, to be sure, to those who are 
 engaged in producing or manufacturing those goods at home. 
 That extra profit, however, is distributed among a few persons 
 only. Industrial society as a whole gets comparatively little 
 benefit from it. It is not a compensation for the increased
 
 216 DESCRIPTIVE ECONOMICS. 
 
 price which the mass of people have to pay. Further, if we 
 have to pay more for imported necessities, having only so much 
 income to spend, we can buy less home goods. For this reason 
 protective duties become scarcity duties. 
 
 4. Protection is Robbery. It violates the natural law of sup- 
 ply and demand. It infringes upon the right of each one to 
 buy and sell where he chooses. 
 
 5. Ultimate Injury to Home Industry. If there were no 
 protective tariff, manufacturers engaged in protected indus- 
 tries would employ their capital in other industries, which are* 
 naturally of such a character as to be profitably carried on at 
 home. Home capital would be thus employed in carrying on 
 the natural industries of the country, and the products thus 
 obtained could be exchanged for the products which can be 
 made more cheaply in other countries. Both sides would then 
 be benefited, and it would be better for each nation to engage 
 in the production of those things which its natural resources 
 enable it to produce at the least cost. 
 
 6. Limitations upon Exports. If imports are limited by the 
 protective tariff, in the end, exports will also be limited, and 
 will be limited to an equal extent. This must be the fact be- 
 cause countries to which we export cannot continue to pay us 
 interminably, unless we import from them. Some time or 
 other it would come to pass, that we must stop exporting be- 
 cause there would be no foreign market for our surplus. 
 
 7. Increase of Industry not Real. Hinderance to importa- 
 tion of foreign commodities does not produce any real increase 
 of industrial activity. It does not give room for greater invest- 
 ment of capital, or furnish a greater outline for labor. It 
 results simply in a change in the direction of application. It 
 does not follow that because a nation consumes less of foreign 
 commodities by reason of protective tariffs, that the difference 
 is produced at home. 
 
 8. Assisting Some and Injuring Others. A protective policy 
 affords an opportunity for special legislation. Special interests 
 get control of legislation, and tariff laws become class laws. 
 One industry is protected, while another is not. Protection to 
 one industry always injures some other industry. It is difficult,
 
 INTERNATIONAL COMMERCE. 21? 
 
 if not impossible, to frame tariffs so as to bear equally on all 
 industries, on all manufacturing industries, as well as upon 
 agricultural and commercial industries. Protectionism comes 
 to foster monopolies, and enables gigantic combinations to 
 control industrial enterprises. 
 
 9. The Benefit to the Working Man. If protection effects 
 any amelioration of the condition of the employe class, it is 
 only temporary at the least. If foreign industry is decreased by 
 reason of protective tariffs, foreign labor soon seeks our shores. 
 If an artificial price, imposed by a protective tariff, increases 
 home production and causes more wages to be paid out, it is a 
 relative payment only, and not an absolute payment. That is 
 to say, wages at home may be relatively higher, but not 
 absolutely higher. If it is desired to protect home labor, a tax 
 should be put upon the importation of labor, so as to make labor 
 dear, and then foreign commodities should be imported for 
 subsistence. Moreover, while the wages of laboring men may 
 appear to be higher at home than abroad, indirectly he is 
 assessed to pay the increased price imposed by the tariff. The 
 laboring man is a tax payer as well as the capitalist. The 
 heaviest tax payer is he whose income bears the closest relation 
 to the necessities of life. 
 
 10. Protectionism and Patriotism. Protectionism is not 
 necessary in order to create patriotism. International com- 
 munication has never been so far reaching, and international 
 commerce never so widespread, as in modern times. There has 
 been no loss of patriotism, however. Nationalism has rather 
 assumed higher and more pronounced forms. 
 
 11. Survival of Medievalism. Protectionism is a survival of 
 the economy of the middle ages, when the gilds and the 
 gild system exercised a despotic power over industry. It 
 is applying to international commerce the medieval restrict- 
 ions and regulations which were applied to domestic and inter- 
 municipal commerce. This argument is illustrated by the 
 curious regulations of trade which existed in the city of London 
 in the early part of the 14th century. It is related that one 
 Thomas Lespicer of Portsmouth, brought to London six pots 
 of eels. Instead of standing with them in the open market for
 
 218 DESCRIPTIVE ECONOMICS. 
 
 four days, which by law he was bound to do, he took them 
 secretly to the house of a fishmonger, secreted them there for 
 two days and afterwards sold them without bringing them to 
 the open market. Thomas confessed his guilt and took oath 
 that henceforth he would always sell eels at the proper place, 
 and the fishmonger likewise confessed his guilt, and took oath 
 that he would always tell strangers where they ought to take 
 their eels. Later on, Londoners were glad to know that the 
 king ordered that aliens as well as denizens might freely buy 
 and sell "to what person it should please them." 
 
 12. Abandoning Protection. If protection is a temporary 
 expedient for the promotion of young industries in new 
 countries, who is to say when it shall be abolished? How shall 
 it be decided when the time is come that certain industries 
 shall be surrendered " to all the wind, rain and sunshine of 
 free competition?" 
 
 13. Protection and the Industrial Stage of Economics. 
 Finally it is argued that in any event protection cannot be 
 favorable to a country, unless it has entered upon the industrial 
 stage of economics. All the factors of national economic life 
 must first be brought into action. Domestic commerce must 
 have reached its full development. Manufacturing industry, 
 mining and agriculture must have first come to work in unison, 
 and the division of employments must have become fully 
 developed. 
 
 Arguments for Protection. An analysis of the foregoing 
 free trade arguments, shows that some of them are devoted to 
 denials of the claims of the protectionists. They are not 
 strictly arguments, and many of them are not worthy of being 
 called arguments. The same observations apply to the argu- 
 ments for protection which follow. They are worth bearing in 
 mind, however, because they form a part of current tariff dis- 
 cussion and need to be stated if only to expose their sophistry. 
 
 1. Foreign Capital Brought in. The imposition of pro- 
 tective duties produces a change in the direction of the invest- 
 ment of capital, and likewise a change in the application of 
 labor. Home industry is increased, and foreign industry de- 
 creased to a like extent. "When foreign factories are closed.
 
 INTERNATIONAL COMMERCE. 219 
 
 and workers are idle there, there must be just so many more 
 factories in operation at home, and so many more workers busy. 
 One man's gain must be some other- man's loss. Labor is 
 benefited, wages are increased, and amelioration and prosperity 
 ensues. Moreover, the capital which would be profitably em- 
 ployed in foreign countries must find investment in our own 
 country, and furnish so much more employment here. Within 
 the last few years, much English capital has been invested in 
 the United States. Syndicates, as they are called, have been 
 formed of English capitalists, and great American industrial 
 concerns have been transferred to the syndicates. 
 
 2. Infant Industries. Economic growth, from the lower to 
 the higher stages, may be rendered difficult if unrestricted 
 competition with foreign industry, already developed, is allowed. 
 New industries will be stimulated by restricting foreign impor- 
 tation, and efforts will be made to produce those things which 
 will satisfy the highest economic wants. The natural resources 
 of a new country will thus be developed. New incentives and 
 impulses will be spread. If there is no protection in a new 
 country, industrial talent will be undervalued and forced to 
 emigrate. Younger nations will be compelled to act as agri- 
 cultural districts, while other nations are as cities and the 
 centers of industrial activity. For the purpose of establishing 
 and developing new industries protection may be merely a 
 temporary matter, and after they are established, it may be 
 abolished. 
 
 3. Protection and Nationalism. The protective system 
 develops political independence as well as economic inde- 
 pendence. It is productive of nationalism and patriotism, 
 while free trade promotes cosmopolitanism. Patriotism and 
 love of country are prime requisites of national welfare, and 
 whatever will bind a people together should be encouraged. 
 Protectionism will bind them together, because it separates 
 them from the other nations and makes the various parts of 
 the country economically dependent. It is the duty of the 
 state as well as the individual "to provide for his own, 
 especially them that are of his own house." 
 
 4. Military Necessities. "In time of peace prepare for war."
 
 220 DESCRIPTIVE ECONOMICS. 
 
 Each nation should so regulate its economic affairs that in case 
 of war it will not be crippled by being cut off from a base of 
 supplies. 
 
 5. A Social Leaven. Protective tariffs tend to do away 
 with distinctions between economic classes. Such distinctions 
 are more pronounced among people living in an agricultural 
 condition, or among a people whose industry is mainly directed 
 to the production of raw materials. In those conditions a 
 landed aristocracy usually prevails. By shutting out foreign 
 manufactures, home manufactures must take their place, and 
 the artisan class 3 always a great factor in national economy, 
 assumes a prominent place. Thus protection exalts the artisan 
 class at the expense of the landed class, and leavens society. 
 
 6. Protection in History. The nations of antiquity gave 
 little thought to the protection of industry. It is an historical 
 fact that their industries were invariably insignificant, and 
 were confined to the handling of raw products. 
 
 7. Protection is not Robbery. The so-called right of man to 
 buy and sell in any market, does not exist. The individual 
 must surrender his individual rights to the state for the com- 
 mon welfare. Individualism must give way to nationalism, 
 and individual economic life must be subservient to the 
 economic life of the nation. The whole state must be con- 
 sidered a unit, as to economic questions which affect the entire 
 population. The state ought to do what is best for the whole 
 people, and if restriction of foreign commerce will best 
 subserve the nation as a whole, individual rights must be 
 surrendered. 
 
 8. Equilibrium of the Three Industries. Free trade creates 
 an undue development of commerce and manufactures at the 
 expense of agriculture. It prevents the three industries from 
 assuming a due balance. Varied industry is the foundation of 
 modern national welfare. It is neglected under the free trade 
 policy. The country which becomes as a vast city and the rest 
 of the world an agricultural country, taking its surplus to the 
 city in exchange for the city manufactures and luxuries, 
 assumes an economic one-sidedness. England has boasted that 
 under her free trade system she would become as such a city,
 
 INTERNATIONAL COMMERCE. 221 
 
 with other nations, like agricultural districts dependent upon 
 her. It is argued that while she may have become such, it has 
 been at the expense of severe agricultural depression. Her 
 farmers are in a most forlorn state. 
 
 The Solution of the Question. It is plain that both 
 sides cannot be right. Many of these arguments are diametri- 
 cally opposed to each other. If some are true, others are 
 false. Both sides deal freely with statistics to prove the truth 
 of their arguments. In such cases statistics are usually mis- 
 leading. No inference can ordinarily be founded upon them. 
 Doubtless circumstances of time, place and physical limitations 
 must be taken into account in applying either the free trade or 
 protective system. The true solution may depend upon some 
 of these circumstances: 
 
 a. The Stage of Economic Growth. Protection may be a 
 good thing at one stage of national economic development, 
 and free trade at another. 
 
 b. Physical Environment. The climate, soil and diversity 
 of natural resources must doubtless be taken into account. It 
 would be folly for a nation to restrict the importation of com- 
 modities which it cannot produce at home. 
 
 c. Territorial and Physical Geography. A nation extending 
 over many degrees of latitude, with diverse climates and diverse 
 agricultural resources, is in a far different condition to talk 
 about free trade or protection, from that of a nation possessing 
 a limited territory with a uniformity of climate and natural 
 productions. Internal waterways and means of internal com- 
 munication, as well as extent of seacoast and possession of 
 numerous harbors will also be taken into account. 
 
 d. The Proximity of Neighboring Nations will also have a 
 bearing upon the commercial policy of a nation. England 
 enjoys a pre-eminent situation for international trade. The 
 extent of her sea coast and the number of her harbors compare 
 favorably with extent of territory. Why should not these 
 things be taken into account in determining what her policy 
 should be, and why should not a nation devoid of these advan- 
 tages, take that fact into account? 
 
 Economic Progress. Closer international communication
 
 222 
 
 would seem to be in harmony with the progress of industrial 
 society. There appears to have been a gradual evolution of 
 industrial society, commencing with the barbarous, isolated 
 family as an economic unit, through the village community 
 and then the city to the nation. With each advancing step 
 intercourse has been closer. Mutual co-operation between the 
 units has increased. To restrict international commerce and 
 thus indirectly restrict international intercourse would appear 
 to be like throwing a stumbling block in the way of the 
 further development of industrial society. 
 
 Importance of the Subject Overestimated. The ques- 
 tion of restricting or regulating international commerce, has 
 been given undue importance as compared with other economic 
 questions. Its importance has been overestimated by reason 
 of the political cast which has been given to its discussion. 
 Having been made a purely political question instead of an 
 economic question, its debate has been heated and rancorous, 
 rather than reasonable and decorous. If more attention were 
 paid to questions relating to the development of internal com- 
 merce; to the installation of means for domestic transporta- 
 tion, more good would be done. It is pointed out that by 
 international commerce, only one side is benefited. With 
 domestic commerce, both sides to the transaction are benefited. 
 There is greater rapidity of circulation in the case of domestic 
 commerce. Capital is turned quicker. It is said that twelve 
 exchanges can be made at home for one abroad.
 
 INTERNATIONAL ECONOMIC PROBLEMS. 223 
 
 CHAPTER II. 
 INTERNATIONAL ECONOMIC PROBLEMS. 
 
 International Migration. In the United States this is 
 frequently considered a serious economic problem. When Mal- 
 thusianism was a generally accepted theory, nations worried 
 about too great a population. In modern times, however, and 
 among the western nations, the more worry has been about a 
 decrease or too slow an increase of population. Population 
 frequently fails to increase so as to keep pace with economic 
 progress. Nations have reason to rejoice over a rapid in- 
 crease of population provided they can show a commensurate 
 economic growth. Various modes have been adopted for pro- 
 moting the increase of population. In France, Colbert agreed 
 that whoever married before his twentieth year should be ex- 
 empt from taxation until his twenty-fifth, and he who had ten 
 children, all living, should be exempt from taxation for all 
 time. America has always called for immigrants. There has 
 always been room for mature men, especially men from thickly 
 peopled and highly civilized countries. Such men can pro- 
 mote the industries of the country of their adoption. The 
 problem therefore, does not concern the mere coming of immi- 
 grants, but the character of the immigrants and their assimi- 
 lation. If they bring no capital whatever with them, they are of 
 no advantage, unless they are good and able workmen. 
 If they have clear heads or able bodies, they are sure to do 
 their part in developing the economy of the nation. Either 
 intelligence or physical strength will constitute capital enough 
 to make them welcome additions. On the other hand, if they 
 come without any worldly goods and their minds have assumed 
 that state of weakness and dependence which characterizes 
 chronic pauperism, and which unfits its possessor for self help, 
 they are unwelcome citizens. Mere lack of worldly goods is 
 to be distinguished from the pauper condition. Other things
 
 224 DESCRIPTIVE ECONOMICS. 
 
 being equal, persons who have from time to time received pub- 
 lic aid, or for long periods have been associated in families 
 having pauper dependencies, are liable to become and remain 
 chronic paupers. They assume the pauper state or condition. 
 The burden of supporting them falls upon all members of the 
 community, and industrial activity must be vigorous in pro- 
 portion to the number of the pauper class. The second class 
 of unwelcome immigrants is the criminal class. It is not the 
 criminal by passion, or the insane criminal, which is to be 
 feared as the result of unlimited immigration, but rather the 
 " born " criminal. He is sometimes called the congenital or 
 instinctive criminal. He possesses a vicious state of mind, due 
 either to hereditary influences, or long association with vice 
 and crime. In some cases it is due to both. The international 
 migration problem relates to the exclusion of these unwelcome 
 classes, and the promotion of migration on the part of the 
 other classes. Statisticians claim that, in recent years, the 
 growth of pauperism and crime has been at a standstill in 
 Europe, and has increased in the United States. 
 
 Chinese Exclusion, is not inaugurated to keep out the un- 
 welcome classes which have been specified. The one real 
 argument against Chinese immigrants has been their failure to 
 become naturalized, or to become American citizens. Back 
 of this, however, is the fact that the politics as well as the 
 economics of the Orient are so different from our own, that it 
 is difficult if not impossible for the eastern people to adapt 
 themselves to our economic conditions or become an integral 
 part of our body politic. It is certainly not possible in the 
 case of large numbers in a brief period of time. The change 
 means something like the passing of a people from the 
 economic stage of the village to the economic stage of the 
 nation. It cannot be a sudden change, but must be a growth 
 involving the lapse of long periods of time. 
 
 International Health. International migration and com- 
 munication have become so constant and assumed such vast 
 proportions as to cause the preservation of the public health 
 to become an international economic problem. All the modern 
 nations have instituted systems of public sanitation. In 
 Europe there are three systems. There is first:
 
 INTERNATIONAL ECONOMIC PROBLEMS. 225 
 
 1. Tlie French System. Under this system public hygiene is 
 directed by Councils of Public Health. These councils have 
 purely consultative powers. Executive authority is entrusted 
 to a chief health officer, or a Prefect, who is ex-officio 
 President of the Council. Over all there is a National Coun- 
 cil, having particular charge of quarantines. The French 
 system prevails in France, Italy, Belgium and Spain. 
 
 2. The English System is regulated by a comprehensive 
 scheme of sanitary legislation. The system was inaugurated 
 by the acts looking to the regulation of sewerage in the reigns 
 of Henry VIII. and Elizabeth. Later on public sanitation 
 fell into disuse and the United Kingdom assumed such an un- 
 sanitary state that the cholera killed seventy thousand in one 
 year. In 1848 health laws were enacted for the drainage of 
 marshes, streets and houses, and for preventing the contamina- 
 tion of rivers and streams. Aqueducts and sewers were estab- 
 lished. Under the English system the execution of the health 
 laws is entrusted to a General Board of Health for each munic- 
 ipality. In minor instances, however, it is vested in Poor 
 Boards. 
 
 3. T7ie German System, which is the third in vogue, com- 
 prises a series of bureaus. There is first, a District Health 
 Physician; then of a higher grade the official Guardian of the 
 Public Health. Above that officer is the Court Physician, 
 charged with attendance on the poor. A little higher is the 
 Medical College, having provincial authority. At the head of 
 the system is a Superior Committee. Holland, Russia, Sweden 
 and Denmark have at various times followed Germany in the 
 use of this system. 
 
 In the United States, the several states have from time to time 
 enacted sanitary legislation. A fair sample of this state legislation 
 is that of New York, which provides a Town Board of Health in 
 each town, and a Municipal Board of Health for each city. A 
 State Board of Health has general supervision and powers. The 
 statutes grant autocratic powers to these various boards. They 
 can abate and summarily remove anything which is detrimental 
 to the public health, whether it be a sewer or cess-pool, a slaughter 
 house or a stagnant pond. There is also a National Board of 
 15
 
 226 DESCRIPTIVE ECONOMICS. 
 
 Health. That board, however, having but little authority 
 within the precincts of a state, is largely of an advisory nature. 
 It has exclusive jurisdiction only upon United States property. 
 
 Necessity of Centralization. The time will come, doubt- 
 less, when the states will have to surrender some authority to a 
 national body. While each state may be able to cope with a 
 disease arising within its own borders, some more centralized 
 authority is necessary to restrict epidemics assuming national 
 proportions. Intercommunication between the several states 
 is such that a wider and more centralized authority will be de- 
 manded. The conflict of authority which arose at New York 
 during the threatened cholera invasion of the summer of 1892, 
 showed the weakness of a health system, or in that case a 
 quarantine system, under the local direction of the states. 
 Legislation designed to inaugurate a national quarantine system 
 will, in time, overcome these defects. 
 
 International Health Boards. International commerce 
 and travel is so far reaching that diseases are liable to assume 
 an international character, and to meet the condition of things 
 national boards of health must be empowered to inaugurate 
 and maintain international sanitary regulations and quaran- 
 tines. For centuries cholera has been endemic in parts of 
 Asia. The meager facilities for its communication westward 
 have prevented its becoming epidemic in America, except at 
 rare intervals. When communication with India, for instance, 
 was by sailing vessels, around the Cape of Good Hope, the 
 chances for the introduction of the disease into Europe were 
 slight. The opening of the Suez canal, accompanied by con- 
 stant and quick steam communication with cholera ports, 
 has infinitely magnified the opportunities for cholera epidem- 
 ics in the West. General increase of intercommunication has 
 followed the increase of transportation facilities between all 
 parts of Asia and all parts of Europe and America. Commerce 
 can not stop for fear of contagion. It must go on. The 
 nations of the world will need to agree upon a system of quar- 
 antine and by friendly co-operation inaugurate measures pre- 
 ventive of international epidemics. 
 
 International Money. Each nation having its own coin-
 
 INTERNATIONAL ECONOMIC PROBLEMS. 227 
 
 age and monetary system, a multiplicity of moneys results. It 
 becomes a source of inconvenience in international commerce. 
 It deters intercommunication. Much has been done to bring 
 about an international, or more properly, a universal system of 
 coinage. A beginning was made in Europe by the Latin 
 Monetary Union, formed early in the century, composed of 
 France, Spain, Italy and Belgium, and which existed for 
 seventy years. The recent international monetary conference 
 of Brussels, afforded some evidence of international monetary 
 growth. The primary purpose of that conference was to con- 
 sider by what means, if any, the use of silver could be increased 
 in the currency systems of the nations of the world. So far, 
 international effort has been mainly directed toward the for- 
 mation of international agreements regarding the use of gold 
 and silver as money. If the great nations of the world could 
 adopt a universal system of coinage by agreeing upon a 
 standard of purity of the metals, and by entering into an 
 agreement concerning the relative use and coinage of gold and 
 silver, the first great step would have been taken towards an 
 international money. A greater achievement would be the 
 coinage of a few gold pieces, by authority of the United States 
 and the principal nations of Europe. These would constitute 
 a universal circulation. They could be easily followed by the 
 adoption of an international bank note. It would be of a 
 universal type and have a universal purchasing power. . It 
 would have currency in all countries. If the great commercial 
 nations of the world could reach that stage of economics where- 
 in authority could be conferred upon an international body to 
 issue such notes upon the separate and binding pledge of each 
 nation for their redemption, those notes would soon have cur- 
 rency, even among nations which did not officially recognize 
 them. Their commercial use would compel a demand for 
 them, in spite even of the active resistance of a few lesser 
 nations. The disadvantages arising when the currency of one 
 country has no circulating power in another, are quite evident. 
 The currency of one country accumulating in another, must 
 be remitted; transportation must be paid for; insurance 
 premiums must be paid. The foreign bill of exchange is the
 
 228 DESCRIPTIVE ECONOMICS. 
 
 primitive international bank note. For centuries it has acted 
 in the settlement of balances of international trade, and en- 
 abled merchants to avoid the necessity of transportating coin. 
 Give it the sanction of international agreement and inter- 
 national pledge of redemption and it becomes paper money 
 instead of money paper.
 
 A WOULD ECONOMY 229 
 
 CHAPTER III. 
 A WORLD ECONOMY. 
 
 The Preparations for it. The attempts which hare been 
 made to solve the problems referred to in the last chapter, are 
 preparations for a world economy. There are other prepara- 
 tions which may be referred to more by way of suggestion, 
 than as accomplished facts. The various national economics 
 are now the units of economics. The economic life of the 
 people of the United States under its independent political 
 organization furnishes a national economy. It is the same 
 with the economic life of the people organized into other 
 political units. These various national economics do not 
 by any means make up a world economy. It is our pleasure, 
 however, to observe how they are growing into a unity. We 
 may profitably do so, even though we cannot say that they will 
 ever attain that unity. 
 
 The study began with The Economics of the Family. That 
 is the title of the first part of the work. That part concerns 
 the economic life and material welfare of the family as an 
 economic unit. Passing on to the other parts of the book, 
 economic progress is seen to have been from the isolated effort 
 of one family getting a living by itself producing all its wants 
 by the labor of its own members, bound together by the social 
 ties of the family hearth, or more frequently by the family 
 camp-fire, through the isolated village, economically independ- 
 ent of every other village, and then through the city, to the 
 nation. The nation represents many families, villages and 
 cities, mutually co-operating. Getting a living appears to be 
 easier with each advancing stage. Isolation has ceased and co- 
 operation and economic dependence have taken its place. This 
 very economic evolution is, in itself, a great preparation for a 
 still higher form of economic activity. What shall it be? It 
 may be first the economic co-operation of several nations like
 
 230 DESCRTPTirE ECONOMICS. 
 
 an economic union of the Americas, of Europe, or the nations of 
 Asia, and through such as these a world economy. A few 
 specific instances of preparation for a world economy and of 
 changes which such an economy necessitates, may be singled out 
 and mentioned in the succeeding paragraphs. 
 
 International Investments. The time has come when 
 English money is no longer wholly invested in England. 
 Dutch capital is not confined to Holland, nor German capital 
 to Germany. American stocks are quoted in all the great 
 foreign exchanges as habitually as home stocks. Dutch bond- 
 holders control railways in the United States as well as 
 railways in Africa. English syndicates control some of the 
 greatest manufacturing interests of the United States. American 
 capital is building railways in Mexico and in the countries of 
 South America. It is no longer the home market for home 
 money. The world is the field for the investment of capital 
 and for the capitalization of industrial enterprises. Indeed, it 
 is frequently the case that a foreign investment presents greater 
 allurements to the capitalist than a home investment of the 
 same character. The distant corners of the earth, where the 
 greatest returns can be had, is where money is sent. The 
 stocks representing these international investments, having a 
 market quotation at national monetary centers, are fast tend- 
 ing to take the place of gold in settling balances between 
 nations. As mediums for the settlement of differences of ex- 
 change, the stocks have the advantage of gold, because their 
 ownership can be transferred by cablegram, and time and 
 space are annihilated. 
 
 International Labor Organizations. The international 
 organization of labor may not yet have advanced equally with 
 the international organization of capital. Such organization, 
 however, following past economic growth will tend to follow 
 hard after the organization of capital, even to treading upon 
 its heels. In the United States there are many national labor 
 organizations, such as those of the miners, the iron workers, 
 the cigar makers, and railway employes. These instances are 
 not selected because they represent the highest type of national 
 organization, but as illustrations simply. These national
 
 A WORLD ECONOMY. 231 
 
 organizations are reaching out to affiliate with European 
 organizations. 
 
 In Europe, international organization has advanced a step 
 higher. The International Congress of Miners first met at 
 Jolimont, Belgium, in 1890. Its second convention was in 
 Paris in 1891. At Westminister in 1892, delegates were pres- 
 ent from Germany, Belgium, France, . Austro-Hungary, 
 England, Scotland and Wales. They claimed to speak for 
 nine million miners, and the congress placed its objects on 
 record as follows: " To bring together the mining nationalities 
 of the world; to limit the hours of under-ground labor to 
 eight; to obtain legislation for the proper supervision and in- 
 spection of mines, including some inspectors to be elected by 
 the miners themselves." As these lines are written (April, 
 1893), a congress of international workers is called to meet at 
 Zurich in May, 1893. The tendency to international co- 
 operation is a crucial distinction between the gild system of 
 the middle ages and the labor organization system of modern 
 times. There was little union or co-operation among the gilds. 
 Each gild was for itself and under the control of the industry 
 of the town. 
 
 International organization of capital will compel and beget 
 international organization of labor, but there is another reason 
 for larger labor organization. It is the world market of the 
 day. More extended reference will be made to this under the 
 head of International Transportation, following. In this con- 
 nection, however, its influence upon labor requires a word or 
 two of illustration. There was a time when the Eastern 
 States furnished the market for eastern mined coal. As long 
 as that state of affairs continued, a miners' organization em- 
 bracing the territory included in the market, answered the 
 purposes of the men fairly well. But that condition of things 
 has passed. The Eastern States are no longer the market for 
 eastern mined coal. The Eastern, Middle and Western States 
 are so closely and intimately connected by great trunk rail- 
 ways, that no mine can be said to possess a local market. The 
 whole country is the coal market for all the coal. To render 
 organization effective, the miners have found that there must
 
 232 DESCRIPTIVE ECONOMICS. 
 
 be national organization. Whatever good has resulted from 
 the payment of wages based on a sliding scale, has come out of 
 national organization. It would be of no possible use for the 
 ironworkers of Pennsylvania to enter into an agreement with 
 their employers for the payment of wages based on the selling 
 price of iron, so long as their iron must compete in the market 
 with the iron of all the other States, unless wages were paid 
 elsewhere on the same basis. The employers, too, have found 
 that a universal wage system based on a sliding scale according 
 to the selling price of iron, has been not without benefit to 
 themselves. In the memorable iron panic of 1880, the selling 
 price of iron fell fifty per cent, within the period of four weeks. 
 According to the scale in force throughout the country, the 
 wages of ironworkers every where fell fifty percent, accordingly. 
 There was little or no trouble or clash between employe and 
 employer. In no other way could the employers have reduced 
 the wages of their employes fifty per cent, within that period, 
 so as to meet the corresponding fall in the selling price of iron, 
 without precipitating conflicts. 
 
 International Transportation. Perhaps a more express- 
 ive headline would be " The World Market." Before trying to 
 tell what it is, let us see how it has sh6wn itself. The hop 
 market of the east is not regulated by the hop crop of New 
 York; nor is the hop market of the west fixed by the crop of 
 Oregon or Washington. The crop of every section of every 
 state has something to do with fixing the price of hops for the 
 American continent, but it is only a factor after all. The crop 
 of England or Germany has just as much to do with the mak- 
 ing of the price. The crop of every section of every country of 
 the earth governs the price of hops. The same thing is true 
 with all agricultural products. It is true also as to all staple 
 manufactures. The combined product of the world regulates 
 the market, and the world is the market of every farmer and 
 of every manufacturer. Dakota wheat is mixed in Liverpool bins 
 with Eussian and Indian wheat. Ohio mutton hangs side by side, 
 in London stalls, with frozen mutton from Australia. Adam 
 Smith told the English farmers, not long ago, that they never 
 need fear competition in the production of a commodity like
 
 A WORLD ECONOMY. 233 
 
 beef, because of the difficulty of transportation. The beef 
 production of England has, now, hardly anything to do with 
 fixing the price of beef there. The introduction and use of 
 great refrigerator compartments in ships has truly made the 
 whole world the market for the beef of every farmer. 
 
 The evolution of transportation is responsible for this state 
 of affairs. Fast lines of steamships bring all parts of the globe 
 into communication. They have facilities for transporting all 
 products. The Suez canal went a long way toward furthering 
 the world economy. A Nicaragua canal may some time do 
 even more. Railroad building in Africa points toward con- 
 necting the Indian ocean with the Atlantic. The great trans- 
 Siberian railroad will connect Europe with the Pacific. The 
 inhabitants of the Western portion of the United States 
 may soon find it more speedy or convenient to reach Europe by 
 sailing westward and crossing Siberia. It is not simply the 
 existence of international transportation, however, which forms 
 a preparation for a world economy. It is also the cheapness of 
 such transportation. It has been cheapened until products of 
 local manufactures, which formerly had no commercial value, 
 can be utilized in other countries, and have thereby become of 
 great revenue. Natural products which once went to waste 
 are utilized in other parts of the globe. 
 
 Intercommunication. Internationa, transportation has 
 had the effect of increasing communication between nations. 
 Intercommunication by individuals results finally in closer re- 
 lations between governments. International comity has hither- 
 to been of a political rather than of an economic character. 
 The future of international co-operation for economic purposes, 
 however, may be considered as fairly outlined by the Interna- 
 tional American Conference which convened at Washington in 
 October, 1889. The professed object of the conference was to 
 devise "some plan of arbitration for the settlement of disagree- 
 ments and disputes that may hereafter arise, and for consider- 
 ing questions relating to the improvement of business intercourse 
 and means of trade intercommunication between the said coun- 
 tries, and to encourage such reciprocal commercial relations as 
 will be beneficial to all, and to secure more extensive markets
 
 234 JDESCRIP TIVE ECONOMICS. 
 
 for the products of each of said countries." To this conference 
 the governments and republics of Mexico, Central and Soutli 
 America, Haiti, San Domingo and Brazil were invited. Con- 
 ferences for the discussion of international economics are likely 
 to be more frequent in the future. As the German economist 
 Roscher says: " Where the feeling that all mankind constitute 
 one vast family, is stronger than that of their political and re- 
 ligious diversity; where the sense of right and the love of peace 
 have extinguished every dangerous spark of ambition for em- 
 pire and all warlike jealousy; where especially, their economic 
 interests are rightly understood on both sides, a real conflict 
 between the interests of two nations must always be a phenome- 
 non of rare occurrence and an exception to the general rule, 
 which should not be admitted until it has been clearly demon- 
 strated to exist." 
 
 International Arbitration. There is greater love of peace 
 and greater toleration among nations. Peace conquers. The 
 result of the court of arbitration upon the Alabama Claims ap- 
 pears to have been a signal and salutary lesson in favor of in- 
 ternational arbitration. The practical utility of such courts 
 was then demonstrated. Since that time arbitration for the 
 settlement of international disputes and differences has steadily 
 grown in favor. The settlement of the Behring Sea dispute 
 between England and the United States by the court of arbi- 
 tration which met at Paris in the summer of 1893, proved the 
 continued growth of the principle of arbitration. In August, 
 1892, the first International Peace Congress assm bled at Berne. 
 All the great powers were represented. A permanent Interna- 
 tional Peace Bureau was established. An International Arbi- 
 tration Court was instituted, Berne to be its convening place. 
 It adjourned to meet at Chicago during the International Col- 
 umbian Exposition. International law is gradually but surely 
 approaching a higher codification, and with an International 
 Court to apply it, a court to whose decisions the great powers 
 shall have pledged fidelity and obedience, international war 
 will be practically abolished. International arbitration for the 
 settlement of quarrels is then substituted in place of war. In- 
 ternational economics must be correspondingly advanced.
 
 A WORLD ECONOMY. 235 
 
 International Religious Movements. According to a 
 conception of economics, widely diffused in recent times, ethics 
 is an important economic factor. Political economy was for- 
 merly considered the science of driving a good bargain. Self 
 interest was supposed to control men in all their dealings with 
 each other. It was supposed to define and characterize all 
 economic activity. Selfishness was the beginning of all eco- 
 nomic law. So called laws of supply and demand were held to 
 govern all economic activity, and ethics had nothing to do with 
 it. According to old doctrines, some men were born to be 
 laborers, and some to be capitalists, and a social gulf must neces- 
 sarily intervene between the .two classes. Each class must for- 
 ever keep on protecting its class interests and fighting the other 
 class. In recent times, however, there are those who advocate 
 that economics teaches how there may be progress from lower 
 to higher ethical conditions; how things may and ought to be 
 better; "that in the general, peaceful pursuit of economic 
 wellbeing, we have, in civilized nations, only recently reached 
 an ethical goal longed for by the best for many generations," 
 and " ethical purposes for the future, exist now as they have 
 always existed, and they will mould our economic life." 
 
 Ethics inculcates higher standards of material welfare. It 
 aims to develop the social side of economics, and to mould 
 economic life according to ethical standards. It advocates a 
 universal industrial peace and co-operation. It believes that 
 the laborer is worthy of his hire, and that all men are laborers. 
 According to the ethical idea of economics, religion would substi- 
 tute the promotion of neighborly and brotherly welfare, in place 
 of self interest. In the words of one of its advocates: "An eco- 
 nomic world union of brothers is in process of formation, and 
 this explains a large part of our anxiety and uneasiness with 
 respect to social conditions. It is of no avail to say that busi- 
 ness is excluded from the domination of ethical principals, for 
 it is precisely in our economic life that ethical principles of any 
 real validity must manifest themselves. It is only in an im- 
 perfect condition of society that sharp practice and hard bar- 
 gaining can ever appear to men to be morally right. There is 
 a very general determination to make all departments of social
 
 236 D ESC RIP TI VE ECONOMICS. 
 
 life to conform with ethical principles, and that is what is 
 meant by the phrase used by the Christian, 'the world is the 
 subject of redemption.' " The World's Parliament of Religions 
 in connection with the International Columbian Exposition, is 
 in line with the introduction of ethical principles into eco- 
 nomics. It is by such conferences that men can be brought to 
 believe that mankind constitutes "one vast family;" that the 
 economic nation is only an undivided part of one great whole, 
 not yet brought into relation, but existing in embryo.
 
 INDEX. 
 
 A. 
 
 PAQK. 
 
 Africa, lack of wants in affect- 
 ing economic progress 49 
 
 capital in 51 
 
 Agricultural life supplanting 
 
 pastoral life 63 
 
 stages 67-70 
 
 Agriculture, beginning and 
 
 growth of 64, 66, 67 
 
 its economic significance 63 
 
 enlarging sources of subsist- 
 ence 70-71 
 
 producing victory over nature 70 
 commerce and manufactures, 
 
 co operation of 139 
 
 Alabama claims, arbitration of 234 
 Allen, Grant on economic strug- 
 gles of animals 20 
 
 Amalgamated scale 165, 232 
 
 Anarchism -- 169 
 
 Animal domestication 40-46 
 
 Animal propagation, rate of in- 
 crease 175 
 
 Animals, economic struggles of 
 
 ....20-22 
 
 and changeful surroundings. 21 
 
 family life of 29 
 
 gregariousness of 29 
 
 economic co-operation among 30 
 
 industrial society of 30 
 
 number of indigenous affect- 
 ing pastoral life 42 
 
 domestic, distribution of 42-43 
 
 new domestic.. 43 
 
 hoarding capital. 51 
 
 domestic, barter in.. 56 
 
 Ants, industrial society of 80 
 
 subsisting on aphides 30-31 
 
 Apprentices. Elizabethan law of 162 
 
 PAGE. 
 
 Arbitration, between capital and 
 
 labor 162-163 
 
 between capital and labor, 
 
 steps in growth of 163 
 
 court, an international 234 
 
 international 234 
 
 Arkwight's loom revolutioniz- 
 ing textile industry 162 
 
 Army and navy a public monop- 
 oly 148 
 
 Artificial monopolies 149 
 
 Artisan class, beginning of 117 
 
 Artisans, in village stage 88-117 
 
 significance of appearance of 117 
 Australian tribes, common prop- 
 erty in game among -. 52 
 
 Autonomous producing class.. 125 
 Avocation of the family stage. - 49 
 
 B. 
 
 Balance of trade theory 211-213 
 
 Bank notes as promises to pay_ 
 
 190, 195 
 
 convertible 195 
 
 Bank, functions of 203 
 
 Banks and banking, general dis 
 
 cussion 203-206 
 
 savings 204 
 
 of deposit 204, 205 
 
 Barter in family stage 55-57 
 
 in game.. - 55 
 
 in domestic animals 56 
 
 in weapons. 56 
 
 discouragements of in family 
 
 stage 57 
 
 Bi-metalism, definition 199 
 
 self -regulating 202, 203 
 
 and free coinage 203 
 
 237
 
 238 
 
 INDEX. 
 
 international 203 
 
 Bison, domestication of 43 
 
 Borneo, economic life in 36 
 
 Boycotts as one of the evils of 
 
 labor organization 160 
 
 Burghers and the artisans, con- 
 test between 118 et seq. 
 
 and the trading privilege 113 
 
 as the land-holding class. .112-113 
 Burgess-ship, right of described 112 
 
 as affecting city economy. 112, 113 
 
 C. 
 
 Cameron, disadvantage of truck 
 economy.. 93 
 
 Carniverous plants, struggle for 
 existence among 19 
 
 Cannibalism caused by lack of 
 subsistence 71 
 
 Capital, aggregations of , demand 
 
 economic study 15 
 
 accumulation by animals 51 
 
 of the nomad 51 
 
 of the family 51-54 
 
 community of 52 
 
 progressive forms of 52 
 
 reasons for community of in 
 
 primitive societies 53 
 
 increase of in village stage. . . 91 
 co-operating with land and 
 
 labor 136-137 
 
 definition 137 
 
 use of distinguishing primi- 
 tive and modern producer. 137 
 
 modern aggregations of 144 
 
 organization of 144-151 
 
 freedom of in national stage. . 147 
 and labor, division of the 
 
 product 155-156 
 
 and labor, the quarrel illus- 
 trated 156 
 
 and labor, union of 161 
 
 international organization of. 230 
 
 PAGE. 
 
 Chaffaujou M., describing Gua- 
 
 haribo Indians 36 
 
 Chinese exclusion 224 
 
 Cattle money 95 
 
 Cities, rise of 101 
 
 formed by economic concen- 
 tration 102 
 
 influence of trade in building 103 
 
 rise of maritime 103 
 
 rise of, conditioned by good 
 
 roads 104 
 
 sites of, natural 106 
 
 Civil authority exercised by land 
 
 holding class in city stage. 113 
 authority of merchant gilds. 115 
 
 City, economics of 101-133 
 
 and town, distinction 102 
 
 modern and medieval con- 
 trasted Ill, 136 
 
 the medieval, the exponent 
 
 of city economics 112 
 
 commerce of, and merchant 
 
 gilds 113-116 
 
 control of trade in 116, 132, 210 
 
 economic supremacy of 132 
 
 Citizenship, modern and medie- 
 val contrasted 123 
 
 Class, the landless 121 
 
 divisions, modern ..124-126 
 
 distinctions fixed in city stage 133 
 Classes, distinguished by posses- 
 sion of land _ 113 
 
 merchant and artisan, origin 
 
 and growth .118-120, 123 
 
 in communal life 121 
 
 the economic 121-126 
 
 caused by differentiation of 
 
 crafts 124 
 
 distinguished from castes 126 
 
 Clearing house, the 205-206 
 
 Climate, diversity of in United 
 
 States 16 
 
 Clothing as a necessary want. . 22 
 and shelter of the family stage 48
 
 INDEX. 
 
 239 
 
 PAGE. 
 
 Coinage of money, function of 
 
 government in 131 
 
 a public monopoly 148 
 
 fineness of 201 
 
 international 227 
 
 Coins, international 227 
 
 Colbert, plan to increase popu- 
 lation 223 
 
 Collectivism, see Socialism 
 Columbia river valley a center 
 
 of population 60 
 
 Comforts, their relation to life 13, 26 
 distinguishing man from low- 
 er animals 24 
 
 Commerce and the rise of cities 
 
 104, 132, 139 
 
 intermunicipal, regulation of 116 
 co-operation of, with agricul- 
 ture and manufacturing.. 139 
 international, general discus- 
 sion 207-222 
 
 evolution of 208 
 
 See also Trade 
 
 Commercial regulations com- 
 mencing with merchant 
 
 gild 116 
 
 regulations, evolution of. 209-211 
 Communal life.devoid of classes 121 
 Communication international.. 233 
 Communism, see Socialism 
 Community of capital in fam- 
 ily stage 52 
 
 of living in family stage.... 59 
 Competition of natural monopo- 
 lies 150 
 
 Connecticut, taxes paid in cows 193 
 Conquest giving rise to classes 
 
 121-122 
 
 Convertible notes 195, 197 
 
 Cookery, nomadic 47 
 
 Co-operation in the satisfaction 
 
 of wants 26 
 
 among animals 30. 31 
 
 of the three factors. . . . 136-138 
 
 PAGE. 
 
 between employer and em- 
 ploye 162-164 
 
 Corporations and organization 
 of capital 145 
 
 evils of 145 
 
 Courts of arbitration 234 
 
 Craft gilds 118-120 
 
 Craftsman, the 117-120 
 
 contest with landhold ing class 123 
 Crafts, differentiation of, form- 
 ing classes 124 
 
 Credit commercial 182 
 
 economy 182 
 
 system, affecting amount of 
 
 money needed. 188 
 
 Criminals, kinds of 224 
 
 Currency, fluctuation of 194 
 
 international 227 
 
 volume of 193 
 
 See also money 
 
 Customs laws 213 
 
 Curumbus of India 36 
 
 D 
 Debased coinage 193 
 
 Descriptive economics, defini- 
 tion 12 
 
 objects of.. 13 
 
 Diminishing returns, law of 178 
 Distribution of commodities in 
 
 village stage 99 
 
 Division of employments, see 
 Employments 
 
 labor -.171, 173 
 
 See also Employments 
 employments accompanying 
 
 community life 81 
 
 products in village stage 88 
 
 Domestication of animals 40-46 
 
 animals for food. 41 
 
 animals for transportation 41 
 animals for agricultural pur- 
 poses 42 
 
 animals for the hunt.. 40
 
 240 
 
 INDEX. 
 
 E. 
 
 PAGE. 
 
 Economic knowledge, definition 8 
 
 activity, definition 11 
 
 Economics, definitions 10, 28 
 
 descriptive, nature and objects 12 
 
 relation to other studies 12 
 
 Economic knowledge, practical 
 
 nature of 14 
 
 reasons for a wide diffusion 
 
 of .14-18 
 
 Economic functions of the state, 
 
 growth of 17 
 
 Economics of the family, defini- 
 tion 30 
 
 Economic isolation distinguish- 
 ed from territorial 33 
 
 Economics of family contrasted 
 
 with economics of village. 64 
 Economic stages, first and sec- 
 ond compared 64 
 
 Economic dependence in village 
 
 community life 73 
 
 Economics, derivation of 87 
 
 Economic isolation of village.. 99 
 
 disadvantages of 93-94 
 
 Economics of city in North 
 
 America 105 
 
 international, general discus- 
 sion 207-236 
 
 Economic classes, in city stage, 
 distinguished by landholding 
 and right of burgess-ship.112-114 
 
 origin of artisan class 117 
 
 See also artisan class 
 origin, divisions and growth 
 
 of 121-126 
 
 Economy, truck, in village stage 89 
 
 of the city, beginning of 101 
 
 of the medieval city 111 
 
 of the nation governed by na- 
 ture 138 
 
 Economic dependence arising 
 from division of employ- 
 ments.. ..172-173 
 
 PAGE. 
 
 Economics of population, gen- 
 eral discussion. 1 74-1 79 
 
 and ethics 235-236 
 
 Economic conditions affecting 
 amount of money a nation 
 
 needs 187 
 
 Economy of credit 182 
 
 a world 229 
 
 Ethics, place in economics 235 
 
 Employe class, organization of 
 
 151-152, 157 
 
 Employer and employe class, 
 
 origin 124 
 
 and employe class, described 125 
 and employe, profit sharing. 163 
 
 Employers, coalitions of 155 
 
 Employments, division of, ac- 
 companying agricultural 
 
 community life 81 
 
 in village stage. 87 
 
 of the family stage 49 
 
 differentiation of, following 
 
 rise of artisan class..-117 et seq. 
 division of, general discussion 
 
 170-173 
 
 growth of division of 170 
 
 advantages of division of 171 
 
 disadvantages of division of 
 
 172-173 
 
 Exchange of commodities, in 
 village stage 98 
 
 F. 
 
 Factory laws, secured by labor 
 
 organization 159 
 
 Fairs and markets 108-109 
 
 ancient origin of 109 
 
 Family the isolated illustrated. 32 
 the human, the beginning of 
 
 industrial society 82 
 
 the isolated, beginning of 
 
 economic study 32-34 
 
 capital of 51-54
 
 INDEX. 
 
 241 
 
 PAGE. 
 
 the economic, definition 54 
 
 barter 55-57 
 
 the economic distinguished 
 
 from ethnological 54 
 
 economics compared with vil- 
 lage economics 64 
 
 Famines in hunter state 39 
 
 in pastoral state 45 
 
 Farming, the revolution in 181 
 
 Fishing and hunting stage, ... 37-39 
 
 Fisher before hunter 37 
 
 the primitive and modern con- 
 trasted 137 
 
 Fineness in coinage 201 
 
 Fijians, inter-island barter 
 
 among 110 
 
 Food as a necessary want 19 
 
 the struggle for among plants, 
 
 animals and men 19-21 
 
 corresponding to the econo- 
 mic state .21-22 
 
 and the ascending scale. . 22 
 
 of nomadic life.. 47 
 
 Franklin Benj. three ways of 
 acquiring national wealth. 139 
 
 Free coinage 203 
 
 Free trade, general discussion. ' 
 
 .213-222 
 
 definition of .213-214 
 
 arguments for 214-218 
 
 inland 142 
 
 Frugiferous subsistence 35 
 
 state and restricted habitat.. 36 
 
 Fruit subsistence 35-36 
 
 Fuegians, fishing appliances of 181 
 Furmoney 95 
 
 G. 
 Game, barter in 55 
 
 common property in 52 
 
 subsistence. 38 
 
 Ganges, valley of, a center of 
 population 174 
 
 Genoa, in city economics 104 
 
 16 
 
 PAGE. 
 
 prosperity of and the balance 
 
 of trade theory 211 
 
 Gilds, the craft 118-120 
 
 the merchant 114-116 
 
 medieval, distinguished from 
 
 modern labor organizations 151 
 Gold, distribution and produc- 
 tion of 199 
 
 and silver, ratio of, in coin- 
 age 199, 200 
 
 Government, function of in 
 
 coining money .- 131 
 
 power to create money. ..191-192 
 
 Grain money 95 
 
 Gregariousness of animals 29 
 
 Greenbacks, as promises to pay 191 
 
 Gresham's law 193-202 
 
 Guiot, Yves, on relations of mas- 
 ter and journeymen 160 
 
 H. 
 
 Habitat, enlargement of by agri- 
 culture 70 
 
 enlargement of by shepherd- 
 ing and pastoral life 44 
 
 restricted in frugiferous state 36 
 
 enlargement of in hunter state 38 
 Harbors causing location of 
 
 cities 103 
 
 Hanse, see merchant gild 114-116 
 
 Health boards, international... 226 
 Health, international 224 
 
 public boards of 225-226 
 
 Himadryad baboons, economic 
 
 co-operation among 30 
 
 Hunter's subsistence 38 
 
 Hunting and fishing state 37-39 
 
 with animals 40 
 
 I. 
 
 Inconvertible paper money.196-198 
 Indians, American, abstinence 
 
 from food 22 
 
 Indian money 96
 
 242 
 
 INDEX. 
 
 PAGE. 
 
 Industrial society, definition... 9 
 
 its extensiveness 10 
 
 growth in United States de- 
 manding wide diffusion of 
 
 economic knowledge 17 
 
 controlling satisfaction of 
 
 wants 26 
 
 of animals 30 
 
 Industrial stage of economics 
 135-139 
 
 Industrial democracy 167, 168 
 
 Industrial revolution, general 
 
 discussion 180-183 
 
 in farming 181 
 
 in manufacturing 182 
 
 its historical meaning 183 
 
 [ndustry, modern changes in. 15, 16 
 
 Infanticide caused by lack of 
 subsistence 71 
 
 Inland cities caused by concen- 
 tration of village economy... 104 
 
 International economics 207-236 
 
 International health 224-226 
 
 investments 230 
 
 labor organizations 230-232 
 
 transportation 232-233 
 
 communication 233 
 
 arbitration 234 
 
 religious movements 235 
 
 Invention, beginning of 61 
 
 progress by, intermittent 183 
 
 Isolated family the economic 
 unit 32-34 
 
 Isolation, territorial and eco- 
 nomic compared 83 
 
 J. 
 
 Jevons, W. 8., disadvantages 
 of truck economy 93 
 
 Journeymen and masters, rela 
 
 tions of 151 
 
 separated by possession of 
 capital 156 
 
 PAGE. 
 Journeymen their relations to 
 
 the master described 160 
 
 Jural organization affecting na- 
 tional economy 138 
 
 K. 
 
 Kane, Dr., description of fam- 
 ine at Etah 39 
 
 Kettle, Rupert, system of arbi- 
 trating labor disputes .'. 163 
 
 Knights of labor illustrating 
 growth of labor organization 154 
 
 Knights of labor and separate 
 organization of industries 155 
 
 Knights of labor, aims of... 158-159 
 
 L. 
 
 Labor organizations, advan- 
 tages of. 159 
 
 evils of 160 
 
 international 230-232 
 
 Labor and capital, union of 161 
 
 Labor legislation, to unite cap- 
 ital andlabor 161 
 
 Labor organization a reasbn for 
 
 economic study 16 
 
 systematized with introduc- 
 tion of landed property 80 
 
 Laborers serving for fixed 
 
 wages in village life 81 
 
 Labor question, origin 120-124 
 
 ever present 153 
 
 Labor, co-operating with land 
 
 and capital.. 136, 137, 140 et seq. 
 organization of in national 
 
 stage 151 et seq. 
 
 modern and medieval condi- 
 tions of compared 152 
 
 Labor, greater efficiency of in 
 
 later economic stages 177 
 
 Landed property among animals 79 
 
 among nomads 79 
 
 economic significance of 80
 
 INDEX. 
 
 243 
 
 PAGE. 
 
 evolution of 82 
 
 Land, collective ownership 
 
 82, 84, 122 
 
 periodical allotment of use. . . 82 
 
 tenure holding of 83, 122 
 
 freehold in 84 
 
 transfer of, Torrens system. . 84 
 property in, in family stage. . 60 
 organization of giving rise to 
 
 classes 113, 121-123 
 
 distribution of in village. .113, 122 
 
 meaning of in economics 137 
 
 and craftsmen, contest be- 
 tween 123 
 
 labor and capital, co-opera- 
 tion of in national stage.. . 
 
 136-137 
 
 labor and capital, relations of, 
 causing social economic 
 
 problems 140 
 
 public or private ownership 
 
 of 141, 142 
 
 nationalization.. 141 
 
 Landholders, the citizen class 
 
 113, 123 
 
 Lasalle, Ferdinand, law of wages 153 
 
 Latin monetary union 201, 227 
 
 Law and order as factors in in- 
 dustrial development 105 
 
 influence of, on economic de- 
 velopment 105 
 
 Legal security, lack of, affecting 
 development of trade. .105, 108 
 
 Lejeune, Indian legend 39 
 
 Legislation to unite labor and 
 
 capital 161 
 
 Letourneau on community of 
 
 capital 52 
 
 Lock-out, the 155 
 
 Lombard street jewelers first 
 
 bankers 204 
 
 London once a village commu- 
 nity 104 
 
 first bankers of .. . 204 
 
 M. 
 
 PAGB. 
 
 Machinery, use of in case of 
 
 profit sharing 164 
 
 MacAdam, alphabet of finance. 20i 
 Man distinguished from animals 
 
 by wants 24 
 
 distinguished from animals 
 
 by struggle for food 20-22 
 
 Manufactures of village stage. . 92 
 
 of family stage 58 
 
 growth of from village stage . 
 
 117,132,139 
 
 Maritime cities, rise of 103 
 
 trader, characteristics of 106 
 
 Markets in village stage 108 
 
 Market, the world 208, 232 
 
 advantages of with free 
 
 trade 315 
 
 Master and journeyman 
 
 151,156,160 
 
 Malthusianism 174 
 
 Marine telegraphy 183 
 
 Medieval city distinguished 
 
 from modern Ill 
 
 Mediterranean, the, a factor in 
 
 city economics 103 
 
 Medium of exchange, higher 
 qualities of, with advancing 
 
 civilization.. 128 
 
 Mercantilists, the 211 
 
 Merchant class in city stage, 
 
 controlling trade 113, 132 
 
 Merchant gilds, objects of 114 
 
 membership 114 
 
 organization 115 
 
 civic authority of 114 
 
 practical lessons of 115-116 
 
 and artisan classes, origin. 118-120 
 
 Metals, precious, as money 131 
 
 Mexico, valley of, a center of 
 
 population 60 
 
 Pueblos of, as a city 105 
 
 fairs in 110 
 
 Middens kitchen,., 37
 
 244 
 
 INDEX. 
 
 PAGE. 
 
 Michigan, lower, a center of 
 
 population 
 
 Migration, international 223-224 
 
 of paupers and criminals. 223-224 
 
 of Chinese 224 
 
 Milk and meat subsistence 44 
 
 Money, first forms of... 93, 127, 128 
 
 cattle 95 
 
 grain 95 
 
 fur 95 
 
 wampum 96 
 
 the common third medium of 
 
 exchange 127-131 
 
 and rise of trade 127 
 
 advantages of precious metals 
 
 for 128 
 
 economy, significance of 129 
 
 four functions of 129 
 
 government coinage of 131 
 
 precious metals as 131 
 
 of the nation, general discus- 
 sion 185 el seq. 
 
 functions of 185 
 
 amount a nation needs 186 
 
 place in commerce illustrated 186 
 amount needed depending on 
 
 economic conditions 187 
 
 amount needed depending on 
 
 credit system. 188 
 
 amount self-regulating 189 
 
 amount needed for wages. .. 190 
 
 paper, character of 190 
 
 paper, amount which will cir- 
 culate depending on confi- 
 dence 191 
 
 paper as a creation of govern- 
 ment 191-192 
 
 function of government in 
 
 creation of 192 
 
 paper, advantages and dan- 
 gers of 192-193 
 
 paper, volume of 193-194 
 
 fluctuation in volume of. .194-195 
 convertible bank notes 195-197 
 
 PAGE. 
 
 paper, who should issue.. 196-197 
 the superior drives out the 
 
 inferior 193, 202 
 
 international 226-228 
 
 Mono-metallism 199, 203 
 
 Monetary union, the Latin.. 201, 227 
 
 Monks of medieval Europe, in- 
 fluence of upon industrial 
 development 105 
 
 Monopolies distinguished from 
 
 corporations 147 
 
 kinds of 148 
 
 public 148 
 
 private. 148 
 
 natural 149 
 
 public control of 149-151 
 
 artificial 149-150 
 
 competition of natural 150 
 
 ownership of 151 
 
 Mundella's courts of arbitration 
 for settling labor disputes. . 168 
 
 Municipal economy, in the east 112 
 
 of medieval Europe Ill, 112 
 
 summary of 131-133 
 
 Municipalization of land 142 
 
 N. 
 
 Narragansetts, money of 90 
 
 Natural monopolies 149 
 
 Nationalism and tariff regula- 
 tions 217, 219 
 
 economy and physical en- 
 vironment 143 
 
 Nation, the, definition of 135 
 
 the economic 135 
 
 Nature, conquest of, following 
 
 introduction of agriculture 70 
 resistance of in family stage. 59 
 subjection of in village stage. 97 
 external, as a factor in eco- 
 nomic activity 136-138 
 
 governing national economy 
 
 138, 143
 
 INDEX. 
 
 245 
 
 PAGE 
 
 Nationalization of land 141 
 
 Necessary wants of man 19 
 
 Negroes of the south, lack of 
 
 wants 50 
 
 Nile, valley of a center of pop- 
 ulation 60 
 
 Nomadic life superseded by vil- 
 lage community life 73 
 
 horde an economic family 54 
 
 economic life 47 
 
 cookery 47 
 
 Nomad, capital of 51 
 
 Nomads, landed property of... 79 
 
 Normal wages 153-154 
 
 O. 
 
 Organization of trade 113-116 
 
 of merchant class, see mer- 
 chant gild 
 of artisan class, see craft gild 
 
 of industry, in city stage 132 
 
 Organizations, labor, general 
 statement of, advantages of 159 
 
 P. 
 
 Paper money, character of 190 
 
 See also Money, 
 amount of which will circu- 
 late depending on confi- 
 dence in government 191 
 
 when at a discount 191 
 
 advantages and dangers of. . 192 
 
 volume of 193-194 
 
 one function of 196 
 
 incon verti ble 1 96-1 98 
 
 who should issue 196 
 
 Pastoral state 40-46 
 
 subsistence of 44 
 
 famines of 45 
 
 Pauper class 125-126 
 
 Pauperism 223 
 
 Penology 224 
 
 PAGE. 
 
 People in frugiferous state 86 
 
 Peru, illustrating land and labor 
 
 without capital 140 
 
 Physical environment control- 
 ling national economy 148 
 
 Piece work, affecting relations 
 
 of employer and employe. 164 
 Pioneer life similar to village 
 
 community life 89 
 
 Plants, carnivorous, economic 
 
 struggles of 19 
 
 Professional class, the 125 
 
 Political economy, common 
 
 term for economics 11 
 
 See also Economics 
 Political growth, a reason for 
 diffusion of economic 
 
 knowledge 14 
 
 Population, early centers of 60 
 
 checking growth of, in primi- 
 tive society 71 
 
 Malthus', law of 174 
 
 economics of, general discus- 
 sion 174-179 
 
 rate of increase illustrated by 
 
 increase of animals 175 
 
 checks on increase 175 
 
 plan to increase 223 
 
 Precious metals, advantages of, 
 
 for money 128 
 
 Prehistoric sources of subsist- 
 ence 36 
 
 Private monopolies. 148 
 
 Profits, division of, village stage 88 
 Profit sharing between employer 
 
 and employe 163 
 
 Property, community of, in 
 
 weapons and game 52-53 
 
 reasons for community of, in 
 
 primitive society 53 
 
 growth of private ownership 99 
 Protection, general discussion 
 
 218-222 
 
 and robbery 216, 220
 
 246 
 
 INDEX. 
 
 PAGE 
 
 arguments for and against 
 
 214-221 
 
 Protective tariffs 211 
 
 Public monopolies 148 
 
 control of 149 
 
 Pueblo of Mexico as a city 10 
 
 R. 
 
 Railroads, natural monopolies. 149 
 Rate of increase of population 
 
 174-179 
 
 of lower animals 175 
 
 Ratio in coinage, definition 199 
 
 flxingthe 199 
 
 fluctuation of 200 
 
 Ratios, the European 201 
 
 the United States 201 
 
 Raw products handled by early 
 
 traders 108 
 
 Relief societies, labor organiza- 
 tions as... 159 
 
 Returns diminishing in product- 
 ive enterprises 178 
 
 Roads, influence of upon indus- 
 trial development 104 
 
 Robbery, discouraging trade. . 108 
 Rome, in city economics 104 
 
 8. 
 
 Sanitation, systems of 225 
 
 public 225-226 
 
 Saturnian age in economics 61 
 
 Savings banks 204 
 
 Scale system in payment of 
 
 wages 165, 232 
 
 Seas and rivers as avenues of 
 
 progress 37 
 
 Serfdom, origin of 85, 86 
 
 Serf, condition of . _ 86 
 
 Shelter as a necessary want ... 22 
 
 Shell mounds of fisher state 37 
 
 Seen, the, and unseen 183 
 
 PAGE. 
 
 Silver question, the 198 
 
 production of 199 
 
 ratio with gold in coinage.200-201 
 
 Slavery, development of 85 
 
 Social economic problems 140 
 
 Socialism and communism.166-169 
 
 Socialism, objects of 166 
 
 distribution under 167 
 
 theory and practice of 168 
 
 Society, industrial, definition.. 9 
 
 extensiveness 10 
 
 of animals 29-30 
 
 Source of, subsistence in frugif- 
 
 erous state 35-36 
 
 in hunter state 37-39 
 
 Standard of life with reference 
 
 to wages 154 
 
 coinage, see Bi-metallism and 
 
 monometalism 
 
 fineness in coinage, see fine- 
 ness 
 
 Stourbridge fair, described 109 
 
 Subsistence in family stage.. .35-37 
 
 game 38 
 
 milk and meat 44 
 
 increase of in village stage . _ 97 
 increase of with reference to 
 
 increase of population 176 
 
 increasing with development 
 
 of industrial society 177 
 
 Surroundings, struggles of ani- 
 mals with 21 
 
 Syndicates 145-146 
 
 English, in United States 219 
 
 T. 
 
 Tariff laws, general discussion . 
 
 213-222 
 
 Tariffs, kinds of 213-214 
 
 Taxes, who pays. 126 
 
 Telegraphy, marine, as an ele- 
 ment in industrial revolu- 
 tion.. ..183-184
 
 INDEX. 
 
 247 
 
 PAGE 
 
 Thompson, J. Arthur, on eco- 
 nomic struggles of ani- 
 
 mals.- 20 
 
 Tools, progressive use of 98 
 
 Town and city, distinctions be- 
 tween 10 
 
 Trade, control of family 55-5 
 
 character of 209 
 
 control of village 89, 90, 210 
 
 village 90 
 
 builds cities 103 
 
 organization of by merchant 
 
 gild 115-116 
 
 causing need of money 127 
 
 control of in city economics. 
 
 116, 132, 210 
 
 international, general discus- 
 sion 207-222 
 
 balanceof 211 
 
 Trader, maritime, characteris- 
 
 istics of 107 
 
 inland 108 
 
 Trader's employment, growth 
 
 of 110 
 
 Trades unions, illustrating 
 growth of labor organiza 
 
 tions 154 
 
 development of 157 
 
 original purposes of 158 
 
 in the United States 158 
 
 Taxes on early trade 108 
 
 Transportation, internation . _ 
 
 232-233 
 
 Truck economy in village com- 
 munity life 89 
 
 disadvantage of 93, 94 
 
 Trusts 145, 146 
 
 V. 
 
 Venice in city economics 104 
 
 prosperity of and balance of 
 trade theory 211 
 
 PAGE. 
 Village community, economic 
 
 characteristics of 73-78 
 
 of east and west compared 
 
 75-78 
 
 Village sites, selection of 74 
 
 Village community life sup- 
 planting nomadic life 73 
 
 among Pueblos 70-77 
 
 Village trade, control and 
 
 character of 89-90 
 
 capital, increase of 91 
 
 manufactures, character of.. 92 
 
 sources of subsistence 97 
 
 isolation 99 
 
 economy, differentiation of.. 101 
 
 craftsmen 117 
 
 Village distribution of land in. . 122 
 membership of involving land 
 holding 122 
 
 W. 
 
 Wage fund theory 154 
 
 Wages, Lasalle's law 153-154 
 
 raised by labor organizations 159 
 
 paid by scale system 165, 232 
 
 affecting amount of money 
 
 needed 190 
 
 Wampum as money 96, 193 
 
 Wants, the three classes 9 
 
 economic dependence in the 
 
 satisfaction of 9 
 
 the three necessary 19 
 
 distinguishing man and ani- 
 mals 24 
 
 increasing with civilization 
 
 25, 27 
 
 satisfaction of depending 
 
 upon industrial society 26 
 
 of family economics 47 
 
 of food, clothing and shelter 
 
 of the family stage 47-48 
 
 lack of in family stage 49
 
 INDEX. 
 
 PAGE. 
 
 lack of affecting economic 
 progress 49 
 
 increase of in the city stage.. 101 
 
 Wasp, storing for future use 51 
 
 Weapons, barter in 56 
 
 common property in 52 
 
 Wheat, rate of increase of 176 
 
 Working class 124 
 
 see also classes, and employer 
 
 and employe class. 
 World market, the 208,232 
 
 PAGE. 
 
 economy, general discussion 
 
 ...229-236 
 
 World's parliament of religions 236 
 
 Z. 
 
 Zuni, illustration of village eco- 
 nomics 76 
 
 Zurich, international labor con- 
 gress at '.. 231
 
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