said to receive a balance from the other; because the price of the overplus labour must be paid in gold and silver. For example; if there are only ten thousand persons employed in England in making goods or raising some kind of produce for the market of France, and forty thousand in France for the market of England, then we must pay these additional 30,000 Frenchmen in gold and silver; that is, be at the charge of maintaining them.

14. MERCANTILISM IN 1870'

BY BONAMY PRICE

Let us take up the newspapers of today. Read the city articles of every one of them. Look at the cast of thought, at the style of literature, at the principles proceeded upon, at the whole spirit of the language. What is thought most deserving of record? The sums of gold taken to the Bank of England, or taken away from it; the amount of bullion; the vessels laden with gold on their passage to England from California and Australia; the state of the exchanges. The beloved phrase of the mercantile theory, "favorable exchanges," is dwelt upon with satisfaction; unfavorable exchanges, and the departure of gold to foreign countries, are bemoaned with anxiety as a loss; prognostications are made of a languishing or flourishing trade, according to the influx or reflux of bullion; and weekly returns are proclaimed of ingots buried out of sight in the cellars of the Bank. The doctrine that gold is wealth-the doctrine which Mr. Mill paints as an absurdity so palpable that the present age regards it as incredible, as a crude fancy of childhood-breathes in every line of the city articles of all our daily newspapers. ... What is this, I ask, but the mercantile theory, pure and fresh, as you heard Mr. Mill describe it? What is it but the resurrection of the Practical Man the reassertion of himself, of his experience, his appeal to outward form, to what may be touched and handled? The world fondly imagined that he was vanquished and gone; that Adam Smith had finally disposed of him; that boys and students had learned to pity him, and to pride themselves on having been born after the great Scotch genius; never was there a greater mistake. It takes many Adam Smiths in Political Economy to kill off forever genuine mercantile superstitions. The great authority, the man of millions, who is supposed to understand the theory of business precisely because he 'Quoted from Henry V. Poor, Money, Its Laws and History, p. 406.

has made millions, revives in every age. The mercantile theory may be consigned by philosophers to the limbo of nursery toys; but it lives on all the same, is master of the mind of the city, is supreme over city articles, and regulates the barometer of commercial weather, and, above all, is held to know the great secret of trade, and to be able to show men the way to get rich.

15. THE PRACTICAL BUSINESS VIEW OF WEALTH'

BY HENRY V. POOR

Writings such as those of Professor Price show the incoherent buffoonery taught in the name of Political Economy in one of the first universities in Christendom. Where are her purists, that they tolerate within her sacred precincts a fustian rhetoric to be matched only by that of Pistol?

A reader of the Economists cannot fail to be struck with the hostility, not to say hatred, which all of them display toward merchants. Adam Smith, when he called them "sneaking underlings," struck the keynote for all his followers. What is the reason of this hatred, with a sharper tooth even than that of the odium theologicum ?— the practice of treating gold as wealth, and the highest form of wealth, in the very face of the teachings of the Economists that it is not wealth; or that it is the lowest form of wealth. It was a reflection not to be tolerated. Smith did his best to sustain his theory by sneers and flings at those who grew rich by its violation. He declared them to be a mean and selfish race, the abettors of the worst forms of monopoly, and the disturbers of the peace of the world. Price, in his grotesque way, attempts to paint them in still blacker colors. He admits that if the merchant, if the universal instinct of the race, is to be trusted, the teachings of Adam Smith, so far as they relate to money, are shams; that one of the two must go to the wall. The only refuge of the Economists is in crying that the science has been overborne by the selfishness of men of affairs. They cannot deny that these grow rich by pursuing methods precisely the opposite to those which they lay down. The man of millions vaunts his methods; and, in reply to criticism upon them, shakes his moneybags. The Economists fiercely reply that truth is sacrificed to mammon; but if it be the. office of Political Economy to teach the method of wealth, why has

'Adapted from Money, Its Laws and History, pp. 406-8. H. V. and H. W. Poor (1877).

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.

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 SITUATION2

The treasury statement for May I 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,

2

Adapted from the Chicago Record-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

Adapted from Current Economic Problems, pp. 284-87. (The University of Chicago Press, 1915.)

311

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."

(3) THE CONFUSION INVOLVED

19. WHENCE THE COMPLAINT OF THE WANT OF MONEY ?1 BY JOSEPH HARRIS

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.