THE USUAL METHOD OF SHOEING A HORSE

These creatures are organized into powerful guilds and so obtain their share of the "squeeze," known in America as graft, that runs from the top to the bottom of Chinese life. The fellows shown herewith are not, strictly speaking, Chinese, but a race known as sang lai occupying a place similar to that of the Indian here. When a beggar calls on a merchant for a contribution and is refused, he simply gets a horde of his fellows to come back with him and the last state of that merchant is worse than the first.

When do the Chinese relax, for they do not observe a weekly rest day? There are a few religious festivals and the great occasion of New Year's which lasts a couple of weeks and is equal to our Christmas, Easter and Fourth of July celebrated

his back. Another will put two hundred pounds on a pole balanced across his shoulders and shuffle along six miles an hour with a sort of sliding motion that has in it the minimum of perpendicular vibration. But such labor is by no means the rule, and there is plenty of loafing, for not even Chinese endurance could stand it to "speed up" for the long hours required of them, and they work not from pleasure but necessity. Their employment of time is like sending water through a very leaky hose, a great deal of it goes to waste.

Something must be said about the class that does not work at all, the mendicants.

WATER CARRIERS EMPLOYED IN THE CON

STRUCTION OF BUILDINGS

two years ago on a farm in Chautauqua County, New York. As a boy he did the ordinary farm chores, went to the public schools and the state normal school. His people, of old New England stock, had been college bred for generations. Accordingly the youth was sent to Columbia in the class of '76. He helped pay his own way by tutoring. The course at that time was prescribed throughout and Ely, if he then had a bent, was unable to display it. There were fifty in his class, but he won the fellowship in letters which carried him to Germany to sit for four years under the greatest teachers and thinkers in the world. His purpose was to study philosophy. He was fond of analysis, fond of getting at underlying causes.

Ely had no special interest in political economy. Indeed he had never had a chance to become interested. At Columbia but one term was given to the subject. A single text-book was used, "Mrs. Fawcett's Political Economy for Beginners." At the end of each chapter of this primer was a printed set of questions and answers which the class learned by heart, then came to recitation parrot-crammed. But after entering the University of Halle in Prussia, Ely received a new idea of political economy. He was fascinated by the lovable personality as well as the brilliant lectures of Professor Conrad, who opposed to the cold and fatalistic teachings of the laissez faire school, then dominant in England and America, the warm humanitarianism of hope. More Americans have studied under Conrad than under any other of the German teachers.

The next year Ely traveled to Heidelberg, and definitely taking political economy under Carl Kneiss as his major study, relegated philosophy to the position of minor. Kneiss was a great, big man with a voice that boomed and a powerful laugh. He believed vociferously in "freedom to learn and freedom to teach, and made his students promise always to keep that freedom for themselves.

At Heidelberg Ely obtained his doctor's degree; and honorable mention for his thesis in spite of its imperfect German. The next year he went to Geneva to pick up French, and, incidentally to become acquainted with Russian refugees and nihilists. In 1879 he went to the University of Berlin and attended the

courses of Adolph Wagner, a giant of a man, built on the Kneiss order and with the same outlook on life. Among the political economists of the universities of the world to-day, Wagner, now over seventy, is with little dissent looked up to as master, as the greatest single force.

Ely returned to America in 1880 and put in a year as a newspaper man. Then he took charge of the political economy department of Johns Hopkins University in Baltimore. During his first years there, he found the sledding hard. Three men in America stood out as leaders of economic thought: William G. Sumner of Yale, Arthur Perry of Williams, and David H. Wells, unattached. These three were regular contributors to the Nation, edited by E. Lawrence Godkin, who echoed, in his editorials, a constant Amen. to the sayings of the big three. In the early eighties, in college and university life, the doctrines of these three men had achieved an overshadowing mastery. Even those teachers who dissented in the back corners of their understandings, hesitated to announce their dissent openly lest they should be swiftly branded with the damning phrase, "an unsound and shallow thinker." The business of political economists was to think correctly and profoundly. That was what they were paid for. By that they made their livelihood.

As well call a broncho-buster a weak rider as say a teacher of economics is a shallow, unsound thinker.

Sumner, Perry and Wells, who had then possessed, in their field, the power of excommunication, belonged to the laissez faire school. They believed that there were certain underlying laws which guided business and politics. These laws were fundamental and, like the axioms of geometry, unprovable. All proofs were built on them. Just as the axiom that "the whole is equal to the sum of its parts" is a geometrical truth in Africa, Asia and America, just as it was as true in 1907 B. C., as in 1907 A. D., so these fundamental laws in economics were true in all places, at all times, for all stages of society.

The chief of these laws was: "The best government is the least government. From this it was deduced that protection is always worse for a country than free

trade; that laws to protect workers from dangerous machinery, to prevent child and regulate woman labor, to limit hours, were but man's vain foredoomed attempts to oppose Nature's law of supply and demand. Labor unions, since they ran contrary to this same inexorable law, were not merely immoral but also silly.

College-bred men accepted these teachings with but a single exception. This exception concerned the matter of protection and free trade. Sons of manufacturers almost invariably turned protectionist despite their college training. Whatever the theory, they were for protection because they saw it meant dollars and cents to them. They voted for protection and they got it, and got rich through it. However, they were very faithful to the rest of the laissez faire teaching.

But at the same time the unions were forming, fighting, striking, negotiating, hunting scabs, picketing, being broken and reforming. The net result was that they won and maintained higher wages and shorter hours. And they didn't particularly care when the professors told them they were doing something economically impossible.

The evident failure of the facts of life to jibe with the theories of the big three began to be whispered behind the academic palm.

Ely, James, now president of the University of Illinois, and a few other young men came out boldly; declared that the big three were all wrong in their first premises; that the laws of commerce were not fixed, like axioms, but fluid and changeable; that what was a good thing for a country to-day might be extremely bad for it to-morrow; that the least government might be and often was the worst government; that it was the duty of society by law to protect its women and children from the cruelties of "supply and demand" and "free contract"; that laborers could get much better terms for themselves organized than unorganized.

These young men said that they belonged to the historical school, that the best way to find out economic laws was to observe economic happenings and then to reason back from effect to cause; and not as the other school did, to assume a few "fundamental" laws, and then to

seek rigidly to fit happenings into these laws. The historicalists made much of the many evidences that the daily happenings of life were refusing obstinately to respond to the laws proclaimed by Sumner, Perry and Wells.

But the young leaders of the new school had plenty of discouragement at first. They were moving against long tradition and firm authority. When Ely published his "History of the Labor Movement in America," there were many calls for his dismissal from Johns Hopkins. A fellow member of the faculty of that institution, the famous astronomer, Simon Newcomb, wrote in the Nation that a man who would publish such a subversive work was unfit to hold a professorship anywhere.

In 1885 Ely, James, Andrew D. White of Cornell, Woodrow Wilson, then of Bryn Mawr, and others started the American Economic Association. The first article stated:

"We regard the state as an educational and ethical agency whose positive aid is an indispensable condition of human progress. We hold that the doctrine of laissez faire is unsafe in politics and unsound in morals and that it suggests an inadequate explanation of the relations between the state and citizens."

The challenge was bold and the triumph surprisingly rapid. Youth would be served. Ely was secretary of the new society during its first seven years, and president in 1899 and 1901. The big three and their close followers did what they could to stem the new influence; but their day was past. To-day every economist of reputation in the country is a member of the association, with the single exception of Sumner of Yale. He belonged to the old guard which dies but does not surrender. He has given up economics, and now lectures at Yale on the customs of primitive peoples.

Ely's reputation continued to grow. He had drawn to Johns Hopkins for postgraduate courses a number of exceptionally gifted men. Among them were Woodrow Wilson, E. Benjamin Andrews, Dr. Albion W. Small, now of the University of Chicago; T. N. Carver and C. J. Bullock, now of Harvard; John Finley, now of City College, New York; Albert Shaw, of the Review of Reviews, and B.