The CHAIRMAN. Does an operator in clothing make more money now by the week than he did in 18607

Mr. BEARD. The wages, as compared with 1860, would show an increase rather than a decrease. Compared with 1870, they would show a large decrease.

The CHAIRMAN. But the price of everything which a man buys with his wages would also show a great decrease since 1870?

Mr. BEARD. Yes; but you must recollect that the price of woolen and cotton goods has been decreasing from 1866 to 1873, notwithstanding the extension and expansion of business.

The CHAIRMAN. That was due to the introduction of machinery, I suppose? Mr. BEARD. We were accumulating, all that time, a surplus of labor. We had an exhaustion of labor by the war; but we were accumulating a surplus of labor, especially in the large cities and towns, not only from emigration (which was so abundant and which stops in the large cities and towns), but from the young men in the country (more than the youn women) coming into the cities and towns seeking mercantile employment, more than anything else. There is now a greater percentage of men of mercantile training out of employment than of any other class; and there is less hope for that class, because they are very largely men of middle age, and are past the age when capital is freely tendered to them, and they have very little show of getting any other work.

The CHAIRMAN. You do not see how we are to make provision for that class of people?

Mr. BEARD. I do not see much hope for them. Take another branch of labor-a very large brauch too in this country-which I have not heard mentioned here to-day and have not seen noticed in any reports of the proceedings of this committee-domestic labor, servants in families. The wages of that class are almost double what they were in 1860, so far as my experience in concerned. And there is no corresponding expense on their part, because the clothing used by that class is as cheap to-day as it was in 1860, if they confine themselves to as small an amount, and they are furnished board and lodging.

The CHAIRMAN. Then there is no suffering among the women who are willing to take service in families?

Mr. BEARD. I presume not, and so far as I know, if you go into the agricultural portions of the country and want female service in a family, it must be brought from the cities.

The CHAIRMAN. Is there a great reluctance on the part of Americans (men and women both) to engage in household service?

Mr. BEARD. I should presume that there was. Labor has changed somewhat in that respect. When I first commenced to have a shop and to make my own goods, my female help was largely American and from the provinces-Nova Scotia and New Brunswick. Now it is almost entirely foreign, or of foreign parentage. American female labor seems to be as averse to the shops as it is to household service.

The CHAIRMAN. Where does the American female labor find its outlet?
Mr. BEARD. It stays at home.

The CHAIRMAN. And does nothing?

Mr. BEARD. It attends to the family. There has been some talk to-day (not much) about the hours of labor, and I have thought a great many times that if government (I do not mean the National government, for it is hardly its province, but the State government) would concern itself about the homes in which the laborers live, and about the sanitary influences under which they live, rather than about the hours of labor, it would be better for the working people and for the general community. I was brought up on a farm, and I know something about a farming community. I can recollect when thousands of young women, of the section in which I lived, would go to Manchester and to Lowell and work in the factory until they were able to pay off the mortgage on the farm. I can recollect when they supported their magazines, and at the same time worked 13 hours a day; but then they boarded in the corporation boarding-houses under strict regulations, where they had to be in at a certain hour, where the food was good, where everthing was healthy, and where the moral tendency was better than it is to-day; and then there were less instances of loss of health, and less suffering than there is to-day with the shorter hours of labor and with everybody living where he or she pleases. The laboring people in manufacturing cities live in very different homes now to what they lived in twenty-five years ago.

The CHAIRMAN. Then, if I understand you, there has been, instead of an advance in the condition of the laboring classes, a movement the other way?

Mr. BEARD. There has been a change in the laboring classes. Twenty-five or thirty years ago the laboring classes in the factories were American; they came from the farms. Their sojourn in the manufacturing districts was temporary. As they came home and got married, somebody else took their places in the factory. But the laborers whom we have been employing recently have come from abroad, and while they have advanced beyond what their condition was on the other side of the water, still

their system of living is entirely different from what prevailed in the manufacturing towns before.

The CHAIRMAN. There must be some good reason for this class driving off the other class. Is it that they do the work cheaper?

Mr. BEARD. They would not have been employed if they did not work cheaper.
The CHAIRMAN. Then goods are produced cheaper in consequence of that?

Mr. BEARD. Yes.

The CHAIRMAN. The community at large gets its supplies cheaper?

Mr. BEARD. That class came because they were needed; but that necessarily produced this surplus of labor which we have to-day in the large cities and towns. Do not understand me as objecting to this emigration. But, now that the necessity for it does not exist to such a great degree, it must seek new avocations. My point is, that there is still room for this labor, and more of it than we have now, in the agricultural sections.

The CHAIRMAN. In other words, there is room enough in the country for all the unemployed labor, but the labor is badly distributed, and stays in places where it should not be?

Mr. BEARD. That is it exactly.

The CHAIRMAN. How would you meet that difficulty? Can you propose any government agency to relieve it?

Mr. BEARD. No further than the provision which this government has already liberally made, in allowing settlement on the public lands.

The CHAIRMAN. You would not undertake any system of colonization?

Mr. BEARD. Not by means of government agents. Societies can do that, as in the case of Kansas. I know certain ecclesiastical bodies that are carrying out that plan now, to a considerable extent, and are moving quite large communities to the Western lands and forming whole townships.

The CHAIRMAN. If individuals, working for wages, are frugal and intelligent, is there any impediment in the way of their finding a chance to rise in life, now, any more than there was when you were younger?

Mr. BEARD. That depends somewhat on where they are located. I think that they have got to break away from where there is a surplus of labor. I do not think that a young man has the same chance who comes from the country to-day, in New York or Boston or any other large city, that he had twenty-five years ago.

The CHAIRMAN. Is it that it takes a higher order of capacity to succeed in a dense population than in a new and sparse population?

Mr. BEARD. I would not say that; but there are only a certain number wanted, and the surplus man who does not get the opportunity has no chance to show what his capacity is.

The CHAIRMAN. Are there not a great many persons to-day in Boston and New York emerging from what may be termed the average ranks of employment and coming into wealth, just as much now as ever?

Mr. BEARD. I have no doubt of that. I have no doubt there are as large number as there were twenty years ago, but not so many as were apparently doing it ten years ago.

The CHAIRMAN. In other words, you do not find that fortunes are any more readily continued in families now than heretofore in this country?

Mr. BEARD. What Mr. Walker said in regard to his business in Worcester is peculiarly so in the case of my own business. I do not know any man who has been successful in our business who did not begin as a workman or as a salesman, and work his way up. It is impossible for an outside capitalist to come into the business and make money out of it without combining practical experience with his capital.

The CHAIRMAN. And this process of success in business is going on now as it always

did?

Mr. BEARD. Yes.

The CHAIRMAN. Is there any special grievance which people without means have to complain of now which they did not heretofore in the history of the country have to complain of?

Mr. BEARD. I do not know that there is. I think that the revival of business has been very much delayed because of the uncertainty as to what legislation was going to take place, especially with regard to the currency. It was somewhat delayed last year by the uncertainty with regard to the tariff.

The CHAIRMAN. Your opinion is that the agitation of changes in legislation is an unfavorable element in the recovery from depression?

Mr. BEARD. Yes; anything that involves a radical change.

The CHAIRMAN. You would recommend, in changing the tariff, moderation, and small improvements and amendments, not a radical, revolutionary change?

Mr. BEARD. I would. I do not think that the tariff can be successfully amended (without destruction to the business of the country) by any radical change. I think that the tariff must be managed with reference to particular interests, and that changes

must be gradual. I think that there should be common sense applied to it instead of abstract theories.

The CHAIRMAN. Do you think, from your knowledge of the importation business of the country, that the number of articles on which duties are assessed can be largely reduced? In other words, can you increase the free list with advantage and thereby get rid of great complications attending the collection of duties?

Mr. BEARD. My own theory would be that raw materials should be admitted free, and that the protection should be to labor rather than to raw materials. But I have not given the subject enough attention to go into it in detail.

The CHAIRMAN. The great trouble is to get the definition of the words "raw material." For instance, a man making cutlery insists upon it that bar steel is his raw material, and therefore he objects to any duty on bar steel; whereas the manufacturer of steel insists that pig-iron is his raw material, and he wants the duty on steel instead of on pig-iron. The pig-iron man, on the other hand, insists that ore is his raw material, and he wants the duty taken off ore. But the ore miner wants protection against the foreign producer of ore. This is the practical difficulty which we have to face all

the time.

Mr. BEARD. I think that the agitation of the tariff has not been so detrimental to the revival of business as the agitation of the currency. I think that capital has been more alarmed at the agitation of the currency; and that the danger of radical change there has done more than any other cause to prevent the revival of business. In order to revive business we must have capital, enterprise, and credit conjoined, and the man who has capital must have confidence before he is willing to give credit or to put his capital with another man's enterprise. That lack of confidence as to what a dollar is to be worth has done more than any other cause to prevent the revival of business. Something has been said about the morals of the people. I agree with Mr. Walker as to the general standard of morality of our people. At the same time I do not think that the national Congress, or a great many leading members of the national Congress, are doing much to promote that feeling of morality. When they teach that the nation need not pay its debts, or that it can clip off a portion of them, it is not a great stretch of logic for the individual to argue in the same way as to his debts.

The CHAIRMAN. You think that the proposition that the government shall pay its debts with legal-tender notes not redeemable would be a violation of good faith? Mr. BEARD. I think it would be a violation of good faith, and I do not see how it could be done at all.

The CHAIRMAN. Suppose that the government calls in all the six per cent. bonds that are outstanding and offers to give legal-tender notes for them?

Mr. BEARD. Nobody is obliged to take the legal-tender notes.

The CHAIRMAN. But suppose the government says, "Here is what we will give you for your bonds; and if you will not take it, we will pay no more interest on the bonds; sixty days hence interest on all the six per cents. will cease."

Mr. BEARD. That is supposing that the government will violate all obligations of public faith and all Constitutional obligations.

The CHAIRMAN. It is alleged here that those six per cent. bonds were payable in lawful money (lawful money being at that time legal-tender notes) and that therefore the government has a right to redeem them in lawful money (that is, legal-tender notes). What is there to be said on the other side of that question?

Mr. BEARD. Everybody at that time considered the legal-tender notes simply as a forced loan justified by the exigencies of the war, and they expected that the government would pay those notes or fund them in good faith just as soon as that exigency passed away, and as the government had the ability to do so.

The CHAIRMAN. That is, that "lawful money" really meant the money of the Constitution-gold and silver-and nothing else?

Mr. BEARD. Yes; it meant what was a dollar at the day the note was printed. The CHAIRMAN. You spoke of confidence. Did you mean by that confidence on the part of the capitalist that he would get back a dollar of fixed and certain value? Mr. BEARD. It is hard to explain what is meant by confidence. There are times when men are all willing to engage in business and to put capital into business; and there are other times when they shrink back and will not do anything at all.

The CHAIRMAN. When it is uncertain in what value a man's capital is to be returned to him, would he be apt to have confidence?

Mr. BEARD. No, sir. Then there is another feeling which most men have. They feel that values are certainly (merchandise for instance) at as low a point as they could possibly reach in case we had come to a sound and substantial specie basis; and they feel that the moment that result is accomplished, when the currency is on a sound basis, and when there is no longer a doubt as to what a dollar means, everything will begin to move forward.

The CHAIRMAN. Can we increase the currency and at the same time maintain its relative value to gold?

Mr. BEARD. I think that the quality of the paper has more to do with the value than the quantity.

The CHAIRMAN. What do you mean by quality?

Mr. BEARD. The disposition and power to make that paper good in gold whenever that gold is demanded-good in the recognized standard of the world.

The CHAIRMAN. In other words, there must be redemption in gold in order to inspire faith?

Mr. BEARD. There must be the fact that you can have the gold for the paper if you want it not that every man wants the gold at all.

The CHAIRMAN. Then an increase in the quantity would interfere with that faith— that a man could get gold for it when he wanted to?

Mr. BEARD. I think that, with our banking system as it is now, the currency is perfectly good, and that all that the government needs to do is to make its own promises good, and the national-bank currency will take care of itself. As an illustration of that, take the banks of our city (and I presume it is true also as to the banks of New York) and you will find that the banks of Boston have only about half the circulation which their capital allows them to have. If it were profitable for them to have a large circulation, or if there was any demand for more currency, they would issue as much circulation as the law allows them: but they now only issue about one-half. They have about twenty-five or twenty-six millions of circulation, whereas their capital would allow them somewhere about fifty millions.

The CHAIRMAN. If business were to revive, would there be more currency wanted? Mr. BEARD. Then the banks could put more of their capital into bonds and get more currency.

The CHAIRMAN. It is said here that there is great injustice to the community in the fact that the banks draw interest on their government bonds, and that they also lend their notes to the people and get interest on them, thus getting interest twice on their money.

Mr. BEARD. The best answer to that is the fact which I have just stated, that whereas the Boston banks are entitled to fifty millions of circulation, they have only taken out twenty-five millions. If circulation were so profitable, why would they not take out more?

The CHAIRMAN. What they have got out is profitable to them?

Mr. BEARD. The banks are surrendering it. The currency is being contracted, so far as the national banks are concerned. The government does not pay any more interest on its bonds because they are owned by the national banks than it would pay if they were not owned by national banks. Then the government derives revenue from the banks-one per cent. on circulation, and a certain tax on deposits, &c. The fact that the banks hold these bonds costs nobody anything. The banks put up those bonds as collateral security; but, suppose that they could put up as security mortgage bonds, railroad stock, or anything else that was just as good a security, the interest on those collaterals would go to the owners, just as in the case of the government bonds. The CHAIRMAN. But this is the allegation: that if the banks can keep up this amount of circulation, the government should do it; and that, therefore, the banks should be required to retire their notes, and that the government issue a corresponding amount of notes and with those notes buy up the government bonds; and that thereby a corresponding amount of interest would be saved.

Mr. BEARD. In the first place, the banks are compelled to keep the means of redemption. The onus of redemption is on the banks, not on the government. If the government issued notes redeemable in coin at the will of the holder, then the government must undertake the expense of keeping the means of redemption constantly on hand. The government would be then a grand bank of issue and redemption. I would have the national government divorced from business. I would not have it meddle with business any more than is absolutely necessary.

The CHAIRMAN. Would you have the government retire the outstanding greenbacks? Mr. BEARD. I think that it will be a long time before the government can retire its present greenbacks, after it has got to the point of redeeming greenbacks whenever gold is demanded.

The CHAIRMAN. When the greenbacks are redeemed, and when they come in, would you have the government reissue them or cancel them?

Mr. BEARD. My own idea is that they should be canceled. I do not believe in the government having obligations out. I do not believe in a rich and prosperous nation issuing paper money.

The CHAIRMAN. Why should not a government (inasmuch as the people must have a currency, and inasmuch as a certain amount always floats in a community) issue that amount of money, so as to save interest?

Mr. BEARD. The government is no more entitled to the profits of the capital of the country in the shape of money than it is entitled to the profits of the capital of the country in the shape of clothing or of boots or shoes.

The CHAIRMAN. That is hardly a parallel case. Here is a fact-that a certain amount

of paper money will float in a community without redemption. That is not due to the operations of any one man, but is due to the operations of the entire community. It is alleged that there is a profit in that transaction, and that the government should avail itself of that profit. I am trying to arrive at some good reason why the government should not do it. You merely answer that the government should not have anything to do with business at all. Is there a Constitutional objection to it?

Mr. BEARD. The principle being admitted that the government should make a dollar good at the will of the holder, it becomes merely a question of economy and expediency whether the government can do it better than individuals can do it. Now, what is the general experience of the government in that regard when it takes hold of business matters? Does it execute them more economically than individuals do, or does it waste money? to say nothing about corruption or about the increase of Federal patronage. It is only a general obligation as to expediency. The government stands in the relation of trustee to the people, holding a collateral security which makes every national-bank bill good for its face. The government holds that security with a margin. If the bank fails, there is not only the original bond there securing the currency, but there is 15 per cent. additional in the government hands. The gov ernment holds 15 per cent. of security to make good whatever expense may attend the redemption of this bank currency.

The CHAIRMAN. But still that rests upon the faith of the government and upon its ability to pay its bonds; and why should not the government's obligation to redeem its notes be as good as the obligation of the banks?

Mr. BEARD. I admit that it is as good. It is only a question of economy.

The CHAIRMAN. It is said on the other side that there would be interest to be saved on two hundred and fifty or three hundred millions of bonds now deposited by the banks, which interest would amount to twelve millions at 4 per cent., or to eighteen millions at 6 per cent.; and it is said that it would not cost any considerable portion of that twelve or eighteen millions for the government to do this work, and certainly it would not.

Mr. BEARD. The government gets 1 per cent. on national-bank circulation; and it also gets a tax upon the deposits of banks; and it charges all expenses of redemption for which this 15 per cent. is held. One great objection made to national banks to-day is that they are not taxed. The men who make this objection forget that they are taxed in the reduced rate of interest which they now get on their bonds; that there is a tax upon the national-bank currency, and that they are also subject to local State taxation. In our State that taxation averages about 14 per cent. Suppose a bank with half a million of capital and three hundred thousand dollars circulation. It has put up three hundred and thirty thousand dollars of bonds out of this capital, and it is taxed on its whole half million of capital; so that the public is receiving in local taxation the taxes on the amount vested in the bonds the government holds as collateral same as any other property. The local governments would lose all this taxation if banking went into the hands of the government.

The CHAIRMAN. Is there anything to prevent the government from imposing the tax up to the point where there would be no longer any interest in circulating the money? Mr. BEARD. There is nothing to prevent it, except the old adage about people "killing the goose that laid the golden egg.'

The CHAIRMAN. You could make it unprofitable and then it would cease.

Mr. BEARD. Yes. Withholding the interest is simply taxing to the amount of the interest.

The CHAIRMAN. On the other theory that the government is to issue the paper, it would then depend upon the action of Congress how much paper would be in existence, would it not?

Mr. BEARD. Yes. You asked me what objection there would be. That would be one objection. As the system is to-day, it is automatic; it regulates itself. If more currency is wanted capitalists will put up the bonds and get the currency; if less currency is needed, they will surrender the currency and take back the bonds. But if the government had charge of it the amount of currency would depend upon the vote of Congress, and sometimes there might be too little currency and there would be no way of getting more except by a vote of Congress; and, again, on the other hand, public clamor might make Congress vote an undue amount.

The CHAIRMAN. You think it would not be judicious to leave it to the discretion of the Secretary of the Treasury how much currency should be out?

Mr. BEARD. Yes. To-day the government does not issue the currency; it simply guarantees it. I am talking about the national-bank currency, not the greenbacks. Individuals issue the national-bank currency and the government guarantees it. The check on those individuals in issuing the currency is that they must redeem it in greenbacks or coin, and they have to put up the security on it. There is that check upon them. Upon the vote of Congress there would be no check except the popular will. The CHAIRMAN. You think, then, that the redemption which might be provided for