not the man of millions the true method; and what need of going beyond his rules? As for the selfishness of the race, we fear that Political Economists have no prescription for its cure. 16. MERCANTILISM TODAY' BY JOHN CALLAN O'LAUGHLIN The great war has not crippled American commerce as was expected when it began last August. Statistics show that during the expiring year the United States has had the largest balance of trade in its favor that it ever has had. The balance will be about $1,000,000,000. Prior to the present fiscal year the largest trade balance enjoyed by the United States was in 1908, when it amounted to $665,000,000. While there has naturally been more falling off in imports on account of the war, the great gain has come from the tremendous growth of exports. Their value will be almost $300,000,000 over the figures of last year, and practically $200,000,000 over those of the year previous, the prize year in exports. This enormous balance of trade in our favor is very gratifying to the American people and the American government. 17. THE PRESENT GRATIFYING SITUATION I The treasury statement for May 1 discloses a gratifying condition of our circulating medium and one which promises great strength to meet any possible emergency of the near future. During April the national bank notes in the hands of the public, including the emergency notes, decreased from $842,615,970 to $814,832,339, while the federal reserve notes increased from $40,736,130 to $53,749,860. On the first of April the gold coin in circulation-which includes gold held by the banks as reserve and other gold that has been placed in the hands of the public by the treasury-amounted to $614,632,850. On the first of May this amount had fallen off to $598,931,706, but of gold certificates, representing the metal, there was $951,205,229 April 1 and $987,447,729 May 1. The aggregate of these totals for each of the months represents the actual amount of gold in circulation and shows an increase between April 1 and May 1 of $20,541,356. This gain is largely due to the importations. The aggregate of these two items, gold and certificates representing gold, May 1, was $1,586,I Adapted from the Chicago Herald, June 28, 1915. Adapted from an editorial in the Chicago Economist, May 15, 1915. 379,435, standing for the aggregate of gold actually used as money by the public. The total amount of gold used as money, including bullion in the treasury of the United States at that time, was over $1,889,000,000. This amount is far in excess of that held by any other country for the purpose, and is a tremendously strong basis for future financial operations. How far we have gone in the right direction since the resumption of specie payments January 1, 1879, is shown by a comparison of this billion and a half of gold with the $117,000,000 we had then. 18. PATRONIZE HOME INDUSTRY' BY WALTON H. HAMILTON "A dollar spent in Auburn gives you another chance at it; but, if it is spent out of town, it's 'Good-bye Mary."" "Down with the parcels post. No more diabolical device was ever perfected by the big cities for stripping the small towns and country districts of all their surplus cash. Yet the rich mail-order houses wax fat with the dollars that are the property of local merchants." "If I were mayor, and had my way, I would place a fine of one hundred dollars on every man who ordered goods from a mail-order house." "The individual can get rich only by selling more than he buys. Likewise a community can prosper only by selling to other communities more than it buys from them." "The annual influx of students and other outsiders into our fruit belt to engage in fruit-picking and packing is an abuse that should be stopped at once. These people consume very little, saving their money to take back to Ann Arbor, Madison, Champaign, and other places from which they come. Thus, while making large sums off us, they give little or nothing in support of our industries." "The county commissioners should be promptly impeached and removed from office for their action last Monday. We understand that the contract for the building of the new courthouse was let to the Knoxville firm only because their bid was $1,800 under that of our fellow-citizen, James R. Robertson. Robertson, as we are all aware, is an expert at this line of work, and was well equipped to do a 1 Adapted from Current Economic Problems, pp. 284-87. (The University of Chicago Press, 1915.) handsome job. The only excuse which the commissioners give is the $1,800. But, against this must be set down the $32,000 which will be paid to the Knoxville gang. Think of it! Sending $32,000 out of town to save a paltry $1,800." "Now look here, Doc,' said the dollar to the dentist, 'if you'll only let me stay in this town, and won't send me to Roars, Sawbuck & Co.'s in Chicago for that shaving-mug, I'll circulate around and do you lots of good. You buy a big beefsteak with me, and the dry goods merchant will pay his doctor's bill with me, and the doctor will give me to the farmer for oats with which to feed his horse, and the farmer will buy fresh beef from the butcher, and the butcher will come around to you to get his tooth mended. In the long run you see I will be more useful to you here at home than if you send me away forever." "The recent cold spell, which caused a large number of water pipes to burst, has been a bonanza for business. Few things in the last year have caused so many people to dig down in their jeans and cough up the cartwheels that spell prosperity." 19. (3) THE CONFUSION INVOLVED WHENCE THE COMPLAINT OF THE WANT OF MONEY ?1 The want of money is a common cry. All the scramble is for money; few think they have enough, and many complain. This probably will ever be the case, nor would setting the mint to work cure the evil; and perhaps there is nowhere more want than where there is most money. The beggar hath no property, nothing to exchange for money; and if he will not work, none would come to his share, if the common stock was ever so much increased; a greater plenty of money would be so far from being advantageous to him that he would run the greater risk of starving, as bread and provisions of all sorts would then be so much the dearer. The farmer complains, and thinks that if there was more money in the country his corn and cattle would fetch a better price: They would fetch more money, but not more of anything else that he wants; and he would not be at all bettered by this higher price, unless so far as a sudden Adapted from An Essay on Money and Coins (1757). Reprinted in Select Tracts on Currency, pp. 413-14. increase of money might ease him in his rent, by lessening the intrinsic value of the specific sum which he had agreed to pay. The same may be said to the merchant, shopkeeper, &c. While all commodities keep the same proportion of value in respect to one another, no one reaps any advantage by the raising of the price in respect of money, of his particular commodity. The complaints of particular persons arise, not from a deficiency of money, of counters in circulation; but from their own want of property, want of skill, address, or opportunity of getting more money; or perhaps only for want of frugality, in spending more than their income or proper share. 20. MONEY AND WEALTH' BY JOHN WITHERSPOON There are many persons who cry, "We must have more paper for a circulating medium, as there is such a scarcity of gold and silver." It is argued, "When I go about from day to day, and cannot collect what is due me, when my creditors are calling upon me and I cannot satisfy them, is not the only explanation the scarcity of money everywhere?" What shall be said to satisfy these persons? I must tell them plainly, it is their poverty, or the nation's poverty and not a want of gold and silver, and if there were an hundred times as much gold and silver in circulation as there is, their poverty and difficulties would be just the same. If these persons read the scriptures they may there learn that in Solomon's time the silver was plentiful as stones in Jerusalem; probably they will think that all the people in Jerusalem at that time must have lived like princes, but they must be told, it was added as a necessary consequence that it was nothing accounted of in the days of Solomon. 21. A REFUTATION2 BY BENJAMIN FRANKLIN As to plenty of money being a benefit to trade and manufactures, we apprehend everyone conversant therein must know that the coin, by which we generally understand money, of every respective state, is by no means the mover of the intercourse or tradings of the world in general. We may say that coins, in general, can no otherwise be 1 Adapted from Works, IV, 230. (Philadelphia: William W. Woodward, 1802.) Adapted from The Principles of Trade (1774), in Franklin's Works, II, 394-95 Written jointly and anonymously by Franklin and George Whatley. useful than as the common measure between man and man, as serving to barter against, or exchange for, all kinds of commodities. Certain it is, that coins cannot be ranked amongst those which are only of real use. Let us therefore suppose pieces of coin to be counters, and, to simplify the matter still more, suppose every manufacturer to have of these counters any sum whatever; will it follow that any sort of manufacture shall be industriously attended to, or more work done than when no more counters than just enough to barter for the real wants of meat, drink, and clothes, etc., can be procured by labor? Surely no. It must be the desire of supplying our wants, which excites industry as above hinted; that alone sets trade going, and that only can procure plenty of manufactures. That the welfare of any state depends upon its keeping all its gold and silver, either in bullion or in coin, must be founded on a very narrow principle indeed. All republics we know of wisely think otherwise. Spain, the grand source of silver, has of late years very justly allowed the free exportation of it, silver paying a duty, as in Great Britain lead and tin do; nor prior to this permission could the penal laws in Spain hinder its being exported; for it was a commodity which that kingdom was under a necessity of giving as an equivalent for what was furnished to them by other countries. Could Spain and Portugal have succeeded in executing their foolish laws of "hedging in the cuckoo," as Locke called it, and have kept at home all their gold and silver, those metals would, by this time, have been of little more value than so much lead or iron. Their plenty would have lessened their value. We see the folly of these edicts. 22. A PRACTICAL BUSINESS VIEW TODAY' The great inflow of gold to the United States at the present time is embarrassing. This country does not need gold and does not particularly want gold. We already have such an excess of the metal, and the credit conditions and money rates generally are so easy, that we are confronted with the unusual problem of not knowing just how to employ our unexpectedly large resources in this particular field. The turnabout from the conditions of last fall has been so sudden and so radical that business men and bankers in this country are for the moment at a loss to know just how to act under present circumstances. It is almost like an individual who, having struggled along Adapted from an editorial in Moody's Magazine, March, 1915. |