The Forgotten Man, and Other Essays

by William Graham Sumner

Monopoly of the Money.

We hear it asserted that the gold standard gives the owners of gold power to appropriate the money and make it scarce, and that they have used this power. Why, then, under silver or paper, may not the holders of silver or paper do the same? That the holders of gold have not done it has been shown above. But nobody can do it with any kind of value money. There are no “holders of gold.” He who holds gold wins no gains on it. The bankers who are supposed to hold it, if peace and security reign, put it all out at loan in order to get gain on it. When peace and security do not reign it is not safe to put it out, and borrowers, fearing to engage in new enterprises, do not present a demand for it. Furthermore, the greatest gains can then be won by holding money ready to buy property when the crash comes. That is what those who own surpluses are doing now. Hence there are no “holders of gold” until monetary threats and dangers call them into existence. Silver legislation has made a great many. The law of 1873 never made any.

There is not, therefore, a fact or deduction about the law of 1873, or the history of the market since, which the silver men have put forward, which will stand examination.

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A CONCURRENT CIRCULATION OF GOLD AND SILVER
[1878]

It seems as if the United States were destined to be the arena for testing experimentally every fallacy in regard to money which has ever been propounded. A few years ago only a very few people here had ever heard of the “double standard” or knew what it meant. In 1873 we became simply and distinctly a “gold country” in law, as we had been for forty years in fact. Immediately after that date silver began to fall in value relatively to gold, so that, if we had been on the “double standard,” and had not been deterred by considerations of honor, morality, and public credit, which considerations kept the double-standard countries from taking that course, we could have paid our debts in silver at an advantage. Forthwith all those persons who had before been racking their brains to devise some scheme for resumption without pain or sacrifice, turned their attention to silver, and began to devise plans for getting back to the position which, as they thought, we had unwisely abandoned. The consequence has been that, for the last year, the country has produced numberless editorials, essays, lectures, and speeches, full of the most crude sophistry, and the most astonishing errors as to all the elementary doctrines of coinage and money. The favorite object of all these schemes is to find some means of increasing the amount of money at the disposal of the world, or of this nation, so as to raise prices and make it easier to pay debts. These schemes have taken their point of departure in the speculations of some European economists. In Europe the propositions of the economists in question have never passed beyond the realm of speculation and theoretical discussion amongst professional economists. They have been regarded by some as probably sound, and capable of being made the basis of advantageous legislation. By others, superior in number and authority, they have been regarded as unsound. Inasmuch as they involve an international coinage union between all civilized countries and could be put to the experiment only on a scale involving immeasurable risks, the overwhelming judgment has been that they were out of the question. Here, however, our amateurs and empirics are in hot haste to make the experiments, without any coinage convention, or with the coöperation of only a few and the less important nations, that is to say under circumstances which even the most extreme bimetallists condemn as ruinous.

It must be observed then that there lies back of all this popular discussion a scientific and technical question of great delicacy. I might even say that it is a speculative question, or a question in speculative economics, for we have no experience of an international coinage union, or of a concurrent circulation, of the metals. We have to imagine the state of things proposed and reason a priori as to what must be the result. There is a postulate to all these schemes which has never been expressed and never been discussed, but which is assumed to be true. It has two different forms: (1) A concurrent circulation of gold and silver may be established in any country: (2) A concurrent circulation of gold and silver may be established by a coinage union of all civilized nations. These postulates, or we may say this postulate, for the latter includes the former, I have now to bring in question. If the science of money teaches that there cannot be a concurrent circulation of the metals, then the schemes which I have referred to are all condemned. The question, moreover, has won such an immediate and practical significance in the country that it is no longer a subject for academical discussion amongst economists, about whom opinions may differ without importance.

The Senate of the United States has just passed a bill containing the following provision:

“Sec. 2. That immediately after the passage of this act the President shall invite the governments of the countries composing the Latin Union, so called, and of such other European nations as he may deem advisable, to join the United States in a conference to adopt a common ratio between gold and silver for the purpose of establishing internationally the use of bimetallic money and securing a fixity of the relative value between those metals; such conference to be held at such a place in Europe or in the United States at such a time within six months as may be mutually agreed upon by the executives of the governments joining in the same. Whenever the governments so invited, or any three of them, shall have signified their willingness to unite in the same, the President shall, by and with the advice and consent of the Senate, appoint three commissioners who shall attend such conference on behalf of the United States, and shall report the doings thereof to the President, who shall transmit the same to Congress.”

The conception which governed this legislation is plain enough. It proposes to secure a concurrent circulation of the two metals at a fixed ratio by an international agreement. The proposition is to put the experiment at work when only three nations besides ourselves consent and in the meantime to remonetize silver here at sixteen to one when the market ratio is seventeen and one-half to one. This adds to the absurdity of the bill, but has no bearing on my present controversy. I challenge the postulate which is assumed, which has never been discussed, much less proved, that a concurrent circulation is possible if an international union can be made. Anybody who concedes this concedes, as I view it, the fundamental and controlling error in the silver craze. If this premise is conceded, there can be no further controversy on the arena of science. It remains only to try to overcome practical difficulties. Such is the issue I raise with those who, under any reservations whatsoever, concede that a concurrent circulation is possible. In a body of scientific gentlemen I need only refer to the mischief done in science by assuming the truth of postulates without examination, and I need make no apology for bringing forward with all possible force and vigor a controversy on a point so essential. It is my duty to say that I may be in error, and I have the misfortune to differ here with gentlemen from whom I dissent seldom and unwillingly, but it will not be denied that, while there is controversy on a point so essential, and at a moment when practical measures of high importance to every person in this country are proposed, based on certain views of the matter, I am right in promoting discussion. I wish to be understood as paying full respect to everybody, but I address myself, without compliments, to the question in hand. I shall be satisfied if I make it appear that I have some strong grounds for the position I take in a long, careful, and mature study of this question in all its bearings.

It will economize time and space, if, before entering on my subject, I try to clear up two points: (1) what is an economic force or an economic law, and how ought we to go about the study of economic phenomena? (2) What is a legal tender?

(1) What should be our conception of an economic force or an economic law, and how ought we to study economic phenomena? Some people seem to think that economic phenomena constitute a domain of arbitrary and artificial action. They think that social phenomena of every kind are subject to chance or to control. They see no sequence between incidents of this kind. They have no conception of social forces. They think economic laws are only formulae established by grouping a certain number of facts together, like a rule in grammar, and they are prepared for a list of exceptions to follow. This conception, in its grosser forms, is now banished from the science, but it still has strong hold on popular opinion. It also still colors a great many scientific discussions, those, namely, who seek to carry forward the science by following out the complicated cases produced by the combined action of economic forces in our modern industrial life, and describing them in detail. In my opinion such efforts are all mistaken.

I regard economic forces as simply parallel to physical forces, arising just as spontaneously and naturally, following a sequence of cause and effect just as inevitably as physical forces—neither more nor less. The perturbations and complications which present themselves in social phenomena are strictly analogous to those which appear in physical phenomena. The social order is, to my mind, the product of social forces tending always towards an equilibrium at some ideal point, which point is continually changing under the ever-changing amount or velocity of the forces or under their new combinations. Consequently, I do not believe that the advance of economic science depends upon fuller and more minute description of complicated social phenomena as they present themselves in experience, but on a stricter analysis of them in order to get a closer and clearer knowledge of the laws by which the forces producing them operate. If this can be attained, all the complications which arise from their combined action will be easily solved. Of course we have peculiar difficulties to contend with, inasmuch as we cannot constitute experiments, and it is necessary to rely largely upon historical cases which present now one and now another force or set of forces in peculiar prominence. The facts which show the difficulty of the task, however, have nothing to do with its nature.

According to this view of the matter there is no more reason to be satisfied with generalities in economics than in physics. Some writers on economic subjects, who pride themselves upon scientific reluctance, remind me of Mr. Brooks, in “Middlemarch.” They believe in things up to a certain point, and are always afraid of going too far. They would be careful about the multiplication table, and not bear down too hard on the rule of three. They do not discriminate between care in the application of rules, and confidence in scientific results; or between harshness in personal relations and firm convictions in science. The more we come to understand economic science the more clear it is that we are dealing with only another presentation of matter and force, that is to say, with quantity and law, so that we have mathematical relations, and have every encouragement to severity and exactitude in our methods. When, therefore, it is said that the economists do not pay sufficient heed to the power of legislation, that is no stopping place for the argument any more than it would be in physics to say that sufficient heed was not paid to friction. The question would then arise: What is the force of legislation? Let us study it, just as we would go on to study friction in mechanics. When it is loosely said (as if that dismissed the subject) that men have passions and emotions and do not act by rule, the objection is not pertinent at all. It is connected with another wide and common, but very erroneous notion, that economic laws involve some stress of obligation on men to do or abstain from doing certain things. I suppose this notion arises from the classification of political economy amongst the moral sciences. Economic laws only declare relations of cause and effect which will follow, if set in motion. Whether a man sets the sequence in motion at all or not, and if he does so, whether he does it from passion or habit or upon reflection, is immaterial. Such is the case, as I understand it, with all sciences. They simply instruct men as to the laws of this world in which we live that they may know what to expect if they take one course or another, or they instruct men so that they may understand the relations of phenomena of forces beyond our control so that we may foresee and guard ourselves against harm. It follows from all this that I demand and aim at just as close thinking in political economy as in any other science. I think we must try to get as firm hold of principles and fundamental laws as we can, and that, especially in the face of speculative propositions, we ought to cling to and trust the firmly established laws of the science.

(2) As to legal tender, it seems to me that the public mind has been sadly confused under the régime of paper money. Money is any commodity which is set apart by common consent to serve as a medium of exchange. If it is a commodity, it will exchange by the laws of value, and will therefore serve to measure value. It must therefore be a commodity, an object of desire requiring onerous exertion to get it. In theory, it may be any commodity. The question as to what commodity is a question of convenience—that one which will answer the purpose best. Through a long period of experiments we have come to use gold or silver, simply because we found them the best. Convenience here gave rise to custom, and money of gold or silver owes its existence to custom entirely, and not to law at all. Law has only in very few instances even selected that one of the two metals which should be used. Even that has come about through custom. Law, therefore, here as elsewhere where it has been beneficent and not arbitrary, has followed custom, recognized it, ratified it, and given it sanctions. (1) A legal tender law, therefore, where customary money is used, simply declares that the parties to a contract shall not vex each other by arbitrarily departing from the custom. The creditor shall not demand, and the debtor shall not offer, out of spite or malice, anything but the customary money of the nation. Such a legal tender law has no significance whatever. No one thinks of it or speaks of it or takes it into account, unless he be one of those whose idle malice it prevents.

(2) A legal tender law is used where a subsidiary token currency is employed as a part of the system, to prevent debtors from using it in payment, and to prevent the system from bringing about a depreciation of the money. In this case it is part of the device for using a token currency, and is open to no objection. It would check the debtor when he meant to perpetrate a wrong. It would not enable him to do one.

(3) A legal tender law has been used very often, however, to give forced circulation to a depreciated currency of little or no value as a commodity. In that case the legal tender act enables the debtor to discharge his obligations with less commodities than he and the creditor understood and expected when the contract was made. If the creditor appeals to the courts, they are obliged to rule that the debtor has discharged his obligation, when he has not, and they give the creditor no relief. Hence it appears that a legal tender act giving forced circulation to depreciated currency amounts simply to this: it withdraws the protection of the courts from one party to a contract, and leaves him at the mercy of the other party to the extent of the depreciation of the currency. Obviously no other act of legislation more completely reverses the whole proper object of legislation, or more thoroughly subverts civil order. The English passed two or three acts of this nature, although they were not specifically acts for making banknotes legal tender, during the bank suspension at the beginning of this century. It would have been interesting to see what English courts would have made of an act which reversed the whole spirit of English law by diminishing the rights of one party under a contract, and which made the courts an instrument for his oppression instead of an institution to provide a remedy, but no case came up. The twelve judges on appeal overturned the sentence of a man convicted of buying and selling gold at a premium. Some few persons demanded and obtained gold payments throughout the suspension but the paper circulation was really sustained by public opinion and consent, it being believed that the bank suspension was necessary. This form of legal tender, therefore, is totally different from that first described. I call it, for the sake of discrimination, a forced circulation. When a legal tender act giving forced circulation to a depreciated currency is first passed, if it applies to existing contracts it transfers a percentage of all capital engaged in credit operations from the creditor to the debtor. In its subsequent action it subjects either party to the fluctuations which may occur in the forced circulation, robbing first one and then another. Hence the debtor interest is that the depreciation once begun shall go on steadily, because any recovery would rob debtors as creditors were robbed in the first place.

Having disposed of these two points I now take up the question I proposed at the outset: Is a concurrent circulation of gold and silver possible under an international coinage union?

Here we have to make a radical distinction between two different propositions for an international coinage union. The first is that of M. Wolowski. He pointed to the comparatively small fluctuations of the precious metals and to the effect which France had exerted by the double standard, and inferred that if all civilized nations would join France in her system they might arrest the fall of either metal before it became important. If the coinage union fixed upon a ratio of one to fifteen and one-half, then, if silver fell all would use silver, which would arrest its fall. If gold should fall, all would use gold. As the metal in use would always be the one which was cheaper than the legal ratio, the other would be above it, if I may so express it. Hence neither would be permanently demonetized, because neither could fall so low as to go out of use. Only one would be used at a time but the other would be within reach, and if either should rise relatively to commodities, debtors would not suffer but might even be benefited by being enabled to turn to the falling metal. This system would require of the law nothing except to prescribe that the mint should coin either metal indifferently which people might bring, silver coins being made fifteen and one-half times as heavy as gold coins of the same denomination, both being of the same fineness. This is Wolowski’s plan, and these are the advantages he expected from it. He thought that it would hold the alternative open between the two metals. He feared that silver, if universally demonetized, would fall so low as to go out of use entirely for money. He thought that France and, later, the Latin Union ought not to bear alone the cost of keeping up the value of silver. He thought the debtor ought not to be oppressed by being forced to rely on one metal alone which might rise relatively to commodities. He did not propose to give the debtor the use of the whole mass of both metals at the same time. Indeed that arrangement would defeat Wolowski’s purpose, for if the whole mass of both metals could be brought into use at once prices would rise. Those who are indebted now would win, but when prices and credit had adjusted themselves to the bimetallic money the effect would be exhausted. Debts contracted after that would be relatively just as heavy to pay as they are now, and if the precious metals taken together rose relatively to commodities, debtors would have no recourse to anything else. Now this chance of recourse, when the standard of value rose, was just what Wolowski wanted. His language is very guarded and scientific. He never went further than to say that his scheme would restrain and limit the fluctuations of the metals—how far he did not know and did not pretend to say. He thought the fluctuations would be so narrow that the transition from one metal to the other would be a relief to debtors without any appreciable injustice to creditors. All this is very clear and very sensible. On theory it is open to no radical objection. The discussion of it turns upon considerations of practicability and expediency. It is much to be wished that this plan should be called by its proper name: the alternative standard, or, better still, the alternate standard. It counts among its adherents a number of strong men, and many others have signified assent to it on theoretical grounds.

The term “bimetallism” ought to be restricted to another theory of which Cernuschi is the advocate, which has for its purpose to unite the two metals at once in the circulation and give debtors the whole mass of both metals as a means of payment. Cernuschi believes that the international coinage union could arrest the fluctuations of the metals entirely; or that there is some narrow limit of fluctuation within which both would remain in use, and that the coinage union could hold the value-fluctuations of the metals within these limits. The American schemes are numerous and so crude that it is difficult to analyze or classify them. They are also of many different grades. They all, however, seem to have this in common, that they want to secure to the debtor the use of both metals at once, and that they aim at a concurrent circulation. They must, therefore, be classed under bimetallism. These schemes all involve not simply what Wolowski said—that legislation and union could limit the fluctuations—but the proposers know how much it would limit them, and they can control the results. This view has very few adherents in Europe. It has not been discussed there save by one or two writers. It is passed by in silence for reasons which I shall soon show.

The opinion has been expressed that these two propositions differ only in degree. From this opinion I must express my earnest dissent. It is the very cardinal point of my present argument. Wolowski’s alternate standard seems to me to rest upon the belief that legislation of the kind proposed would restrict the fluctuations in value of the metals. It affirms that legislation would have a certain tendency. Any plan for a concurrent circulation giving debtors the use of the whole mass of both metals pretends to say how far the tendency would go and what its results would be. To my mind the difference between those two propositions is that between a scientific and an unscientific proposition. We have a parallel case before us. Some say re-monetization would cause an advance in silver. Others say re-monetization would make a four hundred and twelve and one-half grain silver dollar equal in value to a gold one. Are those two propositions the same save in degree? It seems to me that only a very superficial consideration of them could so declare. Obviously they differ in quality more than in degree. The former of these propositions is not false in principle; the question in regard to it must be decided by circumstances. The second is false and erroneous from beginning to end, and would be false even if temporarily and by force of circumstances the silver dollar should become equal to the gold dollar, because it rests, like the old doctrine that nature abhors a vacuum, upon false views of all the forces involved. Just so with regard to a concurrent circulation or bimetallism as compared with the alternate standard. The latter predicts tendencies to arise from the play of certain forces. Those tendencies are the true effect of those forces. The question may be raised whether the means proposed would bring those forces into action, whether they would be as great as is expected, whether they would be counteracted by others, but there is no error as to the nature and operation of economic forces. Bimetallism predicts results, not tendencies. It assumes to measure the consequences and say what will result as a permanent state of things. It therefore involves the doctrine that legislation can control natural forces for definite results. If legislation cannot so control natural forces, then we cannot secure a concurrent circulation, giving the debtor the use of the whole mass of both metals with which to pay his debts. At a time like this, when the silver craze seems to be asserting itself as a mania, by sweeping away some who ought to be most staunch in their adherence to economic laws and most clear in their perception of economic truths, I may be pardoned for insisting most strenuously upon this distinction and upon its importance. Many of the American writers have been betrayed into error by not having examined these two plans and discriminated between them with sufficient care. It is very common to see arguments based upon the alternate standard and inferences drawn as to bimetallism which are entirely fallacious because they cross the gulf between the two theories without recognizing it. Bimetallism is so plainly opposed to fundamental doctrines of political economy that few European economists have felt called upon to discuss it. Here the case is different, and the more ground it wins, and the more danger there is that it will affect legislation, the more urgent is the necessity to resist every form of it.

Now my proposition is that a concurrent circulation, that is a permanent union of the two metals in the coinage, so that the debtor can use both or either, is impossible. Permanent stability of the metals in the coinage, whether with or without an international coinage union, is just as impossible in economics as perpetual motion is in physics. Against perpetual motion the physicist sets a broad and complete negation, because action and reaction are equal. He does not care what the principle may be on which any one may try to construct perpetual motion. If any one brings to him a perpetual motion perhaps he will spend time to examine and analyze it and show how it contravenes the great law of motion. I claim that a concurrent circulation is impossible on any scheme or under any circumstances because it contravenes the law of value. Value fluctuates under supply and demand at a limit fixed by what Cairnes calls cost of production, or Jevons calls the final increment of utility, or Walras calls scarcity, all of which on analysis will be found to be the same thing. Bimetallism affirms that, under legislation, although supply and demand may vary, value shall not. In order to test this let us next examine the influence of legislation on value.

The cases in which legislation acts on value are all cases of monopoly. Such is the case with token money; such is the case with irredeemable paper. As with every other monopoly, the successful manipulation of these monopolies consists in controlling supply, to fit the supply to the demand at the price which the monopolist wants to get. The history of every monopoly shows the great difficulty, I might say, in the long run, the impossibility, of doing this. The bimetallists propose not to act on the supply, and so create a monopoly, but to act upon the demand. This is a new exercise of legislation, different from any yet tried, and not guaranteed by any experience. Now to act upon the demand is, in the phrase of the stock brokers, to make a corner, that is to buy all that is offered at a price. Stock gamblers do this so as to sell out again at an advance to those who are forced to buy. If there are none who are forced to buy, then those who bought above the market have lost their capital. The propositions of the advocates of the alternate standard and of bimetallism are alike in proposing that all civilized nations shall combine to make a corner on the falling metal. Whether that is a worthy undertaking or not I will not stop to inquire. It is evident that the nations of the coinage union would have no one on whom to unload after they had bought, and that there would be an inevitable loss and waste of capital in the transaction. This, however, is not all. A corner is effective or not according to its scope. It must embrace the whole object to be raised in price, and above all it must act upon a limited amount which is not fed from any new source of supply. A corner on the precious metals is not to be made effective even by a combination of all civilized nations. In my opinion there is a grand fallacy in the notion that a coinage union would do what France did, only on a larger scale. Wolowski saw France, lying between Germany, a silver nation, and England, a gold nation, carry out the compensatory operation, and he inferred that all nations could agree to do the same, more widely, more easily, and with wider distribution of the loss. It seems to me that there was an action and reaction here between members of the group of nations which one can easily understand, but that if all nations joined in the system, the alternation would not work at all for want of a point of reaction. If all nations agreed to join the corner on the falling metal, they could not all bring their new demand to bear on the new supply at the same time. As the mines are limited and local, a new supply would touch the market only at one point. Hence the coinage union implies no aggregation of force at all. Make the union embrace the whole world, and the effect is just the same as if there were none at all, the matter standing simply on the natural laws for the distribution of the precious metals. Control of demand by a corner or of supply by a monopoly acts more efficiently the smaller and closer the market is, and, conversely, the larger and wider the transaction, the less the efficiency. Furthermore, a corner to succeed must make sure that there is no source of supply, and that it has to deal only with an amount which can be computed. The gold corner on Black Friday, 1869, was ruined when the Secretary of the Treasury ordered sales of gold. A monopoly in like manner, must be able to count on steady and uniform demand. The coal combination failed when the hard times suddenly contracted the demand for coal. Hence the movement towards a wider market, embracing a larger quantity, is always a movement towards less, and not towards greater control by artificial expedients.

Applying these observations to the matter before us, I have to say (1) that I consider the inference that a coinage union would do what France did under the double standard, only more surely and efficiently, quite mistaken; (2) as to the alternate standard, I do not believe that the alternation would work on a worldwide scale at all. I regard its operation in France as fully accounted for by the relations of the three countries, England, France, and Germany; (3) as to bimetallism, the coinage union, instead of gaining more stringent control to counteract and nullify the effect of changes in supply of either metal, would have less effect in that direction the larger it was.

Having thus examined the nature of artificial interferences with value, and their limitations, I return to my proposition that to establish a concurrent circulation is just as impossible as to square the circle or to invent perpetual motion. No doubt it is difficult, perhaps impossible, to make a demonstration of a negative proposition like this. The burden of proof lies upon those who bring forward attempts to solve the problem, and I can justly be held only to examine and refute such attempts. No proof has ever been offered by any of the persons in question. No one of them has attempted as much of an analysis of the effect of artificial expedients on value as the one I have just offered. No one of them has attempted to analyze the operation of the proposed coinage union, to show how or why they expect it to act as they say. They pass over this assumption as lightly as our popular advocates of silver assume that re-monetization would put an end to the hard times. They content themselves with analogies, or with loose and general guesses that such and such things would result from a coinage union. We all know what dangers lurk in the argument from analogy. The further you follow it the further you are from the point. An analogy has no proper use save to set in clearer light an opinion or a proposition which must rest for its merits on an appropriate demonstration. Thus the attempt has been made to illustrate the power of governments to control the fluctuations of the metals by the analogy of a man driving two horses. It is said that this is “controlling natural forces for definite results,” and it is asked, “if one man in his sphere can do this, why may not the collective might of the nation do this in its sphere?” My answer is that it is in the sphere of man to tame horses, but it is not in the sphere of nations to control value, and therefore the analogy is radically false. I cannot be held to argue both sides of the question. I am not bound to put all the cases of the adversaries into proper shape for discussion and then to refute them. I plant myself squarely upon the fundamental principles of the science of which I am a student and deny that any concurrent circulation is possible except under temporary and accidental circumstances, because it involves the proposition that legislation can control value to bring about desired results. A concurrent circulation must mean one which is concurrent, and if it is to offer debtors the whole mass of both metals to pay their debts with, it must be permanent. If both metals should be used for a time until prices and contracts were adjusted to them, and then one should rise so much as to go out of use, the consequences would be disastrous to debtors beyond anything now apprehended.

I proceed then to criticize the notions of a concurrent circulation, as to their common features. The error with them all is that they try to corner commodities the supply of which is beyond their control or knowledge. That is a fatal error in any corner, as I have already shown. If it were proposed that each nation should have a certain amount of circulation, composed of the two metals in equal parts, and then that the circulation should be closed, then the corner might work and there would be some sense in it. Suppose that a nation had two hundred millions of fixed circulation, half gold and half silver, and that this sum was not in excess of its requirement for money. Then I do not see how either half of the coinage should fall relatively to the other; but if silver did fall, every dollar of silver which was sought would involve the relinquishment of a dollar in gold and this exchange would act on equal and limited amounts of each metal. It would then depress one metal and raise the other to an exactly equal degree. The balance might, in that case, be retained. The hypothesis of a closed circulation is, however, preposterous. No one thinks of it.

The plan of a concurrent circulation with a free mint strikes, upon close examination, at every step, against difficulties of that sort which warn a scientific man that he is dealing with an empirical and impossible delusion. How is it to be brought about? The movement towards a bimetallic circulation would never begin unless the ratio of the coinage was the market ratio. It would not go on unless the mint ratio followed every fluctuation of the market. It would not be accomplished unless the mint ratio at last was that of the market. It would not remain unless the market ratio remained fixed. But the mint ratio cannot be changed from time to time. If it were, the result would be inextricable confusion in the coins, driving us back to the use of scales and weights with which to treat the coins as bullion.

If we pass over this difficulty, and suppose, for the sake of argument, that the system had been brought into activity, the reasons why it could not stand present themselves in numbers. They all come back to this, that the supply is beyond our knowledge and control. If the supply of either metal increased, it would overthrow the legal rating at the point at which it was put into the market, and would destroy the equality there. Its effects would spread according to the amount of the new supply and the length of time it continued. The bimetallists seem to forget that an increased demand counteracts an increased supply only by absorbing it under a price fluctuation. The same error is familiar in the plans for perpetual motion. Speculations to that end often overlook the fact that we cannot employ a force in mechanics without providing an escapement which is always exhausting the force at our disposal. So the bimetallists seem to think of their enhanced demand as acting on value without an actual action and reaction which consist in absorbing supply under a price fluctuation. The new metal would therefore pass into the circulation and would destroy the equilibrium of the metals in the coinage. If this new addition were only a mathematical increment it would suffice to establish the principle for which I contend and to overthrow the bimetallic theory, for if I see that any force has a certain effect I must infer that the same force increased or continued would go on to greater effects; and if the final effect is not reached it is because the force is not sufficient, not because there is an act of the legislature in the way. If then, silver entered the circulation, gold would leave it and be exported, if the exchanges allowed of any export, or would be hoarded and melted. The silver-producing countries would therefore gravitate towards a silver circulation only, and other countries towards a gold circulation.

Here another assumption of the bimetallists is involved. They assume that the metal to be exported would be the one which falls. Thus, if all nations had a bimetallic circulation, and if the supply of silver in the United States increased, it would be necessary that this silver should be proportionately distributed among all the nations in order to keep up the bimetallic system. No bimetallist has ever faced this question. They assume that Americans would pay their foreign debts with silver in that case, and they rely on the international legal tender law to secure this. This is one of the fallacies of legal tender referred to at the outset. Rates of exchange and prices would at once vary to counteract any such operation, just as they always counteract the injustice of a forced circulation and throw it back on those who try to perpetrate it. It may suffice to put the case this way. If we had both metals circulating together so that a merchant obtained both in substantially equal proportions, and if silver should fall ever so little in our markets, owing to increased production, and if a foreigner were selling his products here, intending to carry home his returns in metal, which metal would he retain to carry away? Obviously that one which at the time and prospectively had the higher value. Rates of exchange and prices would adjust themselves so as to bring about the same result through the mechanism of finance. This is one of the most subtle questions involved in the general issue, but it is vital to the bimetallic theory.

Some writers have satisfied themselves with general opinions—guesses, I am obliged to call them—that if the fluctuations were kept within certain limits the concurrent circulation would stand. They probably rely on an element analogous to friction which unquestionably acts in economy and finance. This element consists of habit, prejudice, passion, dislike of trouble. It acts with great force in retail trade, and in individual cases, and in small transactions. Its force diminishes as we go upwards towards the largest transactions, where the smallest percentages give very appreciable sums. It seems to me that the bimetallic system reduces this friction to a minimum. If a man has to spend a dollar he does not go to a broker to buy a trade dollar with a greenback dollar, and save a cent or two, but if he has both a gold dollar and a silver dollar in his pocket (and, under the bimetallic system, the chances are that when he has two dollars he will have one of each), it needs only the lightest shade of difference in value to determine him which to give and which to hold. A bank of issue, holding equal amounts of the two metals with which to redeem its notes, would find an appreciable profit in giving one and holding the other, and it would require nothing but a word of command to the proper officer, involving no risk at all. Hence I say this friction would be reduced to its minimum under the bimetallic system. It is astonishing what light margins of profit suffice to produce financial movements nowadays; and the tendency is to make the movements turn on smaller and smaller margins. Five in the thousand above par carries gold out of this country. Four in the thousand carries it from England to France. When the French suspended specie payments a depreciation of two in the thousand on the paper sufficed to throw gold out of circulation. A variation in the ratio of metals from 15.5:1 to 15.6:1 is a variation of six and one-half in the thousand. I do not see how small a variation must be in order to justify any one in saying that a bimetallic circulation could exist in spite of it. Therefore it seems to me that the more accurately the bimetallic system was established the more delicate and more easily overthrown it would be, while if it was not accurately established it would not come about at all. I submit that such a result is one of the notes of an absurdity in any science.

An analogy has been suggested in illustration and support of the bimetallic theory that two vessels of water connected by a tube tend to preserve a level. I have already indicated my suspicion of all analogies, but I will alter this one to make it fit my idea of bimetallism. Suppose two vessels capable of expansion and contraction to a considerable degree, under the operation of forces which act entirely independently of each other, so that the variations in shape and capacity of each may have all conceivable relations to the corresponding variations of the other. Suppose further that each is fed by a stream of water, each stream being variable in its flow and the variations of each having all possible relations to the variations of the other. The fluctuations in capacity may represent fluctuations of demand, and the fluctuations of inflow, fluctuations of supply. Would the water in the two vessels stand at the same level except temporarily and accidentally, even though the two vessels were connected by a tube? The analogy of the connecting tube could not be admitted even then, because it brings into play the natural law of the equilibrium of fluids, to which the legal tie between the metals is not analogous. If we desire to make the analogy approximately just, in this respect, we may suppose that each vessel has an outlet and that a man is stationed to open the outlet of the vessel in which the water is at the higher point so as to try to keep them both at a level. It is evident that his utmost vigilance would be unavailing to secure the object proposed. I do not borrow the analogy or adopt it. I only show how inadequate it is, in the form proposed.

There is another group of propositions which have many advocates amongst us, of which something ought to be said—propositions of those who want to use silver as a legal tender at its value, under some scheme or other. Some want a public declaration, by appointed persons, from time to time, of the market value. Any such plan would throw on the officers in question a responsibility which would be onerous in the extreme, so much so that no one could or would discharge it; and it would introduce a mischievous element of speculation into the payment of all debts. It is, besides, open to the objections which may be adduced against the other plan, which is to have either coins or bars of silver, assayed and stamped, legal tender for debts at the market quotation. Here we need to remember the definition of legal tender given at the outset. If these silver coins and bars are convenient for the purpose they will come into use by custom and consent at their value. If they really pass at their market value, there will be no advantage to the debtor. One who has silver and wants to pay a debt can do so at its value by selling the silver. In this sense every man who produces wheat, cotton, iron, or personal services, pays his debts with them at their value. One who produced something else than silver would have no object in selling it for silver, to pay his debt with at the value of silver. He would have the trouble of another transaction, he would have to buy silver at its selling price, and the creditor to whom he paid it would have to sell it for money at the broker’s buying price, with no advantage to either, but only to the broker. If silver passes at its value, legal tender has no force for it; if it is to have forced circulation in some way, it will help the debtor, as all forced circulation does, by enabling him to keep part of what he borrowed. If then these schemes really mean that silver shall pass at its value, they are of no use. It does so now. If they mean that silver shall be enabled to pay debts in some other way than iron, wheat, cotton, etc., then we know what we are dealing with. There is just as much reason why the government should pay for elevators and issue certificates of the amount and quality of grain, which should be legal tender, as there is why it should assay and stamp silver for that purpose, and issue notes for it. These cases only serve to bring out the distinction between money and merchandise, and to show that the perfection of money does not lie in the direction of a multiple legal tender, but of a single standard, as sharp and definite as possible. Such a standard has the same advantages in exchange as the most accurate measures of length and weight have in surveying or in chemistry, and it is turning backward the progress of monetary science to introduce fluctuations and doubt into the standard of value, just as it would be to cultivate inaccuracy in weights and measures.

Here I am forced to notice another hasty and mischievous analogy. Some devices for composite measures of length have been adopted to avoid contraction and expansion, and it is urged that bimetallic money is a step in the same direction. I by no means assert that science can do nothing to reach a better standard of value than gold is. What progress in that direction may lie in the future no one can tell, and he would be rash who should ever presume to deny that progress can be made; but when any proposition is presented it will have to show what composite measures of length show, viz., that its action is founded on natural laws. Heat and cold act oppositely on the components of the composite measures of length, or the arrangement is such that the action of the natural forces neutralizes. No such scientific principle underlies bimetallic money. The forces determining the value of gold and silver act independently of each other and are not subject to common influences. They are complex, moreover, and their effects are not uniform in their different degrees. Therefore this analogy also fails.

The opinion that a concurrent circulation is not possible has led several of the leading nations of Europe (and, at the time of writing such is still the system of the United States) to adopt the plan of a permanently false rating of gold and silver, so as to use silver as a subsidiary coinage. Silver is permanently overrated, so that it obtains currency above its bullion value. If the civilized nations want to use silver for money, so that the total amount of metallic money in the Western world shall be greater than the amount of gold, and if they are not satisfied with the use of it as subsidiary, then there is only one way left, and that is for some nations to use gold and some to use silver. This was the solution of the bimetallic difficulty which China was forced to adopt a thousand years ago. Some provinces used iron and some copper. The question then arises as to who will take silver. This brings me to the last point of which I have to speak.

I have discussed my subject as if gold and silver stood on the same level of desirability for money, and as if there were no choice of convenience between them. Such is not the case in fact. It will be observed that gold and silver never have been used together. Gold has generally been subsidiary, being employed for large transactions. With the advance of prices and the increase in variety of commodities, as well as in the magnitude of transactions, nations have passed from copper money to silver and from silver to gold. This advance is dictated by convenience. Silver is no longer as convenient a money for civilized industrial and commercial nations as gold. We therefore see them gradually abandoning silver, and we saw the Latin Union set up a bar against silver so soon as the operation of the double legal tender threatened to take away gold and give it silver. Whether this movement from silver to gold can be accomplished without financial convulsions I am not prepared to say, especially in view of the extent to which the nations have depreciated gold by paper issues, but I regard the movement as one which must inevitably go forward. The nations which step into the movement first will lose least on the silver they have to sell. The nations which use silver until the last will lose most upon it, because they will find no one to take it off their hands. If we now abandon the gold standard and buy the cast-off silver of the nations which have been using it and are now anxious to get rid of it, we voluntarily subject ourselves to that loss, which we are in no respect called upon to share. The Dutch at New York kept up the use of wampum longer than the English in New England. When the Yankees were trying to get rid of it, they carried it to New York, adding some which they manufactured for the purpose, and they carried the goods of the Dutchmen away. The latter then found that they held a currency which they could only get rid of at great loss and delay to the Indians north and west of them. The Yankees thus early earned a reputation for smartness. The measure now proposed is a complete parallel, only that now this nation proposes to take the rôle of the Dutch. We shall have to give our capital for silver, and after we have suffered from years of experience with a tool of exchange inferior to that which our neighbors are using, we shall have to get rid of it and buy the best. Then we shall incur the loss—to all those who have anything—of the difference between the capital we gave and that which we can get for the silver. The dreams of getting silver and keeping gold too, so as to have a concurrent circulation, are all vain. At the rating proposed there is no difference of opinion on this point amongst any persons at all qualified to give an opinion. The real significance of the propositions before the country is to make us one of the nations to take silver in the distribution I have described. The notion of a coinage union is impracticable. It would be easier to get up an international union to do away with war. England is perfectly satisfied with her money. She appreciates the peril of monetary experiments and will make none. Germany, Sweden, Finland, Denmark, and Holland have just changed from silver to gold, and will not enter on any new changes for a long period, if ever. The coinage union is therefore out of the question. The issue before us is simply whether we, being a gold nation, will, under these circumstances, abandon gold and take up silver. No doubt the nations which want gold would be very glad to have us do it. We should render them a great service; we should, however, do ourselves great harm, as much so as if we should buy a lot of cast-off machinery from them. They are waiting to see whether we are ignorant and foolish enough to put ourselves in this position; and when they have seen, we shall hear no more of the coinage union.

I have now presented the views to which my study of this question has led me. It will be perceived that I direct my attack against the postulate of all the bimetallic theories. I have carefully discriminated between the alternate standard and bimetallism. I have said little about the former. It is very much a matter of opinion whether it would work or not. I do not believe that it would, under a coinage union, but I should not feel forced to take strong ground against any one who held the contrary opinion. My subject has been a concurrent circulation of gold and silver, and I have tried to controvert the notion that any such thing is possible, with or without a coinage union, because that notion contradicts the first great law of economic science. If that notion is true, then there is no science of political economy at all; there are no laws to be found out, a professional economist has nothing to teach, and he might better try to find some useful occupation. If that notion is true, we have no ground on which to criticize the Congressmen who are trying to pass the silver bill. We cannot predict any consequences or draw any inferences from past experience. If legislation can control value for definite results, then the whole matter is purely empirical. In that case, the Congressional experiment may turn out well for all the grounds we have to assert the contrary; its success would only be questionable, not impossible; if it failed it would not be because its supporters had attempted the impossible, but because they had not used sufficient means. They could go on to try the experiment again and again in other forms and with other means, and they would indeed be doing right to proceed with their experiments, like the old alchemists, in the hope of hitting it at last. No economist would have any ground upon which to step in and define the limits of the possible, or to prescribe the conditions of success, or to set forth the methods which must be pursued—if he could not appeal with confidence to the laws of his science as something to which legislature as well as individuals must bend. Therefore one who holds the views I have expressed in regard to economic forces, laws, and phenomena is compelled, as well by his faith in his science as by the public interests now at stake in the question, to maintain that a concurrent circulation of gold and silver, either with or without a coinage union, is impossible.

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THE INFLUENCE OF COMMERCIAL CRISES ON OPINIONS ABOUT ECONOMIC DOCTRINES
[1879]

Any one who follows the current literature about economic subjects will perceive that it is so full of contradictions as to create a doubt whether there are any economic laws, or whether, if there are any, we know anything about them. No body of men ever succeeded in molding the opinions of others by wrangling with each other, and that is the present attitude in which the economists present themselves before the public. Like other people who engage in wrangling, the economists have also allowed their method to degenerate from argument to abuse, contempt, and sneering disparagement of each other. The more superficial and self-sufficient the opinions and behavior of the disputants, the more absolutely they abandon sober arguments and devote themselves to the method I have described. As I have little taste for this kind of discussion and believe that it only degrades the science of which I am a student, I have taken no part in it. In answer to your invitation, now, what I propose to do is to call your attention to some features of the economic situation of civilized nations at the present time with a view to establish two points:

1. To explain the vacillation and feebleness of opinions about economic doctrine which mark the present time, and

2. To show the necessity, just at this time, of calm and sober apprehension of sound doctrine in political economy.

At the outset let me ask you to notice the effects which have been produced during the last century by the developments of science and of the industrial arts. Formerly, industry was pursued on a small scale, with little or no organization. Markets were limited to small districts, and commerce was confined to raw materials and colonial products. Producer and consumer met face to face. The conditions of the market were open to personal inspection. The relations of supply and demand were matters of personal experience. Production was carried on for orders only in many branches of industry, so that supply and demand were fitted to one another, as we may say, physically. Disproportionate production was, therefore, prevented and the necessity of redistributing productive effort was made plain by the most direct personal experience. Under such a state of things, much time must elapse between the formation of a wish and its realization.

Within a century very many and various forces have been at work to produce an entire change in this system of industry. The invention of the steam engine and of the machines used in the textile fabrics produced the factory system, with a high organization of industry, concentrated at certain centers. The opening of canals and the improvement of highways made possible the commerce by which the products were distributed. The cheapening of printing and the multiplication of means of advertising widened the market by concentrating the demand which was widely dispersed in place, until now the market is the civilized world. The applications of steam power to roads and ships only extended further the same development, and the telegraph has only cheapened and accelerated the means of communicating information to the same end.

What have been the effects on industry?

1. The whole industry and commerce of the world have been built up into a great system in which organization has become essential and in which it has been carried forward and is being carried forward every day to new developments. Industry has been growing more and more impersonal as far as the parties to it are concerned. Our wants are satisfied instantaneously and regularly by the coöperation of thousands of people all over the world whom we have never seen or heard of; and we earn our living daily by contributing to satisfy the wants of thousands scattered all over the world, of whom we know nothing personally. In the place of actual contact and acquaintance with the persons who are parties to the transactions, we now depend upon the regularity, under the conditions of earthly life, of human wants and human efforts. The system of industry is built upon the constancy of certain conditions of human existence, upon the certainty of the economic forces which thence arise, and upon the fact that those forces act with perfect regularity under changeless laws. If we but reflect a moment, we shall see that modern industry and commerce could not go on for a day if we were not dealing here with forces and laws which may properly be called natural because they come into action when the conditions are fulfilled, because the conditions cannot but exist if there is a society of human beings collected anywhere on earth, and because, when the forces come into action, they work themselves out, according to their laws, without possible escape from their effects. We can divert the forces from one course to another; we can change their form; we can make them expend themselves upon one person or interest instead of upon another. We do this all the time, by bad legislation, by prejudice, habit, fashion, erroneous notions of equity, happiness, the highest good, and so on; but we never destroy an economic force any more than we destroy a physical force.

2. Of course it follows that success in the production of wealth under this modern system depends primarily on the correctness with which men learn the character of economic forces and of the laws under which those forces act. This is the field of the science of political economy, and it is the reason why it is a science. It investigates the laws of forces which are natural, not arbitrary, artificial, or conventional. Some communities have developed a great hatred for persons who held different religious opinions from themselves. Such a feeling would be a great social force, but it would be arbitrary and artificial. Many communities have held that all labor, not mental, was slavish and degrading. This notion, too, was conventional, but it was a great social force where it existed. Such notions, either past or present, are worth studying for historical interest and instruction, but they do not afford the basis for a science whose object is to find out what is true in regard to the relations of man to the world in which he lives. The study of them throws a valuable sidelight on the true relations of human life, just as the study of error always throws a sidelight upon the truth, but they have no similarity to the law that men want the maximum of satisfaction for the minimum of effort, or to the law of the diminishing return from land, or to the law of population, or to the law of supply and demand. Nothing can be gained, therefore, by mixing up history and science, valuable as one is to the other. If men try to carry on any operation without an intelligent theory of the forces with which they are dealing, they inevitably become the victims of the operation, not its masters. Hence they always do try to form some theory of the forces in question and to plan the means to the end accordingly. The forces of nature go on and are true only to themselves. They never swerve out of pity for innocent error or well-intentioned mistakes. This is as true of economic forces as of any others. What is meant by a good or a bad investment, except that one is based on a correct judgment of forces and the other on incorrect judgment? How would sagacity, care, good judgment, and prudence meet their reward if the economic forces swerved out of pity for error? We know that there is no such thing in the order of nature.

I repeat, then, that the modern industrial and commercial system, dealing as it does with vast movements which no one mind can follow or compass in their ramifications and which are kept in harmony by natural laws, demands steadily advancing, clear, and precise knowledge of economic laws; that this knowledge must banish prejudices and traditions; that it must conquer baseless enthusiasms and whimsical hopes. If it does not accomplish this, we can expect but one result—that men will chase all sorts of phantoms and impossible hopes; that they will waste their efforts upon schemes which can only bring loss; and that some will run one way and some another until society loses all coherence, all unanimity of judgment as to what is to be sought and how to attain to it. The destruction of capital is only the least of the evils to be apprehended in such a case. I do not believe that we begin to appreciate one effect of the new civilization of the nineteenth century, viz., that the civilized world of to-day is a unit, that it must move as a whole, that with the means we have devised of a common consent in regard to the ends of human life and the means of attaining them has come also the necessity that we should move onward in civilization by a common consent. The barriers of race, religion, language, and nationality are melting away under the operation of the same forces which have to such an extent annihilated the obstacles of distance and time. Civilization is constantly becoming more uniform. The conquests of some become at once the possession of all. It follows that our scientific knowledge of the laws which govern the life of men in society must keep pace with this development or we shall find our social tasks grow faster than our knowledge of social science, and our society will break to pieces under the burden. How, then, is this scientific knowledge to grow? Certainly not without controversy, but certainly also not without coherent, steady, and persistent effort, proceeding on the lines already cut, breaking new ground when possible, correcting old errors when necessary.

3. It is another feature of the modern industrial system that, like every high organization, it requires men of suitable ability and skill at its head. The qualities which are required for a great banker, merchant, or manufacturer are as rare as any other great gifts among men, and the qualities demanded, or the degree in which they are demanded, are increasing every day with the expansion of the modern industrial system. The qualities required are those of the practical man, properly so called: sagacity, good judgment, prudence, boldness, and energy. The training, both scientific and practical, which is required for a great master of industry is wide and various. The great movements of industry, like all other great movements, present subordinate phenomena which are apparently opposed to, or inconsistent with their great tendencies and their general character. These phenomena, being smaller in scope, more directly subject to observation and therefore apparently more distinct and positive, are well calculated to mislead the judgment, either of the practical man or of the scientific student. In nothing, therefore, does the well-trained man distinguish himself from the ill-trained man more than in the balance of judgment by which he puts phenomena in their true relative position and refuses to be led astray by what is incidental or subsidiary. If, now, the question is asked, whether we have produced a class of highly trained men, competent to organize labor, transportation, commerce, and banking, on the scale required by the modern system, as rapidly as the need for them has increased, I believe no one will answer in the affirmative.

4. Another observation to which we are led upon noticing the character of the modern industrial system is that any errors or follies committed in one portion of it will produce effects which will ramify through the whole system. We have here an industrial organism, not a mere mechanical combination, and any disturbance in one part of it will derange or vitiate, more or less, the whole. The phenomena which here appear belong to what has been called fructifying causation. One economic error produces fruits which combine with those of another economic error, and the product of the two is not their sum, nor even their simple product, but the evil may be raised to a very high power by the combination. If a number of errors fall together the mischief is increased accordingly. Currency and tariff errors constantly react upon each other, and multiply and develop each other in this way. Furthermore, the errors of one nation will be felt in other nations through the relations of commerce and credit which are now so close. There is no limit to the interest which civilized nations have in each other’s economic and political wisdom, for they all bear the consequences of each other’s follies. Hence when we have to deal with that form of economic disease which we call a commercial crisis, we may trace its origin to special errors in one country and in another, and may trace out the actions and reactions by which the effects have been communicated from one to another until shared by all; but no philosophy of a great commercial crisis is adequate nowadays unless it embraces in its scope the whole civilized world. A commercial crisis is a disturbance in the harmonious operation of the parts of the industrial organism. During economic health, the system moves smoothly and harmoniously, expanding continually, and its health and vigor are denoted by its growth, that is, by the accumulation of capital, which stimulates in its turn the hope, energy, and enterprise of men. Industrial disease is produced by disproportionate production, a wrong distribution of labor, erroneous judgment in enterprise, or miscalculations of force. These all have the same effect, viz., to waste and destroy capital. Such causes disturb, in a greater or less degree, the harmonious working of the system, which depends upon the regular and exact fulfillment of the expectations which have been based on coöperative effort throughout the whole industrial body. The disturbance may be slight and temporary, or it may be very serious. In the latter case it will be necessary to arrest the movement of the whole system and to proceed to a general liquidation, before starting again. Such was the case from 1837 to 1842, and such has been the case for the last five years. It is needless to add that this arrest and liquidation cannot be accomplished without distress and loss to great numbers of innocent persons, and great positive loss of capital, to say nothing of what might have been won during the same period but must be foregone.

The financial organization is the medium by which the various parts of the industrial and commercial organism are held in harmony. It is by the financial organization that capital is collected and distributed, that the friction of exchanges is reduced to a minimum, and that time is economized, through credit, between production and consumption. The financial system furnishes three indicators—prices, the rate of discount, and the foreign exchanges—through which we may read the operation of economic forces now that their magnitude makes it impossible to inspect them directly. Hence the great mischief of usury laws which tamper with the rate of discount, and of fluctuating currencies which falsify prices and the foreign exchanges. They destroy the value of the indicators, and have the same effect as tampering with the scales of a chemist or the steam-gauge of a locomotive.

In the matter of prices we have another difficulty to contend with, which is inevitable in the nature of things. We must choose some commodity to be the denominator of value. We can find no commodity which is not itself subject to fluctuation in its ratio of exchange with other things. Great crises have been caused in past times by fluctuations in the value of the commodities chosen as money, and such an element is, no doubt, at hand in the present crisis, although it had nothing to do with bringing it about. It follows that any improvement in the world’s money is worth any sacrifice which it can possibly cost, if it tends to secure a more simple, exact, and unchanging standard of value.

The next point of which I wish to speak is easily introduced by the last remark; that point is the cost of all improvement. The human race has made no step whatever in civilization which has not been won by pain and distress. It wins no steps now without paying for them in sacrifices. To notice only things which are directly pertinent to our present purpose: every service which we win from nature displaces the acquired skill of the men who formerly performed the service; every such step is a gain to the race, but it imposes on some men the necessity of finding new means of livelihood, and if those men are advanced in life, this necessity may be harsh in the extreme. Every new machine, although it saves labor, and because it saves labor, serves the human race, yet destroys a vested interest of some laborers in the work which it performs. It imposes on them the necessity of turning to a new occupation, and this is hardly ever possible without a period of distress. It very probably throws them down from the rank of skilled to that of unskilled labor. Every new machine also destroys capital. It makes useless the half-worn-out machines which it supersedes. So canals caused capital which was invested in turnpikes and state coaches to depreciate, and so railroads have caused the capital invested in canals and other forms to depreciate. I see no exception to the rule that the progress won by the race is always won at the expense of some group of its members.

Any one who will look back upon the last twenty-five years cannot fail to notice that the changes, advances, and improvements have been numerous and various. We are accustomed to congratulate each other upon them. There can be no doubt that they must and will contribute to the welfare of the human race beyond what any one can now possibly foresee or measure. I am firmly convinced, for my opinion, that the conditions of wealth and civilization for the next quarter of a century are provided for in excess of any previous period of history, and that nothing but human folly can prevent a period of prosperity which we, even now, should regard as fabulous. We can throw it away if we are too timid, if we become frightened at the rate of our own speed, or if we mistake the phenomena of a new era for the approach of calamity, or if the nations turn back to mediæval darkness and isolation, or if we elevate the follies and ignorances of the past into elements of economic truth, or if, instead of pursuing liberty with full faith and hope, the civilized world becomes the arena of a great war of classes in which all civilization must be destroyed. But, such follies apart, the conditions of prosperity are all provided.

We must notice, however, that these innovations have fallen with great rapidity upon a vast range of industries, that they have accumulated their effects, that they have suddenly altered the currents of trade and the methods of industry, and that we have hardly learned to accommodate ourselves to one new set of circumstances before a newer change or modification has been imposed. Some inventions, of which the Bessemer steel is the most remarkable example, have revolutionized industries. Some new channels of commerce have been opened which have changed the character and methods of very important branches of commerce. We have also seen a movement of several nations to secure a gold currency, which movement fell in with a large if not extraordinary production of silver and altered the comparative demand and supply of the two metals at the same time. This movement had nothing arbitrary about it, but proceeded from sound motives and reasons in the interest of the nations which took this step. There is here no ground for condemnation or approval. Such action by sovereign nations is taken under liberty and responsibility to themselves alone, and if it is taken on a sufficiently large scale to form an event of importance to the civilized world, it must be regarded as a step in civilization. It can only be criticized by history. For the present, it is to be accepted and interpreted only as an indication that there are reasons and motives of self-interest which can lead a large part of the civilized world to this step at this time.

The last twenty-five years have also included political events which have had great effects on industry. Our Civil War caused an immense destruction of capital and left a large territory with millions of inhabitants almost entirely ruined in its industry, and with its labor system exposed to the necessity of an entire re-formation. Part of the expenditures and losses of the war were postponed and distributed by means of the paper currency which, instead of imposing industry and economy to restore the losses and waste, created the foolish belief that we could make war and get rich by it. The patriotic willingness of the nation to be taxed was abused to impose taxes for protection, not for revenue, so that the industry of the country was distorted and forced into unnatural development. The collapse of 1873, followed by a fall in prices and a general liquidation, was due to the fact that every one knew in his heart that the state of things which had existed for some years before was hollow and fictitious. Confidence failed because every one knew that there were no real grounds for confidence. The Franco-Prussian war had, also, while it lasted, produced a period of false and feverish prosperity in England. It was succeeded by great political changes in Germany which, together with the war indemnity, led to a sudden and unfounded expansion of speculation, amounting to a mania. Germany undoubtedly stands face to face with a new political and industrial future, but she has postponed it by a headlong effort to realize it at once. In France, too, the war was followed by a hasty, and, as we are told, unwise extension of permanent capital, planned to meet the extraordinary demand of an empty market. In England the prosperity of 1870–1872 has been followed as usual by developments of unsound credit, bad banking, and needless investments in worthless securities.

Here then we have, in a brief and inadequate statement, circumstances in all these great industrial nations peculiar to each, yet certainly sufficient to account for a period of reaction and distress. We have also before us great features of change in the world’s industry and commerce which must ultimately produce immeasurable advantages, but which may well, operating with local causes, produce temporary difficulty; and we have to notice also that the local causes react through the commercial and credit relations of nations to distribute the evil.

It is not surprising, under such a state of things, that some people should lose their heads and begin to doubt the economic doctrines which have been most thoroughly established. It belongs to the symptoms of disease to lose confidence in the laws of health and to have recourse to quack remedies. I have already observed that certain phenomena appear in every great social movement which are calculated to deceive by apparent inconsistency or divergence. Hence we have seen the economists, instead of holding together and sustaining, at the time when it was most needed, both the scientific authority and the positive truth of their doctrines, break up and run hither and thither, some of them running away altogether. Many of them seem to be terrified to find that distress and misery still remain on earth and promise to remain as long as the vices of human nature remain. Many of them are frightened at liberty, especially under the form of competition, which they elevate into a bugbear. They think that it bears harshly on the weak. They do not perceive that here “the strong” and “the weak” are terms which admit of no definition unless they are made equivalent to the industrious and the idle, the frugal and the extravagant. They do not perceive, furthermore, that if we do not like the survival of the fittest, we have only one possible alternative, and that is the survival of the unfittest. The former is the law of civilization; the latter is the law of anti-civilization. We have our choice between the two, or we can go on, as in the past, vacillating between the two, but a third plan—the socialist desideratum—a plan for nourishing the unfittest and yet advancing in civilization, no man will ever find. Some of the crude notions, however, which have been put forward surpass what might reasonably have been expected. These have attached themselves to branches of the subject which it is worth while to notice.

1. As the change in the relative value of the precious metals is by far the most difficult and most important of the features of this period, it is quite what we might have expected that the ill-trained and dilettante writers should have pounced upon it as their special prey. The dabblers in philology never attempt anything less than the problem of the origin of language. Every teacher knows that he has to guard his most enthusiastic pupils against precipitate attempts to solve the most abstruse difficulties of the science. The change in the value of the precious metals which is going on will no doubt figure in history as one of the most important events in the economic history of this century. It will undoubtedly cost much inconvenience and loss to those who are in the way of it, or who get in the way of it. It will, when the currency changes connected with it are accomplished, prove a great gain to the whole commercial world. The nations which make the change do so because it is important for their interests to do it. Now, suppose that it were possible for those who are frightened at the immediate and temporary inconveniences, to arrest the movement—the only consequence would be that they would arrest and delay the inevitable march of improvement in the industrial system.

2. The second field, which is an especial favorite with the class of writers which I have described, is that of prognostications as to what developments of the economic system lie in the future. Probably every one has notions about this and every one who has to conduct business or make investments is forced to form judgments about it. There is hardly a field of economic speculation, however, which is more barren.

3. The third field into which these writers venture by preference is that of remedies for existing troubles. The popular tide of medicine is always therapeutics, and the less one knows of anatomy and physiology the more sure he is to address himself exclusively to this department, and to rely upon empirical remedies. The same procedure is followed in social science, and it is accompanied by the same contempt for scientific doctrine and knowledge and remedies. To bring out the points which here seem to me important, it will be necessary to go back for a moment to some facts which I have already described.

One of the chief characteristics of the great improvements in industry, which have been described, is that they bring about new distributions of population. If machinery displaces laborers engaged in manufactures, these laborers are driven to small shopkeeping, if they have a little capital; or to agricultural labor, if they have no capital. Improvements in commerce will destroy a local industry and force the laborers to find a new industry or to change their abode. When forces of this character coöperate on a grand scale, they may and do produce very important redistributions of population. In like manner legislation may, as tariff legislation does, draw population to certain places, and its repeal may force them to unwelcome change. We may state the fact in this way: let us suppose that, in 1850, out of every hundred laborers in the population, the economical distribution was such that fifty should be engaged in agriculture, thirty in manufacturing, and the other twenty in other pursuits. That is to say that, with the machinery and appliances then available, thirty manufacturing laborers could use the raw materials and food produced by fifty agricultural laborers so as to occupy all to the highest advantage. Now suppose that, by improvements in the arts, twenty men could, in 1880, use to the best advantage the raw materials and food produced by sixty in agriculture. It is evident that a redistribution would be necessary by which ten should be turned from manufacturing to land. That such a change has been produced within the last thirty years and that it has reached a point at which is setting in the counter movement to the former tendency from the land to the cities and towns, seems to me certain. There are even indications of great changes going on in the matter of distribution which will correct the loss and waste involved in the old methods of distribution long before any of the fancy plans for correcting them can be realized, and which are setting free both labor and capital in that department. Now if we can economize labor and capital in manufacturing, transportation, and distribution, and turn this labor and capital back upon the soil, we must vastly increase wealth, for that movement would enlarge the stream of wealth from its very source.

Right here, however, we need to make two observations.

1. The modern industrial system which I have described, with its high organization and fine division of labor, has one great drawback. The men, or groups of men, are dissevered from one another, their interests are often antagonistic, and the changes which occur take the form of conflicts of interest. I mean this: if a shoemaker worked alone, using a small capital of his own in tools and stock, and working for orders, he would have directly before him the facts of the market. He would find out without effort or reflection when “trade fell off,” when there was risk of not replacing his capital, when the course of fashion or competition called upon him to find other occupation, and so on. When a journeyman shoemaker works for wages, he pays no heed to these things. The employer, feeling them, has no recourse but to lower wages. It is by this measure that, under the higher organization, the need of new energy, or of a change of industry, or of a change of place is brought home to the workman. To him, however, it seems an arbitrary and cruel act of the master. Hence follow trade wars and strikes as an especial phenomenon of the modern system. It is just because it is a system, or more properly still, an organism, that the readjustments which are necessary from time to time in order to keep its parts in harmonious activity, and to keep it in harmony with physical surroundings, are brought about through this play of the parts on each other.

2. A general movement of labor and capital towards land, throughout the civilized world, means a great migration towards the new countries. This does not by any means imply the abandonment or decay of older countries, as some have seemed to believe. On the contrary, it means new prosperity for them. When I read that the United States are about to feed the world, not only with wheat and provisions, but with meat also, that they are to furnish coal and iron to mankind, that they are to displace all the older countries as exporters of manufactures, that they are to furnish the world’s supply of the precious metals, and I know not what all besides, I am forced to ask what is the rest of the world going to do for us? What are they to give us besides tea, coffee, and sugar? Not ships, for we will not take them and are ambitious to carry away all our products ourselves. Certainly this is the most remarkable absurdity into which we have been led by forgetting that trade is an exchange. Neither can any one well expect that all mankind are to come and live here. The conditions of a large migration do, however, seem to exist. A migration of population is still a very unpopular idea in all the older states. The prejudice against it is apparent amongst Liberals and Tories, economists and sentimentalists. There is, however, a condition which is always suppressed in stating the social problem as it presents itself in hard times. That problem, as stated, is: “How are the population to find means of support?” and the suppressed condition is: “if they insist on staying and seeking support where they are and in pursuits to which they are accustomed.” The hardships of change are not for one moment to be denied, but nothing is gained by sitting down to whine about them. The sentimental reasons for clinging to one’s birthplace may be allowed full weight, but they cannot be allowed to counterbalance important advantages. I do not see that any but land owners are interested to hold population in certain places, unless possibly we add governing classes and those who want military power. When I read declamations about nationality and the importance of national divisions to political economy (observe that I do not say to political science), I never can find any sense in them, and I am very sure that the writers never put any sense into them.

We may now return to consider the remedies proposed for hard times. We shall see that although they are quack remedies, and although they set at defiance all the economic doctrines which have been so laboriously established during the last century, they are fitted to meet the difficulty as it presents itself to land owners, governments, military powers, socialists, and sentimentalists. The tendency is towards an industrial system controlled by a natural coöperation far grander than anybody has ever planned, towards a community of interest and welfare far more beneficent than any universal republic or fraternity of labor which the Internationalists hope for, and towards a free and peaceful rivalry amongst nations in the arts of civilization. It is necessary to stop this tendency. What are the means proposed?

1. The first is to put a limit to civil liberty. By civil liberty (for I feel at once the need of defining this much-abused word) I mean the status which is created for an individual by those institutions which guarantee him the use of his own powers for his own development. For three or four centuries now, the civilized world has been struggling towards the realization of this civil liberty. Progress towards it has been hindered by the notion that liberty was some vague abstraction, or an emancipation from some of the hard conditions of human life, from which men never can be emancipated while they live on this earth. Civil liberty has also been confused with political activity or share in civil government. Political activity itself, however, is only a means to an end, and is valuable because it is necessary to secure to the individual free exercise of his powers to produce and exchange according to his own choice and his own conception of happiness, and to secure him also that the products of his labor shall be applied to his satisfaction and not to that of any others. When we come to understand civil liberty for what it is, we shall probably go forward to realize it more completely. It will then appear that it begins and ends with freedom of production, freedom of exchange, and security of property. It will then appear also that governments depart from their prime and essential function when they undertake to transfer property instead of securing it, and it may then be understood that legal tender laws, and protective tariffs as amongst the last and most ingenious devices for transferring one man’s product to another man’s use, are gross violations of civil liberty. At present the attempt is being made to decry liberty, to magnify the blunders and errors of men in the pursuit of happiness into facts which should be made the basis of generalizations about the functions of government, and to present the phenomena of the commercial crisis as reasons for putting industry once more in leading strings. It is only a new foe with an old face. Those who have held the leading strings of industry in time past have always taken rich pay for their services, and they will do it again.

2. The second form of remedy proposed is quite consistent with the last. It consists in rehabilitating the old and decaying superstition of government. It is called the state, and all kinds of poetical and fanciful attributes are ascribed to it. It is presented, of course, as a superior power, able and ready to get us out of trouble. If an individual is in trouble, he has to help himself or secure the help of friends as best he can, but if a group of persons are in trouble together, they constitute a party, a power, and begin to make themselves felt in the state. The state has no means of helping them except by enabling them to throw the risks and losses of their business upon other people who already have the burdens and losses of their own business to bear, but who are less well organized. The “state” assumes to judge what is for the public interest and imposes taxes or interferes with contracts to force individuals to the course which will realize what it has set before itself. When, however, all the fine phrases are stripped away, it appears that the state is only a group of men with human interests, passions, and desires, or, worse yet, the state is, as somebody has said, only an obscure clerk hidden in some corner of a governmental bureau. In either case the assumption of superhuman wisdom and virtue is proved false. The state is only a part of the organization of society in and for itself. That organization secures certain interests and provides for certain functions which are important but which would otherwise be neglected. The task of society, however, has always been and is yet, to secure this organization, and yet to prevent the man in whose hands public power must at last be lodged from using it to plunder the governed—that is, to destroy liberty. This is what despots, oligarchs, aristocrats, and democrats always have done, and the latest development is only a new form of the old abuse. The abuses have always been perpetrated in the name of the public interest. It was for the public interest to support the throne and the altar. It was for the public interest to sustain privileged classes, to maintain an established church, standing armies, and the passport and police system. Now, it is for the public interest to have certain industries carried on, and the holders of the state power apportion their favor without rule or reason, without responsibility, and without any return service. In the end, therefore, the high function of the state to regulate the industrial organization in the public interest is simply that the governing group interferes to make some people give the products of their labor to other people to use and enjoy. Every one sees the evils of the state meddling with his own business and thinks that he ought to be let alone in it, but he sees great public interests which would be served if the state would interfere to make other people do what he wants to have them do.

Now if these two measures could be carried out—if liberty could be brought into misapprehension and contempt, and if the state-superstition could be saved from the decay to which it is doomed, the movements of population and the changes in industry, commerce, and finance, could be arrested. The condemnation of all such projects is, once and for all, that they would arrest the march of civilization. The joy and the fears which have been aroused on one side and on the other by the reactionary propositions which have been made during the last five years are both greatly exaggerated. Such reactionary propositions are in the nature of things at such a time. It must be expected that the pressure of distress and disappointed hopes will produce passionate reaction and senseless outcries. From such phenomena to actual practical measures is a long step. Every step towards practical realization of any reactionary measures will encounter new and multiplying obstacles. A war of tariffs at this time would so fly in the face of all the tendencies of commerce and industry that it would only hasten the downfall of all tariffs. Purely retaliatory tariffs are a case of what the children call “cutting off your nose to spite your face.” Some follies have become physically impossible for great nations nowadays. Germany has been afflicted: first, by too eager hopes, second, by the great calamity of too many and too pedantic doctors, third, by a declining revenue, and fourth, by socialistic agitation amongst the new electors. It appears that she is about to abandon the free-trade policy although she does not embrace protection with much vigor. The project already comes in conflict with numerous and various difficulties which had not been foreseen, and, in its execution, it must meet with many more. The result remains to be studied. France finds that the expiration of each treaty of commerce produces consequences upon her industry which are unendurable, and while the task of adjusting rival and contending interests so as to create a new system drags along, she is compelled to ward off, by temporary arrangements, the revival of the general tariff which the treaties had superseded. In the meantime her economists, who are the most sober and the best trained in the world, are opening a vigorous campaign on the general issue. If England should think of reviving protection, she would not know what to protect. If she wanted to retaliate, she could only tax raw materials and food. The proposition, as soon as it is reduced to practical form, has no footing. As for ourselves we know that our present protective system never could have been fastened upon us if it had not been concealed under the war legislation, and if its effects had not been confused with those of the war. It could not last now if the public mind could be freed from its absorption in sectional politics, so that it would be at liberty to turn to this subject.

In conclusion, let me refer again to another important subject on which I have touched in this paper—what we call the silver question. It would, no doubt, be in the power of civilized nations to take some steps which would alleviate the inconveniences connected with the transition of several important nations from a silver to a gold currency. For one nation, which has no share in the trouble at all, to come forward out of “magnanimity” or any other motive to save the world from the troubles incident to this step, is quixotic and ridiculous. It might properly leave those who are in the trouble to deal with it amongst themselves. Either they or all might, however, do much to modify the effects of the change. The effort to bring about an international union to establish a bimetallic currency at a fixed ratio is quite another thing. It will stand in the history of our time as the most singular folly which has gained any important adherence. As a practical measure the international union is simply impossible. As a scientific proposition, bimetallism is as absurd as perpetual motion. It proposes to establish perpetual rest in the fluctuations of value of two commodities, to do which it must extinguish the economic forces of supply and demand of those commodities upon which value depends. The movement of the great commercial nations towards a single gold currency is the most important event in the monetary history of our time, and one which nothing can possibly arrest. It produces temporary distress, and the means of alleviating that distress are a proper subject of consideration; but the advantages which will be obtained for all time to come immeasurably surpass the present loss and inconvenience.

I return, then, to the propositions with which I set out. Feebleness and vacillation in regard to economic doctrine are natural to a period of commercial crisis, on account of the distress, uncertainty, and disorder which then prevail in industry and trade; but that is just the time also when a tenacious grasp of scientific principles is of the highest importance. The human race must go forward to meet and conquer its problems and difficulties as they arise, to bear the penalties of its follies, and to pay the price of its acquisitions. To shrink from this is simply to go back and to abandon civilization. The path forward, as far as any human foresight can now reach, lies in a better understanding and a better realization of liberty, under which individuals and societies can work out their destiny, subject only to the incorruptible laws of nature.

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THE PHILOSOPHY OF STRIKES[41]

The progress in material comfort which has been made during the last hundred years has not produced content. Quite the contrary: the men of to-day are not nearly so contented with life on earth as their ancestors were. This observation is easily explainable by familiar facts in human nature. If satisfaction does not reach to the pitch of satiety, it does not produce content, but discontent; it is therefore a stimulus to more effort, and is essential to growth. If, however, we confine our study of the observation which we have made to its sociological aspects, we perceive that all which we call “progress” is limited by the counter-movements which it creates, and we also see the true meaning of the phenomena which have led some to the crude and silly absurdity that progress makes us worse off. Progress certainly does not make people happier, unless their mental and moral growth corresponds to the greater command of material comfort which they win. All that we call progress is a simple enlargement of chances, and the question of personal happiness is a question of how the chances will be used. It follows that if men do not grow in their knowledge of life and in their intelligent judgment of the rules of right living as rapidly as they gain control over physical resources, they will not win happiness at all. They will simply accumulate chances which they do not know how to use.

The observation which has just been made about individual happiness has also a public or social aspect which is important. It is essential that the political institutions, the social code, and the accepted notions which constitute public opinion should develop in equal measure with the increase of power over nature. The penalty of failure to maintain due proportion between the popular philosophy of life and the increase of material comfort will be social convulsions, which will arrest civilization and will subject the human race to such a reaction toward barbarism as that which followed the fall of the Roman Empire. It is easy to see that at the present moment our popular philosophy of life is all in confusion. The old codes are breaking down; new ones are not yet made; and even amongst people of standing, to whom we must look to establish the body of public opinion, we hear the most contradictory and heterogeneous doctrines about life and society.

The growth of the United States has done a great deal to break up the traditional codes and creeds which had been adopted in Europe. The civilized world being divided into two parts, one old and densely populated and the other new and thinly populated, social phenomena have been produced which, although completely covered by the same laws of social force, have appeared to be contradictory. The effect has been to disturb and break up the faith of philosophers and students in the laws, and to engender numberless fallacies amongst those who are not careful students. The popular judgment especially has been disordered and misled. The new country has offered such chances as no generation of men has ever had before. It has not, however, enabled any man to live without work, or to keep capital without thrift and prudence; it has not enabled a man to “rise in the world” from a position of ignorance and poverty, and at the same time to marry early, spend freely, and bring up a large family of children.

The men of this generation, therefore, without distinction of class, and with only individual exceptions, suffer from the discontent of an appetite excited by a taste of luxury, but held far below satiety. The power to appreciate a remote future good, in comparison with a present one, is a distinguishing mark of highly civilized men, but if it is not combined with powers of persevering industry and self-denial, it degenerates into mere day-dreaming and the diseases of an overheated imagination. If any number of persons are of this character, we have morbid discontent and romantic ambition as social traits. Our literature, especially our fiction, bears witness to the existence of classes who are corrupted by these diseases of character. We find classes of persons who are whining and fault-finding, and who use the organs of public discussion and deliberation in order to put forth childish complaints and impossible demands, while they philosophize about life like the Arabian Nights. Of course this whole tone of thought and mode of behavior is as far as possible from the sturdy manliness which meets the problems of life and wins victories as much by what it endures as by what it conquers.

Our American life, by its ease, exerts another demoralizing effect on a great many of us. Hundreds of our young people grow up without any real discipline; life is made easy for them, and their tastes and wishes are consulted too much; they grow to maturity with the notion that they ought to find the world only pleasant and easy. Every one knows this type of young person, who wants to find an occupation which he would “like,” and who discusses the drawbacks of difficulty or disagreeableness in anything which offers. The point here referred to is, of course, entirely different from another and still more lamentable fact, that is, the terrible inefficiency and incapability of a great many of the people who are complaining and begging. If any one wants a copyist, he will be more saddened than annoyed by the overwhelming applications for the position. The advertisements which are to be found in the newspapers of widest circulation, offering a genteel occupation to be carried on at home, not requiring any previous training, by which two or three dollars a day may be earned, are a proof of the existence of a class to which they appeal. How many thousand people in the United States want just that kind of employment! What a beautiful world this would be if there were any such employment!

Then, again, our social ambition is often silly and mischievous. Our young people despise the occupations which involve physical effort or dirt, and they struggle “up” (as we have agreed to call it) into all the nondescript and irregular employments which are clean and genteel. Our orators and poets talk about the “dignity of labor,” and neither they nor we believe in it. Leisure, not labor, is dignified. Nearly all of us, however, have to sacrifice our dignity, and labor, and it would be to the purpose if, instead of declamation about dignity, we should learn to respect, in ourselves and each other, work which is good of its kind, no matter what the kind is. To spoil a good shoemaker in order to make a bad parson is surely not going “up”; and a man who digs well is by all sound criteria superior to the man who writes ill. Everybody who talks to American schoolboys thinks that he does them and his country service if he reminds them that each one of them has a chance to be President of the United States, and our literature is all the time stimulating the same kind of senseless social ambition, instead of inculcating the code and the standards which should be adopted by orderly, sober, and useful citizens.

The consequences of the observations which have now been grouped together are familiar to us all. Population tends from the country to the city. Mechanical and technical occupations are abandoned, and those occupations which are easy and genteel are overcrowded. Of course the persons in question must be allowed to take their own choice, and seek their own happiness in their own way, but it is inevitable that thousands of them should be disappointed and suffer. If the young men abandon farms and trades to become clerks and bookkeepers, the consequence will be that the remuneration of the crowded occupations will fall, and that of the neglected occupations will rise; if the young women refuse to do housework, and go into shops, stores, telegraph offices and schools, the wages of the crowded occupations will fall, while those of domestic servants advance. If women in seeking occupation try to gain admission to some business like telegraphing, in competition with men, they will bid under the men. Similar effects would be produced if a leisure class in an old country should be compelled by some social convulsion to support themselves. They would run down the compensation for labor in the few occupations which they could enter.

Now the question is raised whether there is any remedy for the low wages of the crowded occupations, and the question answers itself: there is no remedy except not to continue the causes of the evil. To strike, that is, to say that the workers will not work in their chosen line, yet that they will not leave it for some other line, is simply suicide. Neither can any amount of declamation, nor even of law-making, force a man who owns a business to submit the control of it to a man who does not own it. The telegraphers have an occupation which requires training and skill, but it is one which is very attractive in many respects to those who seek manual occupation; it is also an occupation which is very suitable, at least in many of its branches, for women. The occupation is therefore capable of a limited monopoly. The demand that women should be paid equally with men is, on the face of it, just, but its real effect would be to keep women out of the business. It was often said during the telegraphers’ strike that the demand of the strikers was just, because their wages were less than those of artisans. The argument has no force at all. The only question was whether the current wages for telegraphing were sufficient to bring out an adequate supply of telegraphers. If the growing boys prefer to be artisans, the wages of telegraphers will rise. If, even at present rates, boys and girls continue to prefer telegraphing to handicraft or housework, the wages of telegraphers will fall. Could, then, a strike advance at a blow the wages of all who are now telegraphers? There was only one reason to hope so, and that was that the monopoly of the trade might prove stringent enough and the public inconvenience great enough to force a concession—which would, however, have been speedily lost again by an increased supply of telegraphers.

Now let us ask what the state of the case would be if it was really possible for the telegraphers to make a successful strike. They have a very close monopoly; six years ago they nearly arrested the transportation of the country for a fortnight; but they were unable to effect their object. More recently the freight-handlers struck against the competition of a new influx of foreign unskilled laborers, and in vain. The printers might make a combination, and try to force an advance in wages by arresting the publication of all the newspapers on a given day, but there are so many persons who could set type, in case of need, that such an attempt would be quite hopeless. In any branch of ordinary handicraft there would be no possibility of creating a working monopoly or of producing a great public calamity by a strike. If we go on to other occupations we see that bookkeepers, clerks, and salesmen could not as a body combine and strike; much less could teachers do so; still less could household servants do so. Finally, farmers and other independent workers could not do it at all. In short, a striker is a man who says: “I mean to get my living by doing this thing and no other thing as my share of the social effort, and I do not mean to do this thing except on such and such terms.” He therefore proposes to make a contract with his fellow-men and to dictate the terms of it. Any man who can do this must be in a very exceptional situation; he must have a monopoly of the service in question, and it must be one of which his fellow-men have great need. If, then, the telegraphers could have succeeded in advancing their wages fifteen per cent simply because they had agreed to ask for the advance, they must have been far better off than any of the rest of their fellowmen.

Our fathers taught us the old maxim: Cut your coat according to your cloth; but the popular discussions of social questions seem to be leading up to a new maxim: Demand your cloth according to your coat. The fathers thought that a man in this world must do the best he could with the means he had, and that good training and education consisted in developing skill, sagacity, and thrift to use resources economically; the new doctrine seems to be that if a man has been born into this world he should make up his mind what he needs here, formulate his demands, and present them to “society” or to the “state.” He wants congenial and easy occupation, and good pay for it. He does not want to be hampered by any limitations such as come from a world in which wool grows, but not coats; in which iron ore is found, but not weapons and tools; in which the ground will produce wheat, but only after hard labor and self-denial; in which we cannot eat our cake and keep it; in which two and two make only four. He wants to be guaranteed a “market,” so as not to suffer from “overproduction.” In private life and in personal relations we already estimate this way of looking at things at its true value, but as soon as we are called upon to deal with a general question, or a phenomenon of industry in which a number of persons are interested, we adopt an entirely conventional and unsound mode of discussion. The sound gospel of industry, prudence, painstaking, and thrift is, of course, unpopular; we all long to be emancipated from worry, anxiety, disappointment, and the whole train of cares which fall upon us as we work our way through the world. Can we really gain anything in that struggle by organizing for a battle with each other? This is the practical question. Is there any ground whatever for believing that we shall come to anything, by pursuing this line of effort, which will be of any benefit to anybody? If a man is dissatisfied with his position, let him strive to better it in one way or another by such chances as he can find or make, and let him inculcate in his children good habits and sound notions, so that they may live wisely and not expose themselves to hardship by error or folly; but every experiment only makes it more clear that for men to band together in order to carry on an industrial war, instead of being a remedy for disappointment in the ratio of satisfaction to effort, is only a way of courting new calamity.

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STRIKES AND THE INDUSTRIAL ORGANIZATION[42]

Anyone who has read with attention the current discussion of labor topics must have noticed that writers start from assumptions, in regard to the doctrine of wages, which are as divergent as notions on the same subject-matter well can be. It appears, therefore, that we must have a dogma of wages, that we cannot reason correctly about the policy or the rights of the wages system until we have such a dogma, and that, in the meantime, it is not strange that confusion and absurdity should be the chief marks of discussion carried on before this prime condition is fulfilled.

Some writers assume that wages can be raised if the prices of products be raised, and that no particular difficulty would be experienced in raising prices; others assume that wages could be raised if the employers would be satisfied with smaller profits for themselves; still others assume that wages could be raised or lowered according as the cost of living rises or falls. These are common and popular assumptions, and have nothing to do with the controversies of professional economists about the doctrine of wages. The latter are a disgrace to the science, and have the especial evil at this time that the science cannot respond to the chief demand now made upon it.

If the employer could simply add any increase of wages to his prices, and so recoup himself at the expense of the consumer, no employer would hold out long against a strike. Why should he? Why should he undertake loss, worry, and war, for the sake of the consumers behind him? If an employer need only submit to a positive and measurable curtailment of his profits, in order to avoid a strike and secure peace, it is probable that he would in almost every case submit to it. But if the employees should demand five per cent advance, and the employer should grant it, adding so much to his prices, they would naturally and most properly immediately demand another five per cent, to be charged to the consumers in the same way. There would be no other course for men of common sense to pursue. They would repeat this process until at some point or other they found themselves arrested by some resistance which they could not overcome. Similarly, if wages could be increased at the expense of the employer’s gains, the employer who yielded one increase would have to yield another, until at some point he decided to refuse and resist. In either case, where and what would the limit be? Whenever the point was reached at which some unconquerable resistance was encountered, the task of the economist would begin.

There is no rule whatever for determining the share which any one ought to get out of the distribution of products through the industrial organization, except that he should get all that the market will give him in return for what he has put into it. Whenever, therefore, the limit is reached, the task of the economist is to find out the conditions by which this limit is determined.

Now it is the character of the modern industrial system that it becomes more and more impersonal and automatic under the play of social forces which act with natural necessity; the system could not exist if they did not so act, for it is constructed in reliance upon their action according to ascertainable laws. The condition of all social actions and reactions is therefore set in the nature of the forces which we have learned to know on other fields of scientific investigation, and which are different here only inasmuch as they act in a different field and on different material. The relations of parties, therefore, in the industrial organism is such as the nature of the case permits. The case may permit of a variety of relations, thus providing some range of choice.

A person who comes into the market, therefore, with something to sell, cannot raise the price of it because he wants to do so, or because his “cost of production” has been raised. He has already pushed the market to the utmost, and raised the price as high as supply and demand would allow, so as to win as large profits as he could. How, then, can he raise it further, just because his own circumstances make it desirable for him so to do? If the market stands so that he can raise his price, he will do it, whether his cost of production has increased or not. Neither can an employer reduce his own profits at will; he will immediately perceive that he is going out of business, and distributing his capital in presents.

The difficulty with a strike, therefore, is, that it is an attempt to move the whole industrial organization, in which all the parts are interdependent and intersupporting. It is not, indeed, impossible to do this, although it is very difficult. The organization has a great deal of elasticity in its parts—an aggressive organ can win something at the expense of others. Everything displaces everything else; but if force enough is brought to bear, a general displacement and readjustment may be brought about. An organ which has been suffering from the aggression of others may right itself. It is only by the collision of social pressure, constantly maintained, that the life of the organism is kept up, and its forces are developed to their full effect.

Strikes are not necessarily connected with violence to either persons or property. Violence is provided for by the criminal law. Taking strikes by themselves, therefore, it may be believed that they are not great evils; they are costly, but they test the market. Supply and demand does not mean that the social forces will operate of themselves; the law, as laid down, assumes that every party will struggle to the utmost for its interests—if it does not do so, it will lose its interests. Buyers and sellers, borrowers and lenders, landlords and tenants, employers and employees, and all other parties to contracts, must be expected to develop their interests fully in the competition and struggle of life. It is for the health of the industrial organization that they should do so. The other social interests are in the constant habit of testing the market, in order to get all they can out of it. A strike, rationally begun and rationally conducted, only does the same thing for the wage-earning interest.

The facts stare us plainly in the face, if we will only look at them, that the wages of the employees and the price of the products have nothing to do with each other; that the wages have nothing to do with the profits of the employer; that they have nothing to do with the cost of living or with the prosperity of the business. They are really governed by the supply and demand of labor, as every strike shows us, and by nothing else.

Turning to the moral relations of the subject, we are constantly exhorted to do something to improve the relations of employer and employee. I submit that the relation in life which has the least bad feeling or personal bitterness in it is the pure business relation, the relation of contract, because it is a relation of bargain and consent and equivalence. Where is there so much dissension and bitterness as in family matters, where people try to act by sentiment and affection? The way to improve the relation of employer and employee is not to get sentiment into it, but to get sentiment out of it. We are told that classes are becoming more separated, and that the poor are learning to hate the rich, although there was a time when no class hatreds existed. I have sought diligently in history for the time when no class hatreds existed between rich and poor. I cannot find any such period, and I make bold to say that no one can point to it.

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TRUSTS AND TRADES-UNIONS[43]

I have attempted to show, in foregoing essays,[44] what an immense rôle is played by monopoly throughout the whole social life of mankind in all its stages. There would not be any struggle for existence if it were not true that the supply in nature of the things necessary for human existence is niggardly. The struggle for existence consists in a contest against the constraints by which human life is surrounded; the process by which men have won something in that contest, in the course of time, has consisted in playing off one of nature’s monopolies against another—the process, namely, which we call “employing natural agents.” On its social and political side, the advance has consisted in securing for the individual a chance in some degree to control his own destiny; not to be at the sport of natural and social forces, but to bring his own energy to bear to enlarge his own conditions of enjoyment and survival.

At every stage of history, however, the natural monopolies have formed the basis of social and political monopolies. The possession of those powers which, under the circumstances, were most efficient for the acquisition of what men want has always given superiority and dominion in human society, whether those powers were physical force, beauty, learning, virtue, capital, or anything else. Where does any one find ground to believe that the fact will ever be different, and that those who have the powers which are most potent in the society in which they live will use those powers, not to get the things which all men want for themselves, but to get those same things for other people?

The fashion has always been in the past for those who possessed the essential powers to take control of the state and realize their monopoly in that way. If plutocracy should now prevail it would be simply a repetition of that experience. The only device which has ever given promise of wider and more humane organization of the state is constitutional liberty, which compels, by the intervention of institutions created to serve this purpose, the ruling class, whoever they were, to respect the recognized and defined rights of all the rest.

Now, democracy having sapped and dissolved all the inherited forms of social organization and reduced the social body to atoms, it is most interesting to observe the inevitable recurrence of all the old tendencies, in new forms fitted to the times. Some of us thought that liberty was won forever, and that the race was nevermore to be disturbed by its old problems, but it is already apparent that, when a society is resolved into its constituent atoms, the question under what forces, and upon what nuclei, it will crystallize into new forms, has acquired an importance never known before.

Just now public attention is all absorbed by the new name “trust” applied to one of these phenomena. I can see nothing new in a trust as compared with the rings, pools, etc., with which we have been familiar during this generation, except the guarantee which the trust secures to all the members of the same that no one inside of it shall play traitor to the rest. The greatest difficulty with modern combinations has been that there have been no sanctions by which the members could be bound, and that the profits of the insider who turned against his comrades have always been an irresistible temptation. In the mediæval guilds, which were “trusts” of the most solid construction, the sanctions were of the sternest kind—religious, political, and social—and yet they never succeeded in their purpose. In modern times, as is well known to all who are acquainted with the attempts which have been made, inside of various branches of industry, to arrange agreements which have not been large enough or public enough to get into the newspapers the difficulty of enforcing loyalty against those who felt strong enough to beat the rest if they should go alone, or against those who saw a chance to sell out on the rest, or against those who were in desperate straits for cash, has been the constant stumbling-block. Fifty years ago, in the last days of the United States Bank, Nicholas Biddle organized a cotton trust, to try to control the cotton market of the world. It was a complete failure. In general, combinations of this character are in constant dilemma: they must always grow bigger and bigger, in order to encompass a sufficient area to constitute a unit; but the bigger they grow, the less is their internal cohesion. The exception to this must be noted in a moment.

The great expansion of the market by modern inventions in transportation has broken up all the former local and petty monopolies, and is rapidly making of the industry and commerce of mankind a whole which cannot be divided by geographical lines. The conditions of competition in such a system are no doubt onerous to the last degree. The conditions that must be taken into account to win success are numerous and complicated. The nerve-strain of comprehending and of justly estimating the factors, and of following their constant variations, is too great for any one to endure. Foresight must be used, yet there are so many unknown quantities that foresight is impossible; if the attempt is made to master all the unknown quantities, then the task is so enormous that it cannot be accomplished. Furthermore, the relations with other persons in the industrial system are necessarily close. It is impossible to escape such relations, and it is impossible to avoid a share in the consequences of the mistakes and incompetence of the others. It must be added that, at a time when the advance in the arts has forced the whole industry of the globe into intimate relations which nothing can possibly cut off, legislative interferences have produced artificial and erratic currents in the industrial and commercial relations of all countries. The consequences are disappointing and disastrous incidents in the history of industry. At the same time the improvements in the communication of intelligence have made it possible for men farthest apart in space, language, and nationality, if they have confidence in each other’s business ability and command of capital, to coöperate by personal agreements.

Trusts are an attempt to deal with this state of things. It is, of course, a jest when the makers of a trust affirm that they make it for the benefit of consumers, and it may very well be doubted whether a trust is a feasible and beneficial device in the interest of either party; but it is wrong to overlook the fact that the trust, in its efforts to deal with the case, and to secure orderly and rational development, instead of heats and chills in industry, has a real and legitimate task on hand. It is certain that there is room for the introduction of intelligent method into modern industry, under forms which shall be germane to modern conditions, and it is certain that this will never be done properly by legislation, but only by the voluntary and intelligent coöperation of the parties interested. It is also by no means certain that this systematization of industry, under intelligent coöperation of the parties conducting it, would cost consumers anything, provided always that there was no legislation to prevent the recourse at any time to any other sources of supply which might be available. The economies of management under intelligent administration are a source from which gains may be made which will cost the consumer nothing. The expenses of industrial war constitute a big fund for dividends to which the consumer does not contribute.

It is worth while to notice, by some familiar examples, what the motive of a trust is; it will be found a far more everyday matter than most people suppose. A man who owns a house and lot buys the vacant lot adjacent in order to control it. He and his neighbors buy up all the vacant lots on the street in order to prevent undesirable contact with anything which would deteriorate their property. They have already fallen victims to the spirit of monopoly, and are subject to all the denunciations heaped upon aristocrats and exclusivists. In their case already the practical difficulty of defining the unit to be comprehended, in order to attain the object and no more, is apparent. Examples are furnished every day in which capital is refused for certain enterprises because it is seen that the investment might no sooner be made than its profits might be destroyed by another enterprise parallel with it. The thing cannot be done at all until it is done on a scale sufficiently large to constitute a complete unit. We are familiar enough with the dilemma offered to us when, on the one hand, railroads which consolidate put themselves in a position to serve us far more efficiently, yet on the other hand, railroads which consolidate cease to compete with each other for our benefit. Which do we want them to do? The railroads themselves are familiar with the experience that they are constantly forced to make extensions in order to secure a certain territory, that is, to establish a closed unit, and that every extension, instead of attaining a finality, only makes further extension unavoidable. This is the class of facts in the industrial development of our time which has produced the trusts, and it is certain that they offer another motive than that of simple desire to secure means of extortion.

I am not yet able to see that any trust can succeed unless it is founded on a natural or legislative monopoly, and furthermore on a monopoly whose product cannot be produced in an amount exceeding the demand at the price which has been customary before the formation of the trust; and I cannot see any chance for legislation to do any good unless it is in the repeal of all such laws as are found to furnish a basis for the organization of an artificial monopoly.

It cannot have escaped the attention of the reader that trades-unions are a monopolistic organization on the side of labor entirely parallel with the trusts on the side of capital, “a product of the same age and of the same forces,” and an endeavor to deal with the same problem from the standpoint of another interest. The motives of coercion, discipline, and strict internal organization are the same in both cases, and some of the sanctions are the same; for the pools and rings have tried the boycott until they have proved its worthlessness. There is a notion afloat that the modern trades-union is a descendant of the mediæval gild. It might, with equal truth, and equal futility, be asserted that the modern college, stock exchange, and joint stock company, are descended from the mediæval gild. The nineteenth-century trades-union is a nineteenth-century institution, as much or more so than the ring, pool, corner, or trust. They are all products of the same facts in the industrial development, and one is just as inevitable, and, in that sense, legitimate, as the other. There are some who, while vehemently denouncing trusts, offer us, with great complacency and satisfaction, as a solution of the “labor question,” the assertion that the employers and employees ought to combine or coöperate in some way; they do not appear to see at all that if any such thing should be brought about it would be the most gigantic “trust” that could possibly be conceived.

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AN OLD “TRUST”[45]

In the year 1579, Conrad Roth, a merchant of Augsburg, who had been interested in the trade in spices between Lisbon and Germany, proposed to an officer of the treasury of the Elector of Saxony a scheme for a company to monopolize the pepper trade. The Elector was one of the most enterprising and enlightened princes of his time, and the proposition was really intended to be made to him as the only person who could command the necessary capital and had, at the same time, courage and energy to undertake the enterprise.

A company was formed of officers of the treasury, called the Thuringian Company, and a warehouse was prepared at Leipzig. It was reckoned that if the company could raise the price of pepper one groschen per pound, the profits would be over 38,000 florins per annum. Roth and the Thuringian Company were to participate in the enterprise equally, but the Prince was to put up all the capital, and Roth was to do all the work. The latter also owned a very valuable contract with the King of Portugal, according to which he was, for five years, to send to India money enough to buy up all the pepper produced, so that none could come into Europe through Egypt and Italy. Before that time the Portuguese officers had illegally sold some of it, so that it did get into Europe that way; but by buying in India this was now to be stopped.

Roth proposed to divide Europe into three sections: Portugal, Spain, and the West; Italy and the South; Germany and the North. The Saxon company was to have the last as its share of the monopoly. It was hoped that the gains might be forced up to a much higher figure than the one above given, if only all pepper then in Frankfort, Venice, Nuremberg, and Hamburg could be bought up.

No sooner was the plan formed, however, than Roth began to reach out after extensions to it. He wanted to include the trade in other spices. He also proposed that the Elector should provide the capital for an exchange bank to do the exchange business between Leipzig and Lisbon. Next he found that the existing postal arrangements were entirely inadequate to the requirements of his business, and he proposed to the Elector a complete plan for a postal service between Italy, Germany, France, Spain, and Portugal. Then, having found the shipping facilities unsatisfactory, he proposed that the Elector should enter into a contract with the King of Denmark, by which the latter, who owned ships, should provide a regular service between Lisbon and the Elbe.

These plans all show the grand energy of this projector, and the Elector entered into them all. He could not carry out the postal service without the consent of the Emperor, and this he was unable to get. Roth and the Elector were ahead of their time; the Emperor was not; he said that the plan proposed “something new, which had never been in use in the time of their ancestors.” The attempt to unite private merchants in the speculation also failed at Leipzig, and elsewhere the attitude toward it was extremely unfriendly.

When the stock of pepper began to accumulate at Leipzig, it was found that the article did not begin to be scarce elsewhere. Although the advances of the Prince were already far greater than he had promised when the plan was formed, it was found impossible to begin sales until all the pepper on the European market elsewhere could be bought up; and at the same time reports came that, in spite of Roth’s contract, any one who had money could buy all the pepper he wanted in India, and that it was coming into Europe freely through Egypt and Venice. In the spring of 1580 the supply in the cities of Holland and Germany was ample. It appeared that Roth could not prevent the contractors for other parts of Europe from shipping to Germany, and the price was falling there; instead of being at fifteen groschen, where the speculators hoped to hold it, it was below twelve. At this point Roth’s creditors began to put attachments on his property. All this led the Elector to say: “We fear that there has been a great mistake in Roth’s original and still repeated assertion that all the pepper which comes into Europe comes through Lisbon.”

In April Roth committed suicide upon hearing of the death of the King of Portugal. It was known that the King of Spain intended to claim the succession, and that the Portuguese would resist; this war and the possibility of a Spanish succession meant ruin to the speculation. The Elector was obliged to send agents in every direction to get possession of the assets of the company, in order to recover his funds. In the end it appears that he escaped without very serious loss; he sold the whole stock to a syndicate of South German merchants, at a price which restored all his capital. After moralizing on his experience he declared: “Inasmuch as I am now weary and sick, and am anxious to pass the remaining time which God vouchsafes me in quiet, I have firmly determined to have done with commerce, whether it would bring me gain or loss.” “I have,” he says again, “strengthened my head and I will have done with false commerce.”[46]

This enterprise was plainly an attempt to exploit a natural monopoly, and to do it by an operation which should embrace the whole world; it was a purely money-making scheme, unrelieved by any social or industrial advantage. It shows how erroneous it is to suppose that the merchants of the fifteenth and sixteenth centuries were inferior in boldness to those of to-day, or superior to them in disposition to sacrifice themselves for the public good; it would be easy to accumulate any amount of evidence that they were, on the contrary, entirely unscrupulous in the pursuit of gain, and that they were bold beyond anything known to modern merchants. They might well be so. This story shows what great risks, dangers, perplexities, and disappointments they were subject to. The risk element was plainly enormous, but the gains corresponded, of course, and hence we find some of these men enormously rich; but it is plain that there was no routine to help the man who had less natural ability. There was no regularity in any of the contributory operations, such as shipping lines and post-office; there were no regular and adequate banking facilities. If by “trust” we mean a combination to exploit a monopoly, either natural or artificial, the men of that period had made an art of that sort of undertaking, and had a skill in it of which the moderns have no conception.

One cannot help admiring the courage and energy of this Roth. He had everything to contend with; he was far in advance of his age. If he had lived in our time he would have been a great captain of industry—we could have given him something better to do than making a corner on pepper.

In our current social discussions there is a special kind of fallacy which consists in quasi-historical assertions. For instance, it is said that the power of capital is increasing and is greater than it ever has been. This is in form an historical assertion, but those who make it never expect to be held to an historical responsibility for it. They throw it out with a kind of risk, because they are not very accurately informed as to the power of capital in former times, and have not heard that it used to act as it does now. Capitalists never had less irresponsible power than now. It is said that monopoly is growing evil; that it never was so great. If people choose to pass laws to make monopolies, they must, of course, take the consequences; but there never was a time when the control of natural monopolies was so rational as now, and there never was a time when the efforts of cliques to make artificial monopolies could be so easily frustrated as now. It is said that trusts embracing the whole world are a new and threatening danger, never heard of before. It has seemed to me that, if we are to have history, it might be well for once to see some facts which illustrate “the good old times” as they really were. Of course nothing is thereby proved as to the good or ill of trusts; but something is proved as to the fallacy of that class of quasi-historical assertions which I have described.

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SHALL AMERICANS OWN SHIPS?[47]

Since the war, public attention has been drawn more or less to the marked decline in American shipping. It has been generally assumed and conceded that this was a matter for regret, and some discussion has arisen as to remedies—what to do, in fact, in order to bring it about that Americans should own ships. In these discussions, there has generally been a confusion apparent in regard to three things which ought to be very carefully distinguished from each other: ship-building, the carrying trade, and foreign commerce.

1. As to ship-building—Americans began to build ships, as an industry, within fifteen years after the settlement at Massachusetts Bay. Before the Revolution they competed successfully as ship-builders with the Dutch and English, and they sold ships to be used by their rivals. Tonnage and navigation laws played an important part in the question of separation between the colonies and England, and the same laws took an important place in the formation of the Federal Constitution. One generation was required for the people of this country to get over the hard logical twist in the notion that laws which were pernicious when laid by Great Britain were beneficial when laid by ourselves. The vacillation which has marked the history of our laws about tonnage and navigation is such that it does not seem possible to trace the effects of legislation upon ship-building. In the decade 1850–1860 a very great decline in the number of ships built, especially for ocean traffic, began to be marked. Sails began to give way to steam, but the building of steamships required great advantages of every kind in the production of engines and other apparatus—that is, it required the presence, in a highly developed state, of a number of important auxiliary and coöperating industries. As iron was introduced into ship-building, of course the ship-building industry became dependent upon cheap supplies of iron as it had before been dependent on cheap supplies of wood. No doubt these changes in the conditions of the industry itself have been the chief cause of the decline in ship-building in this country, and legislation has had only incidental effects. It is a plain fact of history that the decline in ship-building began before the war and the high tariff. Of course the effects produced by changes in the conditions of an industry are inevitable; they are not to be avoided by any legislation. They are annoying because they break up acquired habits and established routine, and they involve loss in a change from one industry to another, but legislation can never do anything but cause that loss to fall on some other set of people instead of on those directly interested. Within the last few years it has become certain that steel is to be the material of ocean vessels—a new improvement which will not tend to bring the industry back to this country. On the whole, therefore, the decline in ship-building of the last twenty-five years seems to indicate that somebody else than ourselves must build the world’s ships for the present. We have, by legislative devices, forced the production of a few ocean steamers, but these cases prove nothing to the contrary of our inference. If this nation has a hobby for owning some ships built in this country, and is willing to pay enough for the gratification of that hobby, no doubt it can secure the pleasure it seeks. A fisherman who has caught nothing sometimes buys fish at a fancy price; he saves himself mortification and gets a dinner, but the possession of the fish does not prove that he has profitably employed his time or that he has had sport.

2. The carrying trade differs from ship-building as carting differs from wagon-building. Carrying is the industry of men who own ships; their interests are more or less hostile to those of the ship-builders. Ship owners want to buy new ships at low prices; they want the number of competing ships kept small; they want freights high. In all these points the interest of the ship-builder is the opposite: the ship owner is indifferent where he gets his ships; he only wants them cheap and good. There is no sentiment in the matter any more than there is in the purchase of wagons by an express company, or carriages by a livery-stable keeper.

3. Foreign commerce is still another thing. It consists in the exchange of the products of one country for those of another. The merchant wants plenty of ships to carry all the goods at the lowest possible freights, but it is of no importance to him where the ships were built, or who owns and sails them.

A statement and definition of these three industries suffices to show what confusion must arise in any discussion in which they are not properly distinguished. It is plain that there are three different questions: (1) Can the farmer build a vehicle? (2) Can he get his crop carried to market? (3) Can he sell his crop? It is evident that a country which needs a protective tariff on iron and steel must give up all hopes of building ships for ocean traffic. For the country which, by the hypothesis, needs a protective tariff on iron and steel cannot produce those articles as cheaply as some other country. Its ships, however, must compete upon the ocean with those of the country which has cheap iron and steel. The former embody a larger capital than the latter, and they must be driven from the ocean. If, then, subsidies are given to protect the carrying trade, when prosecuted in ships built of protected iron, the loss is transferred from the ship owners to the people who pay taxes on shore. These taxes, however, add to the cost of production of all things produced in the country, and thereby lessen the power of the country to compete in foreign commerce. This lessens the amount of goods to be carried both out and in, lowers freights, throws ships out of use, and checks the building of ships; and the whole series of legislative aids and encouragements must be begun over again, with a repetition and intensification of the same results. As long as the system lasts it works down, and the statistics show, very naturally, that fewer and fewer ships are built in the country, and that less and less of the carrying trade is carried on under the national flag. In view of the three different and sometimes adverse interests which are connected by their relation to the shipping question, it is not strange that when the representatives of those interests meet to try to consider that question, there should simply be a scramble between them to see which can capture the convention. The last convention of this sort was captured by the owners of a lot of unsalable and unsailable old hulks, who had hit upon the brilliant idea of getting the nation to pay them an annual bounty for the use of their antiquated and dilapidated property. Strange to say, in a country which is charged with being too practical and hardheaded, this proposition received respectful attention and consideration. It is also strange that our people should believe that taxing farmers to force the production of iron, taxing farmers again to force the production of ships out of protected iron, and taxing farmers again to pay subsidies to enable protected ships to do business, is a way to make this country rich.

So soon as the three different industries, or departments of business, which I have described are distinguished from each other, it is apparent that the fundamental one of the three is foreign commerce. If we have no commerce we need no carrying, and it would be absurd to build ships; if we have foreign commerce its magnitude determines the amount of demand there is for freight and for ships. The circle of taxation which I have mentioned, and which is obviously only a kind of circuit, described from and upon the farmer as a center and fulcrum to bear the weight of the whole, is necessarily and constantly vicious, because it presses down on the foreign commerce, which is the proper source of support for carrying and ship-building. On the other hand, the emancipation of foreign commerce from all trammels of every sort is the only means of increasing the natural, normal, and spontaneous support of carrying and ship-building, assuming that the carrying trade and ship-building are ends in themselves.

It is, however, no object at all for a country to have either ship-building industry, or carrying trade, or foreign commerce; herein lies the fundamental fallacy of all the popular and Congressional discussions about ships and commerce. It is only important that the whole population should be engaged in those industries which will pay the best under the circumstances of the country. For the sake of exposing the true doctrine about the matter, we may suppose (what is not conceivable as a possible fact) that a country might not find greater profit in the exportation of any part of any of its products than in the home use of the same. If this could be true, and if it were realized, the proof of it would be that no foreign trade would exist. There would be no ground for regret since the people would be satisfied and better off than as if they had a foreign trade. Carrying trade and ship-building would not exist.

If a country had a foreign trade of any magnitude whatever, it would not be any object for that country to do its own carrying. The figures which show the amount paid by the people of the United States to non-American ship owners for freight, and the figures which show the small percentage of our foreign commerce which is carried under the American flag, in themselves prove nothing at all. The only question which is of importance is this: are the people of the United States better employed now than they would be if engaged in owning and sailing ships? If they were under no restraints or interferences, that question also would answer itself. If Americans owned no ships and sailed no ships, but hired the people of other countries to do their ocean transportation for them, it would simply prove that Americans had some better employment for their capital and labor. They would get their transportation accomplished as cheaply as possible. That is all they care for, and it would be as foolish for any nation to insist on doing its own ocean transportation, devoting to this use capital and labor which might be otherwise more profitably employed, as it would be for a merchant to insist on doing his own carting, when some person engaged in carting offered him a contract on more advantageous terms than those on which he could do the work.

Furthermore, the people of a country which had little foreign commerce might find it very advantageous to prosecute the carrying trade. In history, the great trading nations have been those which had a small or poor territory at home: the Dutch were the great carriers of the seventeenth and eighteenth centuries, when the foreign commerce of their own territory was insignificant; the New Englanders of the last century and of the first quarter of this century became the carriers of commodities to and fro between all parts of the world, especially between our middle and southern states and the rest of the world. They took to the sea because their land did not furnish them with products which could remunerate their capital and labor so well as the carrying trade did. They won a high reputation for the merchant service, which was in their hands, and they earned fortunes by energy, enterprise, promptitude, and fidelity. The carrying trade is an industry like any other; it is neither more nor less desirable in itself than any other. In any natural and rational state of things it would be absurd to be writing essays about it. If any one thought he could make more profit in that business than in some other he would set about it. When the census was taken he would be found busy at that business, would be so reported, and that would be the end of the matter as a phenomenon of public interest.

If a nation had foreign commerce, and some of its citizens found the carrying trade an advantageous employment for their labor and capital as compared with other possible industries in the country, it would not follow that some other citizens of that country ought to engage in ship-building. It is no object to build ships, but only to get such ships as are wanted, in the most advantageous manner. If a man should refuse to carry on a carting business unless he could make his own wagons, it would be such a reflection on his good sense that his business credit would be very low. If some Americans could buy and sail ships so as to make profits, what is the sense of saying that they shall not do it because some other Americans cannot build ships at a profit? Only one answer to this question has ever been offered by anybody, and that is the prediction that, some day, if we go without ships long enough, we shall, by the mere process of going without, begin to get some—a prediction for which the prophets give no guarantee, in addition to their personal authority, save the fact that we have fewer ships and worse ones every year.

I have said above that, if there were no restraints or interferences, we should simply notice whether any Americans took to the carrying trade or not, and should thence infer that they might or might not be better employed in some other industry. It is impossible, now, to say whether, if all restrictions were removed, the carrying trade or ship-building would be a profitable industry in the United States or not. Any opinion given by anybody on that point is purely speculative. The present state of the iron and steel industries, and of the manufacture of engines and machinery, is so artificial that no one can judge what would be the possibilities of those industries under an entirely different state of things. It is, however, just because the present state of things prevents a free trial that it is indefensible; we are working in the dark and on speculation all the time and have none of the natural and proper tests and guarantees for what we are doing. We are controlled by the predictions of prophets, the notions of dogmatizers, the crude errors of superficial students of history, the wrong-headed inferences of shallow observers, and the selfish machinations of interested persons. We can distinguish many forces which are at work on our ship-building and on our carrying trade, but none of them are genuine or respectable. We are submitting to restraints and losses, and we have no guarantee whatever that we shall ever win any compensation. The teaching of economic science is distinctly that we never shall win any. We are expending capital without any measurement or adjustment of the quid pro quo; we are spending without calculation, and receiving something or nothing—we do not know which. The wrong of all this is not in the assumption that we have not certain industries which we would have (for we cannot tell whether that is so or not), but the wrong is in the arbitrary interference which prevents us from having them, if any man wants to put his capital into them, and which prevents us from obtaining the proper facts on which to base a judgment about the state and relations of industries in the country.

Whenever the question of ships is raised, the clamor for subsidies and bounties is renewed, and we are told again that England has established her commerce by subsidies. It would be well if we could have an understanding, once for all, whether England’s example is a good argument or not. As she has tried, at some time or other, nearly every conceivable economic folly, and has also made experiment of some sound economic principles, all disputants find in her history facts to suit them, and it needs only a certain easily acquired skill in misunderstanding things to fashion any required argument from the economic history of England. Some of our writers and speakers seem to be under a fascination which impels them to accept as authoritative examples the follies of English history, and to reject its sound lessons. In the present case, however, the matter stands somewhat differently. England is a great manufacturing area; it imports food and raw materials, and exports finished products; it has, therefore, a general and public interest in maintaining communication with all parts of the world. The analogy in our case is furnished by the subsidized railroads in our new states, or, perhaps even better, by the mail routes which we sustain all over our territory, from general considerations of public advantage, although many such routes do not pay at all. Subsidies to ships for the mere sake of having ships, or ocean traffic, when there is no business occasion for the subsidized lines, would have no analogy with English subsidies.

If then the question is put: Shall Americans own ships? I do not see how any one can avoid the simple answer: Yes, if they want them. Universally, if an American wants anything, he ought to have it if he can get it, and if he hurts no one else by getting it. To enter on the question whether he is going to make it or buy it, and whether he is going to buy it of A or of B, is an impertinence. We boast a great deal of having a free country; our orators shout themselves hoarse about liberty and freedom. Stop one of them, however, and ask him if he means free trade and free ships, and he will demur. No; not that; that will not do. He is in favor of freedom for himself and his friends in those respects in which they want liberty against other people, but he is not in favor of freedom for other people against restraints which are advantageous to him and his political allies. He is in favor of freedom for those who are being oppressed—by somebody else; not for those who are being oppressed by himself. I heard it asserted not long ago that we have no monopolies in this country, because it is a free country. It is not a free country, because there are more artificial monopolies in it than in any other country in the world. The popular notion that it is free rises from the fact that there are fewer natural monopolies in it than in any other great civilized country. It is necessary, however, to go to Turkey or Russia to find instances of legislative and administrative abuses to equal the existing laws and regulations of the United States about ships, the carrying trade, and foreign commerce. These laws have been brought to public attention again and again, but apparently with little effect in awakening popular attention, while the newspapers carry all over the country details about abuses in Ireland, Russia, and South Africa. We should stop bragging about a free country and about the enlightened power of the people in a democratic republic to correct abuses, while laws remain which treat the buying, importing, owning, and sailing of ships as pernicious actions, or, at least, as doubtful and suspicious ones. I have no conception of a free man or a free country which can be satisfied if a citizen of that country may not own a ship, if he wants one, getting it in any legitimate manner in which he might acquire other property; or may not sail one, if he finds that a profitable industry suited to his taste and ability; or may not exchange the products of his labor with that person, whoever he may be, who offers the most advantageous terms.

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POLITICS IN AMERICA, 1776–1876[48]

When the Continental Congress met in 1774, few persons in the colonies perceived that the ties to the mother country were about to be severed, and few, if any, were republicans in theory, or contemplated a “revolution” in the political system. The desire for independence was developed during 1775, and the question as to the form of government to be adopted came up by consequence. It presented no real difficulty. The political organization of some of the colonies was such already that there were no signs of dependence except the arms and flag, the form of writs, and a responsibility to the Lords of Trade which sat very lightly upon them. Necessary changes being made in these respects, those colonies stood as complete republics. The others conformed to this model.

In bringing about these changes great interest was developed in political speculations, an interest which found its first direction from Paine’s “Common Sense,” and was sustained by diligent reading of Burgh’s “Political Disquisitions,” and Macaulay’s “History of England.” The same speculations continued to be favorite subjects of discussion for twenty-five years afterwards. The journals of the time were largely made up of long essays by writers with fanciful noms de plume, who discussed no simple matters of detail, but the fundamental principles of politics and government. The method of treatment was not historical, unless we must except crude and erroneous generalizations on classical history, and it seemed to be believed that the colonial history of this country was especially unfit to furnish guidance for the subsequent period; but the disquisitions in question pursued an a priori method, starting from the broadest and most abstract assumptions. The same method has marked American political philosophy, so far as there has been any such thing, ever since. It is very much easier than the method which requires a laborious study of history.

The natural effect of the war, but still more of the doctrines in regard to liberty taught by Paine, and of the deplorable policy of local terrorism pursued by the Committees of Safety against Tories and Refugees, was to produce and bring into prominence a class of active, shallow men, who felt their new powers and privileges but not the responsibility which ought to go with these. The old colonial bureaucracy, which had enjoyed all the social preëminence that colonial life permitted, was gone. Office was open to many who, before the war, had little chance of attaining it. They sought it eagerly, expecting to enjoy the social advantages they had formerly envied. In the northern states a class of eager office-seekers arose who gained a great influence, saw their arena in the states especially, and jealously opposed the power of the Confederation. This class made hatred to England almost a religion, and testified to their political virtues by persecuting Tories and Refugees. They found popular grievances also ready to their hand as a means of advancement. The mass of the people had been impoverished by the war. The attempts at commercial war had reacted upon the nation with great severity. The paper issues of the Congress and the states had wrought their work to derange values, violate contracts, inflate credit, and destroy confidence. On the return of peace the industries which had been sustained only by war ceased to be profitable; the reduction of prices spread general ruin and left thousands indebted and impoverished. The consequence was discontent and disorder. All this was heightened by the contrast with another class which had been enriched by privateering, contracts, and “financiering.” The soldier who returned in rags, bringing only a few bits of scrip worth fifteen or twenty cents on the dollar, found his family in want, and some of his neighbors, who had borne few of the sacrifices of the war, enriched by it and now enjoying its fruits. It seemed to this whole class that they had not yet got liberty, or that they did not know what it was. They did not look for it to a closer union.

This party, for it soon became a party, found an alliance in a quarter where it would hardly have been expected, in the slave-owning planters of the South—an alliance which has been of immense importance in our political history. The planters, at the outbreak of the war, had been heavily indebted to English capitalists and merchants. They now feared that they would be compelled to pay their debts, and they saw in the treaty-making power of the general government the source from which this compulsion would come. They therefore opposed any union which would strengthen and give vigor to that power. To this party were added those who had adopted, on theoretical and philosophical grounds, the enthusiasm for liberty which was then prevalent in both hemispheres. It should be added to the characteristics of this party that it looked with indifference upon foreign commerce, cared little for foreign opinion, would have been glad to be isolated from the Old World, and had very crude opinions as to the status and relations of European nations.

This party naturally went on to confound liberty with equality, and political virtue with tenacity of rights. It furthermore confounded power with privilege, and thought that it must allow no civil power or authority to exist if it meant really to exterminate aristocratic privilege. It was not so clear in its conception of political duties, and certainly failed to see that the best citizen is not the one who is most tenacious of his political rights, but the one who is most faithful to his political duties; that envy and jealousy are not political virtues; and that equality can be attained only by cutting off every social advance and setting up as the standard, not what is highest, but what is a low average.

An opposing party gradually formed itself of men of wider information and superior training. These men understood the institutions of Great Britain and their contrast to those of any other country in Europe. They understood just what the war had done for the Colonies. They did not consider that it had altered the internal institutions inherited from the mother country, or set the Colonies adrift upon a sea of political speculation to try to find a political utopia. Some of them joined for a time in the prevalent opinion that the Americans were better and purer than the rest of mankind, but experience soon taught them their error. Tradition and experience still had weight with them; and in making innovations they sought development rather than destruction and reconstruction. They were conservative by property, education, and character.

To this party it was evident that the colonies had lost much by falling out of the place in the family of nations which they had filled as part of the British Empire, and they believed that a similar place must now be won on an independent footing. They understood the necessity of well-regulated foreign relations, of foreign commerce, and of public credit. Their general effort was, therefore, to secure order and peace in the internal relations of the country by establishing liberty indeed, but liberty under law; and to secure respectability and respect abroad by fidelity to treaties and pecuniary engagements, by a reputation for commercial integrity, and by a development of the arts of peace. The first requisite to all this was a more perfect union.

The two parties, therefore, formed about the issue of a revision of the Articles of Confederation, but it was not until the absolute necessity of the objects aimed at by the Federalists—objects which are in their nature less directly obvious and tangible—had been demonstrated by experience, that this revision was brought about. The Union was not the result of a free and spontaneous effort, but was “extorted from the grinding necessity of a reluctant people.” A political party which resists a proposed movement by predicting calamitous results to flow from it must abide by the verdict of history. Tried by this test, the anti-Federalists are convicted of resisting the most salutary action in our political history. The victory was won, not by writing critical essays about the movement and the relations of parties, but by the direct and energetic activity of those men of that generation who had enjoyed the greatest advantages of education and culture.

Three evils were inherited under the new Constitution from the old system: slavery (which the framers of the Constitution tolerated, thinking it on the decline), paper money (which they thought they had eradicated), and the mercantile theories of political economy. These three evils, in their single or combined development, have given character to the whole subsequent political history of the country. One of them has been eliminated by a civil war. The other two confront us as the great political issues of to-day.

The framers of the Constitution, without having any precise definition of a republic in mind, knew well that it differed from a democracy. No one of them was a democrat. They were, at the time of framing the Constitution, under an especial dread of democracy, on account of the rebellion in Massachusetts. They meant to make a Constitution in order to establish organized or articulated liberty, giving guarantees for it which should protect it from popular tyranny as much as from personal despotism. Indeed, they recognized the former as a great danger, the latter as a delusion. They therefore established a constitutional republic. The essential feature of such a system of government (for it is a system of government, and not a political theory) is that political power be conferred under a temporary and defeasible tenure. That it be conferred by popular election is not essential, although it is convenient in many cases. This method was the one naturally indicated by the circumstances of the United States. The system which was established did not pretend to give direct effect to public opinion according to its fluctuations. It rather interposed delays and checks in order to secure deliberation, and it aimed to give expression to public opinion only after it was matured. It sought to eliminate prejudice and passion by prescribing beforehand methods which seemed just in themselves, independently of conflicting interests, in order that, when a case arose, no advantage of procedure might be offered to either party; and it aimed to subject action to organs whose operation should be as impersonal as it is possible for the operation of political organs to be.

Democracy, on the other hand, has for its essential feature equality, and it confers power on a numerical majority of equal political units. It is not a system of government for a state with any but the narrowest limits. On a wider field it is a theory as to the depositary of sovereignty. It seizes upon majority rule, which is only a practical expedient for getting a decision where something must be done and a unanimous judgment as to what ought to be done is impossible, and it makes this majority the depositary of sovereignty, under the name of the sovereignty of the people. This sovereign, however, is as likely as any despot to aggrandize itself, and to promulgate the unformulated doctrines of the divine right of the sovereign majority to rule, the duty of passive obedience in the minority, and that the majority can do no wrong.

Opposition to the Federal Constitution died out in a year or two, and no one could be found who would confess that he had resisted its adoption. Parties divided on questions of detail and of interpretation, and the points on which they differed were those by which the Constitution imposed delays and restraints upon the popular will. The administrations of Washington and Adams threw continually increasing weight in favor of constitutional guarantees, as the history of the French Revolution seemed to the Federalists to furnish more and more convincing proofs of the dangers of unbridled democracy. The opposition saw nothing in that history save the extravagant ebullitions of a people new to freedom—saw rather examples to be imitated than dangers to be shunned. Sympathy and gratitude came in to exercise a weighty influence on political issues. The personal executive and the judiciary were the chief subjects of dislike, and General Washington himself finally incurred abuse more wanton and severe than any President since, except the elder Adams, has endured, because the fact was recognized that Washington’s personality was the strongest bulwark which the system possessed at the outset.

Democracy, however, was, and still is, so deeply rooted in the physical and economic circumstances of the United States, that the constitutional barriers set up against it have proved feeble and vain. Fears of monarchy have now almost ceased or are ridiculed. Monarchist and aristocrat are now used only as epithets to put down some over-bold critic of our political system; but in the early days of the Republic the mass of the people believed that the supporters of the first two administrations desired aristocracy and monarchy. In a new country, however, with unlimited land, the substantial equality of the people in property, culture, and social position is inevitable. Political equality follows naturally. Democracy is given in the circumstances of the case. The yeoman farmer is the prevailing type of the population. It is only when the pressure of population and the development of a more complex social organization produce actual inequality in the circumstances of individuals, that a political aristocracy can follow and grow upon a social aristocracy. The United States are far from having reached any such state as yet. These facts were felt, if not distinctly analyzed and perceived, even by those who might on theory have preferred monarchical institutions; and, as Washington said, there were not ten men in the country who wanted a monarchy.

The Federalists repaid their opponents with a no less exaggerated fear of their principles and intentions, regarding them as Jacobins and sans culottes, who desired to destroy whatever was good and to produce bloodshed and anarchy. Party spirit ran to heights seldom reached since. Partisan abuse outstripped anything since. It was an additional misfortune that the questions at issue were delicate questions of foreign policy and international law. It is a great evil in a republic that parties should divide by sympathy with two foreign nations, and it is the greatest evil possible that they should not believe in each other’s loyalty to the existing constitution.

The deeper movement which was stirring to affect the general attitude or standpoint from which the Constitution was viewed (a matter, of course, of the first importance under a written constitution), and which was changing the constitutional republic into a democratic republic, did not escape the observation of the most sagacious men of the earliest days. Fisher Ames wrote to Wolcott in 1800: “The fact really is, that over and above the difficulties of sustaining a free government, and the freer the more difficult, there is a want of accordance between our system and the state of our public opinion. The government is republican; opinion is essentially democratic. Either events will raise public opinion high enough to support our government, or public opinion will pull down the government to its own level.” The fact was that the government could not, under the system, long remain above the level of public opinion. The Federalists, assisted by the prestige of Washington’s name, held it there for twelve years; but they probably never, on any of the party issues, even with a restricted suffrage, had a majority of the voters. Dating the rise of parties from the time of Jay’s Treaty, they had a majority of the House of Representatives only under the excitement of French insult in 1798.

The leading men of 1787–1788, as has been said, worked industriously and energetically for political objects. The first decade of the Republic had not passed by, however, before men began to estimate the cost and sacrifices of public life and the worry of abuse and misrepresentation, to compare this with what they could accomplish in politics, and to abandon the contest. To the best public men professions and other careers offered fame, fortune, honorable and gratifying success. In public life they struggled against, and were defeated by, noisy, active men who could not have competed with them in any other profession. Their best efforts were misunderstood and misrepresented. They had no reward but the consciousness of fulfilling a high public duty. Furthermore they lacked, as a class, the tact and sagacity which the system indispensably requires. The leaders of the Federal party committed a political blunder of the first magnitude in quarrelling with John Adams, whatever may have been his faults. They thereby separated themselves from the mass of their own party, and at a time when parties were so evenly balanced that they required harmony for any chance of success; and they put themselves in the position of a junto or cabal, trying to dictate to the party without guiding its reason. Those of them who had withdrawn from, or had been thrown out of political life by the causes above mentioned were most active in this work of disorganization. They had abandoned that sort of task which they had engaged in at the outset, and which, difficult as it is, is permanently incumbent on the cultured classes of the country—to make the culture of the nation homogeneous and uniform by imparting and receiving, by living in and of and for the nation, contributing to its thought and life their best stores, whatever they are. A breach was opened there which has gone on widening ever since, and which has been as harmful to our culture as to our politics. On the one side it has been left to anti-culture to control all which is indigenous and “American”; and on the other hand American culture has been like a plant in a thin soil, given over to a sickly dilettantism and the slavish imitation of foreign models, ill understood, copied for matters of form, and, as often as not, imitated for their worst defects.

An actual withdrawal of the ablest men from political life, such as we have come to deplore, began, then, at this early day. Many others were thrown out for too great honesty and truth in running counter to the popular notions of the day. John Adams incurred great unpopularity for having said that the English Constitution was one of the grandest achievements of the human race—an assertion which Callender disputed, with great popular success, by dilating upon the corruption of the English administration under George III, but an assertion which, in the sense in which it was made, no well-informed man would question. Sedgwick laid down the principle that the government might claim the last man as a soldier and the last dollar in taxation—an abstract proposition which is unquestionable, but which Callender disputed, once more with great popular success, by arguing as if it were a proposition to take the last man and the last dollar. Dexter lost a reëlection by opposing a clause of the naturalization law, that a foreign nobleman should renounce his titles on being naturalized. It was opposed as idle and frivolous, and favored as if every foreign nobleman would otherwise become by naturalization a member of Congress. Hamilton and Knox abandoned the public service on account of the meagerness of their salaries. Pickering, who left office really insolvent, and with only a few hundred dollars in cash, was pursued by charges of corruption on the ground of unclosed accounts. Wolcott, at the end of long and faithful service, was charged with the responsibility for a fire which broke out in his office, as if he had sought to destroy the records of corrupt proceedings.

It is no wonder that these men abandoned public life, and that their examples deterred others, unless they were men born to it, who could not live out of the public arena; but it is true now, as it was then, that men of true culture, high character, and correct training can abandon public political effort only by the surrender of some of the best interests of themselves and their posterity. The pursuit of wealth, which is the natural alternative, has always absorbed far too much of the ambition of the nation, and under such circumstances there could be no other result than that a wealthy class should arise, to whom wealth offers no honorable social power, in whom it awakens no intellectual or political ambition, to whom it brings no sense of responsibility, but for whom it means simply the ability to buy what they want, men or measures, and to enjoy sensual luxury. A class of men is produced which mocks at the accepted notions while it uses them, and scorns the rest of us with a scorn which is so insulting only because it is so just. It is based on the fact that we will not undergo the sacrifices necessary to self-defense. This pursuit of wealth was almost the only pursuit attractive to able men who turned their backs on the public service in the early days. In later years professional careers and scientific and literary pursuits have disputed to a great and greater extent the dominion of wealth over the energies of the nation; but politics have not yet won back their due attraction for able and ambitious men.

The Federalists also held a defective political philosophy. They did not see that the strength of a constitutional republic such as they desired must be in the intelligent approval and confidence of the citizens. Adams and Hamilton agreed in supposing that some artificial bond must be constructed to give strength to the system. Hamilton looked for it in the interest of the wealthy class, which he wanted to bind up in the system—a theory which would have changed it into a plutocracy. Adams sought the bond in ambition for social eminence, and did not see that, where such eminence sprang only from wealth or official rank, the very principle of human nature which he invoked would, under the form of envy, counteract his effort.

The presidential election of 1801 having been thrown into the House of Representatives, the Federalists added to their former blunder another far more grave. Abandoning their claims to principle and character, they took to political intrigue and bargaining, in the attempt to elect Burr over Jefferson. Their exit from power might otherwise have been honorable, and they might, as an opposition party, have made a stand for inflexible principle and political integrity; but it was hard for them after this to talk of those things, especially as Burr went on to develop the character which Hamilton had warned them that he possessed. They fell into the position of “independent voters,” throwing their aid now with one and now with the other faction of the majority; but history does not show that they ever forced either one or the other to “adopt good measures,” for the obvious reason that the majority possessed the initiative. The purchase of Louisiana seemed to them to transfer the power of the Union to the southern and frontier states, the seat of the political theories which they regarded as reckless and lawless. They feared that the power of the Union would be used to sacrifice commerce and to put in operation wild theories by which the interests of the northern and eastern states would be imperiled, and the inherited institutions of constitutional liberty, which they valued as their best possessions, would be overthrown. The Embargo and Non-intercourse Acts seemed only the fulfillment of these fears. The recourse of a minority has always been to invoke the Constitution and to insist upon the unconstitutionality of what they could not resist by votes, each party in turn thereby bearing witness to the truth that the Constitution is the real safeguard of rights and liberty. In the last resort also the minority, if it has been local, and has seen the majority threatening to use the tremendous power of the Confederation to make the interests of the minority subservient to the interests of the rest, has felt its loyalty to the Union decline. How far the Federalists went in this direction it is difficult to say, but they certainly went farther than they were afterwards willing to confess or remember. They gradually faded out of view as a political power after the second war and in the twenties “Federalist” became a term of reproach.

The opposite party, called by themselves Republicans after 1792, took definite form in opposition to Washington’s administration on the question of ratifying Jay’s Treaty. They were first called Democrats in 1798, the name being opprobrious. They adopted it, however, first in connection with the former name; and the joint appellation, Democratic Republicans, or either separately, was used indifferently down to the middle of this century. Jefferson was the leader of this party. He did not write any political disquisitions or aid in the attempts which have been mentioned to form public opinion; but his expressions in letters and fugitive writings struck in with the tide of Democracy so aptly and exactly that he seemed to have put into people’s mouths just the expression for the vague notions which they had not yet themselves been able to get into words. Jefferson, in fact, was no thinker. He was a good specimen of the a priori political philosopher. He did not reason or deduce; he dogmatized on the widest and most rash assumptions, which were laid down as self-evident truths. He did not borrow from the contemporaneous French schools, for his democracy is of a different type; but both sprang from the same germs and pursued the same methods of speculation. Freneau, Bache, Callender, and Duane wrought continually upon public opinion, and Jefferson entered into the leadership of the party they created, by virtue of a certain skill in giving watchwords and dogmatic expressions for the ideas which they disseminated.

The dogmas which Jefferson taught, or of which he was the exponent, were not without truth. Their fallacy consisted in embracing much falsehood, and also in excluding the vast amount of truth which lay outside of them. For instance, the dogma that the voice of the people is the voice of God is not without truth, if it means that the enlightened and mature judgment of mankind is the highest verdict on earth as to what is true or wise. This is the truth which is sought to be expressed in the ecclesiastical dogma of Catholicity, but the political and the ecclesiastical dogma have the same limitation. This verdict of mankind cannot be obtained in any formal and concrete expression, and is absolutely unattainable on grounds of speculation antecedent to experiment. It is in history only; or, rather, it constitutes history. In Jefferson’s doctrine and practice it resolved itself simply into this practical rule: the test of wisdom for the statesman and of truth for the philosopher is popularity. When the statesman has a difficult practical question before him as to what to do, according to this theory he puts forward what seems to him best as a proposition. If, then, the return wave of popular sympathy comes back to him with promptitude and with the intensity to which he is accustomed, he infers that he has proposed wisely, and goes forward. If there is delay or uncertainty in the response, he draws back. The actual operation of this theory is that, if the statesman in question is the idol of a popular majority, the approving response is quick and sure, because the proposition comes from him, not because the tribunal of appeal has considered or can consider the question. If an unpopular man endeavors to use the same test, the answer is doubtful, feeble, hesitating, or impatient, because those to whom he appeals have not the necessary preparation, or time, or interest to judge in the matter. In general, the theory is popular, because it flatters men that they can decide anything offhand, by the light of nature, or by some prompt application of assumptions as to “natural rights,” or by applying the test of a popular dogma or prejudice. It tramples study and thought and culture under foot and turns their boasts to scorn. On the other hand, it makes statesmanship impossible. Study and thought go for nothing. There can be no authority derived from information or science or training, and no leadership won by virtue of these. If the decision is to come from a popular vote, why not abandon useless trouble and trust to that alone?

Such has been the outcome in history, as will appear further on, of the doctrines which are associated with the name of Jefferson, although they really had their origin in the great social tendencies of the time and in the circumstances of the American people. The love of philosophizing about government was a feature in the life of the second half of the eighteenth century. The method of philosophizing on assumptions was the only one employed. The Americans, with meager experience and high purposes, readily took refuge in abstractions. The habit of pursuing two or three occupations at once destroyed respect for special or technical knowledge. There seemed to be nothing unreasonable in referring a question of jurisprudence or international law to merchants, farmers, and mechanics, for them to give an opinion on it as a mere incident in their regular occupations. Jefferson himself could sit down and develop out of his own consciousness a plan for fortifications and a navy, for a nation in imminent danger of war, with no more misgivings, apparently, than if he was planning an alteration on his estate.

“The further democracy was pushed, first in theory, then in practice, the more completely was the belief in the equality of all [in rights and privileges] converted, in the minds of the masses, into the belief in the equal ability of all to decide political questions of every kind. The principle of mere numbers gradually supplanted the principle of reflection and study.” This tendency reaches its climax in the popular doctrines that every man has a right to his opinion and that one man’s opinion is as good as another’s. We have abundant illustration of the might which it gives to “the phrase.”

It has been well said that “men can reason only from what they know”—a doctrine which would reduce the amount of reasoning to be done by anybody to a very little. The common practice is to reason from what we do not know, which makes every man a philosopher.

Jefferson’s election was the first triumph of the tendency towards democracy—a triumph which has never yet been reversed. The old conservatism of the former administrations died out, and it is important to observe that, from this time on, we have in conflict not the same two parties as before, but only factions or subdivisions of the one party which, under Washington and Adams, was in opposition to the administration.

The event did not justify the fears which were entertained before the election. Jefferson did not surrender any of the power of the executive. He aggrandized it as neither of his predecessors would have dared to do. He did not surrender the central power in favor of states’ rights; and his foreign policy, governed by sympathy to France and hatred to England, was only too sharp and spirited. It seldom happens to an opposition party, coming into power, to have the same question proposed to it as to its predecessor, and to put its own policy to trial. This happened to Jefferson. Jay’s Treaty was hesitatingly signed by Washington, and it gave the country ten years of peace and neutrality. Pinckney and Monroe’s Treaty was rejected by Jefferson, and in six years the country was engaged in a fruitless war.

Madison’s administration revived many of the social usages which Jefferson had ostentatiously set aside, in consistency with the general spirit of preference, on the ground of republican simplicity, for what is common over what is elegant and refined. The natural tendency of the party in power to think that what is is right, and that while they are comfortable other people ought to be so, was apparent here. It went on so far during Madison’s first term, that the leaders thought it necessary to break the monotony and to secure again, in some way, the readiness and activity of political life which had prevailed under Jefferson. They forced Madison into the war with England—a war which brought disturbance into the finances and spread distress amongst the people, which won some glory at sea only by vindicating the old Federalist policy in regard to a navy, but which was marked by disaster on land until the battle of New Orleans. At the return of peace in Europe, England was left free to deal with the United States, and a peace was hastily made in which the question of impressment, the only question at issue, was left just where it had been at the beginning.

There ensued in our internal politics an “era of good feeling.” The old parties no longer had any reason to exist. Some of the Federal doctrines had been adopted. The navy was secure in its popularity. The Federal financial system had been adopted by the party in power. They had contracted a debt, laid direct taxes, and enlisted armies. When confronted by problems of war and debt, they had found no better way to deal with them than the ways which had been elaborated by the older nations, and which they had blamed the Federalists for adopting. The questions of neutrality had disappeared with the return of peace in Europe. The fears of Jacobinism on the one hand and of monarchy on the other were recognized as ridiculous. If, however, any one is disposed to exaggerate the evils of party, he ought to study the history of the era of good feeling. Political issues were gone, but personal issues took their place. Personal factions sprang up around each of the prominent men who might aspire to the Presidency, and, in their struggles to advance their favorites and destroy their rivals, they introduced into politics a shameful series of calumnies and personal scandals. Every candidate had to defend himself from aspersions, from attacks based upon his official or private life. The newspapers were loaded down with controversies, letters, documents, and evidence on these charges. The character of much of this matter is such as to awaken disgust and ridicule. Mr. A. tells Mr. B that, when in Washington, he was present at a dinner at the house of Mr. C at which Mr. D said that he came on in the stage with Mr. E, who told him that Mr. F had seen a letter from Mr. G, a supposed friend of one candidate, to Mr. H, the friend of another candidate, making charges against the first candidate, which he (Mr. G) felt bound in honor to make known. Mr. B publishes his information, and then follow long letters from all the other gentlemen, with explanations, denials, corroborative testimony, and so on, in endless reiteration and confusion. It was another noteworthy feature of this period, that every public man seemed to stand ready to publish a “vindication” at the slightest provocation, and that in these vindications a confusion between character and reputation appears to be universal.

These faction struggles culminated in the campaign of 1824. The first mention of General Jackson for the Presidency seems to be in a letter from Aaron Burr to his son-in-law, Alston of South Carolina, in 1815. An effort was being made to form a party against the Virginia oligarchy. Those who were engaged in it sought a candidate who might be strong enough to secure success. Burr justified his reputation as a politician by pointing out the man, but it was yet too soon. The standard of what a Federal officer ought to be was yet too high. The Albany Argus said of the nomination, in 1824: “He [Jackson] is respected as a gallant soldier, but he stands in the minds of the people of this state at an immeasurable distance from the executive chair.” The name of Jackson was used, however, in connection with the Presidency, by various local conventions, during 1822 and 1823; and, although the nomination was generally met with indifference or contempt in the North and East, it soon became apparent that he was the most dangerous rival in the field. The nominations had hitherto been made by caucuses of the members of Congress of either party. Until Jefferson’s second nomination, these had been held under a decent veil of secrecy. Since that time they had exerted more and more complete and recognized control. Crawford was marked for the succession, although he was under some discipline for having allowed his name to be used in the caucus of 1816 against Monroe. The opposing candidates now discovered that caucus nominations were evil, and joined forces in a movement to put an end to them. This movement gained popular approval on general principles. When the caucus was called, naturally only the friends of Crawford attended—sixty-six out of two hundred and sixteen Republican members. The nomination probably hurt him. It was proudly said that King Caucus was now dethroned, but never was there a greater mistake. He had only just come of age and escaped from tutelage. He was about to enter on his inheritance.

General Jackson obtained the greatest number of votes in the electoral college; and when the election came into the House, a claim was loudly put forward which had been feebly heard in 1801, that the House ought simply to carry out the “will of the people” by electing him. This claim distinctly raised the issue which has been described, of democracy against the Constitution. Does the Constitution give the election to the House in certain contingencies, or does it simply charge it with the duty of changing a plurality vote into an election? No one had a majority, but the House was asked really to give to a major vote the authority which, even on the democratic theory, belongs to a majority.

The election could not but result in the discontent of three candidates and their adherents, but the Jackson party was by far the most discontented and most clamorous. They proceeded to organize and labor for the next campaign. They were shrewd, active men, who knew well the arena and the science of the game. They offered to Adams’s administration a ruthless and relentless opposition. There were no great party issues; indeed, the country was going through a period of profound peace and prosperity which offered little material for history and little occasion for active political combat. The administration was simple and businesslike and conducted the affairs of the government with that smoothness and quiet success which belong to the system in times of peace and prosperity. Mr. Adams was urged to consolidate his party by using the patronage of the executive, and the opinion has been expressed that, if he had done so, he could have won his reëlection. He steadfastly refused to do this.

The truth was that a new spirit had come over the country, and that the candidacy of Jackson was the form in which it was seeking admission into the Federal administration. Here we meet with one of the great difficulties in the study of American political history. The forces which we find in action on the Federal arena have their origin in the political struggles and personal jealousies of local politicians, now in one state and now in another; and the doctrines which are propounded at Washington, and come before us in their maturity, have really grown up in the states. Rotation in office began to be practiced in New York and Pennsylvania at the beginning of the century. The Federalists then lost power in those states, and their political history consists of the struggles of factions in the Republican party. Jefferson and Madison taught Democracy in Virginia, but it never entered their heads that the “low-down whites” were really to meddle in the formative stage of politics. They expected that gentlemen planters would meet and agree upon a distribution of offices, and that then the masses should have the privilege of electing the men they proposed. The Clintons and Livingstones in New York were Democrats, but they likewise understood that, in practice, they were to distribute offices around their dinner-tables.

In the meantime men like Duane were writing essays for farmers and mechanics, which were read from one end of the Union to the other, in which they were preaching hostility to banks and the “money power,” hostility to the judiciary and to the introduction of the common law of England, the election of judicial officers, rotation in office, and all the dogmas which we generally ascribe to a much later origin. These notions even found some practical applications, as in the political impeachment of judges in Pennsylvania in 1804—acts which fortunately did not become precedents. The new constitutions which were adopted from time to time during the first quarter of this century show the slow working of this leaven, together with the gradual adoption of improvements far less questionable.

After 1810 began also the series of great inventions which have really opened this continent to mankind. The steamboat was priceless to a country which had grand rivers but scarcely any roads. In 1817 De Witt Clinton persuaded New York to commence the Erie Canal, and before it was finished scores of others were projected or begun. Politically and financially the system of internal improvements has proved disastrous, but those enterprises helped on the events which we are now pursuing, for they assisted in opening the resources of the continent to the reach of those who had nothing. The great mass of the population found themselves steadily gaining in property and comfort. Their independence and self-reliance expanded. They developed new traits of national character, and intensified some of the old ones. They had full confidence in their own powers, feared no difficulties, made light of experience, were ready to deal offhand with any problems, laughed at their own mistakes, despised science and study, overestimated the practical man, and overesteemed material good. To such a class the doctrines of democracy seemed axiomatic, and they ascribed to democracy the benefits which accrued to them as the first-comers in a new country. They generally believed that the political system created their prosperity; and they never perceived that the very bountifulness of the new country, the simplicity of life, and the general looseness of the social organism, allowed their blunders to pass without the evil results which would have followed in an older and denser community. The same causes have produced similar results ever since.

Political machinery also underwent great development during the first quarter of the century. In New York there was perhaps the greatest amount of talent and skill employed in this work, and the first engine used was the appointing power. The opposing parties were only personal and family factions, but they rigorously used power, when they got it, to absorb honors and places. That conception of office arose, under which it is regarded as a favor conferred on the holder, not a position in which work is to be done for the public service. Hence the office-holder sat down to enjoy, instead of going to work to serve. If some zealous man who took the latter view got into office, he soon found that he could count upon being blamed for all that went amiss, but would get little recognition or reward while things went well, and that the safest policy was to do nothing. The public was the worst paymaster and the most exacting and unjust employer in the country, and it got the worst service. The consequence was that the early political history of New York is little more than a story of the combinations and quarrels of factions, annual elections, and lists of changes in the office-holders. The Clintons and Livingstones united against Burr, who was the center of an eager and active and ambitious coterie of young men, who already threatened to apply democratic doctrines with a consistency for which the aristocratic families were not prepared. Then they began to struggle with each other until the Livingstones were broken up. Then the “Martling men” and the Clintonians, the Madisonians and the Clintonians, the “Bucktails” and the Clintonians, with various subdivisions, kept up the conflict until the Constitution of 1821 altered the conditions of the fight, and Regency and Anti-regency, or Regency and People’s Party, or Regency and Workingmen’s Party became the party headings. The net result of all this for national politics was the production of a class of finished “politicians,” skilled in all the work of “organization” which in any wide democracy must be the first consideration. Some of these gentlemen entered the national arena in 1824. The Regency was then supporting Crawford as the regular successor. On its own terms it could have been won for Adams, but this arrangement was not brought about. It did not require the astuteness of these men to see on reflection, that Jackson was the coming man. He was in and of the rising power. He represented a newer and more rigorous application of the Jeffersonian dogmas. His manners, tastes, and education, had nothing cold or aristocratic about them. He had never been trained to aim at anything high, elegant, and refined, and had not been spoiled by contact with those who had developed the art of life. He had, moreover, the great advantage of military glory. He had bullied a judge, but he had won the battle of New Orleans. He had hung a man against the verdict of a court-martial, but the man was a British emissary. It was clear that a tide was rising which would carry him into the Presidential chair, and it behooved other ambitious men to cling to his skirts and be carried up with him.

It is in and around the tariff of 1828 that the conflict centers in which these various forces were combined or neutralized to accomplish the result. The student of our economic or political history cannot pay too close study to that crisis. For the next fifteen years the financial and political questions are inextricably interwoven.

The election of Jackson marks a new era in our political history. A new order of men appeared in the Federal administration. The whole force of local adherents of the new administration, who had worked for it and therefore had claims upon it, streamed to Washington to get their reward. It seems that Jackson was forced by the rapacity of this crowd into the “reformation” of the government. The political customs which had grown up in New York and Pennsylvania were transferred to Washington. Mr. Marcy, in a speech in the Senate, January 24, 1832, on Van Buren’s nomination as minister to England, boldly stated the doctrine that to the victors belong the spoils, avowing it as a doctrine which did not seem to him to call for any delicacy on the part of politicians. In fact, to men who had grown up as Mr. Marcy had, habit in this respect must have made that doctrine seem natural and necessary to the political system. The New York politicians had developed an entire code of political morals for all branches and members of the political party machine. They had studied the passions, prejudices, and whims of bodies of men. They had built up an organization in which all the parts were adjusted to support and help one another. The subordinate officers looked up to and sustained the party leaders while carrying the party machinery into every nook and corner of the state, and the party leaders in turn cared for and protected their subordinates. Organization and discipline were insisted upon throughout the party as the first political duty. There is scarcely a phenomenon more interesting to the social philosopher than to observe, under a political system remarkable for its looseness and lack of organization, the social bond returning and vindicating itself in the form of party tyranny, and to observe under a political system where loyalty and allegiance to the Commonwealth are only names, how loyalty and allegiance to party are intensified. It is one of the forms under which the constant peril of the system presents itself, namely, that a part may organize to use the whole for narrow and selfish ends. The idea of the commonwealth is lost and the public arena seems only a scrambling-ground for selfish cliques. In the especial case of the New York factions, this was all intensified by the fact that there were no dignified issues, no real questions of public policy at stake, but only factions of the ins and the outs, struggling for the spoils of office. Naturally enough, the contestants thought that to the victors belong the spoils—otherwise the contest had no sense at all. In this system, now, fidelity to a caucus was professed and enforced. Bolting, or running against a regular nomination, were high crimes which were rarely condoned. On the other hand, the leaders professed the doctrine that a man who surrendered his claims for the good of the party, or who stood by the party, must never be allowed to suffer for it. The same doctrines had been accepted more or less at Washington, but in a feeble and timid way. From this time they grew into firm recognition. Under their operation politics became a trade. The public officer was, of necessity, a politician, and the work by which he lived was not service in his official duty, but political party labor. The tenure of office was so insecure and the pay so meager, that few men of suitable ability could be found who did not think that they could earn their living more easily, pleasantly, and honorably in some other career. Public service gravitated downwards to the hands of those who, under the circumstances, were willing to take it. It presented some great prizes in the form of collectorships, etc., the remuneration for which was in glaring contrast with the salaries of some of the highest and most responsible officers in the government; but, for the most part, the public service fell into the hands of men who were exposed to the temptation to make it pay.

After the general onslaught on the caucus, in 1824, it fell into disuse as a means of nominating state officers, and conventions took its place. At first sight this seemed to be a more complete fulfillment of the democratic idea. The people were to meet and act on their own motion. It was soon found, however, that the only change was in the necessity for higher organization. In the thirties there was indeed a fulfillment of the theory which seems now to have passed away; there was a spontaneity and readiness in assembling and organizing common action which no longer exists; there was a public interest and activity far beyond what is now observable. One is astonished at the slight occasion on which meetings were held, high excitement developed, and energetic action inaugurated. The anti-Masonic movement, from 1826 to 1832, is a good instance. The “Liberty party” (Abolitionists), the “Native Americans,” the “Anti-renters,” all bear witness to a facility of association which certainly does not now exist. It is, however, an indispensable prerequisite to the pure operation of the machinery of caucus and convention. The effort to combine all good men has been talked about from the beginning, but it has always failed on account of the lack of a bond between them as strong as the bond of interest which unites the factions.

During the decade from 1830 to 1840 a whole new set of machinery was created to fit the new arrangements. This consisted in committees, caucuses, and conventions, ramifying down finally into the wards of great cities, and guided and handled by astute and experienced men. Under their control the initiative of “the people” died out. The public saw men elected whom they had never chosen, and measures adopted which they had never desired, and themselves, in short, made the sport of a system which cajoled and flattered while it cheated them. If a governor had been elected by some political trickery a little more flagrant than usual, he was very apt, in his inaugural, to draw a dark picture of the effete monarchies of the Old World, and to congratulate the people on the blessings they enjoyed in being able to choose their own rulers.

This period was full of new energy and turbulent life. Railroads were just beginning to carry on the extension of production which steamboats and canals had begun. Immigration was rapidly increasing. The application of anthracite coal to the arts was working a revolution in them. On every side reigned the greatest activity. Literature and science, which before had had but a meager existence, were coming into life. The public journals, which had formerly been organs of persons and factions, or substitutes for books, now began to be transformed into the modern newspaper. The difficulties and problems presented by all this new life were indeed great, and the tasks of government, as well to discriminate between what belonged to it and what did not, as to do what did belong to it, were great. On the general principles of the Democratic party of the day in regard to the province of government, history has already passed the verdict that they were sound and correct. On the main questions which divided the administration and the opposition, it must pass a verdict in favor of the administration. These issues were not indeed clear and the parties did not, as is generally supposed, take sides upon them definitely. Free trade, so far as it was represented by the compromise tariff, was the result of a coalition between Clay and Calhoun against the administration, after Calhoun’s quarrel with Jackson had led the latter to revoke the understanding in accordance with which Calhoun retired from the contest of 1824 and took the second place. The South was now in the position in which the northeastern states had found themselves at the beginning of the century. The Southerners considered that the tariff of 1828 had subjected their interests to those of another section which held a majority in the general government, and that the Union was being used only as a means of so subjecting them. They seized upon the Kentucky and Virginia resolutions of 1798, which Jefferson and Madison had drawn when in opposition, as furnishing them a ground of resistance, and threw into the tariff question no less a stake than civil war and disunion. On this issue there were no parties. South Carolina stood alone.

Banks had been political questions in the states and in the general government from the outset. The history of Pennsylvania and New York furnishes some great scandals under this head. From time to time, the methods of banking employed had called down the condemnation of the most conservative and sensible men, and had aroused some less well-balanced of judgment to indiscriminate hostility. Jackson’s attack on the Bank of the United States sprang from a political motive, and he proposed instead of it a bank on the “credit and revenues of the government”—a proposition too vague to be understood, but which suggested a grand paper-machine, at a time when the Bank of the United States was at its best. This attack rallied to itself at once all the local banks; the great victory of 1832 was not a victory for hard money so much as it was a victory of the state banks over the national bank. The removal of the deposits was a reckless financial step, and the crash of 1837 was its direct result.

The traditional position of the Democratic party on hard money has another source. In 1835 a party sprang up in New York City, as a faction of Tammany, which took the name of the “Equal Rights party,” but which soon received the name of the “Locofoco party” from an incident which occurred at Tammany Hall, and which is significant of the sharpness of party tactics at the time. This party was a radical movement inside of the administration party. It claimed, and justly enough, that it had returned to the Jeffersonian fountain and drawn deeper and purer waters than the Jacksonian Democrats. It demanded equality with a new energy, and in its denunciations of monopolies and banks went very close to the rights of property. It demanded that all charters should be repealable, urgently favored a metallic currency, resisted the application of English precedents in law courts and legislatures, and desired an elective judiciary. It lasted as a separate party only five or six years, and then was cajoled out of existence by superior political tactics; but it was not without reason that the name spread to the whole party, for, laying aside certain extravagances, two or three of its chief features soon came to be adopted by the Democrats.

On the great measures of public policy, therefore, the position of the administration was not clear and thorough, but the tendency was in the right direction, especially when contrasted with the policy urged by the Whigs. In regard to internal improvements, the administration early took up a position which the result fully justified, and in its opposition to the distribution of the surplus revenue its position was unassailable. In its practical administration of the government there is less ground for satisfaction in the retrospect. Besides the general lowering of tone which has been mentioned, there were scandals and abuses which it is not necessary to specify. General Jackson’s first cabinet fell to pieces suddenly, under the effect of a private scandal and of the President’s attempt to coerce the private social tastes of his cabinet, or rather of their wives. He held to the doctrine of popularity, and its natural effect upon a man of his temper, without the sobriety of training and culture, was to stimulate him to lawless self-will. He regarded himself as the chosen representative of the whole people, charged, as such, with peculiar duties over against Congress. The “will of the people” here received a new extension. He found it in himself, and what he found there he did not hesitate to set in opposition to the will of the people as this found expression through their constitutional organs. At the same time the practice of “instructions” marked an extension, on another side, of the general tendency to bring public action closer under the control of changing majorities.

Van Buren’s election was a triumph of the caucus and convention, which had now been reduced to scarcely less exactitude of action than the old congressional caucus. Van Buren, however, showed more principle than had been expected from his reputation. He had to bear all the blame for the evil fruits resulting from the mistakes made during the last eight years. Moving with the radical or Locofoco tendency, he attempted to sever bank and state by the independent treasury, and in so doing he lost the support of the “Bank Democrats.” This, together with the natural political revulsion after a financial crisis, lost him his re-election.

The Whig party was rich in able men, which makes it the more astonishing that one cannot find, in their political doctrines, a sound policy of government. The national bank may still be regarded as an open question, and favoring the bank was not favoring inconvertible paper money; but their policy of high tariff for protection, of internal improvements, and of distribution of the surplus revenue, has been calamitous so far as it has been tried. They also present the same lack of political sagacity which we have remarked in the Federalists, whose successors in general they were. They oscillated between principle and expediency in such a way as to get the advantages of neither; and they abandoned their best men for available men at just such times as to throw away all their advantages. The campaign of 1840 presents a pitiful story. There are features in it which are almost tragic. An opportunity for success offering, a man was chosen who had no marks of eminence and no ability for the position. His selection bears witness to an anxious search for a military hero. It resulted in finding one whose glory had to be exhumed from the doubtful tradition of a border Indian war. The campaign was marked by the introduction of mass meetings and systematic stump-speaking, and by the erection of “log-cabins,” which generally served as barrooms for the assembled crowd, so that many a man who went to a drunkard’s grave twenty or thirty years ago dated his ruin from the “hard-cider campaign.” After the election it proved that hungry Whigs could imitate the Democrats of 1829 in their clamor for office, and, if anything, better the instruction. The President’s death was charged partly to worry and fatigue. It left Mr. Tyler President, and the question then arose what Mr. Tyler was—a question to which the convention at Harrisburg, fatigued with the choice between Clay and Harrison, had not given much attention. It was found that he was such that the Whig victory turned to ashes. No bank was possible, no distribution was possible, and only a tariff which was lame and feeble from the Whig point of view. The cabinet resigned, leaving Mr. Webster alone at his post. In vain, like a true statesman, he urged the Whigs to rule with Mr. Tyler, since they had got him and could not get rid of him or get anybody else. Like a true statesman, again, he remained at his post, in spite of misrepresentation, until he could finish the English treaty, and it was another feature of the story that he lost position with his party by so doing. The system did not allow Mr. Webster the highest reward of a statesman, to plan and mold measures so as to impress himself on the history of his country. It allowed him only the work of reducing to a minimum the harm which other people’s measures were likely to do. In the circumstances of the time war with England was imminent, and there was good reason for fear if the negotiation were to fall into the hands of the men whom Mr. Tyler was gathering about him. The Whigs were broken and discouraged, and as their discipline had always been far looser than that of their adversaries, they seemed threatened with disintegration. The other party, however, was divided by local issues and broken into factions. Its discipline had suffered injury, and its old leaders had lost their fire while new ones had not arisen to take their places. The western states were growing into a size and influence in the confederation which made it impossible for two or three of the old states to control national politics any longer.

In this state of things the southern leaders came forward to give impetus and direction to the national administration. They had, what the southern politicians always had, leisure for conference. They had also character and social position, and a code of honor which enabled them to rely on one another without any especial bond of interest other than the general one. They had such a bond, common and complete, in their stake in slavery. They could count, without doubt or danger, on support throughout their entire section. They had a fixed program also, which was an immense advantage for entering on the control of a mass of men under no especial impetus. They had besides their traditional alliance with the Democrats of the North—an alliance which always was unnatural and illogical, and which now turned to the perversion of that party. They prepared their principles, doctrines, and constitutional theories to fit their plans.

Difficulties with Mexico in regard to Texas had arisen during Jackson’s administration. These difficulties seemed to be gratuitous and unjust on the part of the United States, and they seemed to be nursed by the same power. The diplomatic correspondence on this affair is not pleasant reading to one who would see his country honorable and upright, as unwilling to bully as to be bullied. Such was not the position of the United States in this matter.

It was determined by the southern leaders to annex Texas to the United States, and to this end they seized upon the political machinery and proceeded to employ it.

The election of Polk is another of the points to which the student of American politics should give careful attention. The intrigues which surrounded it have never been more than partially laid bare, but, if fairly studied, they give deep insight into the nature of the forces which operate in the name of the will of the people. The slavery issue was here introduced into American politics; and when that question was once raised, it “could not be settled until it was settled right.” For ten years efforts were made to keep the issue out of politics and to prevent parties from dividing upon it. What was desired was that the old parties should stand in name and organization, in order that they might be used, while the actual purposes were obtained by subordinate means. A party with an organization and discipline, and a history such as the Democratic party had in 1844, is a valuable property. It is like a well-trained and docile animal which will go through the appointed tasks at the given signal. It disturbs the discipline to introduce new watchwords and to depart from the routine, in order to use reason instead of habit. Hence the effort is to reduce the new and important issues to subordinate places, to carry them incidentally, while the old commonplaces hold together the organization. It is safe to say, however, that, in the long run, the true issues are sure to become the actual issues, and that delay and deceit only intensify the conflict.

Upon Polk’s election the independent treasury and comparative free trade were fixed in the policy of the government for fifteen years, with such beneficial results as to render them the proudest traditions of the party which adopted them.

Mr. Calhoun had abandoned the opposition during Van Buren’s administration, and had begun to form and lead the southern movement. His own mind moved too rapidly for his adherents, and he could not bring them to support him up to the positions which he considered it necessary to take; but, even as it was, the steps of the southern program came out with a rapidity, and were of a character, to shock the imperfectly prepared northern allies. The Democratic party of the North was not a proslavery party. Whigs and Democrats at the North united in frowning down Abolition excitements, and in maintaining the compromises of the Constitution. Old-line Whigs and hunker Democrats agreed in the conservatism which resisted the introduction of this question; but when, in 1844, Van Buren was asked, as a test question to a candidate, whether he would favor the annexation of Texas, the subject of slavery in the territories was thrown into the political arena from the southern side. It was not then a question of abolishing slavery in the southern states, which could not have obtained discussion except in irresponsible newspapers and on irresponsible platforms. It was not a question of spreading slavery into the old territories, for Texas and the Indian Territory barred the way to all which the Missouri Compromise left open. It was now a question of taking or buying or conquering new territory for slavery, and every one knew well that the chief reason for the revolt of Texas was that Mexico had abolished slavery. The South indeed claimed to have suffered aggressions and encroachments in regard to slavery ever since the adoption of the Constitution, and the attempt was now to be made to secure recompense. In the form in which the proposition came up it was no slight shock to those who had always been in alliance with the South. Party men like Van Buren and Benton drew back. Southerners like Clay resisted. The actual clash of arms, fraudulently brought about and speciously misrepresented, put an end to discussion, and aroused a war fever under the pernicious motto, “Our country, right or wrong.” If we are a free people and govern ourselves, our country is ourselves, and we have no guaranty of right and injustice if we throw those standards behind us the moment we have done wrong enough to find ourselves at war. The war ended, moreover, in an acquisition of territory, which, of course, was popular; and it proved that this territory was rich in precious metals, which added to the popular estimate of it. The antecedents of the war were forgotten.

Its political results, however, were far more important. Calhoun now came forward to ward off a long conflict in regard to slavery in these territories, by the new doctrine that the Constitution extended to all the national domain, and carried slavery with it—a doctrine which his followers did not, for ten years afterwards, dare to take up and rigorously apply, and which divided the Democratic party of the North. The repeal of the Missouri Compromise and the enactment of the Fugitive Slave Law were only steps in the conflict which was as yet confused, but which was clearing itself for a crisis. The South, like every clamorous suitor, reckless of consequences, obtained wide concessions from an adversary who sought peace and contentment, and who saw clearly the dangers of a struggle outside the limits of constitution and law.

* * * * *

The Abolitionists, from their first organization, pursued an “irreconcilable” course. They refused to vote for any slaveholder, or for any one who would vote for a slaveholder, and refused all alliances which involved any concession whatever. They more than once, by this course, aided the party most hostile to them, and, in the view of the ordinary politician, were guilty of great folly. They showed, however, what is the power of a body which has a principle and has no ambition, and is content to remain in a minority. Probably if the South had been more moderate, the Abolitionists would have attracted little more notice than a fanatical religious sect; but, as events marched on, they came to stand as the leaders in the greatest political movement of our history. The refusal of the Whig Convention of 1848 to adopt an antislavery resolution, and the great acts above mentioned, together with the popular reaction against a party which, if it had had its way, would never have won the grand territories on the Pacific, destroyed the Whig party. The party managers, enraged at the immense foreign element which they saw added year by year to their adversaries, forming a cohort, as it appeared, especially amenable to party discipline and the dictation of party managers, took up the Native American movement, which had had some existence ever since the great tide of immigration set in. The effort was wrecked on the obvious economic follies involved in it. How could a new country set hindrances against the immigration of labor? Politically, the effect was great in confirming the allegiance of naturalized voters, as a mass, to the Democratic party as the party which would protect their political privileges against malicious attacks. The formation of the Free-Soil party or its development into the Republican party, brought the extension of slavery into the territories, and the extension of its influence in the administration of the government, distinctly forward as the controlling political issue.

On this issue the Democratic party, as a political organization, made up traditionally of the southern element which has been described, of so much of the old northern Democratic party as had not been repelled by the recent advances in Southern demands, and of the large body of immigrants who regarded that party as the poor man’s and the immigrant’s friend, fell out of the place it had occupied as the representative of the great democratic tide which flows through and forms our political history. This movement has been in favor of equality. It has borne down and obliterated all the traditions and prejudices which were inherited from the Old World. It has eliminated from our history almost all recollection of the old Federal party, with its ideas of social and political leadership. It has crushed out the prestige of wealth and education in politics. It has, by narrow tenures, and by cutting away all terms of language and ceremonial observances tending to mark official rank, restrained the respect and authority due to office. The Northern hatred of slavery in the later days was due more to the feeling that it was undemocratic than to the feeling that it was immoral. It was always an anomaly that the Virginians should be democrats par excellence, and should regard the yeomen farmers of New England as aristocrats, when, on any correct definitions or standards, the New England States were certainly the most democratic commonwealths in the world. Slavery was an obvious bar to any such classification; and when slavery became a political issue, the parties found their consistent and logical position. The rise and victory of the Republican party was only a continuation of the same grand movement for equality. The old disputes between Federalists and Jeffersonians had ended in such a complete victory for the latter, that the rising generation would have enumerated the Jeffersonian doctrines as axioms or definitions of American institutions. Every schoolboy could dogmatize about natural and inalienable rights, about the conditions under which men are created, about the rights of the majority, and about liberty. The same doctrines are so held to-day by the mass of the people, and they are held so implicitly that corollaries are deduced from them with a more fearless logic than is employed upon political questions anywhere else in the world. Even scholars and philosophers who reflect upon them and doubt them are slow to express their dissent, so jealous and quick is the popular judgment of an attempt upon them. The Democratic party of the fifties was, therefore, false to its fundamental principle of equality when it followed its alliance with the South and allowed itself to be carried against equality for negroes. Whether there were not subtle principles of human nature at work is a question too far-reaching to be followed here.

With the rise of the Republican party there came new elements into American politics. The question at stake was moral in form. It enlisted unselfish and moral and religious motives. It reached outside the proper domain of politics—the expedient measures to be adopted for ends recognized as desirable—and involved justice and right in regard to the ends. It enlisted, therefore, heroic elements: sacrifice for moral good, and devotion to right in spite of expediency. At the same time, the issue was clear, simple, single, and distinct. The organization upon it was close and harmonious, not on account of party discipline, but on account of actual concord in motive and purpose. The American system was here seen in many respects at its best, and it worked more nearly up to its theoretical results in the election of Lincoln, a thoroughly representative man out of the heart of the majority, than in any other election in our history. It is probably the recollection and the standard of this state of things which leads men now on the stage to believe that corruption is spreading and that the political system is degenerating. It is one of the peculiarities of the government of the United States, that it has little historical continuity. If it had more, or if people had more knowledge of their own political history, the above-mentioned opinion would find little ground. The student of history who goes back searching for the golden age does not find it.

All the heroic elements in the political issue of 1860 were, of course, intensified by the war. There was the consciousness of patriotic sacrifice in submitting to loss, bloodshed, and taxation for the sake of an idea, for the further extension of political blessings long enjoyed and highly esteemed. After the war, national pride and consciousness of power expanded naturally, but the questions which then arose were of a different order. They were properly political questions. They concerned taxation, finance, the reconstruction of the South, the status of the freedmen. The war fervor, or the moral fervor of the political contest, could not remain at the former high pitch. There followed a natural reaction. Questions which touched the results of the war brought a quick and eager response. It would not be in human nature that that response should not be tinged by hatred of rebels and by the worse passions which war arouses. For war is at best but a barbarous makeshift for deciding political questions. Let them be never so high and pure in their moral aspects, war drags them down into contact with the lowest and basest passions—with cruelty, rapacity, and revenge. Moreover, it was natural that people should want rest and quiet after the anxiety and excitement of war. Every householder desired to enjoy in peace the political system which he had defended and established by war; he did not care to renew the excitement on the political arena. The questions which arose were no longer such as could be decided by reference to a general political dogma or a moral principle or a text of Scripture. They were such as to perplex and baffle the wisest constitutional lawyer or the ablest financier or the wisest statesman. The indifference and apathy which ensued were remarkable, and they probably had still other causes. The last twenty-five years have seen immense additions to the number and variety of subjects which claim a share of the interest and attention of intelligent men. Literature has taken an entirely new extension and form. Newspapers bring daily information of the political and social events of a half-dozen civilized countries. New sciences appeal to the interest of the entire community. Educational, ecclesiastical, sanitary, and economic undertakings, in which the public welfare is involved, demand a part of the time and effort of every citizen. At the same time trade and industry have undergone such changes in form and method that success in them demands far closer and more exclusive application than formerly. The social organization is becoming more complex, the division of labor is necessarily more refined, and the value of expert ability is rapidly rising.

It follows from all this that, while public interests are becoming broader and weightier, the ability of the average voter to cope with them is declining. It is no wonder that we have not the political activity of the first half of this century. Instead of grasping at the right to a share in deciding, we shrink from the responsibility. We are more inclined to do here what we should do in any other affair—seek for competently trained hands into which to commit the charge. The frequent elections, instead of affording a pleasurable interest to the ordinary voter, appear to be tiresome interruptions. What he wants is good government, honorable and efficient administration, businesslike permanence, and exactitude. He recognizes in the short terms and continual elections, not an opportunity for him to control the government, but an opportunity for professional hangers-on of parties to make a living, and a continually recurring opportunity for schemers of various grades to enter and carry out their plans when people are too busy to watch them. The opinion seems to be gaining ground that, for fear of power, we have eliminated both efficiency and responsibility; that if power is united with responsibility, it will be timid and reluctant enough; and that the voter needs only reserve the right of supervision and interference from time to time. The later state constitutions show a reaction from those of the first half of the century in the length of terms of office, and in the general tendency of the people to take guaranties against themselves or their representatives. There seems also to be a tendency to investigate the theory of appointments or elections to office as a means of devising measures more satisfactory to that end. No system will ever give a self-governing people a government which is better than they can appreciate; but the very belief, to which we have before referred, that the government is degenerating, is the best proof that the public standards as to the personnel and the methods of the government are rising. It seems to be perceived that the plan of popular selection is applicable to executive and legislative officers, but that it is not applicable to the judiciary or to administrative officers. In the one case, broad questions of policy control the choice; in the other case, personal qualifications and technical training, in regard to which the mass of voters cannot be informed and cannot judge. In some quarters, an unfortunate effort has been made to charge the duty of making certain appointments upon the judges, because, as a class, they retain the greatest popular confidence and because the restraints of their position are the weightiest. This, however, seems to be using up our last reserves. There has been abundant criticism of political movements and circumstances of late years. At first sight, it does not appear to be very fruitful. People seem to pay as little heed to it as devout Catholics do to the asserted corruptions of the Church; but other and deeper signs point to a conservative movement, slow, as all popular movements must be, but nevertheless real.

The political party system which had been developed previous to the war underwent no change during the heroic period. The doctrines of spoils and of rotation in office were indeed condemned, but it appeared (as it must appear to any new party coming into office) that the interests at stake were too great to be risked by leaving any part of the administration in the hands of disaffected men, and, with some apologies, the changes were made. It is the fate of the party in power to draw to itself all the unprincipled men who seek to live by politics, and to lose its principled adherents as, on one question after another, they disapprove of its action. The moral and heroic doctrines or sentiments of the Republican party were just the political principles which offered the best chance to the unprincipled. A man of corrupt character could “hate slavery” when that was the line of popularity and success, and could be “loyal” when only loyal men could get offices. The political machinery whose growth has been traced was adopted by the new party as a practical necessity, and the men “inside politics” still teach the old code wrought out by Tammany Hall and the Albany Regency, not only as the only rules of success for the ambitious politician, but also as the only sound theories on which the Republic can be governed. In those quarters where hitherto the refinements of the system have all been invented, a new and ominous development has recently appeared in the shape of the “Boss.” He is the last and perfect flower of the long development at which hundreds of skilful and crafty men have labored, and into which the American people have put by far the greatest part of their political energy. It has been observed that the discipline or coercion which we dread for national purposes and under constitutional forms appears with the vigor of a military despotism in party; and that the conception of loyalty, for which we can find no proper object in our system, is fully developed in the party. Under this last development, also, we find leadership, aristocratic authority of the ablest, nay, even the monarchical control of the party king. He is a dictator out of office. He has power, without the annoyance or restraints of office. He is the product of a long process of natural selection. He has arisen from the ranks, has been tried by various tests, has been trained in subordinate positions, and has come up by steady promotions—all the processes which, when we try to get them into the public service, we are told are visionary and aristocratic. With the now elaborate system of committees rising in a hierarchy from the ward to the nation, with the elaborate system of primaries, nominating committees, caucuses, and conventions, not one citizen in a thousand could tell the process by which a city clerk is elected. It becomes a special trade to watch over and manage these things, and the power which rules is not the “will of the people,” but the address with which “slates” are made up. Organization is the secret by which the branches of the political machinery are manipulated, when they are not, by various devices, reduced, as in the larger cities, to mere forms. In these cases the ring and the “Boss” are the natural outcome. Any one who gets control of the machine can run it to produce what he desires, with the exception, perhaps, that if he should try to make it produce good, he might find that this involved a reverse action of the entire mechanism, under which it would break to pieces. These developments are as yet local, for the plunder of a great city is a prize not to be abandoned for any temptation which the general government can offer. In some cases they are hostile to the power of the Federal office-holders where that is greatest and most dangerous, so that they neutralize each other. At the same time some of the Federal legislation in the way of “protection” and subsidies offers high inducements and abundant opportunities for debauching the public service. There are afforded by the system in great abundance means of rewarding adherents, distributing largess, collecting campaign funds, and performing favors; and it tends to bind men together in cliques up and down through the service, on the basis of mutual assistance and support and protection. Suppose that the ring and the “Boss” should ever be ingrafted upon this system!

It cannot be regarded as a healthful sign that such a state of things creates only a laugh or a groan of disgust or at best a critical essay. It seems sometimes as if the prophecy of Calhoun had turned into history: “When it comes to be once understood that politics is a game, that those who are engaged in it but act a part, and that they make this or that profession, not from honest conviction or an intent to fulfil them, but as a means of deluding the people, and, through that delusion, acquiring power,—when such professions are to be entirely forgotten, the people will lose all confidence in public men. All will be regarded as mere jugglers, the honest and patriotic as well as the cunning and profligate, and the people will become indifferent and passive to the grossest abuses of power, on the ground that those whom they may elevate, under whatever pledges, instead of reforming, will but imitate the example of those whom they have expelled.”

In the final extension of the conception of the “will of the people,” and of the position of Congress in relation to it, Congress has come to be timid and faltering in the face of difficult tasks. It knows how to go when the people have spoken, and not otherwise. The politician gets his opinions from the elections, and the legislature wants to be pushed, even in reference to matters which demand promptitude and energy. Statesmanship has no positive field and has greatly declined. The number of able men who formerly gave their services to mold, correct, and hinder legislation, and upon whom the responsibility for leading on doubtful and difficult measures could be thrown, has greatly decreased. The absence of “leaders” has often been noticed. The fact seems to be that able men have observed that such statesmen as have been described bore the brunt of the hard work, and were held responsible for what they had done their best to hinder; that they cherished a vain hope and ambition their whole lives long, and saw inferior men without talent or industry preferred before them. It is a sad thing to observe the tone adopted towards a mere member of Congress as such. When one reflects that he is a member of the grand legislature of the nation, it is no gratifying sign of the times that he should be regarded without respect, that a slur upon his honor should be met as presumptively just, and that boys should turn flippant jests upon the office, as if it involved a dubious reputation. If the Republic possesses the power to meet and conquer its own tasks, it cannot too soon take measures to secure a representative body which shall respect itself and be respected, without doubt or question, both at home and abroad; for the times have changed and the questions have changed, and we can no longer afford to govern ourselves by means of the small men. The interests are now too vast and complex, and the greatest question now impending, the currency, contains too vast possibilities of mischief to this entire generation to be left the sport of incompetents. The democratic Republic exults in the fact that it has, against the expectations of its enemies, conducted a great civil war to a successful result. A far heavier strain on democratic-republican self-government lies in the questions now impending: can we ward off subsidy-schemers? can we correct administrative abuses? can we purify the machinery of elections? can we revise erroneous financial systems and construct sound ones? The war appealed to the simplest and commonest instincts of human nature, especially as human nature is developed under democratic institutions. The questions before us demand for their solution high intellectual power and training, great moderation and self-control, and perhaps no less disposition to endure sacrifices than did the war itself.

Such a review as has here been given of the century of American politics must raise the question as to whether the course has been upward or downward, and whether the experiment is a success or not. On such questions opinions might fairly differ, and I prefer to express upon them only an individual opinion.

The Federal political system, such as it is historically in the intention and act of its framers, seems to me open to no objection whatever, and to be the only one consistent with the circumstances of the case. I have pursued here a severe and exact criticism of its history, as the only course consistent with the task before me, and the picture may seem dark and ungratifying. I know of no political history which, if treated in the same unsparing way, would appear much better. I find nothing in our history to throw doubt upon the feasibility and practical advantage of a constitutional Republic. That system, however, assumes and imperatively requires high intelligence, great political sense, self-sacrificing activity, moderation, and self-control on the part of the citizens. It is emphatically a system for sober-minded men. It demands that manliness and breadth of view which consider all the factors in a question, submit to no sophistry, never cling to a detail or an objection or a side issue to the loss of the main point, and, above all, which can measure a present advantage against a future loss, and individual interest against the common good. These requirements need only be mentioned to show that they are so high that it is no wonder we should have fallen short of them in our history. The task of history is to show us wherein and why, so that we may do better in future.

If the above sketch of our political history has been presented with any success, it shows the judgment which has been impressed upon my mind by the study of it, namely, that the tenor of the Constitution has undergone a steady remolding in history in the direction of democracy. If a written constitution were hedged about by all the interpretations conceivable, until it were as large as the Talmud, it could not be protected from the historical process which makes it a different thing to one generation from what it is to another, according to the uses and needs of each. I have mentioned the forces which seem to me to produce democracy here. They are material and physical, and there is no fighting against them. It is, however, in my judgment, a corruption of democracy to set up the dogma that all men are equally competent to give judgment on political questions; and it is a still worse perversion of it to adopt the practical rule that they must be called upon to exercise this ability on all questions as the regular process for getting those questions solved. The dogma is false, and the practical rule is absurd. Caucus and wire-pulling and all the other abuses are only parasites which grow upon these errors.

Reform does not seem to me to lie in restricting the suffrage or in other arbitrary measures of a revolutionary nature. They are impossible, if they were desirable. Experience is the only teacher whose authority is admitted in this school, and I look to experience to teach us all that the power of election must be used to select competent men to deal with questions, and not to indirectly decide the questions themselves. I expect that this experience will be very painful, and I expect it very soon.

On the question whether we are degenerating or not, I have already suggested my opinion that we are not degenerating. The lamentations on that subject have never been silent. It seems to me that, taking the whole community through, the tone is rising and the standard is advancing, and that this is one great reason why the system seems to be degenerating. Existing legislation nourishes and produces some startling scandals, which have great effect on people’s minds. The same legislation has demoralized the people, and perverted their ideas of the functions of government even in the details of town and ward interests. The political machinery also has been refined and perfected until it totally defeats the popular will, and has produced a kind of despair in regard to any effort to recover that of which the people have been robbed; but I think that it would be a great mistake to suppose that there are not, behind all this, quite as high political standards and as sound a public will as ever before. An obvious distinction must be made here between the administration of the government, or the methods of party politics, and the general political morale of the people. Great scandals are quickly forgotten, and there are only too many of them throughout our history. Party methods have certainly become worse and worse. The public service has certainly deteriorated; but I should judge that the political will of the nation never was purer than it is to-day. That will needs instruction and guidance. It is instructed only slowly and by great effort, especially through literary efforts, because it has learned distrust. It lacks organization, and its efforts are spasmodic and clumsy. The proofs of its existence are not very definite or specific, and any one in expressing a judgment must be influenced by the circle with which he is most familiar; but there are some public signs of it, which are the best encouragement we have to-day.

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THE ADMINISTRATION OF ANDREW JACKSON[49]
[1880]

You must have observed that the social sciences, including politics and political economy, are the favorite arena of those who would like to engage in learned discussion without overmuch trouble in the way of preparation. I doubt not that you have also been struck by the fact that these sciences are now the refuge of the conceited dogmatism which has been expelled from the physical sciences. It follows that the discussions in social science are the widest, the most vague, the most imperative in form of statement, the most satisfactory to the writers, the least convincing to everybody else; and that the social sciences make very little progress. The harm does not all come from the amateurs and volunteers who meddle in these subjects. It comes also from false methods and want of training on the part of those of higher pretensions. If, however, the methods which have hitherto been pursued are correct, if any one is able without previous care or study to strike out the solution of a difficult social problem, for which solution, however, he can give no guarantee to anybody else, then the social sciences are given over to endless and contemptible wrangling, and are unworthy of the time and attention of sober men. Such, however, is not the case. The Science of Life, which teaches us how to live together in human society, and has more to do with our happiness here than any other science, is not a mere structure of a priori whims. It is not a mass of guesses which the guesser tries to render plausible. It is not a tangle of dogmas which are incapable of verification. It is not a bundle of sentiments and enthusiasms and soft-hearted wishes bound together either by religious or by irreligious prejudices. It is not a heap of statistical matter without logic. Whether you regard the social science under the form of law, politics, political economy, or social science in its narrower application, these negatives all apply. It is only under some application of scientific methods and scientific tests that, in this department as in others, any results worth our notice can be won.

Now the materials, the facts, and the phenomena of social science are presented to us under two forms: first, as a successive series, viz., in history, in which we see social forces at work and the social evolution in progress; secondly, in statistics, in which the contemporaneous phenomena are presented in groups.[50] Under this view social science has promise, at least, of issuing from its present condition and taking on a steady progress, while it also becomes evident what history ought to be and how we ought to use it.

I have thought it necessary to preface the present lecture with this bare suggestion of the standpoint from which I take up my subject. For the study of politics, some questions in political economy, and some social problems, the history of the United States has greater value than that of any other country. All the greater is the pity that its history is as yet unwritten, or all the greater is the humiliation that the only attempts in that direction which are worth mentioning have been made by foreign scholars, and are not even in the English language. In American history also, for the study of politics and finance, no period equals in interest the administration of Andrew Jackson. I propose, therefore, in the limited time I can now command, to point out to you the reasons why this period of our history is worthy of the most attentive study. I may say here that Professor Von Holst of Freiburg has perceived the importance and interest of this period and published a lecture in regard to it which I regard as thoroughly sound and correct in its standpoint and criticism. His views coincide with those which I have been accustomed to present in my lectures on the History of American Politics, and I have profited, for my present purpose, by some suggestions of his.

Mr. Monroe was the last of the public men of the first generation of the republic who succeeded to the presidential chair by virtue of a certain standing before the public. During his administration the old parties died out or were merged in a new party, a compromise between the two. There followed during his second administration what was called the “era of good feeling,” during which there were no party divisions and no strong party feeling. This period was very instructive, however, for any one who is disposed to see the evils of party in an exaggerated light, for there sprang up no less than five aspirants to the succession, whose interests were pushed by personal arguments solely. These arguments took the form also, not of enumerating the services of the candidate favored, but of spreading scandals about his rivals. The newspapers were loaded down with weary “correspondence” about “charges and countercharges” against each of the candidates.

Mr. Crawford of Georgia obtained the nomination of the democratic congressional caucus in 1824, but loud complaints were raised against this method of nominating candidates. It was demanded that the people should be free from the dominion of King Caucus, and should nominate and elect freely. No machinery for accomplishing this was yet at hand, and none was proposed, but the outcry which was partly justified by the evils of the congressional caucus system and partly consisted of phrases which were sure of great popular effect, greatly injured Mr. Crawford. He had been Secretary of the Treasury during the financial troubles of the years following the war, and had managed that thankless office on the whole very well, but he had not performed the impossible. He had not brought the finances of the country into a sound condition while allowing the banks to do as they chose. He had not kept up the revenue while trade was prostrated, and he had not crushed the United States Bank while preserving the business interest of the country. He had many enemies amongst those who, on the one side and on the other, thought that he ought to have done each of these things. Hostility to the Bank was not as great in 1824 as in 1820, but there was a large party which was determined in this hostility. Mr. Crawford was also said to be broken in health, and this came to be believed so firmly that it has generally passed into history as one of the chief causes of his defeat. It is so accepted by Von Holst. Mr. Crawford was disabled from September, 1823, to September, 1824, but he lived until 1834, spending the last years of his life as a circuit judge, and he was well enough in 1830 to ruin John C. Calhoun’s chances of succeeding General Jackson.

The next candidate was Mr. Adams, Secretary of State under Mr. Monroe. He enjoyed the support of New England. There was no question of Mr. Adams’s abilities, or of his great public services, or of his character; but he was not popular. I do not, of course, think this at all derogatory to him, but you observe that it is hard for a man to despise popularity and at the same time have enough of it to be elected to office in a democracy. Mr. Adams really liked popularity and wanted it, and there was a continual strife within him between the aristocrat who sought independent and isolated activity to please himself and the politician who must please others. It is the explanation of much in his conduct which seemed erratic and inconsistent to his contemporaries.

Mr. Clay was the candidate of the West, and Mr. Calhoun of a portion of the South.

These men were all in prominent positions, three of them in the Cabinet, and one speaker of the House. On the 20th of August, 1822, the House of Representatives of Tennessee presented another candidate in the person of General Jackson. This gentleman had been educated for a lawyer and had been on the bench of Tennessee. He was in Congress during the administration of Washington and voted against a clause in the address of Congress to Washington on his retirement, in which a hope was expressed that Washington’s example might be imitated by his successors.[51] As a member of Congress he had been noticeable only for violence of speech and action. At New Orleans he had won a creditable military success at the close of a war which had brought little glory on land. While there he came into collision with the civil court on refusing to obey a writ of habeas corpus. Some incidents of this event are especially characteristic of the man. He came into court March 31, 1815, surrounded by the populace, and refused to answer interrogatories. Then, pointing to the crowd, he said to the judge, alluding to the previous judicial inquiry: “I was then with these brave fellows in arms; you were not, sir!” He interrupted the judge while he was reading his decision, saying: “Sir, state facts and confine yourself to them, since my defence is and has been precluded; let not censure constitute a part of this sought-for punishment.” The judge replied: “It is with delicacy, general, that I speak of your name or character. I consider you the savior of the country, but for your contempt of court authority, or to that effect, you will pay a fine of $1000.” The general drew his check for the sum and retired. The crowd dragged his carriage to the French coffee-house, with acclamations and waving flags. He there made a speech.[52] The fine, amounting with interest to $2,700, was refunded by Congress in 1844.

In 1818 he had violated the territory of Florida, then a province of Spain, with whom we were at peace. He claimed, in 1830, that he had done this with the connivance of Mr. Monroe. During the same campaign against the Seminoles he captured two men who were aiding the enemy and were said to be British subjects. A court-martial condemned one of them to death and the other to less punishment. He ordered both executed, thus overruling the verdict on the side of severity.

The people might have been divided into two great classes according to the opinion of Jackson which was entertained in 1822. The more sober and intelligent considered him a violent, self-willed, ignorant, and untrained man. They thought that he had perhaps the soldier’s virtues and that he had done the country good service as a soldier but they doubted if he had the first qualification of a ruler, viz., to know how to obey. They thought him quarrelsome, vain, untutored in the forms of civilized life which teach men to ignore much, to endure more, and to reserve the stake of personal feeling and personal struggle for the last and highest emergencies. They perceived, on the contrary, that he never distinguished great things from small, especially where his own pride was involved, and that he had no reserve at all about throwing his personality into unseemly controversies, which he never shunned but seemed to like. I have already said that these personal criminations and recriminations were common at the time; Mr. Webster is the only prominent public man of the time who succeeded in avoiding newspaper controversies, and he did not altogether escape altercations in the Senate. Public men were continually scenting attacks on their character and setting vigorously to work to vindicate the same, not perceiving that such vindications always derogate from the man who makes them. This much ought to be said in excuse for General Jackson if this fault was especially prominent in him. You may imagine how incredible it seemed to persons who formed this estimate of Jackson that any one could soberly propose him for the chair which had hitherto been filled by Washington, Adams, Jefferson, Madison, and Monroe. The Federalists of New England had had little affection or admiration for the last three Presidents, but they had never been ashamed of them as public men.

The other of the two great classes to which I have referred held a very opposite opinion of General Jackson. To them he was a military hero and a popular idol. They liked him better for taking Pensacola in defiance of international law. They liked him for bearding the judge who wanted to enforce the habeas corpus. They thought it spirited in him to hang two Englishmen to solve a doubt. I do not mean that they reasoned much about it, for they did not; at bottom they were actuated by an instinct of fellowship. They recognized a man with the same range of ideas and feelings, the same contempt for history, law, Old-World forms, and traditions by which they themselves were actuated. His bluntness, his rollicking, untamed manner, his hit-or-miss arguments, his respect for the popular whim or emotion as the only control he would admit, his plump ignorance which exceeded omniscience in its boldness, all flattered the populace and won its favor. Here was a hero from amongst themselves, using their methods, despising the restrictions of the cultivated and the learned, a virtuoso in negligence and carelessness of manner, aiming at rudeness and bluntness as things worth cultivating, and elevating want of culture into a qualification for greatness and a title to honor.

In order to understand the full importance of this you must look at some facts in social and political development which had immediately preceded. At the adoption of the Constitution property qualifications limiting the suffrage were general, but they had been removed steadily and gradually until by 1820 the suffrage was universal throughout almost all the states. The Jeffersonian ideas of government and policy had also spread steadily and rapidly and had received more and more extended interpretation. They were fallacious and only half true at best, that is to say, they were of the most mischievous order of propositions possible in politics; but in popular use and interpretation they had become worn into a kind of political cant, in which the moiety of truth had disappeared and the residuum of falsehood had become the highest political truth and the badge of political orthodoxy. To use the ballot was held synonymous with freedom; the rule of the numerical majority was made equivalent to the republic; the “will of the people” was held paramount to the Constitution—which is nothing more than saying that to do as you choose is superior to doing as you have agreed. And it had become a political dogma that, if there are only enough of you together, when you do as you have a mind to, you are sure to do right.

I use the past sense here, but you will at once perceive that I am describing what is still strong amongst us.

Of course there was, outside of these two classes, a large body of persons, scattered, as to their political opinions, all the way between the two extremes; but the second class was large and was growing very rapidly from social and industrial causes which are yet to be specified.

During the European wars the people of the New England states made great gains from commerce. In the middle states manufactures began under the protection of embargo and war. In the South there was less wealth, but the possession of land and slaves created an aristocracy of large political influence over poorer neighbors. In New York something of the same kind existed, two or three of the great families struggling with one another for the political control of the state. These were all democrats of a peculiar type well worthy of study. They professed popular principles while they scorned the populace and led cohorts of uneducated men whom they handled and disposed of as they chose. After the war the commerce and industry of the country suffered a heavy reverse from which it did not recover until 1820 or 1821; but then came the influence of steam navigation, as the first of the great inventions, together with the factory system and some great improvements in machinery, and the position of the artisan, in spite of the protective policy to which the result was generally attributed as a cause, underwent a steady and very great improvement. In 1825 the Erie Canal was opened and, together with the application of steam to lake and river navigation, led to an unparalleled development west of the Alleghanies. In the southwestern states the immense profits of cotton culture led to rapid settlement and development. As early as 1816 the tide of immigration had become marked. It was interrupted during the hard times but went on again increasing steadily. Thus you see that the material prosperity of this country was just taking its great start at the beginning of the twenties. The natural consequence was that there was a great body of persons here who had been used to straitened circumstances, but who now found themselves prosperous, every year improving their condition. Such a state of things is of course eminently desirable. Economists and statesmen are continually trying to bring it about. Observe, however, some of the inevitable social, political, and moral effects. This class expanded under the sun of prosperity both its virtues and its vices. It became self-reliant and independent. It feared no mishap. It took reckless risks. It laughed at prudence. It had overcome so many difficulties that it took no forethought for any yet to come. It loved dash and bravado and high spirit. It admired energy and enterprise as amongst the highest human virtues. It scorned especially theory, or philosophy, and professed exaggerated faith in the practical man. It never estimated science very highly until science began to lead to patent mixtures for various purposes and to mining engineering. Then it took to business colleges and technical schools for the dissemination of the same. Especially did this class despise any historical or scientific doctrines which came from the other side of the water. It was a general premise that the new country needed new systems throughout the whole social and political fabric, and that what was enforced by European experience was surely inapplicable here. As against England this assumption was considered especially strong. In the writings of some of the men who greatly influenced public opinion from 1820 to 1830 this amounted almost to fanaticism. “Home industry,” and “Internal Improvements,” owed much of their success over the mind of the nation to the industrious use of this prejudice. These subjects were not political issues until 1830.

Of course I have nothing to do with the question which to many would seem to be here the only important one, viz., whether these traits are not noble and praiseworthy and do not constitute the Americans the first nation in the world. Those are idle questions. Political institutions are not framed to produce noble and praiseworthy men. If any are planned to that end they always fail. But political institutions follow the social and industrial conditions, if the people adapt themselves to the facts of the case. So it has been here; and, although I have used the past tense in this description of the effects of rapid prosperity, you observe that the features are those which still mark our American society as a whole. I have simply to take cognizance of these effects as facts inseparable from the conditions of that society.

Here, then, I come to the assertion to which I desire especially to call your attention under my present subject: that is, that General Jackson’s personal popularity and his political influence were not created by him at all, but were simply the results of the fact that he exactly fitted in as a leader into the rising class of persons of small property, low education, and crude notions of politics and finance. Of this class he was the leader as long as he lived. You will recognize here an illustration of the wider historical generalization, that the prominent man and his surroundings always act and react on one another and the old question as to which “causes” the other is idle.

Such being the circumstances in 1822, when Jackson’s name was first mentioned in connection with the Presidency, the class of persons whom I first described as considering this a bad joke soon discovered their mistake. In the following year the people of Blount County, Tennessee held a meeting at which they passed strong resolutions in his support,[53] and it was soon evident to the aspirants at Washington that he was the most dangerous competitor of all. Calhoun hastened to retire into the second place, with the understanding that he was to succeed in four years, Jackson having pronounced for one term only. Pending the contest, in 1823, Jackson was elected United States Senator from Tennessee. The result of the election of 1824 was that Jackson got 99 votes in the electoral college, Adams 84, Crawford 41, and Clay 37. Clay was thus excluded from the contest in the House. His friends voted for Adams, who got 13 states, Jackson 7, and Crawford 4. The states which voted for Jackson were New Jersey, Pennsylvania, South Carolina, Tennessee, Indiana, Alabama, and Mississippi. This election was in many respects important for the history of politics in the country. I leave aside all but the relation to Jackson and the political movement which he represented. His friends were by no means content, and they were not quiet in their discontent. They accused Clay of carrying his votes over to Adams by a corrupt bargain, according to which he was to be Secretary of State in the new Cabinet. There was less ground for this accusation than for almost any other personal calumny to be found in our political history, but it clung to Mr. Clay as long as he lived.

The most significant feature, however, for the political movement of the time was this: General Jackson’s supporters claimed that, as he had a plurality of the votes of the Electoral College, it was shown to be the will of the people that he should be President, and that the House of Representatives ought simply to have carried out the popular will, thus expressed, to fulfillment. You observe the full significance of the doctrine thus affirmed. The Constitution provides that the House shall elect a President when the Electoral College fails to give any candidate a majority. It confers an independent choice between the three highest candidates upon the House. Already the independent choice which the Constitution intended to give to the Electoral College had been abrogated by Congressional caucus nominations and pledged elections. It was now claimed that the House should simply elevate the plurality of the highest candidate in the College to a majority in the House. Thus the antagonism between the permanent specification of the Constitution and the momentary will of the people was sharply defined. It was the antagonism between the general law and the momentary impulse, between sober dispassionate judgment as to what is generally wise and a special inconvenience or disappointment. I strive to put it into everyday language because it is a phenomenon of human life which is the same whether it is seen in the character of an individual striving to control his wayward impulses by general principles, or in the political history of a great democratic republic seeking to obtain dignity, stability, and imperial majesty by binding the swaying wishes of the hour under broad and sacred constitutional provisions. It was the opening of that issue which is vital to this republican issue which cleaves down through our entire political and social fabric, the issue to which parties must ever return and about which they will always form so long as this experiment lasts—the issue, namely, of constitutionalism versus democracy, of law versus self-will; the question whether we are a constitutional republic whose ultimate bond is the loyalty of the individual citizen to the Constitution and the laws or a democracy in which at any time the laws and the Constitution may give way to what shall seem, although not constitutionally expressed, to be the will of the people. General Jackson was from the time of this election the exponent of the latter theory.

I do not mean to say that the issue was clearly defined at the time, or that the parties ranged themselves upon it with logical consistency. Any student of history knows that political parties never do that. Still less do I mean to say that parties since that time have kept strictly to the position on one side or the other of this issue which their traditions would require. Political history and political tradition have little continuity with us, and the fact has been that the Jacksonian doctrine has permeated our whole community far too deeply. We have had some who merely grubbed in a mole-eyed way in the letter of the Constitution, as indeed Jackson and his fellows did, and we have had others who were and are restive under any invocation of the Constitution. True constitutionalism, however, the grand conception of law, of liberty under law, of the free obedience of intelligent citizens, is what now needs explaining and enforcing as the key to any true solution of the great problems which, as we are told on every side, beset the republic.

I cannot now follow the history in detail to show the movements of parties during the next four years. Mr. Adams’s administration was unfortunate in its attempts to settle the old misunderstanding with England about the West India trade. It got that question into one of those awkward corners, out of which neither party can first seek exit, which the diplomatist ought to avoid as the worst form of diplomatic failure. In its home policy it favored internal improvements and protection to the most exaggerated degree. But the administration was dignified, simple, and businesslike. It was a model in these respects of what an administration under our system ought to be. It presented no heroics whatever, neither achievements nor scandals, and approached, therefore, that millenial form of society in which time passes in peace and prosperity without anything to show that there is either government or history.

Nevertheless this administration did not receive justice from its contemporaries. Mr. Adams seemed always to feel a certain timidity, which he expressed in his letter to the House of Representatives on his election, because he had gone into office without a popular majority. In Congress he had to deal with an opposition which was factious, disappointed, and malignant, determined to make the worst of everything he did and to make capital at every step for General Jackson. It was a campaign four years long, and it was conducted by a new class of politicians who made light of principle and gloried in finesse. The end of the old system of family leadership in New York and the certainty that there would never be another congressional caucus, led to new forms of machinery for manipulating the popular power. These were set up under loud denunciations of dynasties, aristocracies, families, dictation, and so on. The most remarkable and most powerful of these new organs was the Albany Regency, which shaped our political history for the next ten or fifteen years. The intrigues of the period culminated in the tariff act of 1828, in which Pennsylvania and the South were brought into a strange coalition to support Jackson and a high tariff, leaving New England out of the golden shower of tariff-created wealth, as she held aloof from the support of the popular idol. I regret that I cannot now stop to analyze and expose this prime specimen of legislation in which tariff and politics were scientifically intermingled.

As for political principles, there were none at stake and none argued in the contest. The struggle was ruthlessly personal. A month before the election an editorial in Niles’s Register used the following language: “We had much to do with the two great struggles of parties from 1797 to 1804 and 1808 to 1815, and we are glad that we are not so engaged in this, more severe and ruthless than either of the others, and, we must say, derogatory to our country, and detrimental to its free institutions and the rights of suffrage, with a more general grossness of assault upon distinguished individuals than we ever before witnessed.”

Jackson was elected by 178 votes to 83 for Adams. The criticisms which had been made upon Adams’s administration were now all used as a basis for representing the entire government as needing reform. This reform took the form of removing all persons in office and replacing them by friends of the new President. Up to this time the tenure of office in the public service had been during efficiency or good behavior, although instances of removals for political reasons had not been wanting and there had been many changes when Jefferson went into office. I will only say in passing that the complaints of inefficiency in office and of corruption during Jackson’s administration steadily and justly increased. According to a report by Secretary Ewing, in 1841, there were lost, to the government between 1829 and 1841, over two millions and a half of dollars by defalcations of public officials. The Cabinet selected by Jackson at the outset consisted of obscure men remarkable only for their loyalty to the person of the President. It may be said in general of the new appointments to inferior offices that they constituted a deterioration of the public service. Two doctrines were now affirmed as democratic principles which, if they should be accepted as such, would be the condemnation of democracy to all sober-minded men. The first was that of rotation in office, which, if it is a democratic principle, raises inefficiency and venality to permanent features of the public service. You will observe that its effect has been, as a matter of history, to make thousands of people believe despairingly that these things are inseparable from the public service and that elections only determine which set shall enjoy the opportunity. The other doctrine or democratic principle was that to the victors belong the spoils. This was distinctly enunciated by William L. Marcy on the floor of the Senate. He said that he did not hesitate to avow the principle as a principle. By this principle corruption in the public service is made a matter of course. I think that these two “principles” are rotten, and by virtue of their own intrinsic baseness. If any one is inclined to despair of the republic now, he ought to remember that there was a time when men shamelessly professed these doctrines as principles. I doubt if any one would be bold enough to do it to-day.

Whether General Jackson went into office intending to make war on the United States Bank, is a question which has never yet found a solution, but the drift of the evidence is for the negative. During the summer of 1829 some of the New Hampshire politicians of the new school endeavored to obtain the removal of Mr. Jeremiah Mason from the Presidency of the Portsmouth Branch of the United States Bank. They brought no charge whatever against him save that he was a friend of Mr. Webster, and they urged that some friend of the administration might make the Branch useful in its service. The Secretary of the Treasury (Ingham) endeavored to induce the President of the Bank (Biddle) to remove Mr. Mason. Biddle refused to do this. In this controversy the administration men were in the position of striving to bring the Bank into politics on their side and the Bank was in the position of striving to remain neutral in politics. From this, however, dates the great conflict of Jackson’s administration. You will greatly err in trying to form any judgment in this matter if you doubt the bona fides of General Jackson. Where his personal value was not at stake he was genial, good-natured, and generous. In questions of policy he was easily led up to the point at which he formed an opinion. His opinion might be crystallized, however, suddenly, by the most whimsical consideratives, or under the most erratic motives. When he had formed what for him was an opinion, he clung to it with astonishing obstinacy. It rose before his mind as a fact of the most undeniable certainty. The echo of it, which came back to him by virtue of his popularity, seemed to him to sanction it with the highest authority. One who denied it was shameless and unpardonable, one who resisted it deserved any punishment which the fashions of the age allowed. You recognize the description of a strong and originally powerful mind destitute of training.

At the outset the Bank was guilty only of neutrality where he demanded support. At this time it had lived down much of the hatred it had justly incurred at the outset, but there was no difficulty in reviving it. The Bank was never in a stronger or sounder condition than in 1829, and it enjoyed high credit both at home and abroad. The word went out, however, that the Bank was a monopoly, the possession of the moneyed aristocracy, undemocratic, and hostile to liberty. The first blow fell, in spite of some vague premonitory rumors, with great suddenness. In the annual message of December, 1829, Jackson incorporated a short paragraph questioning the constitutionality of the Bank and proposing a Bank on the credit and revenues of the government. The alarm thus created was twofold, first on account of the Bank which was threatened, and second on account of the new institution which sounded like a government paper money bank. Parties did not as yet divide on this issue. The strongest partisans of Jackson took up the cry against the Bank, but not yet with vigor; the more intelligent supporters of the administration still favored it. In 1830 the message was much milder in regard to the Bank, and the Treasury Report was even favorable to it. In 1831, however, the message was once more strongly hostile.

In the meantime the President had vetoed an internal improvement bill and taken up a position of hostility to the policy of improvements. The tariff of 1828 had provoked the South to more and more energetic protests until South Carolina adopted the doctrine and policy of nullification. There never was a greater political error, for she alienated the vast body of the nation, even in the South, which might have been brought to oppose protection but would not favor nullification as a means of destroying it. It was in this connection that Jackson’s traits availed to procure him, in his own day, the approval of men like Webster and has availed to give him a place amongst our political heroes and in the hearts of people who to-day know little more about him than that he prevented nullification. He certainly acted with very commendable firmness in giving it to be understood that nullification meant rebellion and war. His attitude and, far more, the legislation of the session of 1832–1833 including the compromise tariff of March 2, 1833, averted civil war. What part in all this drama was played by his hostility to Mr. Calhoun it is difficult to say. They were now sworn enemies, General Jackson having been informed (by Mr. Crawford) that Mr. Calhoun, instead of being his friend in the cabinet of Mr. Monroe, had been one of those who disapproved of his acts in the Seminole war in 1878. General Jackson upon this diverted the succession from Mr. Calhoun and, after taking a second term himself, gave the succession to Martin Van Buren, a weak and unpopular candidate, who had, by virtue of his position in the Albany Regency, given New York to Jackson. Mr. Van Buren was Secretary of State in Jackson’s first cabinet, which suddenly exploded in 1831 on a question of social etiquette. He was next nominated to the English mission and went out, but failed of confirmation, an incident only worth mentioning because the hotter partisans of Jackson proposed to abolish the Senate for rejecting one of his nominations.

All these and other personalities which it is impossible to group in any way, and which I cannot follow into detail, played their part in the great drama which was opening. The popular democratic party was gaining ground every day. A consciousness of power, a desire to assume public duties from which they had hitherto held aloof, was taking stronger possession of them. On the other hand, an opposition was forming under the name of the National Republican party which had a certain vague legitimacy of descent from the old Federal party. It adopted as its principles protection, internal improvements, distribution of the public lands, and the National Bank. This party first began to be called Whigs in Connecticut, in 1834.[54] It always seemed strangely lacking in political sagacity. It offered to its enemies the very strongest arguments against itself. It had managed to get on the side, which will pass into history as the wrong side, of at least three great questions and perhaps also of the fourth. It forced the administration into an impregnable position in regard to free trade, hard money, and an opposition to the distribution of land or revenue; and it managed in the end to put itself unequivocally in the wrong and the opposite party in the right on the sub-treasury and the public finances.

It commenced its career as a party by a great blunder—an act which was recognized as such immediately afterwards—and that was the effort to re-charter the Bank in 1832. It had been the strongest answer of the Bank to Jackson’s early attacks that its charter did not expire until March 3, 1836, that he had forced the issue of a re-charter on the country six and a half years before the time, and that he had nothing to do with the re-charter unless he assumed that he was to be reëlected. The National Republican convention was held at Baltimore on December 12, 1831. Mr. Clay was nominated for President. The petition for a re-charter was presented January 9, 1832, as a manœuvre in the campaign. Forthwith the charge of anticipating an exciting question was turned against the opposition. They were charged with bringing the Bank into politics, and the Bank was forced into the political campaign to defend its existence. The re-charter was passed July 4, 1832, and vetoed July 10. Up to this time there had been plenty of administration men who favored the Bank. This issue, thus forced by the opposition on the eve of election, and thus accepted by the President for his own person, raised Bank on Anti-Bank to a test of political orthodoxy, and, in the political language of the time, many were forced to “turn a sharp corner.” The issue was now also Jackson versus the Bank, and then first did it become apparent to what extent the Jackson party had gained and how thorough was its devotion. The current party names were Jackson and Anti-Jackson, and candidates were so designated down to the lowest town officers. The Whigs protested in vain against the folly of this. They argued with men who would not argue, and assumed the force of motives the powerlessness of which was proved by the fact that men could profess such personal political allegiance. They did not truly appreciate the democracy in which they lived. They suffered themselves to be isolated as a body and they lost the proper conservative power of an opposition by failing to go with the sentiment of the vast energetic, growing (if you choose to call it so), vulgar democracy. It is a danger which always besets the conservative party here, whose members will always be a minority, and will always find much to offend their refinement in a new community like this. They will always be tempted to withdraw from contact with it and to gratify their vanity at the expense of all public influence.

The consequence of the issue as it was made in 1832 was that Jackson got 219 and Clay 49 votes in the Electoral College.[55] Things now entered on a new stage. The lower class which I have hitherto endeavored to characterize fairly, but without timidity, now took on the character of a genuine proletariat. It has been only at few periods that any development of the lowest sections of our population has produced what could properly be called by that name. The period of Jackson’s second administration was the most marked of these. In the large cities trades-unions arose, and in certain sections agrarian doctrines were advocated, while there was a general dissemination of socialistic notions. In 1836 there were formal riots and public disturbances of lesser grade. Partly this was due to the arrogance of class success, partly to the flattery of demagogues, and partly to industrial changes and to currency disturbances which are to be mentioned in a moment.

The National Bank being doomed if Jackson should be reëlected, a large moneyed class had been drawn into the administration party, viz., those who wanted to found local banks. The administration party, therefore, included these two branches, to the former or lower of which the nickname Locofoco was given.

General Jackson regarded his reëlection as a sanction of all that he had done or proposed. According to his principles the question of wisdom in banking and currency did not come from history or science, but from a majority vote of the people. What is to be noticed, however, is that the people simply assented to whatever he proposed and ratified whatever he did, because it was he that did it. There resulted a state of things paralleled in our history only in the case of Mr. Jefferson, that is, an action and reaction between the executive and a popular majority in which each stimulated the other by ready sympathy and mutual support. The President pursued his way without a misgiving, and the opposition in Congress while they saw their members dwindling and the majority becoming more and more overwhelming, could only express their astonishment at the sudden acts and irregular methods of procedure of the executive. The subservient majority, consisting largely of professional politicians of the new type, recognized that for the time being their occupation of plotting and controling was gone. Their hopes lay in no independent action, but in loyalty to the chief.

I feel here how much I am saying which under other circumstances would require proof, but the proof lies before any one who will throw aside Benton and Parton and look into the Congressional debates and the newspapers of the time.

The President now pushed on his hostility to the Bank, being doubly enraged by the efforts it had made to fight its own battle in contending against him during the campaign. He avowed his determination to make the “experiment” of using local banks as fiscal agents of the government. Naturally enough, the banking and commercial world was frightened at experiments, carried on without skill or knowledge and running athwart the financial and business interests of the country. Up to this time, you must remember, the administration had not pronounced for specie currency at all, but it was supposed that the President favored a government paper bank. In his Bank veto message he had said that a charter for a Bank which would have been free from objection might have been obtained by coming to him beforehand. In his first message after his reëlection he raised the question whether the public deposits were safe in the Bank and whether the government shares in the Bank ought not to be sold. In spite of all that had gone before these were startling questions. A majority of the Committee of Ways and Means found the deposits safe. The minority made some strong and undeniable points against the Bank.

During the summer of 1833 Amos Kendall was appointed agent to see what banks could be engaged to take the public deposits. On August 19 of that year the five government directors of the Bank made a report showing the amount expended by the Bank in printing during the campaign, and on September 18, 1833, the President read to his cabinet a paper setting forth the reasons why the public deposits should be removed from the United States Bank. The Secretary of the Treasury, Mr. Duane, refused to give the order for removal and was dismissed. Mr. Taney was made Secretary and he ordered that no further sums should be deposited in the Bank by collectors or others. December 3, 1833, he reported to Congress his reasons for doing this. On December 9, the government directors sent in a memorial to Congress saying that they had been shut out from a knowledge of the affairs of the Bank. On March 28, 1834, the Senate, after having tried in vain to pass a more specific censure, resolved that the President had “assumed upon himself authority and power not conferred by the Constitution and the laws.” On April 15, the President sent in a protest against this resolution, saying that if he had been guilty of violating the Constitution he ought to be impeached, not censured by resolution. This protest the Senate refused to register. They could not impeach him, and the House was far from thinking of such a thing. In fact, the question of status of the Secretary of the Treasury is a delicate one. Some independent responsibility is laid upon him, according to the laws of 1789 and 1800, but, as he is liable to be dismissed by the President, he cannot have an independent responsibility. The resolution of censure was “expunged” on January 16, 1837. In the House of Representatives, on April 4, 1834, it was resolved that the Bank ought not to be re-chartered, that the deposits ought not to be restored, that the state banks ought to be made depositories of the public funds, and that a select committee on the Bank should be raised. The majority of this committee reported, on May 22, that the Bank had refused to submit to investigation, while the minority (Everett and Ellsworth) reported that the majority had made unreasonable demands. On February 4, 1834 the Senate had referred to the Finance Committee an inquiry in regard to the Bank; and at the next session, on December 18, 1834, the Committee reported, by John Tyler, favorably to the Bank in every respect. In the message of December, 1834, the President reviewed the whole war against the Bank and summed up the charges against it. Therewith the political and congressional war over the old Bank came to an end with a full victory for the administration.

The earliest announcement of the policy of the administration in favor of a metallic currency was in a reply made by the President[56] in February, 1834, to a deputation from Philadelphia who came to complain of the hard times. According to the report they gave, the President was very rude and violent. He ascribed all the trouble to the “monster,” as he called the Bank over and over again. He declared that he would introduce a specie currency and that the government should use no other. He evidently knew little of the laws of money and finance, and, although much which he and his supporters afterwards urged in support of this policy was as true and sound as any propositions in physical science, yet it was mixed up with fallacies which neutralized it, and it degenerated into a kind of fanaticism about the precious metals. The measure of distributing the deposits amongst local banks, and thereby stimulating bank credits, was destructive to the other measure of introducing a specie currency. The distribution of the surplus revenue, which had accumulated in the banks amongst the states, was an opposition measure that was passed on account of the foolish belief, which so often leads our politicians astray, that there was political capital in it. Jackson signed the bill, but he criticized it in his next message, giving plain and statesmanlike reasons against it.

I must mention one other institution which took its rise in this period, and that is the national convention. I have already mentioned the Convention of the National Republicans at Baltimore in 1831. The Jackson men held one at Baltimore on May 21, 1832. With this invention our political institutions entered on a new phase, and “politician” acquired a new meaning. The power of party, the binding force of caucus agreements, the conception of bolting a regular nomination as the highest political crime, were developed first in the ranks of the Jackson party, but speedily followed to the best of their ability by the opposition. The Tammany Club of New York was the school in which these political arts were cultivated to the highest pitch, to be imitated elsewhere. There had been loud shouts over the downfall of “King Caucus” when, in 1824, the candidate of the congressional caucus was defeated, but the fact was that King Caucus had only just come of age and was entering into his inheritance. Behind the convention speedily arose the class of politicians vulgarly known as wire-pullers who spent their time between elections in intriguing and plotting and distributing. The Albany Regency found that its power slipped away into the hands of these more secret operators. There sprang up men who did not care for office, who lived no one knew how, or who took offices which to them were sinecures while they wielded the real political power. The convention proved to be an engine well adapted to the purposes of this class. It had all the forms of freedom, publicity, and popular initiative, while the real manipulation was astonishingly easy for two or three shrewd and experienced men. I am using the past tense here again for decency’s sake. I wish that I could do so because the things I describe were really matters of history.

You see now that I have spared nothing whatever here, neither national pride, nor party prejudice, nor hereditary family feeling. My business is simply with the truth of history so far as it is attainable, and so far as I am able faithfully to state it. It would be very easy now to say that Andrew Jackson demoralized American politics, and to throw upon his memory the blame for all the political troubles, shames, and problems of which we are every day reminded. Such, however, would be very far from the inference I want to draw. I have tried to emphasize the fact that Jackson himself was only a typical and representative man in and of his time, that it is often difficult to say whether he led or was carried forward. His administration, in the view I have tried to present, was only the time at which a certain tendency came to victory. It was only a case of the conflict which constitutes great political parties under all governments, the conflict between the radical and conservative tendencies. The radical tendency had won one victory under Jefferson, and, coming into office, had become conservative. In Jackson’s elevation a new radical tendency, more excessive than the first, came to victory. I have shown also in my criticism on the Whig party how it fell out of sympathy with the great movement which was going on and which was inevitably conditioned in the social and economic circumstances of the country.

This tendency has still pursued its way down to our own times. The party which organized under Jackson became involved in the slavery question by combinations which it would be most interesting to study; but this will be only a passing phase, a temporary issue in our political life, and only a feature of the history of the concrete Democratic party, not of the great democratic tendency. The doctrines of the Jacksonian democracy have permeated nearly the whole country. They have come to be popularly regarded as postulates or axioms of civil liberty. Those who deny them are the scholars, the historians, the philosophers, the book-men of every grade; and they deny them under their breath, at the penalty of sacrificing all share in public life. It is certain, however, that the issue must come back to its permanent form and that the political strife must be waged between the conservative and the radical theories of politics—between those who lay the greater stress on law and those who lay the greater stress on liberty, between those who see political health chiefly in the social principle and those who see it chiefly in the individual, between constitutionalism and democracy.

This will not come about by any critical reflections of mine or by those of any other political philosopher. It will come about by experience, and by instinct rather than by reflection. For the evils and corruptions of which we daily complain arise from democratic theories of politics, developed and applied without reference to the actual circumstances of the case, and under assumptions which are false. Experience has convinced nearly all of us who are willing to think about the matter that rotation in office is mischievous to the public interest and demoralizing to the men who enter the public service. Experience has long since brought home to us the shame of the doctrine that to the victors belong the spoils. Experience has shown us the evils of frequent elections and short terms of office, and it is continually opening the eyes of more and more of us to the evils of electing a large number of administrative officers and making them independent of each other. Experience has shown us the inapplicability of the principle of election to the selection of judges. Experience is showing that the notion of the responsibility of a party is a delusion and that the notion of responsibility to the people is only a jingle of words; and as new constitutions are formed we find that they continually take more guarantees from the people against themselves.

On the contrary the path of reform lies in the direction of stronger constitutional guarantees and greater reverence for law as law. Any conservative party which fulfills its function in this country will have to take its stand on that platform. Its reforms must be historical, not speculative. They must be founded in the genius and history of the country. The democracy here, in the sense of the widest popular participation in public affairs, is inevitable until the land is taken up and the population begins to press upon the means of subsistence, that is to say, for a future far beyond what we need take into consideration. Our whole history shows this, and the part which I have discussed shows conclusively what we may also all see in our own daily observation—that the men, the parties, the theories which oppose themselves to this tendency are swept down like seeds before a flood. It is idle to ask whether is it a good tendency. It is a fact—a fact whose causes arise from the deepest and broadest social and economic circumstances of the country. But there is a foundation for true constitutionalism in the traditions of our race and in our inherited institutions—in our inherited reverence for law, which is all that keeps us from going the way of Mexico and Peru.

The philosophers and book-men have no great rôle offered them in a new country. They will always be a minority, they will always be holding back in the interest of law, order, tradition, history, and they will rarely be entrusted with the conduct of affairs; but, since their lot is cast here, if they withdraw from the functions which fall to them in this society, such as it is, they do it at the sacrifice not only of duty but also of everything which makes a fatherland worth having, to them or to their posterity. The fault which they commit is the complement of that committed by their opponents. For the notion which underlies democracy is that of rights, tenacity in regard to rights, the brutal struggle for room for one’s self, and, still more specifically, for equal rights, the root principle of which is envy. This was abundantly illustrated in Jackson’s day. The opposition of his supporters to bank and tariff had no deeper root than this, and the name they chose for themselves as descriptive of their aims was “The Equal Rights Party.” But the principle of political life lies not in rights but in duties. The struggle for rights is at best war. The subjection to duty reaches the same end, reaches it far better, and reaches it through peace. Still less is there any principle of political health in the idea of equality of rights, much as some people seem to believe the opposite. In political history it has been the melancholy province of France to show us that if you emphasize equality you reduce all to a dead level of slavery, with a succession of revolutions to bring about a change of masters.

If, then, the classes which are by education and position conservative withdraw from public activity, pride themselves on their cleanness from political mire, and satisfy themselves at most with a negative and destructive interference at the polls from time to time, the conception of political duty with them must be as low as with their opponents; and I will add that they will at best turn from one set of masters to another, under a general and steady deterioration in the political tone of the country. If we have to-day a society in which we go our ways in peace, freedom, and security, a society from the height of which we look back upon the life of the sixteenth and seventeenth centuries with a shudder, we owe it to no class of men who wrote satirical essays on contemporary politics and said to one another: “What is the use?” Elliott and Hampden and Sydney and these revolutionary heroes whose praise we are just now chanting did not win for us all the political good we owe them by any such policy as that. There was no use, as far as any one could see, in their cases. They risked persecution, imprisonment, the axe, and the scaffold, and their puny efforts seemed ridiculous in the face of the task they undertook; but they never stopped to think of that. They saw that it was the right thing to do then to speak or to resist, and they did it and let the end take care of itself.

Now we Americans of to-day have no heroic deeds to perform. We have no fear of the stake or the axe for political causes. We are not called upon to do any grand deeds. Perhaps it would be easier if we were. If we had a Cæsar at Washington I would warrant him his Brutus within a fortnight. But we have need of the same sense of duty which has animated all the heroes of constitutional government and civil liberty, and I am not sure but we need some of their courage also, for it demands at least as much moral courage to beard King Majority as it ever did to beard King Cæsar. Nothing less than the experiment of self-government is at stake in the question whether thousands of citizens are capable of that form of duty which makes a man work on without results and without reward, even, it may be, in the face of misrepresentation and abuse, simply because he sees a certain direction in which his efforts ought to be expended.

Such, however, I conceive to be the calling of the conservative classes of this country, at least for this generation. We have undertaken to govern ourselves, and we are just finding, now that the country is filling up and its cities growing large, that it is a great task, that it takes time and thought, that we need any and all resources of science and experience which we can call to our aid; and we are finding especially that the forms of law and of the Constitution are every year more essential, and the untamed forces of society more dangerous. No supernatural interference will come to our assistance. No man, no committee, no party, no centralized organization of the general government, can rid us of our difficulties and yet leave us self-government. Nor can we invent any machinery of elections or of government which will do the work for us. We have got to face the problems like men, animated by patriotism, acting with business-like energy, standing together for the common weal. Whenever we do that we cannot fail of success in getting what we want; so long as we do not do that, our complaints of political corruption are the idlest and most contemptible expressions which grown men can utter.

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THE COMMERCIAL CRISIS OF 1837
[1877–1878]

The decade from 1830 to 1840 is the most important and interesting in the history of the United States. The political, social, and industrial forces which were in action were grand, and their interaction produced such complicated results, that it is difficult to obtain a just and comprehensive view of their relations and influences. In the first place, the United States advanced between the second war with England and 1830 to a position of full and high standing in the family of nations. The security and stability of the government were accepted as established. England and France, on the other hand, just before and after 1830, were involved in social and political troubles of an alarming kind. By contrast, the United States, with a rapidly increasing population, expanding production and trade, a contented people, and a surplus revenue offered great attractions to both laborers and capital. At the same time the pride of the Americans in their country produced self-reliance, energy, and enterprise which laughed at difficulties. New means of transportation by steamboats and canals were opening up the country and assuring to the population the advantages of a new and unbounded continent. Production therefore offered high returns to both labor and capital.

The advantages of a new country were credited to the political institutions of democracy, and increasing prosperity, due to the fresh resources brought within reach, was held to be proof of the truth of the political dogmas entertained by the workers. A sort of boyish exuberance, compounded of inexperience, ignorance, and fearless enterprise, marked politics as well as industry. Jackson’s election in 1828 brought to power a party which had been produced by these circumstances.

The war debt of 1812 became payable in the years after 1824 and was distributed over the period down to 1835. With growth and increasing prosperity, the revenue increased with such rapidity that the debt could be paid almost as fast as it became payable. The chief purposes for which the Bank of the United States had been founded in 1816 were to provide a sound and uniform paper currency convertible with specie, of uniform value throughout the Union, and to act as fiscal agent for the government, holding the revenue wherever collected and disbursing the expenditures wherever they were to be made. The interest of the government and the people was the motive, and the bank charter was a contract with the Bank to perform the services for specified considerations. One of the considerations was the right of the Bank to use the deposits as loanable capital. The government was not bound to keep any balance over expenditure, but the revenue was so large that the Bank came to hold annually increasing average deposits of from five to eight or nine millions of public money, which it used for profit. From this vicious arrangement two consequences followed: first, public attention was directed to the deposits, not as existing for the public service, but for the profit of the Bank; and, second, the public considered itself entitled to claim something of the Bank besides true business credit, in the matter of discounts.

Jackson opened the war on the Bank publicly in his first message. Sharp correspondence had been going on already between the Secretary of the Treasury and the Bank, which had reached such a point that the Secretary had referred to the removal of the deposits as a power in his hands to coerce the Bank. Generally speaking, the state of the Bank and the state of the currency were satisfactory in 1830, but the Bank had begun in 1827 to issue branch drafts which stimulated credit and soon produced mischief. Of the war on the Bank it is not necessary to speak in detail. In December, 1831, Clay was nominated for President by the National Republicans, and he and his friends determined to bring on the question of the re-charter of the Bank as a campaign issue. The re-charter was passed by Congress and vetoed by the President in 1832. The issue in the campaign was thus made up between the personal popularity of Jackson and of the Bank. The former won an overwhelming victory which he construed to mean that the people had weighed the question of re-chartering the Bank and had decided against it.

In September, 1833, he removed the deposits from the National Bank on his own responsibility, and placed them in selected state banks which would agree to keep one-third of their note circulation in coin, redeem all notes on demand, and issue no notes under a five-dollar denomination. This was to be an experiment. In the meantime the administration was eagerly pressing on the extinction of the public debt. The consequences were such as to prove that, however popular such a policy may be, it may easily be carried too far. The public deposits were loaned by the Bank to merchants, then recalled and paid to the public creditors, and then reinvested by them, so that the money market was subjected to recurrent and sudden shocks. The withdrawal and transfer of the deposits constituted another and more violent operation of the same kind, so that there was a crisis and panic in the spring of 1834. The eight or nine millions of public deposits were a continual source of mischief to the money market. By the contraction of the Bank of the United States to pay the deposits, and the contraction of the state banks to put themselves within the rule for receiving the same, the currency, in the summer of 1834, was perhaps better than ever before. The coinage act of June, 1834, turned the standard over from silver to gold.

The deposit banks were urged to discount freely so as to satisfy the public with the change. Banks were organized in great numbers all over the country to take the place of the great Bank and to get a share in the profits of handling the public money. On January 1, 1835, the debt was all paid and the government had no further use for its surplus revenue. There was but one correct and straightforward course to pursue in such a case and that was to lower taxes so as not to collect any surplus, but this the Compromise Act forbade. The surplus revenue was the greatest annoyance to the protectionists who wanted to keep duties high for “incidental protection,” and they proposed scheme after scheme for distributing the lands, or the proceeds of the lands, or, finally, the surplus revenue itself, so as to cut down the revenue without reducing the import duties.

With the increase of banks and bank issues speculation began. It became marked in the spring of 1835 and went on increasing for two years. Cotton was rising in price, for the new machinery, and new means of transportation in England, together with the extension of joint stock banks there, had given a great stimulus to the cotton manufacturer. There was an increasing demand for the raw material. It followed that the cities in which the exchange and banking of all this industry were carried on also enjoyed great prosperity. Railroads were just being introduced and ships were needed to transport the products. Thus from natural causes the period was one of immense industrial development. The great need for carrying it on was capital, and the political incidents which brought about or encouraged the bank expansion may be regarded as accidental. The combination of the two in fact, however, produced a wild speculation. The banks furnished credit, not capital, and being restrained by usury laws from exerting through the rate of discount the proper check upon an inflated or speculative market they embarked with the business community on a course where all landmarks were soon lost.

No sooner, however, was this condition of the commercial and banking community well established than a new shock was given by another political interference. The administration had now advanced to the point of desiring to establish a specie currency for the country. The object was laudable and the means taken were proper, but, following as they did in the train of the events already mentioned, they produced new confusion. In 1836 various acts were passed to bring about a specie currency, and in July of that year the Secretary of the Treasury ordered the receivers of public money to take only gold and silver for lands. The circumstances warranted this order. The sales of lands had risen from two or three to twenty-four million dollars in a year, and the amount was paid in the notes of “banks”[57] which deserved no credit. If the nation was not to be swindled out of the lands the measure was necessary. It then became necessary for the purchasers of land to carry specie to the West and vast amounts of it accumulated in the offices of the receivers, or were transferred at great trouble and expense to deposit banks. The specie was obtained from the eastern banks, and inasmuch as the whole existing system had pushed them to the utmost limit of expansion, these demands for specie were embarrassing. Two points here deserve notice. It is strange to see what a superstition about “specie” had taken possession of the public mind. It was regarded as a good thing to have, but too good to use. A specie dollar was regarded as an excuse for its owner to print and circulate from three to twenty paper ones, but it was not regarded as having any other use. The withdrawal of the specie basis from an inflated paper was no doubt a serious blow to the whole fabric, but, if the paper had not been redundant the transfer of specie to the West could only have forced an importation of so much more. This superstition about specie also prevented any demand upon the banks for specie for any purpose. Such a demand was regarded as a kind of social or business crime. Hence the “convertibility” of the notes was a polite fiction. The second point worth noticing is that the bank advocates continually talked about “the credit system” when they meant the system of issuing credit bank notes; and they grew eloquent about the advantages of credit, as if those advantages could only be won by using worthless bank notes and not by lending gold or silver or capital in any form.

We are not yet, however, at the end of the political acts which threw the money market into convulsions. The opposition succeeded, in the summer of the presidential election year, 1836, in passing an act to deposit with the states the surplus over a balance of five millions in the Treasury on January 1, 1837. The amount was thirty-seven millions. This sum was scattered in eighty-nine deposit banks all over the country. Its distribution was, therefore, controlled by local pressure and political favoritism, not by the needs of the government (for it did not need the money at all) or by the demand and supply of capital. The banks had regarded it as a permanent deposit and had loaned it in aid of the various public and private enterprises which were being pushed on every hand at such a rate that labor was said to be drawn away from agriculture so that the country was importing bread stuffs. It was now to be withdrawn and transferred once more, and this time it was said that, if these “deposits” were such an advantage, the states ought to have it, and could then, as well as the banks, be called on to give back the money whenever it might be needed. The deposit took place in 1837, in three installments, January, April, and July, and amounted to twenty-eight millions. The fourth installment was never paid. The money was all squandered or worse.

The charter of the Bank of the United States was to expire on the 3d of March, 1836. One year before that time the directors ordered the “exchange committee” to loan the capital, as fast as it should be released, on stocks, so as to prepare for winding up. From this resolution dates the subsequent history of the Bank, for the exchange committee consisted of the President and two directors selected by him, to whose hands the whole business of the Bank was hereby entrusted. The branches were sold and the capital gradually released throughout 1835, but in February, 1836, an act was suddenly passed by the Pennsylvania legislature to charter the United States Bank of Pennsylvania, continuing the old Bank. The act was said to have been obtained by bribery, but investigation failed to prove it. The most open bribery was on the face of it, for it provided for several pet local schemes of public improvement, for a bonus and loans to the state by the Bank, and for abolishing taxes—provisions which secured the necessary support to carry it.

During the year 1836 the money market was very stringent. The enterprises, speculations, and internal improvements demanded continual new supplies of capital. The amount of securities exported grew greater and greater and kept the foreign exchanges depressed. American importing houses contracted larger and longer debts to foreign agents. The money market in England became very stringent likewise, and these long credits became harder and harder to carry. Three English houses, Willson, Wildes, and Wiggins, had become especially engaged in these American credits which they found it necessary to curtail. The winter was one of continual stringency, aggravated by popular discontent, riots, and trades-union disturbances, arising from high prices and high rents. The failures commenced on the fourth of March, 1837, the day that Van Buren was inaugurated, in Mississippi and Louisiana. Hermann, Briggs & Co., of New Orleans, failed, with liabilities said to be from four to eight millions. As soon as this was known in New York, their correspondents, J. L. & S. Joseph & Co. failed. The first break in the expanded fabric of credit therefore came in connection with cotton. The price had advanced so much during the last three or four years as to draw many thousands of persons who had no capital into cotton production, but the profits were so great that a good crop or two would pay for all the capital. The planters of Mississippi especially had accordingly organized themselves into banking corporations and issued notes as the easiest way to borrow the capital they wanted. From 1830 to 1839 the banking capital of Mississippi increased from three to seventy-five millions, which of course represented one credit built upon another, on renewed and extended debt, as the old planters bought more slaves and took up more land instead of paying for the old, or as new settlers came in. Mississippi was therefore indebted to the Northeast for the redemption of their immense bank debt, or for the capital bought with it. The high rates for money in England and this country at last checked the rise in cotton in 1836. Bad harvests and high prices for food fell in with a glut of manufactured cotton, and when cotton began to fall ruin was certain. As soon as the revulsion came it ran through the whole speculative system. The new suburbs which had been laid out in every city and village never came to anything. Western lands lost all speculative value, and railroad and canal stock fell with rapidity.

The first resort for help was to Mr. Biddle. The calamity most apprehended was a shipment of specie, and the effort was to gain an extension of credit or the substitution of a better for a less known credit. The Bank of the United States had high credit in Europe, and indeed all over the world. Ultimately payment must be made by crops yet to be produced or forwarded. Biddle entered into an agreement with the New York banks which seems to have been only partially carried out, but he sold post notes payable one year from date at Barny’s in London. He received one hundred and twelve and one-half for these, specie being at one hundred and seven. The bonds were discounted in England at five per cent. United States Bank stock was at one hundred and twenty.

The situation in England was so serious that all seemed to depend on remittances from the United States. The Bank of England extended aid to “the three W’s” to the extent of five hundred thousand pounds on a guarantee made up in the city, and opened a credit of two million pounds for the United States Bank, if one-half the amount should be shipped in specie. To this condition the United States Bank would not agree. The proposition attributed to the Bank of the United States a strength which it did not possess. The management of the Bank of England in this and the two following years was bad, and did much to enhance the mischief in both countries. France participated in the distress although there had been no speculation there.

A delegation of New York merchants was sent to Washington on May 3 to ask the President to recall the specie circular, to defer the collection of duty bonds, and to call an extra session of Congress. In their address to him they sum up the situation: in six months at New York, real estate had shrunk forty millions; in two months two hundred and fifty firms had failed, and stocks had shrunk twenty millions; merchandise had fallen thirty per cent, and within a few weeks twenty thousand persons had been thrown out of employment.

Early in May three banks at Buffalo failed. On May 8, the Dry Dock Bank (New York) failed. On the tenth all the New York City banks suspended. The militia were under arms and there were fears of a riot. On the eleventh the Philadelphia banks suspended, because the New York banks had, and because, although they had plenty of specie for themselves, they had not enough for the whole “Atlantic seaboard.” They said, however, that they were debtors, on balance, to New York. As the news spread through the country, the banks, with few exceptions, suspended. It was one of the notions born of the bank war that the United States Bank was guilty of oppression when it called on state banks for their balances, and the state banks had practiced “leniency” towards each other. Bank statements of the period show enormous sums as due to and from other banks. This was what carried them all down together, for one could not stand alone unless its debits and credits were with the same banks.

During the summer the governors of several states called extra sessions of the legislatures. The President had refused to recall the specie circular, or to call an extra session of Congress, but the embarrassments of the Treasury forced him to do the latter. The collection of duty bonds was deferred and the revenue thereby cut off. The public money was in the suspended banks, and the Treasury, nominally possessed of forty millions, at the very time when part of this sum was being paid to the states, had to drag along from day to day by the use of drafts on its collectors for the small sums received or by chance left over in their hands since the suspension. As notes under five dollars had been forbidden by nearly all the states, and as specie was at ten per cent premium, all small change disappeared, and the towns were flooded with notes and tickets for small sums, issued by municipalities, corporations, and individuals.

The most interesting fact connected with this commercial credit is that New York and Philadelphia took opposite policies in regard to it, and thus offered, in their differing experience, an experimental test of those policies. The New York legislature passed an act allowing suspension for one year. The New York policy then was to contract liabilities and prepare for resumption at the date fixed. The Philadelphia policy, in which Mr. Biddle was the leader, was to wait without active exertions for things to get better. In his letter of May 13 to Adams, Biddle said that the Bank could have gone on without trouble, but that consideration for the rest forced him to go with them. What especially moved him was that, if the Pennsylvania banks had not suspended, Pennsylvanians would have had to do business with a better currency than the New Yorkers, which would have been unfair. Mr. Biddle knew perfectly well that the exchanges would arrange all that. He was an adept at writing plausible letters. The truth, which was not known until four years later, was that the capital of the Bank had never been withdrawn from the stock loans, that the chief officers of the Bank were plundering it, and that suspension was not more welcome to any institution in the country than to the great Bank. The jealousy between New York and Philadelphia was very great at this time. Mr. Biddle’s personal vanity seems to have been greatly flattered when, in March, he was called on by the New Yorkers to help them. He was still the leading financier of the country. The business men could not spare him, even if the government had thrown him off. There seems also to be some evidence that he hoped that a great and universal revulsion would force the general government to re-charter his Bank. The success of his post notes in England and France was another source of gratified vanity to him. In his theory of banking he was one of those who believe that the redemption of the bank note is effected by the merchandise. Hence banking was, for him, an art by which the banker regulated commerce through expansions and contractions of the circulation according to the circumstances which he might observe in the market.

The first effect of the opposite courses taken by New York and Philadelphia was very favorable to his views. The southern trade was transferred from New York to Philadelphia. Southern notes were at a discount of twenty or twenty-five per cent. Receiving these notes from the merchants, the Bank employed them through Bevan and Humphreys in buying cotton. This operation began in July and was intended to move the cotton to Europe in order to meet the post notes of the Bank when they should become due. The firm of Biddle and Humphreys was also formed and established at Liverpool as the agent of this operation. In the extension of the transaction cotton was bought and paid for by drafts on Bevan and Humphreys of Philadelphia, which drafts were discounted by the Bank. Biddle and Humphreys, having sold the cotton, remitted the proceeds to Mr. Jandon, former cashier of the Bank, sent to England as its agent in July. To all this it must be added that the Bank assumed the function of securing, for its producers, a good or fair price for cotton. Jandon’s instructions were to protect the interests of the bank, and “of the country at large.”

If the Bank had simply been a strong, sound bank, intent on earning profits, it would have sent two or three millions to Europe, selling exchange at one hundred and twelve, and would not have suspended. The rest of the story would then have been very different for all concerned. The arrival in June of a ship in England with one hundred thousand dollars specie sufficed to sustain American credit and to revive American securities. When the credit of a debtor is tainted, nothing revives it like payment.

The extra session of Congress met on September 4. The fourth installment of the State Deposit Fund was postponed until January 1, 1839, but it was locked up in the suspended banks and, as the former installments had been drawn from the better banks, the balance due was all in the worst banks of the country, those of the southwestern states. As they had loaned it to their customers, it was, in fact, amongst the people of those states. A law was passed to institute suit against these banks unless they paid on demand, or gave bonds to do so in three installments before July 1, 1839. There were only six deposit banks then paying specie; one was new, four had not suspended, and one had resumed. Power to call on the states for the funds “deposited” with them was taken from the Secretary of the Treasury and held by Congress. Interest-bearing Treasury notes were provided for one year, to meet expenses, and an extension of nine months was given on duty bonds. At this session the sub-treasury system was brought forward as an administration measure. It split the party. The “bank democrats” (state bank interest which joined the Jackson party in 1832 to break down the United States Bank) went into opposition. The advocates of the “credit system” said the sub-treasury scheme, by giving the government control of the specie in the country, would give it control of all credit. Meanwhile Benton said that the eighty million specie in the country was its bulwark against adversity, and the Locofocos said that any one who exported specie was a British hireling. So that there was a fine confusion of financial notions.

In the fall the English money market became much easier, and the same tendency appeared here. Specie at New York was at about seven per cent premium, but steadily declining. Prices of breadstuffs remained very high (flour nine dollars to nine dollars and a half at New York) and the stagnation of industry was complete. Migration to the West was large.

On August 18 the New York banks called a convention of banks to deliberate on resumption. The Philadelphia banks frustrated the proposition by refusing. A convention met in October but adjourned without action until April. On the 7th of April the New York banks had assets two and a half times their liabilities, excluding real estate, and were creditors of the Philadelphia banks for $1,200,000. They had reduced their liabilities from $25,400,000 on January 1, 1837 to $12,900,000 on January 1, 1838, and the foreign exchanges were favorable.

The bank convention met April 1, 1838, and voted by states to resume January 1, 1839, without precluding an earlier day. New York and Mississippi alone voted nay, the former because the date was too remote; the latter because it was too early. New England joined Philadelphia and Baltimore for the later day. Mr. Biddle published another letter in which he blamed the rigor of the contraction at New York; he wanted to remain “prepared to resume but not resuming,” and looked to Congress to do the work. The exchange between New York and Philadelphia was then four and a half per cent against the latter. The southwestern exchanges were growing worse. On May 1, the Philadelphia banks resolved to pay specie for demands under one dollar. The Bank of England engaged to send one million pounds in specie to support resumption, and did send one hundred thousand pounds, but then receded from the undertaking; its stock of specie was now very large and increasing. The New York banks resumed during the first week in May, the Boston and New England banks generally at the same time. Specie was coming into New York. On May 31 Congress repealed the specie circular, whereupon Mr. Biddle published another letter saying that since Congress had acted, he saw his way to resumption and would “coöperate.” The Bank had, at this time, over thirteen millions loaned on “bills receivable,” that is, on securities put in the teller’s drawer, as cash to replace cash taken out.

After the adjournment of Congress on July 9 there was a much better feeling, especially on account of the defeat of the sub-treasury bill, and on July 10, Governor Ritner of Pennsylvania published a proclamation requiring the banks to resume on August 13, and to pay and withdraw all notes under five dollars. On July 23 a bank convention composed of delegates from the middle states met at Philadelphia. It was agreed to resume on August 13. The Philadelphia banks were obliged to contract very suddenly and money was very dear there. As soon as they resumed there were demands on them from New York, exchange being against them. This caused excitement and indignation. The banks generally declared dividends as soon as they resumed. Elsewhere, here and in England, money was easy and the times rapidly improving. There was, however, a feverish and uncertain market for cotton. Biddle and Humphreys were carrying an immense stock, and buyers and sellers differed as to prices.

On December 10, 1838, Biddle published another letter to Adams in which he reviewed his policy of the last two years, and withdrew the Bank from all its former public activity. He says: “It abdicates its involuntary power.” He defended the cotton speculations, saying that he had saved the great staple of our country from being sacrificed, by introducing a new competitor into the market. Here then was a buyer who had gone into the market on purpose to “bull” some one else’s property. His fate could not be very doubtful. At this same time the Liverpool market was very dull and the spinners were curtailing their demands because the supply was under the control of speculators. It was true, as was asserted, that the crop was short, but the buyers took this for a speculator’s story, and, anticipating a break in the corner and a fall in price, they refused to buy. The speculation no doubt unduly depressed the price. The southwestern agents of the Bank of the United States were offering advances of from two to five cents above the market price to secure consignments to Biddle and Humphreys, and Mr. Jandon, because he had lost instead of winning confidence, was paying ruinous rates for money to carry on his operations.

During the winter most of the southern and western banks resumed, at least nominally, but as the spring of 1839 approached the southern exchanges again fell and many of the banks suspended again. On March 29 Biddle resigned the presidency of the Bank, saying that he left it strong and prosperous. The stock fell from one hundred and sixteen to one hundred and twelve, but soon recovered. The money market became stringent again, influenced by fears of the South.

In March, by speculative sales, by the diminution of stock, and by the real shortness of the crop, cotton was forced up one and one-fourth pence at Liverpool, and Biddle and Humphreys sold out their entire stock. The net profit was six hundred thousand dollars. This was regarded as a great triumph, and as a complete vindication of Biddle’s policy. In July, 1839, the Bank of the United States paid a semi-annual dividend of four per cent—its last one.

The success of the cotton speculation led to a plan for renewing it on a grander scale. On June 6, an unsigned circular was published at New York, which proposed a scheme for advancing three-fourths of the value at fourteen cents on all cotton consigned to Biddle and Humphreys. They were to “hold on until prices vigorously rally.” The agent, Mr. Wilder, declared that this had nothing to do with the United States Bank, so far as he knew. It was, however, a scheme of the Bank. The Southwestern notes were falling lower and lower, and the post notes issued in the Southwest the year before were now falling due, and were not paid. The pressure of this fell on Philadelphia, where money was up to fifteen per cent and the banks were curtailing. The news from England was also bad. Cotton was down two cents. The specie of the Bank of England was rapidly declining and money was at five per cent. The arrangements from this side in 1837 had simply consisted in renewals or extensions, and as yet few payments had been made. Stocks, etc., were sent over, but they fell upon a glutted and stringent market and the prices declined. These securities therefore did not furnish means of payment, and specie shipments were found to be necessary. The Bank of the United States had prevented any shipment of specie by offering all the bills demanded at one hundred and nine and a half, and Mr. Jandon had been obliged to adopt the most reckless means to meet these bills. In August he wrote to Biddle and Humphreys to supply him with money at any sacrifice of cotton. “Life or death to the Bank of the United States is the issue.” The Bank here urged Bevan and Humphreys to direct their agents to meet Jandon’s demands and the Bank assumed the loss. In August the Bank sent an agent to New York, to draw all the bills he could sell on Hottinguer at Paris, to draw the proceeds in specie from the New York banks, and to ship it to meet the bills, the object being to force the New York banks to suspend in order that their example might again be quoted. The Bank also sold its post notes at a discount of eighteen per cent per annum in Boston, New York, Baltimore, and smaller places, and gathered up capital to meet the emergency at Philadelphia caused by the failure of the Southern remittances. The money markets in all these cities were very stringent until October. On the ninth of that month the Bank of the United States failed on drafts from New York, and on the tenth the news was received that the drafts on Hottinguer had been protested. He had given notice that he would not pay unless he was covered, and the drafts arrived before the specie did. Jandon succeeded in getting Rothschild to take up the bills. The amount was seven million francs.

The banks south and west of New York and some of the Rhode Island banks now suspended again. Specie at Philadelphia was at one hundred and seven to one hundred and seven and one-half. United States Bank stock at seventy. On October 15, it was at eighty, and sold at New York at one-fourth premium. Scarcely any New York City notes were in circulation.

This suspension was the real catastrophe of the speculative period which preceded. A great and general liquidation now began. Perhaps as many as two hundred of these banks never resumed. The stagnation of industry lasted for three or four years. The public improvements so rashly begun were suspended or abandoned. The states were struggling with the debts contracted. Some repudiated; some suspended the payment of interest. The New England states and New York escaped all the harsher features of this depression and emerged from it first. In proportion as we go further south and west we find the distress more intense and more prolonged. The recovery was never marked by any distinct point of time, but came gradually and imperceptibly.

The credit of the Bank of the United States bore up wonderfully under the shock of its second suspension. Its friends were ready to attribute its misfortunes to conspiracies, jealousy, or any other cause but its own faults. They did not indeed know its internal history. It might have recovered if it had not been ruined from within. The cotton speculations showed a loss, in the summer of 1840, after saddling the Bank with all possible charges, of $630,000 for the speculators. The legislature of Pennsylvania ordered the banks to resume January 15, 1841. On the first of January, 1841, a statement of the assets of the Bank was made, when it appeared that they consisted of a mass of doubtful and worthless securities. The losses to date were over five millions, according to the report of the directors, but over seventeen millions, taking the stocks at their market value. The Bank resumed January 15, with the other Philadelphia banks, and the great Bank loaned the state four hundred thousand dollars, agreeing to loan as much more. In twenty days the Philadelphia banks lost eleven millions in specie, of which six millions were taken from the Bank of the United States. On February 4 the Bank failed for the third and last time. Its final failure was said to be due to stock jobbers. Suits were at once begun in such numbers that all hope of ever resuscitating it had to be abandoned. Its deposits, when it failed, were one million one hundred thousand dollars and its notes in circulation two million eight hundred thousand dollars. Twenty-seven millions out of the thirty-five of its capital were held in Europe. The stock, in March, 1841, was at seventeen. A committee of the stockholders reported in April, showing the internal history of the Bank for five years. This brought out from Mr. Biddle six letters of explanation, defense, and recrimination, which are valuable chiefly for the further insight they give into the history. As to the winding up of the Bank it is very difficult to obtain information. Private inquiries lead to the following results. Three trusts were constituted: one for the city banks to which the Bank owed five or six millions; one for the note-holders and depositors; and one for the other creditors. The city banks, the note-holders, and the depositors were ultimately paid in full. The other claims were bought up by one or two persons who took the assets. What they made of them is not matter of history.

The attempt of the Pennsylvania banks to resume in January, 1841, had been the signal for similar attempts in the other states. The banks on the seaboard as far south as South Carolina generally resumed, and in the Western and Gulf states some took the same step. All were indebted to the Northeast, and were asked to pay as soon as they said they were ready to pay. Like the Philadelphia banks they succumbed to this demand. The Virginia banks held out until April, when the suspension was once more universal south of New York.

All the states except New Hampshire, Vermont, Rhode Island, Connecticut, and Delaware had debts, amounting in all to nearly two hundred millions. The Southern States had generally contracted these debts to found banks. The Middle and Western States had contracted debts for public works. In the former case the profits of the banks were expected to cover the interest on the debt. In the latter case the works were expected to be remunerative in a short time, and the interest was provided for in the meantime by bank dividends (on stocks owned by the state, which only constituted another debt), by taxes on banks, and by royalties. Both schemes were plausible and might have been successful if managed with good judgment and moderation. Under the actual circumstances they were subject to political control, the methods of which were reckless and ignorant. The consequence was that when credit collapsed and the English market no longer absorbed the state stocks with avidity, the states found themselves heavily indebted, bound to pay large interest charges, and without the anticipated revenue. The state banks of the South had loaned their borrowed capital to legislators and politicians, and had no assets but “suspended debt.” The improvement states had become heavily indebted to their own banks and depended on bank dividends to pay interest. The state banks all held state stocks as assets, and when these declined in value, the banks became insolvent. Thus the banking system was interlocked with the state finances and with the mania for improvements unwisely planned and attempted without reference to the capital at command. The aversion to taxation was very strong, and as taxation was delayed, one state after another defaulted on its interest. The delinquent states were Pennsylvania (which laid taxes in 1840, but inadequate to meet the deficiency), Michigan (of which the Bank of the United States held two millions in bonds not paid for when it failed), Mississippi (of which the same bank held five millions in bonds the obligation of which was disputed and never met), Indiana (whose debt was one-fifth of the total valuation), Illinois, Louisiana, Maryland and Arkansas, and Florida territory—total amount, one hundred and eleven millions. In five years the Bank of the United States gave to Pennsylvania three millions, subscribed nearly half a million to public improvements by corporations, and loaned the state eight and one-half millions. In 1857–1858 Pennsylvania sold out her works, which had cost thirty-five millions, for eleven millions. The bonds deposited in New York to secure circulation had a par value of four and six-tenths millions, but were worth only one and six-tenths millions on the first of January, 1843. As early as March, 1841, this decline caused a panic in “Safety Fund” and “Free Bank” notes at New York.

Pennsylvania now entered on another experiment which threatened to ruin her remaining banks as the reckless demands on the Bank of the United States had helped to ruin that institution. On May 3, 1841, the legislature passed, over a veto, a “Relief Act.” The object was to secure a loan of three millions from the banks. The Act allowed them to issue that amount in small notes which they were to subscribe to a five per cent loan. They were to redeem the notes in five per cent stock on demand in amounts over one hundred dollars. The stocks were then at eighty and specie at seven per cent premium.

The best financial writer in the country at that time (Gouge) said of this Act: Pennsylvania, “after having borrowed as much as she could in the old-fashioned way from banks and brokers, and domestic and foreign capitalists, resolved to extort a loan of a dollar a head from every washerwoman and woodsawyer and everybody else within her limits who had a dollar to lend. But as washerwomen and woodsawyers and other dollar people cannot long dispense with the use of their funds, it was necessary to give these certificates of loan in a circulating form, so that the burden might be shifted from one to another day by day, or, if necessary, two or three times a day.”

The summer of 1841 was marked by intense distress in Pennsylvania. A table of the best investment stocks of Philadelphia shows a shrinkage between August, 1838, and August, 1841, from sixty million to three and one-half millions. The wages class was exposed to the bitterest poverty and distress. The Pennsylvanians attributed the trouble to the want of a protective tariff. For a time, in the autumn, the Relief notes seemed to act beneficially. The banks took them and they circulated at par with the rest of the state currency. In January, 1842, the Girard Bank failed, and about the same time the Pennsylvania and three others less important, and by March a crisis was reached worse than anything which had preceded. A bill was suddenly passed by the legislature commanding immediate resumption. An amendment was proposed that the banks should no longer be bound to receive the Relief notes, although the state should do so. The amendment was afterwards withdrawn, but the Relief notes were ruined. They fell, some to seventy-five and some to fifty in state currency and then became merchandise, after six months and three days of use. Capital was now not to be had at four per cent per month, but this bankruptcy had cleared the situation. The eleven banks which had not failed agreed to resume on March 18. The exchanges with New York turned in favor of Philadelphia. The years 1842 and 1843 were years of great depression. The banks throughout the west and south were liquidating, after which they either perished or resumed. From 1843 a new sound and healthy development of industry and credit began. The recovery, however, was very slow, and banks sprang up again sooner and faster than anything else.

The total amount of Relief notes issued in Pennsylvania was two and one tenth millions. In January, 1843, the amount outstanding was, of depreciated $639,834, of specie value (issued by banks which had resumed) $240,801. Bicknell’s Reporter said: “If any one can devise an immediate plan whereby the people can get rid of about $700,000 of paper trash, he will be entitled to the name of a public benefactor.” In February, 1843, the Legislature ordered the Treasurer to cancel $100,000 of Relief notes at once and $100,000 monthly until all were destroyed, but in June, 1843, there were still $684,521 out.

This is certainly a melancholy story of the way in which people who enjoy the most exceptional chances of wealth and prosperity can squander them by ignorance of political economy and recklessness in political management. Banks were regarded as means of borrowing capital, not as institutions for lending it. If there was anywhere a group of needy speculators, they secured a bank charter, elected themselves directors, gave their notes for the stock, printed a lot of bank notes, loaned the notes to themselves, and went out and with the notes bought the capital they wanted. Bank after bank failed with an immense circulation afloat and no assets but the notes of its directors, who had failed too. When the United States had thirty or forty millions surplus on hand and these banks could get the custody and handling of it for an indefinite period, because the country had no need for it, it can readily be understood why banks multiplied. The banks were encouraged to lend this deposit freely to the public, which they were by no means loath to do, for that was the only way to gain a profit on it. They lent it, not once but two or three times over. The New York bank commissioners pointed out the danger of a system in which the borrower came directly into contact with the bank which issued the currency. If a man was eager to borrow and pay high interest and the bank had only to print the notes to accommodate him, there was every stimulus to over-issue. If the borrower engaged in any enterprise he raised the price of everything he bought. When he became engaged in his enterprise and wanted more capital, he went back to the bank more eager and more ready to pay high interest than ever, and the operation was repeated. In 1836, on the top of the inflation, the rates for money were twelve and fifteen per cent throughout the year, with a very tight money market. The banks and the business community could not throw the blame on each other. They stimulated each other and went on in their folly hand in hand. The penalties, however, were not fairly distributed. The banks “suspended,” as they called it; that is, when asked to pay their debts, they said they would not; and they enjoyed a complete immunity in this respect, while people outside who could not pay had to fail.

I have tried, within the limits to which I am bound, to show how many elements were combined in this period and how they were all interwoven. There are the political elements, the tariff element, the movement of population to the new land, the fiscal operations of the general government, the revolution in the coinage, the mania for public improvements, the reckless creation of state debts, and the war on the United States Bank. Any one of these might have accounted for a financial crisis in an old country, and the fact that the catastrophe produced by all combined was not greater here is a striking proof of the vitality of the country and the wonderful advantages which it was wasting.

On the four or five years of inflated prosperity there followed four or five years of the most slow and grinding distress. 1843 is the year of lowest prices in our history, and the year of severest restriction in industry. In 1842 the United States Treasury was under protest and actually bankrupt, and American credit was so low that an agent of the general government who was sent to Europe to try to place a loan of only twelve million dollars there could not do it at all. In that same year, however, out of what income it did have, the general government distributed six hundred thousand dollars, which came from land, amongst the states. As for calling back any of the twenty-eight millions deposited with the states, no effort of the kind was ever made. The states were complaining that the fourth installment, to which they had a right, had never been paid to them. The question is sometimes mooted whether a national debt is a curse or a blessing. There can be no doubt whatever that a national surplus is a curse.

In the years before 1837 there had been a great deal of eloquence spent upon “the credit system.” After 1837 this matter was dropped. By the credit system they meant the multiplication of bank notes which were false promises. The notion was that the system of using these in business gave poor men an easier chance to get rich. At first they were loaned easily at low rates. Then, as prices rose and speculation became active, interest advanced. The “poor men” found themselves forced to submit to more and more ruinous renewals, all the heavier because of the usury law, until they lost all they had ever really owned. The question, then, is how much better off than they were would the poor men of 1830 have been in 1845 if they had gone on slowly earning and saving capital and making no use of credit at all. As it was, the poor men of 1830, after supposing themselves rich in 1836, were all bankrupt in 1845. Such is the course of every inflation of the currency. It is proved by hundreds of instances; and there is no delusion which it seems so hard to stamp out of the minds of men as this, that in business we can make something out of nothing, although we cannot in chemistry or mechanics. Nothing more surely tempts the man without capital to his ruin than the easy credit which accompanies the first stages of inflation.

It is worth while also to reflect for a moment on the results of the two plans for dealing with the crisis: the New York plan and the Philadelphia plan. When an error has been committed in this world, we always have to bear the penalty for it. If we do not like the stripes on one side we can turn and take them on the other, but when nature inflicts penalties for her broken laws we never can squirm out of the way. In this case, then, when the folly had been perpetrated the punishment had to be suffered. The only choice was whether to take it quick and heavy, or light and long. The New Yorkers chose the former way. The contraction was severe and painful while it lasted, but it was soon over. From May, 1838, the New York banks resumed and held on without further default and the New York business recovered and entered upon a new course of growth from that time. The Philadelphians took the other course. They made it easy for the debtors and waited for the storm to blow over. The consequence was that the debts increased still further. The advantage in trade over New York proved shortlived and terribly expensive, for the goods were not paid for. The confusion and distress lasted for four years longer than in New York, and the total loss was very much greater. For the last five years we have been under the same necessity as that which oppressed the country in 1837. We have been following the Philadelphia plan and I may give you my opinion that we have not been wise. I think that we might have escaped three years ago with far less loss, and might have been three years further on the road to new prosperity.

In conclusion let me draw your attention to the lesson of this history in regard to resumption. There was no resumption, you see, until the currency had been reduced to the limits of the actual specie necessity of the country or even below it. Either voluntarily or by bankruptcy the redundant paper had to be withdrawn. Such has been the case in every other instance of resumption that I know of, which has been real and permanent. Applying this to our own present circumstances I ask myself whether the amount of paper now in circulation is in excess of the requirement of the country, and there seems to me every reason to believe that it is. If that is so, resumption cannot be real and permanent until a portion of it has been redeemed and withdrawn. The interest in resumption of the great body of industrious, sober, and thrifty citizens cannot be exaggerated. Renewed prosperity on a solid basis is impossible until after a complete return to specie value. There are those, however, who want to live by anything but honest labor, who find their best chance when prices are fluctuating and currency is continually changing in value. They have schemes and interests which resumption must destroy. They have done all they could to make it fail and they are watchful and eager to see it fail. If it does fail it will be a great national calamity, on account of the authority which it will offer to these prophets of evil if for no other reason. Resumption with us now stands at just that point where the lightest preponderance of force may turn it one way or the other—may insure its success or cause its failure. It is a great gain to get our faces set in the right direction. It arouses the national pride in the success of resumption. It silences opposition and malevolent efforts against it. It makes it very much easier to take the requisite steps to insure success, for they involve no pain at all, nothing but economy and prudence in the national finances; the avoidance of unnecessary expenditure and the postponement for a time of certain expenditures proper in themselves. If the country needs six hundred million dollars to do its business with, then the withdrawal of a portion of the paper would simply bring gold into circulation, and resumption would be placed beyond a doubt. If the country does not want six hundred million dollars to do its business with, then we cannot sustain specie payments with that amount afloat, and we have still before us more of the experience of 1842 and 1843.

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THE SCIENCE OF SOCIOLOGY[58]

In the present state of the science of sociology the man who has studied it at all is very sure to feel great self-distrust in trying to talk about it. The most that one of us can do at the present time is to appreciate the promise which the science offers to us, and to understand the lines of direction in which it seems about to open out. As for the philosophy of the subject, we still need the master to show us how to handle and apply its most fundamental doctrines. I have the feeling all the time, in studying and teaching sociology, that I have not mastered it yet in such a way as to be able to proceed in it with good confidence in my own steps. I have only got so far as to have an almost overpowering conviction of the necessity and value of the study of that science.

Mr. Spencer addressed himself at the outset of his literary career to topics of sociology. In the pursuit of those topics he found himself forced (as I understand it) to seek constantly more fundamental and wider philosophical doctrines. He came at last to fundamental principles of the evolution philosophy. He then extended, tested, confirmed, and corrected these principles by inductions from other sciences, and so finally turned again to sociology, armed with the scientific method which he had acquired. To win a powerful and correct method is, as we all know, to win more than half the battle. When so much is secured, the question of making the discoveries, solving the problems, eliminating the errors, and testing the results, is only a question of time and of strength to collect and master the data.

We have now acquired the method of studying sociology scientifically so as to attain to assured results. We have acquired it none too soon. The need for a science of life in society is urgent, and it is increasing every year. It is a fact which is generally overlooked that the great advance in the sciences and the arts which has taken place during the last century is producing social consequences and giving rise to social problems. We are accustomed to dwell upon the discoveries of science and the development of the arts as simple incidents, complete in themselves, which offer only grounds for congratulation. But the steps which have been won are by no means simple events. Each one has consequences which reach beyond the domain of physical power into social and moral relations, and these effects are multiplied and reproduced by combination with each other. The great discoveries and inventions redistribute population. They reconstruct industries and force new organization of commerce and finance. They bring new employments into existence and render other employments obsolete, while they change the relative value of many others. They overthrow the old order of society, impoverishing some classes and enriching others. They render old political traditions grotesque and ridiculous, and make old maxims of statecraft null and empty. They give old vices of human nature a chance to parade in new masks, so that it demands new skill to detect the same old foes. They produce a kind of social chaos in which contradictory social and economic phenomena appear side by side to bewilder and deceive the student who is not fully armed to deal with them. New interests are brought into existence, and new faiths, ideas, and hopes, are engendered in the minds of men. Some of these are doubtless good and sound; others are delusive; in every case a competent criticism is of the first necessity. In the upheaval of society which is going on, classes and groups are thrown against each other in such a way as to produce class hatreds and hostilities. As the old national jealousies, which used to be the lines on which war was waged, lose their distinctness, class jealousies threaten to take their place. Political and social events which occur on one side of the globe now affect the interests of population on the other side of the globe. Forces which come into action in one part of human society rest not until they have reached all human society. The brotherhood of man is coming to be a reality of such distinct and positive character that we find it a practical question of the greatest moment what kind of creatures some of these hitherto neglected brethren are. Secondary and remoter effects of industrial changes, which were formerly dissipated and lost in the delay and friction of communication, are now, by our prompt and delicate mechanism of communication, caught up and transmitted through society.

It is plain that our social science is not on the level of the tasks which are thrown upon it by the vast and sudden changes in the whole mechanism by which man makes the resources of the globe available to satisfy his needs, and by the new ideas which are born of the new aspects which human life bears to our eyes in consequence of the development of science and the arts. Our traditions about the science and art of living are plainly inadequate. They break to pieces in our hands when we try to apply them to the new cases. A man of good faith may come to the conviction sadly, but he must come to the conviction honestly, that the traditional doctrines and explanations of human life are worthless.

A progress which is not symmetrical is not true; that is to say, every branch of human interest must be developed proportionately to all the other branches, else the one which remains in arrears will measure the advance which may be won by the whole. If, then, we cannot produce a science of life in society which is broad enough to solve all the new social problems which are now forced upon us by the development of science and art, we shall find that the achievements of science and art will be overwhelmed by social reactions and convulsions.

We do not lack for attempts of one kind and another to satisfy the need which I have described. Our discussion is in excess of our deliberation, and our deliberation is in excess of our information. Our journals, platforms, pulpits, and parliaments are full of talking and writing about topics of sociology. The only result, however, of all this discussion is to show that there are half a dozen arbitrary codes of morals, a heterogeneous tangle of economic doctrines, a score of religious creeds and ecclesiastical traditions, and a confused jumble of humanitarian and sentimental notions which jostle each other in the brains of the men of this generation. It is astonishing to watch a discussion and to see how a disputant, starting from a given point of view, will run along on one line of thought until he encounters some fragment of another code or doctrine, which he has derived from some other source of education; whereupon he turns at an angle, and goes on in a new course until he finds himself face to face with another of his old prepossessions. What we need is adequate criteria by which to make the necessary tests and classifications, and appropriate canons of procedure, or the adaptation of universal canons to the special tasks of sociology.

Unquestionably it is to the great philosophy which has now been established by such ample induction in the experimental sciences, and which offers to man such new command of all the relations of life, that we must look for the establishment of the guiding lines in the study of sociology. I can see no boundaries to the scope of the philosophy of evolution. That philosophy is sure to embrace all the interests of man on this earth. It will be one of its crowning triumphs to bring light and order into the social problems which are of universal bearing on all mankind. Mr. Spencer is breaking the path for us into this domain. We stand eager to follow him into it, and we look upon his work on sociology as a grand step in the history of science. When, therefore, we express our earnest hope that Mr. Spencer may have health and strength to bring his work to a speedy conclusion, we not only express our personal respect and good-will for himself, but also our sympathy with what, I doubt not, is the warmest wish of his own heart, and our appreciation of his great services to true science and to the welfare of mankind.

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INTEGRITY IN EDUCATION[59]

In addressing you on the present occasion, I am naturally led to speak of matters connected with education. We are met here amid surroundings which, to the great majority of us, are unfamiliar, but we are assembled in the atmosphere of our school days and under the inspiration of school memories. Some of us are rapidly approaching, if we have not already reached, the time when our interest in education re-arises in behalf of the next generation. Many are engaged in the work of teaching. Others have only just finished a stage in their education. I therefore propose to speak for a few minutes about integrity in education, believing that it is a subject of great importance at the present time, and one which may justly command your interest.

By integrity in education, I mean the opposite of all sensationalism and humbug in education. I would include under it as objects to be aimed at in education, not only the pursuit of genuine and accurate information and wide knowledge of some technical branch of study, but also real discipline in the use of mental powers, sterling character, good manners, and high breeding.

Modern sensationalism is conquering a wide field for itself. It is a sort of parasite on high civilization. Its motto is that seeming is as good as being. Its intrinsic fault is its hollowness, insincerity, and falsehood. It deals in dash, flourish, and meretricious pretense. It resides in the form, not in the substance; in the outward appearance, not in the reality. It arouses disgust whenever it is perceived; but the worst of it is that its forms are so various, its manifestations are sometimes so delicate, and it often lies so near to the real and the true, that is it difficult to distinguish it. Life hurries past us very rapidly. The interests which demand our attention are very numerous and important. We have not time to scrutinize them all. Then, too, the publicity of everything nowadays prevents modest retirement from being a sign of merit. We go on the principle that if anything is good, it is for the public. Publicity is honorable and proper recognition, and those who have charge of the public trumpets have not time, if they have the ability, to discriminate and criticize very closely.

These reflections account sufficiently for the growth of sensationalism in general. Probably each one sees the mischief which it does in his own circle or profession more distinctly than elsewhere. I have certainly been struck by its influence on education. I see it in common-school education as well as in the universities. It attaches to methods as well as to subjects. It develops a dogmatism of its own. Men without education, or experience as teachers, often take up the pitiful rôle of another class which has come to be called “educators.” They start off with a whim or two which they elaborate into theories of education. These they propound with great gravity in speech and writing, producing long discussions as to plans and methods. They are continually searching for a patent method of teaching, or a royal road to learning, when, in fact, the only way to learn is by the labor of the mind in observing, comparing, and generalizing, and any patent method which avoids this irksome labor produces sham results and fails of producing the mental power and discipline of which education consists.

Persons of this class are generally impatient until they have attained some opportunity of putting their notions in practice, and then it is all over with any institution which becomes subject to their wild empiricism.

The saddest results of such proceedings are seen, of course, in the pupils. That a certain school should lose its pupils, or fall into debt, or be closed, is a comparatively small affair. The real mischief is that men should be produced who have no real education, but only a perverse training in putting forward plausible and meretricious appearances. Such education falls in with the outward phenomena of a sensational era and strengthens the impressions which a young and inexperienced observer gets from our modern society, that audacity is the chief of talents, that success or failure is the only measure of right or wrong, that the man to be admired is the one who invents clever tricks to circumvent a rival or opponent, or to skip over a troublesome principle. Young people are more acute in their observations, and they draw inferences and form generalizations more logically and consistently than their elders. They have not yet learned respect for dogmas, traditions, and conventionalities, and their “education” goes on silently but surely, developing a philosophy of life either of one kind or another. If, therefore, you have an educational system consisting of formal cram for recitation or examination, if there is a skimming of text-books, an empty acquisition of terms, a memorizing of results only, you may pursue high-sounding studies and “cover a great deal of ground,” you may have an elaborate curriculum and boast of your proficiency in difficult branches, but you will have no education. You may produce men who can spend a lifetime dawdling over trifles, or men who always scatter their force when they try to think, but you will not have intelligent men with minds well-disciplined and well under control, who are able to apply their full force to any new exigency, or any new problem, and to grasp and conquer it.

The fault here is plain enough. People forget, or do not perceive, that simplicity and modesty are the first requisites in scientific pursuits. We have to begin humbly and with small beginnings if we want to go far. Inflation and pretense only lead to vanity and dilletantism, not to strength and fruitful activity. If we advance eagerly, we deceive ourselves by the notion that we are making grand progress. We are only leaving much undone which we shall have to go back and repair. If, on the other hand, we proceed slowly and with painstaking, every step of advance is sure and genuine. It forms a great vantage-ground for the next step. It strengthens and confirms the mental powers. They come to act with certainty by scientific processes, not by guesses, and this mental discipline enables us to apply our powers wherever we need them. A new task is not a dead wall which is impassable to us because we have never seen one like it before. It is only a new case for the application of old and familiar processes. I never see anything more pitiable than the helpless floundering in a new subject of a young man far on in his education who has never yet learned to use his mind.

In what I have already said about the philosophy of life which a young person forms during the process of education, I have suggested that education must exert a great influence on character. It is sometimes asserted that education ought to mold character—ought to have that object and work towards it, of set purpose. I do not deny this, but I beg you to observe that it obscures the truth. The truth is that education inevitably forms character one way or the other. The error is in speaking as if academical instruction could be carried on without training character, unless the set purpose were entertained. One might read many books on mathematics and the sciences without any very direct moral culture, but everything we learn about this world in which we live reacts in some sort of principle for the regulation of our conduct here. This, however, is not the most important thing. A school is a miniature society. Do we not all know how it forms an atmosphere of its own, how the members make a code of their own, and a public opinion of their own? And then, what a position the teacher holds in this little community. What a dangerous and responsible eminence he occupies. What criticism he undergoes. What an authority his example exerts. So, in this little society, general notions of conduct are unconsciously formed, principles are adopted, habits grow. Every member in his place gives to, and takes from, the common life. It may be well doubted whether there is any association of life which exerts greater influence on character than does the school, and its influence comes, too, just as the formative period, when impressions are most easily received and sink deepest.

Here then is where sensationalism may do its greatest harm, and where integrity of method is most important. The untruthfulness of sensationalism here becomes a germinal principle, which develops into manifold forms of untruthfulness in character. Young people cannot practice show and pretense and yet be taught to believe that the only important thing is what you are, and not at all what people think about you. They cannot practice the devices which give a semblance of learning, and yet be taught to believe that shams are disgraceful and that the frank honesty which owns the worst is a noble trait. They may learn to be ashamed when caught in a false pretense, but they will not learn shame at deceit. I do not say that they will lie or steal, but it is a pitiful code which defines honesty as refraining from seizing other people’s property. Honesty is a far wider virtue than not-stealing. It embraces rectitude of motive and purpose, completeness and consistency of principle, and delicacy of responsibility. Truthfulness is the very cornerstone of character, and an instinct of dislike for whatever is false or meretricious is one of the feelings which all sound education must inculcate. It cannot do so, however, unless its personnel and its methods are all animated by unflinching integrity.

I mentioned also, at the outset, amongst those things which are embraced in education and to which I desire to see the principle of integrity applied, good manners. Some people make an ostentatious display of neglect for good manners. They think it democratic, or a sign of good fellowship, to be negligent in this respect. They think it something to be boasted of that they have no breeding. Some others make manners supersede education and training and even character. It is the latter error which most invades the sphere of education. We are familiar with its forms. It gives us the mock gentleman of the drawing-room under the same coat with the rowdy of the bar-room. When this system triumphs, it fits our young people out with a few fashionable phrases, which suffice for the persiflage of the drawing-room, when a scientific subject by chance comes up. Girls are the victims of this system far more than boys, but in “cultivated circles” cases are common of this kind, in which a smattering of books has been engrafted on the culture of the dancing school. Young men and young women who have tacked together a few miscellaneous phrases current amongst the learned will deliver you their opinions roundly on the gravest problems of philosophy and science. The phrases which stick in their minds the longest are those which are epigrammatic and paradoxical, whether true or not. In fact, they could not analyze or criticize their mental stock if they should try. They have never learned to consider a subject and form an opinion.

It does not follow, however, that boorishness is erudition, or that it does not belong to education to teach the good manners which are good simply because they are the spontaneous expression of a sound heart and a well-trained mind. Envy, malice, and selfishness are the usual springs of bad manners. They belong to the untrained and brutish man, and it is the province of true education to eradicate them. Hence it is that where true education is wanting we may often find the worst manners with the greatest social experience, and the truest courtesy where there has been genuine discipline, but little acquaintance with social forms.

I have not started this train of thought in order to tell you now that we have enjoyed the true method of education, and that others have not, but there are some things connected with this institution which we may remember with pleasure in view of the reflections which I have presented.

This school was founded so long ago that it already has a body of graduates who are useful and influential men in this city, and many others are scattered up and down the country, useful and honorable, if not celebrated citizens. It was not founded without some struggle, but the more enlightened views prevailed and the results have vindicated those views, I suppose to the satisfaction of everybody. The enterprise enjoyed at the outset the patronage of a body of men of remarkably broad views and sound public spirit. We who profited by its instruction in our time may properly remember those men on this occasion with gratitude and respect. One of them, surpassed by none in zeal to work for and intelligence to plan such an institution, has only just passed away. Your city has been fortunate in possessing such citizens.

The plan on which the school was founded was remarkably wise and farseeing. It has placed the highest education within the reach of every boy in your city who had sufficient industry and self-denial to seek it. Many of you are now in the position of active and responsible citizens. You must regard this institution as one of the boasts of your city. Guard it well. You may not boast of it only. You owe it a debt which you must pay. Every boy and girl who has graduated here owes a debt to the common school system of America. Every man for whom this school has opened a career which would otherwise have been beyond his reach, owes a tenfold debt, both to the common school system and to the class in which he was born. Sectarian interests, private school interests, property interests, and some cliques of “culture” falsely so called, are rallying against the system a force which people as yet underrate. There is no knowing how soon the struggle may open, and you may be called upon to pay the allegiance you owe.

This school has also been remarkably fortunate in the selection of the teachers who have presided over it. We cannot exaggerate the value of this selection. It is by the imperceptible influence of the teacher’s character and example that the atmosphere of a school is created. It is from this that the pupils learn what to admire and what to abhor, what to seek and what to shun. It is from this that they learn what methods of action are honorable and what ones are unbecoming. They learn all this from methods of discipline as well as from methods of instruction. They may learn craft and intrigue, or they may learn candor and sincerity. They may learn to win success at any cost, or they may learn to accept failure with dignity, when success could only be won by dishonor.

You know well what has always been the tone impressed on this institution by the teachers we had here. We had many, both gentlemen and ladies, whom we remember with respect and affection. Our later experience of the world and of life has only served to show us more distinctly, in the retrospect, how elevated was their tone, how sincere their devotion, how simple and upright their methods of dealing with us. They were not taskmasters to us, and their work was not a harsh and ungrateful routine to them.

One figure will inevitably arise before the minds of all when these words are said, the figure of one who died with the harness on. I have never seen anywhere, in my experience, a man of more simple and unconscious high-breeding, one who combined more thoroughly the dignity of official authority with the suavity of unrestrained intercourse with his pupils. It is a part of the good fortune which came to us and to this city from this institution that so many young people here enjoyed his personal influence.

It follows, as a natural consequence, from these facts, that we enjoyed here to a high degree what I have described as integrity in education. Sensationalism of any kind has always been foreign to the system here. It must perish in such an atmosphere. We had instruction which was real and solid, which conceded nothing to show and sacrificed nothing to applause. We learned to work patiently for real and enduring results. We learned the faith that what is genuine must outlast and prevail over what is meretricious. We learned to despise empty display. We had also a discipline which was complete and sufficient, but which was attained without friction. There was no sentimentality, no petting, no affectation of free and easy manners. Discipline existed because it was necessary, and it was smooth because it was reasonable.

Now there is nothing to which people apply more severe criticism, as they grow old, than to their education. They find the need of it every day, and they have to ask whether it was sufficient and suited to the purpose or not. It is because we find, I think, that our education here does stand this test that we are able to meet here on an occasion like this with genuine interest and sympathy. The years in their flight have scattered us and brought us weighty cares and new interests. We could not lay these aside to come back here for purposes of mere sentiment, or to repeat conventional phrases. We meet on the ground of grateful recollection of benefits received, benefits which we can specify and weigh and measure.

This school must be regarded as a local institution. It belongs to this city and its advantages are offered to the young people who grow up here. I have referred to the exceptional wisdom and enlightenment which presided over its foundation and have nourished its growth. In conclusion, let me refer to what concerns its present and its future. We are reminded by all we see about us here that its building and its appliances are far better than they were in our day. Its prosperity bears witness to its present good management. But, gentlemen, these good things are not to be preserved without vigilance and labor. The same wisdom and enlightenment must preside over the future as over the past. I doubt not that the value of this institution to your city is so fully appreciated, and the methods by which it has been developed are so well understood, that any peril to it or to them would arouse your earnest efforts for its defence. Keep it as it has been, devoted to correct objects by sound methods. Sacrifice nothing to the éclat of hasty and false success. Concede nothing to the modern quackery of education. Resist the specious schemes of reckless speculators on educational theories. It is not to be expected that you can escape these dangers any more than other people, and you have to be on your guard against them. You want here an educational institution which shall, in its measure, instruct your children in the best science and thought of the day. You want it to make them masters of themselves and of their powers. You want it to make them practical in the best and only true sense, by making them efficient in dealing intelligently with all the problems of life. The country needs such citizens to-day. The state needs them. Your city needs them. They are needed in all the trades and professions. You must look to such institutions as this to provide them, and you must keep it true to its methods and purpose if you want it to turn out men of moral courage, high principle, and devotion to duty.

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