and every description of property in our own markets. Precisely the same thing occurred in the South. The entire railways of the country are largely owned in England. To what extent, then, was foreign capital withdrawn from the whole country? This question it is impossible to answer. Did we know the exact imports and exports of the whole country during the war, it were an easy task to do so; but this is unfortunately not the case. We are ignorant of the facts; we are also ignorant of the foreign business transacted at the South both on private and government account. Finally, we are ignorant of the value of the importations made even at the North on government account. The Government has no more seen fit to vouchsafe us that information, than the rebel government has seen fit to do the same thing at the South. Therefore, all answer to this important question is, at least for the present, left entirely in the dark. FOREIGN CAPITAL ADDED. It is undoubtedly the fact that enormous amounts of foreign capital were withdrawn in the first dark and trying days of 1861 and 1862. But it is no less the fact that in the latter part of 1863, and in 1864 and 1865, other amounts equally, perhaps more enormous, have been added. Some $500,000,000 to $800,000,000 in United States bonds are now held by European capital, and, in addition to this, large amounts are invested in railway, bank, canal, insurance, telegraph, steamship, and manufacturing and mining companies' stocks, or granted by way of commercial credit. It is utterly impossible for any one to say what the aggregate is-so we shall not make the attempt, but it must be something enormous. A THEOREM COOLY SOLVED. Mr. JAY COOKE is, therefore, not quite correct when he assumes that "we have for June, 1865, a wealth of $16,112,000,000." HAS THE SAME RATE OF PROFIT CONTINUED ? The annual net profits during the decade ending in 1860, were, as we have seen, about 8 per cent per annum. Has this rate continued the same! Mr. COOKE assumes that it has, and that it will continue the same, with slight diminution, until the year 1881, and perhaps even longer. But this calculation is as entirely unwarranted as the other. The rate of profit depends upon the competition of capital, and this again depends upon freedom and security. Why does so much British capital come here for investment? Because it brings more profit here than in England. But why does it not all flow to Turkey, to China, to Africa, to South America, where the rate of profit is even higher than it is here! Because, under the governments prevailing in those countries, it is not so secure; and under the tyranny of despotic rulers, or that of anarchy, its freedom of action is circumscribed. Insecurity and restriction, therefore, drive it towards a lower rate of interest, and it comes to the United States. So sensitive is capital to the action of restrictive laws, that the least change in governmental measures will cause it, like the sensitive plant, either to expand or contract in a moment. If the rate of profit in this country, previous to the war, was 84 per cent per annum, it is very easy to ascertain what it has been since that date, by comparing the amount of political and commercial freedom and security which prevailed then, and that which has prevailed since. If we have enjoyed the same freedom as before, then the rate has remained the same. If we have enjoyed less, the rate has increased. But it should be remembered that an increased rate of accumulation is incompatible with new accessions of capital. Either no foreign capital must be added to our capital, or the estimated future rate of accumulation to our capital must be lowered. Mr. JAY COOKE's statements concerning the rate of profit are, therefore, not quite reliable, and we shall not be worth $550,000,000,000 in the year 1900. A GUESS. But some people like figures. They are better satisfied with a column of figures, even though they are told that the figures may be quite bypothetical, than they are with an argument well based. Reduced to figures, arguments are convincing because they are short. Let us, therefore, take a hint from Mr. COOKE, and see what figures will come of an argument based upon due consideration of all the facts in the case, as compared with those which he has adduced from the contemplation, a mere isolated phenomenon. Let us premise that but a very short time, say three years, will suffice for the people of this country to discover the real nature and bearing of the odious restrictions now placed upon finance and commerce, the insecurity of property occasioned by over-legislation, and the shackels placed upon enterprise by the many forms of monopoly which now prevail. From the time of making this discovery, let us suppose it takes twenty years of continued peace to effect the work of reform, and that there shall be, during that time, no marked change in the legislation of other countries. On this basis we may venture to make a rough guess as to the resources of the whole Union; not of the Northern States alone, as Mr. COOKE has done. In 1860, the entire capital in the country was $16,000,000,000, of which Bay *2,000,000,000 was in slaves. The previous rate of increase was about € per cent per annum, reckoning the slaves as free men, or 8 per cent, reckoning them, as Mr. JAY COOKE does, as merchandise. Counting the slaves free, this leaves the aggregate capital, in 1860, at $14,000,000,000. In that year, foreign capital began to take alarm and disappear from the country at a gradually accelerating rate, which culminated in 1863. Then it began to decrease until 1864, when it stopped. By the beginning of the present year, the movement was strongly the other way, and is still in progress. Its culminating point is difficult to determine, but if it has not already been reached, it probably soon will be, under the prevailing state of affairs. The rate of profit has meanwhile been larger than ever. ing the early part of the war, it was probably as high as 10 or 12 per cent. It is now not over six. From 1861, to the present time, the war has continued to sink capital at the rate of about $1,250,000,000 per annum. Taking into consideration the deduction for the slave valuation of 1860, the double movement of capital, the sinking of capital by the war, and the varying rate of profit, we conclude that the entire capital invested in the thirty-five United States is, to-day, about $14,000,000,000, or precisely what it was in 1860, less the slave valuation. Dur RESOURCES OF THE UNITED STATES, No. 1. [All the following sums are stated in millions, except the per centages.] Period. Average yearly Average yearly rate Increase of capital and profit at end 1865-68.... 14,000 2 per cent. 1888-98.... 79,000 2 being a little more per In the year 1900 the amount of capital invested in this country would thus be $175,466,000,000, or a sum so large that the payment of the interest on the national debt, by the debtor class to the creditor class, would be an insignificant bagatelle. But we are here presuming upon many things which may not come to happen. The tempest of over-legislation which is now upturning the very founda tions of security in this country, the rage for protection, for oppressive taxes, for class priviledges, for confiscation, for power-all this may not blow over by the time we have calculated-namely, 1868. Reform may not be inaugurated. And, if inaugurated, it may be a feeble and spasmodic species of reform, which would take longer than ten years to bring us up to, and enable us to overtake, that condition of freedom and security which the foremost nations of the world have meanwhile attained. Let us reverse the picture. Let us say that the condition of affairs today is continued; that men with a minimum allowance of brains are continued to be appointed to public office; that passion and injustice shall rule the country; that five-and-thirty years hence our form of government, no matter what it may be in name, shall be as strong and as despotic as that of Turkey; that the very name of free trade shail be abhorred; and that commercial intercourse between this and Albany shall be as thoroughly tied up and protected as that between this and Europe now is. What then will be our condition? Though California should yield mountains of pure gold, though petroleum should spout up from the earth in volumes that would shame Niagara itself, though coined money rained from the clouds as manna rained upon the Hebrews, though wealth of every kind sprang up upon every side to feast the greedy eye and water the longing lip, the nation will grow poorer and poorer, and finally lapse into a state, which, if compared to the progress made by other nations in the meantime, will closely resemble that which we now call barbarisin, Mr. JAY COOKE, before inserting in his statement a long account of the gold mines in California, and the petroleum wells in Pennsylvania, should have remembered that there are gold mines in Mexico and petroleum wells in India. Both these sources of wealth bave been worked for hundreds of years; in the latter case for thousands. Yet are Mexico and India rich and powerful countries? Oh! Mr. COOKE, something more is wanted besides wealth to make men rich, and that something is freedom-freedom from injustice, freedom from restriction, and freedom from Government! But to the figures. 1 RESOURCES OF THE UNITED STATES, NO. 2. [All the following sums are stated in millions, except the per centages.] Thus, in the year 1900, the amount of capital invested in the country would only be $11,000,000,000, or $3,000,000,000 less than it amounts to at the present time, and in spite of an increasing rate of net accumulation for every decade. Alongside of the two statements, which are based respectively upon increased freedom and increased restraint, let us place Mr. JAY COOKE'S statement, which takes no account of these little inducements to the accretion of national wealth, or its contrary condition of dispersion towards countries where its use and possession is more unrestricted and more secure. Mr. COOKE bases his figures upon the assumption that capital has been, during the last five years, and is now, employed in this country with the same security-no more, no less-and the same freedo n—o more, no less-that existed from 1850 to 1860, and that it will continue to enjoy the same security and freedon up to the year 1870. No allɔwance is made for the four years of war through which we have passel; of the present condition of the Southern States; of the terrorism which has prevailed in the North from time to time, and frightened capital to such an extent that gun-boats had to be stationed at the foot of Wall Street to protect the banks of this city; of the expatriation, voluntary and involuntary, of American citizens, from both North and South, and the removal of their wealth to other countries; of the many odious forms of monopoly generated by the legislation which has been introduced under the color of war necessity; and of the tabooing of capital from competition in the manufacture of wood screws, horse shoes, cut nails, cutlery, ironmongery, cotton textures, wooden ware, prepared fool, spirits, cigars, and a thousand other departments of industry. No mention is made of those things, but the affairs of the country are figured up as though they went by clockwork, and the clock always pointed to just the time wanted. MR. JAY COOKE'S STATEMENT. [All the figures of the table express millions of dollars, except the column of dates and that of per centages.] Further comment upon these figures is useless. They bear about as much relation to truth as the day of the month does to the Chinese budget. But from these various estimates the calculating reader will draw a conclusion which, more than any other, would appear to concern him most. Whether Mr. COOKE be right or wrong, whether the people of this country enjoy increasing freedom or suffer increasing restraint, it appears to be conceded in any event, unless war or some other unforseen calamity happens during the next ten years, that at least, for that period, the debtor class will be in a condition to pay the creditor class-in other words, that the National debt will be paid. True; but as to the value of this conclusion to the reader, much depends upon whether he belongs to the creditor or the debtor class. If to the former, the country may be come another Turkey for all he cares, so long as he gets his seven-thirty per cent; if to the latter, he will be careful to reckon up the difference between the interest at seven-thirty on the one or two hundred dollar bond he is hoarding up, and the overplus which he will have to pay, in the shape of taxes, for ten years, in order to gratify the present inordinate whim of Government to pay seven-thirty per cent when any amount of money can be borrowed at six. CONCLUSION. As an evidence that the possible evils we have foreshadowed are not only not entirely groundless, but are, on the contrary, imminently threatening, we present our readers with two extracts, one from the Constitution of the United States (the bond of agreement between the governors and the governed), and the other from the very statement of Mr. COOKE which we have had under review. Says the Constitution, Art. I., sec. ix., clause 5: "No tax or duty shall be laid on articles exported from any State." Says Mr. COOKE: "Additional Sources of Revenue-Export Duties.— An export duty upon the cotton, tobacco, and other staples of the recon structed Union, for which we have the command of the world's markets, is not only an ultimate reliance but a near probability, and can be made to pay from $60,000,000 to $100,000,000 a year, without detriment to any American interest." |