Footnotes

Footnotes1.The author's preface to the twelfth edition is confined to pointing out the improvements etc., made in the eleventh. There is no new preface to the thirteenth edition of the original, which appeared in 1877.—Translator.2.“We shall never thoroughly understand the reason of customary law unless we also have a knowledge of that which is not customary. The one is connected and bound to the other. We have no slaves; why vex ourselves with questions about slaves?—Words worthy of a novice.”3.“I am a man; I think nothing foreign to me that pertains to man.”4.“That excellent and glorious philosophy.”5.Introduction to the Civilistisches Magazin.6.Dunoyer, De la Liberté du Travail.7.Cicero, De Leg., I.8.Discours Préliminaire du Code Civil.9.Cicero, De Leg., II, 4.“Legem neque hominum ingeniis excogitatam, nec scitum aliquod esse populorum, sed æternum quiddam quod universum mundum regeret, imperandi, prohibendique sapientia.”Ibid.10.Revue de Législ. et de Jurispr. (1841, XIII, p. 39.)Montesquieusays:“The relations of justice and equity are anterior to all positive laws.”11.Mr. Wolowski translated the second edition of Roscher's Principles into French, and prefixed the present essay thereto as a preface. Since Wolowski's translation appeared, the original work has gone through eleven editions, been largely increased in size, and enriched with new notes, the result of nearly twenty additional years of research and thought. The thirteenth German edition, from which the present translation is made, is larger than the first by one hundred and seventy pages.—Translator's note.12.And he adds:“Animals which yield only to an impulse or blind instinct, come together only fortuitously or periodically and in a manner destitute of all morality. But in the case of men, reason is mixed up more or less with every act of their lives. Sentiment is found side by side with desire, and right succeeds instinct. I discover a real contract in the union of the two sexes.”It would be impossible to present a more complete or eloquent refutation of the definition of the Roman jurisconsults which debases marriage to the level of the promiscuous coming together of animals, and which limits the natural law to the law common to man and beast.“Jus naturale est quod natura omnia animalia docuit; nam jus istud non humani generis proprium, sed omnium animalium quæ in terra, quæ in mare nascuntur, avium quoque commune est. Hinc descendit maris atque feminæ conjunctio, quam nos matrimonium appellamus, hinc liberorum procreatio, hinc educatio; videmus etenim cætera quoque animalia, feras etiam, istius juris peritia censeri.”D. L. I. De Just. et Jure.13.Comment. in tit. Dig., De Just. et Jure, VII, 11th Naples edition. The ingenious argument of the great jurisconsult falls to the ground under the beautiful words of Cicero:“Ut justitia, ita jus sine ratione non consistit; soli ratione utentes jure ac lege vivunt.”De Natura Deorum, II, 62.“Virtus ratione constat, brutæ ratione non utuntur, cujus sunt expertia, ergo jure non vivunt, et ut rationis, sic jures sunt expertia.”Besides, Cujas himself recognizes how faulty and incomplete was the definition he was defending:“At ne jus quidem naturale, de quo agimus, est commune omnium animalium quatenus rationale, est, sed quatenus sensible est, sensui congruit. Tullius participare hominem cum brutis eo quod sentit, sed ratione ab eo differre. Et alio loco: jus naturale esse commune omnium Quiritium, veluti ut se velint tueri: sed hoc distare hominem a bellua, quod bellua sensu moveatur, homo etiam ratione.”14.Rossi.15.Politics, I, ch. I, II.16.Ueber die Nothwendigkeit eines Allgemeinen burgerlichen Rechts fur Deutschland.17.Vom Beruf unserer Zeit für Gesetzgebung etc.18.In one of his latest productions (Ueber die sogennante historische und nicht historische Rechtsschule, Archives du Droit Civil, Heidelberg, XXI 1838) the veteran of the philosophical school, resuming a debate begun a quarter of a century before, energetically defends himself against the erroneous interpretations which it was sought to give to his thoughts.“Does it follow,”he inquires,“that because a man is desirous of reform, he must surrender the study of the past? And if there be new laws to construe, how could his evil genius deter him from the necessary knowledge of ancient laws? Is there a single jurisconsult, who, in the hope of a better future, despises the meaning and spirit of that which still exists? I do not know even one.... And when I am accused of passing by the institutions of the past with coldness and hatred in my heart, because I was one of the first to express the hope of a better future, a charge is laid at my door which is perfectly incomprehensible ... I am reproached with despising the history of law. It is a slander on me. Although I have only laughed at these reports, one man's mistake grieved me; for that man's name was Niebuhr.... When he [Niebuhr] returned from Italy to devote himself entirely to science, in his retreat at Bonn, he passed through Heidelberg, where he remained five or six days. During a great part of that time we came frequently together. He was at first a little cold; but Cicero made us friends. After a happy word let drop concerning that writer, he asked me what I thought of him. I answered laconically:‘If they were burning all the Latin authors, and I were permitted to grant a pardon to one of them, I should say, without hesitation: Spare the works of Cicero.’He joyfully exclaimed:‘I have at last found a man who judges rightly of Cicero. I share your admiration for him, and that is the reason I have given my boy the name of Marcus.’The ice was now broken, and he frankly told me that he could not understand how I could be an inveterate enemy of Roman law and of the history of law. I gave him to understand that I had simply been slandered, and I added, that, in order to live entirely with the classics, I had always refused to give legal advice, or act as a counsellor, although I might have made a fortune in that way. I told him that I owed my gayety and vigor, in great part, to my love for the classics of all ages, even those outside the domain of jurisprudence; but that I held, above all things, to the good qualities of the German nation, and that I did not hesitate to say with Facciolatus:‘Expedit omnes gentes Romanis legibus operam dare, suis vivere.’“When he heard those words of mine, he exclaimed with his usual energy and vivacity:‘Habes me consentientem, labes me consentientem.’From that moment all coldness between us was at an end, and we approached, without any embarrassment, a host of questions in one conversation in which I endeavored, as I had before, to learn from him.“Thus I receive with sincere gratitude, all the works, both useful and profound, which have appeared in our day on the history of law. It would be folly in me to deny the impetus which the study of positive law has received. New sources have been discovered. Their newness and importance have excited the zeal of many scholars who have studied them profoundly; a fact which made a review of the older sources, still by far the most important, necessary. These two circumstances soon rendered it imperative to proceed to the making of scrupulous dogmatic researches. Thus there now is a new life among jurisconsults, and a great activity, which, it is my hope, may continue long.”19.Revue de Législ. et de Jurisprudence, 1834-35.20.Rossi.21.M. de Bonald.22.M. Cousinhas brought this out in an admirable manner in his lectures on Adam Smith. Cours de Philosophie Moderne.23.Channing.24.Knies.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode, Braunschweig, 1853.25.Cours Complet d' Economie politique, II, 540, éd. Guillaumin.26.Cousin.27.We here append an extract fromHeinrich Contzen'sGeschichte, Literatur, und Bedeutung der Nationalökonomie, Cassel und Leipzig, 1876, p. 7:“Roscher ... is rightfully considered the real founder and the principal representative of the historical school. This school is continually gaining in extent, and has found, both in Germany and in France, the most distinguished disciples—men who honor Roscher as their teacher and master, the leader whose beacon light they follow. Roscher combines the richest positive learning with rare clearness and plastic beauty in the presentation of his thought. These are conceded to him on every hand; and it does not detract from him, or alter the fact that he possesses them, that, here and there, an ill-humored or maliciously snappish critic calls them in question.”It should be borne in mind here that Wolowski wrote in 1857; Contzen, like Wolowski, a politico-economical writer of mark, in 1876.—Translator's note.28.Leben, Werk und Zeitalter des Thukydides.29.Rau'sArchiv., Heidelberg. This remarkable essay has since appeared in Roscher's Ansichten der Volkswirthschalt vom geschichtlichen Standpunkte, 1861.—Translator's note.30.Grundriss zu Vorlesungen über die Staatswirthschaft nach geschichtlichen Methode.31.Berliner Zeitschrift für allgem Geschichte.32.Ueber Kornhandel und Theuerungspolitik, 3d ed., 1852.33.Untersuchungen über das Kolonialwesen.34.Umrisse zur Naturlehre der drei Staatsformen (Berliner Zeitschrift, 1847-1848).35.Ueber das Verhältniss der Nationalökonomie zum klassischen Alterthume (K. Sachs Akademie der Wissenschaft, 1849). Also to be found in Roscher's Ansichten etc.—Translator.36.Zur Geschichte der englischen Volkswirthschaftslehre im 16 und 17 Jahrh.37.Ein nationalökonom. Princep der Forstwirthschaft.38.Roscher'scomplete work he calls“A System of Political Economy.”It embraces the four parts above referred to; but each of these parts constitutes an independent work. The first part, or the Principles of Political Economy, covers the ground generally covered by English treatises on Political Economy.Besides the works above mentioned,Professor Roscherhas written Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte, 2d ed., Leipzig, 1861; Die deutche Nationalökonomik an der Grenzscheide des sechszehnten und siebenzehnten Jahrhunderts, Leipzig, 1862; Gründungsgeschichte des Zollvereins, Berlin, 1870; Betrachtungen über die geographische Lage der grossen Städte, Leipzig, 1871; Bertrachtungen über die Währungsfrage der deutschen Münzreform, Berlin, 1872; Geschichte der Nationalökonomik in Deutschland, Munich, 1874; Nationalökonomik des Ackerbaues, 8th ed., Stuttgart, 1875.—Translator's note.39.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode.40.Die National Œkonomie der Gegenwart und Zukunft.41.Recherches sur les Finances de France.42.Frédéric Passy, de la Contrainte et de la Liberté.43.Poor peasantry, poor kingdom; poor kingdom, poor sovereign.44.Cours d' Econ. polit., 2e., Leçon I, p. 33.45.This would be: Propter vitiam, vitæ perdere causas.46.Cousin, loc. cit., p. 276.47.Ibid., 274.48.Frédéric Passy: De la Contrainte et de la Liberté.49.Schäffle, Deutsche Vierteljahrsschrift (1861), emphasizes this.Adam Smith, Wealth of Nations (1776), very characteristically, begins with the yearly labor of the nation;J. B. Say(Traité d'Economie Politique, 1802), withrichesses;Ricardo(Principles of Political Economy and Taxation, 1817), with the idea of value.50.The sum total of the wants (Bedarf) of the Bavarian people, for a whole year, is estimated byHermann, Staatswirthschaftliche Untersuchungen (2d ed., 1870, p. 81), at 177,000,000 florins for food (77 millions for wheat and potatoes, 69 millions for meat, 15 millions for milk etc., 16 millions for eggs, vegetables, salt and spices); 50 millions for clothing, 45 millions for shelter, 37.5 millions for fuel, 60 millions for beverages.51.The original adds:deren Gesammtheit sein Bedarf heisst; the aggregate of which is called his [man's] Requisite (Bedarf). There being no exact equivalent in English for the wordBedarfin this connection, this note is appended.—Translator.52.According toBoisguillebert(ob. 1714) Traité des Grains, I., c. 4, the wantsnécessaire,commode,délicat,superflu,magnifique, arise in successive order with increasing welfare or prosperity, and are surrendered in a reverse order, with increasing need.Tuckerdistinguishes necessaries, comforts, and conveniences of the respective conditions, elegancies and refinements, and lastly,“grand and magnificent.”(Two Sermons, 1774, 29 ff.);F. B. W. Hermann, loc. cit, 1st, ed., 1832, 68; necessary goods (Güter der Nothdurft), goods that contribute to pleasure and recuperation, to culture and splendor.53.CompareTucker, On the Naturalization Bill (1751 seq.), IV, note.54.No people without fire (Prometheus!); and it seems that broiling was the earliest mode of preparing food; then followed baking in heated cavities, and lastly came boiling in vessels. (Klemm, Allgemeine Kulturgeschichte, I, 180, 343.)55.There is an interesting attempt byFaucher, in the Vierteljahrsschrift für Volkswirthschaft und Kulturgeschichte, 1868, III, 148 ff., to determine the relative place of our various wants according to their capacity for extension or contraction.56.The qualification“true,”excludes from the circle of goods, not only all those things which might satisfy only irrational or immoral wants (compareMischler, Grundsätze der Nationalökonomie, 1856, I, 187), but also vindicates the fundamental idea of the whole system of Political Economy, as a subject of moral as well as of psychological investigation.57.EvenAristotle(Eth. nicom. V, 8), considers that all things intended to enter into commerce, should be susceptible of comparison with one another, and that the measure of this comparison iswant, which is the foundation of all association among men.58.An Arab helped pillage a caravan, and carried away, as his share of the booty, a chest of pearls. He thought it a box of rice, and gave them to his wife to cook, but finding they did not boil tender, he threw them away. (Niebuhr, Beschreibung von Arabien, 383). See a similar anecdote inAmmian. Marcell.,XXII. CompareStrabo,VIII, 381.59.As soon as the Persians renounce the superstition that the daily contemplation of a turquoise is a talisman against the "evil eye" (K. Ritter, Erdkunde, VIII, 327), that precious stone will lose much of its value. On the other hand, the amulets of antiquity, although they have long lost the quality of goods as objects of superstition, have now a real value for the archæologist.60.Since observation shows, that, as time runs on, matter tends more and more to becomegoods, the blind forms of motion in nature to become useful labor and useful sustenance, impersonal and objectless existence to be transformed into personal property and personal culture,Schäffleinclines to the belief that the whole mechanism of unconsciously governing nature is destined ultimately to aid in the realization of moral good, which alone is really valuable. Das gesellschaftliche System der menschlichen Wirthschaft, III, Auff., 1873, I, 3.61.Hermann, loc. cit, 1st ed., I, calls internal goods whatever each of us finds in himself, the free gift of nature; also that which we develop in ourselves by our own free action; and external, whatever we create or obtain, through the external world, as a means of satisfying our wants. The internal goods of one man may be external goods to another, as, for instance, when the former conveys them directly to the latter to be enjoyed, by words, demeanor, etc., or indirectly, in combination with other external goods.62.The exclusion of all else, has, indeed, been called one-sidedness and materialism. But, asSeniorsays, no one blames the writer on tactics, because he confines his attention to military subjects; nor is the objection raised, that by so doing, he is encouraging eternal war. On the other hand,J. B. Storch(1815) devoted a special division of his work to the consideration of“internal goods”(health, knowledge, morality, security, leisure,.etc.). SeeRau'stranslation of his Manual, II, 337 ff. CompareGioja, Nuovo Prospetto delle Scienze economiche, 1815 ff. VIII.63.The inclination to exchange is, according toAdam Smith, one of the most important marks which distinguish man from the brute. (Wealth of Nations, I, ch. 2). But seeBüsch, Geldumlanf (1780), I, § 29, on exchange among the lower animals.64.Observed byAristot.Polit. I, ch. 6.65.The efforts of political economists to select from among the infinite number of goods, those which should constitute the subject of their investigations, have taken two directions in recent times.Bastiathere confines himself too exclusively to commerce. The political economist should concern himself only with wants and satisfactions, where the labor, which is the connecting link between them, is undertaken by some other person for a consideration. Thus the ordinary act of respiration lies outside the circle, that of the diver, which is paid for, does not. (Harmonies économiques, 1850, 68 ff.) But even Robinson Crusoe had his own system of economy. Are the products which the farmer consumes in his own home, the work he does himself, any the less matters of economic moment than the products he sells, or the labors of his servants?Schäffleis right when he says that ordinary respiration is no economic function, because it is an unconscious necessity of nature. But his definition is too broad, inasmuch as he places the essence of the economic character of goods or of an act, in the conscious adaptation of means to human ends. (Tübinger Progr. z. 27 Sept. 1862, 9, 24 seq.) To take a walk is no economic operation, although it may be the best means to a very important end,—health. The same goods or the same act may have, frequently, according to the end proposed, an economic or non-economic character. The beauty of the human body, for instance, however systematically made use of for purposes of vanity, is not economicgoods. But it is an economic speculation, base though it be, when a man relies on his handsome figure to secure a wealthy wife, or, for purposes of gain, allows her to pose as a model to artists or to take part intableaux vivants. According toC. Menger, Grundsätze der Volkswirthschaftslehre (1871) I, 51 ff., there are no economic goods, but those the disposable supply of which is, at most, equal to the quantity that is required. But is not the largest navigable stream, even in the most thinly populated country, an economic good?66.Hegel, Rechtsphilosophie, § 67. Even the use of a corpse as manure, or for any mercantile purpose, is repugnant to our feelings,“because of the dignity of personality.”(Schäffle, National Œkonomie, 1860, 28.) In this respect, prostitution is a remnant of slavery.Schäffleis right, when he says that to repay personal services with material commodities which do not afford as much food etc., as the former have cost in expenditure of vital energy, is a slow and frequently a very cruel kind of cannibalism. (Kapitalismus und Socialismus, 1870, 18).67.Bornitz, De rerum Sufficientia in Republica procuranda, 1625, gives in this encyclopædia of political science, together with a dissertation on agriculture, commerce and manufactures, a complete survey of theministeria. Several modern writers refuse to look upon personal services, or the ability to render such services, as elements of wealth: compareKaufmann, Untersuchungen im Gebiete der politischen Œkonomie, 1830, II, Heft I. They demonstrate, however, no more than this, that that class of goods has something very peculiar. ThusMalthus, Principles of Political Economy (1820), chap. I, sect. I, objects that they cannot be inventoried or taxed; but can material goods be so completely? Can all the parts of the wealth of a nation be so inventoried and taxed?Rau, Lehrbuch der pol. Œkonomie (1826) I, § 46, remarks that the personal aptitude to perform services dies with the person, and that personal services cannot be stored up (?), etc. I appeal simply to the definition I have given above of economic goods, and which applies equally to services of every kind which can be performed for other people. Besides, those who oppose this view are unable to give a satisfactory explanation of all the phenomena of commerce. Of course, the qualification“recognized as useful”is of the utmost importance as a mark to determine what is goods. But a prima donna, or a world-renowned physician, cast naked by shipwreck on the shores of North America, is certainly, better off than a blind beggar, his fellow sufferer. CompareStorch, Handbuch II, 335 ff. and his Considérations sur la Nature du Revenu National.68.Ad. Müllercompares persons, so far as they render any kind of service, to things, and, so far as they are required to be preserved in their individuality, to persons. The children in the“status”of a country gentleman, for instance, are treated more as persons, and domestics, more like things; the land partakes of a species of personality, but not the implements of labor. (Nothwendigkeit einer theolog. Grundlage der Staatswissenschaft, 1819, 48.)69.The privilege of selling refreshments in the garden of the Palais Royal was formerly let for 38,000 francs a year.70.See the cases cited byHermann, Staatswirtsch. Untersuchungen, 6 ff. and byBernoulli, Schweiz. Archiv. für Statistik und N. Œkon. II, 55. Think of the firm of J. M. Farina! In Athens, good stands were leased at a very high rent, even where there was no investment of the lessee's capital. (Demosthenes, pro. Phorm., 948; adv. Steph. I, iiii.) There is, again, the sale of inventions, while they are still“mere ideas.”According toSchäffle, Theorie der ausschliessendnen Verhältnisse, 1857, II ff., the value in exchange of these relations depends on the extra income which is assured in fact, or in law, against diminution, by the exclusion of competition. He, therefore, recommends, instead of the word“relations,”“custom,”or“publicum.”But these words, by no means, exhaust the meaning expressed by“relation.”Thus, the good administration of public affairs, although it has no value in exchange, is one of the most valuable economic goods which a people can possess.71.The relation mentioned above of a general to an army may even have great value in exchange. Instance, the Italian condottieri in the fifteenth century!72.Relations which take from one man, as much as they afford to their possessor, are of value as components of a man's private fortune, but not of the wealth of the nation. To this class belong debts due from persons or from things, compulsory custom or good-will of every description; as for instance, the seventy-two places of theagents de changein Paris, each of which was worth more than a million of francs; or the right of navigating the Elbe as far as Magdeburg, which, about the beginning of this century, was worth in every instance about 10,000 thalers. (Krug, Abriss. der St. Œkonomie, 62.)73.Schäffle, N. Œkonomie, 10. In the German language, this same word is used to designate utility, and sometimes useful objects (so called values). A clear distinction, however, should be made between utility and value in use. Utility is a quality of things themselves, in relation, it is true, to human wants. Value in use is a quality imputed to them, the result of man's thought, or of his view of them. Thus, for instance, in a beleagured city, the stores of food do not increase in utility, but their value in use does. CompareSchäffle, System, III, I, 170.74.Genovesi, Economia civile (1869), II, I, 7.L. Say, De la Richesse individuelle et de la Richesse publique (1827), 29, estimates the value of goods according to the degree of discomfort attendant on the privation of them.75.Friedländerhas, however, made a general attempt in this direction. Theorie des Werthes (Dorpat, 1852). But saysTh. Fix(Journal des Economistes, 1844, IX, 12):“It is as impossible to establish a scale of values, as it is to find an exact mathematical and permanent measure of our wants, passions, desires, tastes and fancies.”76.CompareKnies, Geld und Credit, 1873, I, 126 ff. The very respectable attempt made byA. Samter, Sociallehre (1875), with the idea society-value (Gesellschaftswerth) covers too nearly the idea of value in exchange. Further research will here have to be made, with the idea of“impotent need,”inasmuch as, from a high ethical, national-dietetical point of view, the question is asked whether, to what extent, and how,“impotent need”may be made a potent one.77.Friedländer, loc. cit, 50. If too many copies of the very best book be published, there is a certainty that a number of them will remain little better than waste paper.78.Schäffle, System, II, aufl., 55. See also his Kapitalismus und Socialismus, 1870, 31, 35, 43.79.ThusKleinwächter(Hildebrand's Jahrbücher für N. Oek. und Statistik, 1867, II, 318), defines value in exchange=value in use + costliness. According to Schäffle, it is“a covert comparison between the cost-value and the value in use of the two kinds of goods to be exchanged.”(Kapitalismus und Socialismus, 35.)80.An intermediate dealer can, so far as he is himself concerned, attribute value in exchange to goods only to the extent that they have use for the last person who has acquired them. Hence,Storchcallsvalue in useimmediate, andvalue in exchange, mediate value. As the English are always wont to express the immediate in words of Germanic origin, and the mediate in words borrowed from the Latin,Lockecalls value in use“worth,”and value in exchange, simply“value.”(K. Marx, Das Kapital. Kritik der politischen Œkonomie, 1867, I, 2.)81.It is, of course, otherwise when, for instance, a beautiful sea view, or a desirable position as regards air and sunshine, is connected with a piece of land.82.In Ravenna a cistern had greater value in exchange than a vineyard:Martial, III, 56. In Paris, too, drinking water, which is transported only with considerable trouble, costs 1-1/3 thalers per cubic meter. We may also mention snow and ice in summer, which last sells in the capitals of southern Europe at 0.34, silber groschens per pound. According toCarey,“utility”is the measure of man's power over nature,“value,”the measure of nature's power over man. He very inaccurately adds, that both are always in an opposite direction. (Principles of Social Science, 1861, VI, ch. 9.)83.HenceAd. Müllercalls value in use, individual value, and value in exchange, social value. The Germans call the value of goods whose value in use is recognized by only one person,Affectionswerth, (affection-value) a value which influences its value in exchange only when the individual who holds it in high esteem is not himself the possessor of the goods. An instance of this latter is a piece of paper covered with notes, intelligible only to the maker of them.84.The very important difference between value in use and value in exchange was recognized oven by Aristotle.Aristot.Pol. I, 9.Hutchinson, System of Moral Philosophy (1755), II, 53 ff. The Physiocrates speak very frequently ofvaleur usuelleandvénale, on which, according toDupont, Physiocratie, CXVIII, the difference betweenbiensandrichessesis based.La valeur d'un septicr de blé, considéré comme richesse ne consiste que dans son prix.(Quesnay, éd. Daire, 300.)Turgotdistinguishes between“valeur estimative”and“échangeableorappréciative;”the former designating the relation between the amount of energy, physical and mental, which one is willing to spend in order to obtain the goods, to the sum total of his energies, physical and mental; the latter the relation between the aggregate like energy of two persons which they are willing to spend in order to procure each of the goods to be exchanged, and the sum total of their energies in general. (Valeurs et Monnaies, p. 87, seq., éd. Daire.)Ad. Smith, in his Wealth of Nations, I, ch. 4, shows that he knew the difference between value in use and value in exchange; but he afterwards drops the consideration of the former, altogether. In this respect he has had only too faithful and one-sided followers among his countrymen, so thatRicardo, Principles, ch. 28, asks what value in exchange can have in common with the capacity of commodities to serve as food or clothing. (See, however, ch. XIX seq.) Many“free traders”would have no objection to interpose, if a people should abandon the cultivation of wheat, etc., to devote themselves exclusively to the manufacture of point lace, provided the latter had a greater value in exchange. The two degrees of the idea of value have been examined with much thoroughness byHufelandin his Neue Grundlegung der Staatswirthschaftskunst (1807), I, 118 ff.;Lotz, Revision der Grundbegriffe (1811 ff.), I, 31, ff.;Storch, Handbuch, I;Rau, Lehrbuch, I, 56, ff.;Thomas, Theorie des Verkehrs, I, p. 11;Knies, Tübing. Zeitschr. 1855;Bastiat'sdeclaration (Harmonies, p. 171 ff.): that“valeur”(by which Bastiat means only value in exchange), =le raport de deux services échangés, contains a two-fold error: the ambiguity of the wordservices, which applies equally to a yielding or affording of utility, as to useful labor, and the error that the labor necessary to produce a commodity, and of which the purchaser is relieved, alone determines its value in exchange. Compareinfra§§47,107,110,115ff., andKnies, loc. cit., p. 644 ff.85.Proudhon, Système des Contradictions économiques, 1846, ch. 2.86.In France, according toCordier(Mémoire sur l'Agriculture de la Flandre Française), the wheat harvest yielded, in1817, forty-eight million hectolitres, with a value in exchange of two thousand and forty-six million francs; in1818, fifty-three million hectolitres, with a value in exchange of one thousand and four hundred and forty-two million francs; in1819, sixty-four million hectolitres, with a value in exchange of one thousand and one hundred and seventy million francs.A rise in the value in exchange of wheat, such as was witnessed in 1817, is synonymous with a decline in the value in exchange of money, and of all those goods whose money price has not risen. It is no objection to the views here advocated, that when the necessaries of life are very scarce, the want of clothing, furniture, articles of luxury etc., is not felt so keenly as at other times, and that the value in use of these commodities really falls; andvice versa.87.CompareB. Hildebrand, N. Œkonomie der Gegenwart und Zukunft, 1848, I, p. 316 ff.Knies, loc. cit.88.The greater importance attached, in our days, to value in exchange, than to value in use, is seen especially in the attitude which the buyer, who is possessed of the more current commodity (money), assumes toward the seller,—an attitude not unlike that of a patron towards his client. In the interior of Africa, the possessor of money, as such, would scarcely look down on the possessor of the means of subsistence. The South American Indians are ready to render an amount of service for a little brandy, which it would be in vain to ask them to perform for ten times its value in gold. (Ausland, Jan. 15, 1870.) The miser estimates the possibility of being able to procure for himself, for one dollar, a hundred different articles worth a dollar each, to be worth one hundred dollars.89.When the wants of a person or of a people change, it is possible for the value in use of one kind of goods, which had the greater prominence before, to take the place occupied previously by its value in exchange; andvice versa. Thus, the youth sells the plaything he used in childhood; the man, the educational apparatus of his earlier years; the old man, the implements that enabled him to acquire wealth, and which he can no longer use except with great effort. (Menger, Grundsätze, I, 220 ff.)90.Rau(Lehrbuch, I, § 61 ff.) distinguishes between the concrete or quantitative value which a certain kind of goods may have for a certain person, under certain circumstances, and the abstract or species-value which a whole class of commodities may have for men in general.ButF. J. Neumann, (Tübinger Zeitschrift, 1872, p. 288 ff.) objects, that even the abstract value of a commodity always suggests the relation of a definite number of concrete men to a definite quantity of goods; else, by the expression, value of goods, is to be understood not what it is generally meant to signify, but only the capacity to satisfy a single want.91.Storch, Ueber die Natur des Nationaleinkommens (1824, 1825), 5, defines (Vermögen) thus: a source of income, permanent in its nature, and capable of being transmitted, the possessor of which does not need to work, on its account. Hence he does not approve of the expression“the people's resources”(Volksvermögen).92.See especiallyLord Lauderdale, Inquiry into the Nature and Origin of Public Wealth, 1804, ch. 2.Storch, loc. cit.93.Moreau de Jonnès, Le Commerce au 19. Siècle (1825) I, 114 ff., says that the United States imported from abroad 9.6, France 6, and Great Britain 5.8 per cent. of their annual consumption; and exported respectively 10.4, 6.2, 9.8 per cent. of their annual production. The recent free trade tendencies, and the improvement in the international means of transportation, have certainly increased the relative importance of foreign commerce. In the kingdom of Saxony (1853),Engelestimates that 10/47 of the whole production of the country was destined for foreign countries, and that 10/47 of the consumption was imported.94.When the land of a country becomes dearer, simply on account of the increase of population, or goods, the quantity of which is susceptible of increase, because the cost of production has been increased, this cannot be considered an increase in the wealth of the people, (v. Mangoldt.)95.Neither is value in exchange a quality inherent in goods, but only a relation between them and other goods. Hence it is absurd to speak of a rise or fall of all values in exchange. If the goods A lose in capacity to be exchanged against goods B, goods B of course increase in exchange power as compared with A, andvice versa. It is necessary to guard against being misled here by the intervention of money, that is, by the custom universal among men of employing a definite kind of goods as a medium of exchange for all others. Yet there are many writers who have been thus misled. ThusGaliani, Delia Moneta (1750), II, p. 2, who regards the lasting increase of the prices of all commodities as an infallible sign of national prosperity. To the same effect is the motto of the Physiocrates:Abondance et cherté c'est opulence. In its coarsest form, inSaint Chamans, Nouv. Essai sur la Richesse des Nations (1824), 456, who would have that which is now the free gift of nature, to come to us or be produced only as the reward of toil.Verri, on the other hand, Meditazioni sull. econ. pol. (1771), ch. V, thinks that the number of buyers in a country should be as small as possible, and that of sellers as great as possible, in order that thus prices might be low; (as if every buyer was not,eo ipso, also a seller.)96.Kaufmann, Untersuchungen, I, p. 165 seq. Also,Verri, Meditazioni, XVII, 2.97.The differences characteristic of poverty, indigence, managing to live, fortune and wealth, cleverly treated byvon Justi, Staatswirthschaft, I, p. 449, seq.Rau, Lehrbuch I, § 76, seq., establishes the following gradation: privation and wretchedness, poverty, indigence,“getting on,”comfort, wealth, superfluity.L. Saycalls those who can satisfy the wants of luxury rich; well-to-do, those who can command the comforts of life; and wretched, those who cannot obtain a sufficiency of the objects of prime necessity. In France, the limits of these situations are marked by an income of respectively 60,000, 6,000 and 900 francs per family, so that a family with an income of only 300 francs per year is in a condition of wretchedness. (Traité de la Richesse, 1827, I ff., 71 ff.)98.Palmieri, Ricchezza nazionale, Introd. The greater number of the definitions of wealth are rather onesided than false.Socrates, for instance, looks only at the relation existing between means and their owner's wants. (Xenoph.Memor., IV, 2, 37, seq. Œconom. II, 2 ff.).Plato, on the other hand, as the socialists are wont to do, looks to the excess over that possessed by others. (Legg. V, 742, seq.).Xenophon'sobservations, Hiero, 4, on the nature of wealth, are many-sided and beautiful.Aristotledistinguishes between natural and artificial wealth: πλῆθος ὀργάνων οἰκονομακῶν καὶ πολιτικῶν—πλῆθος νομίσματος. (Polit, I, 3, 9, 16.) CompareCicero, Parad. VI. The dominant idea of the so-called Mercantile System is thus expressed in a Saxon pamphlet of 1530 (Müntzbelangende Antwort, etc.):“Money is the real watchword; where there is much money, there is wealth, it is clear.”CompareLuther, Werke, Irmisch edition, XXII, p. 200 seq. See some excellent remarks in opposition hereto, in the Saxon pamphlet, Gemeyne Stimmen von der Müntz, 1530.Schröder, Fürstliche Schatz-und Rentkammer, 1686, ch XXIX.“A country grows rich in proportion as it draws gold or money, either from the earth or from other countries; poor, in proportion as money leaves it. The wealth of a country must be estimated by the quantity of gold and silver in it.”See a very passionate argument against this view inBoisguillebert, Dissertation sur la Nature des Richesses, written sometime between 1697 and 1714.Berkeley, Querist (1735), Nos. 562, 542. Among Englishmen, the correct view was prevalent much earlier, especially among the founders of the American colonial empire. SeeHachluyt, Voyages (1600) III, 22 ff. 45 ff. 152 ff. 165 ff. 182 ff. 266 ff; but especially the work“Virginia's Verger”in“Purchas Pilgrims”(1625), IV, p. 809 ff. However, several Spaniards were led by hard experience to adopt a view opposed to the Midas-view (compareAristotle, Polit. I, ch. 3, 16), by which the first American explorers were carried away:Garcilasso de la Vega(1609), Comment. reales II, ch. 6;Saavedra Faxardo, Idea Principis christiani (1640) Symb. 69:potissimæ divitiæ ac opes terræ fructus sunt, nec ditiores in regnis fodinæ, quam agricultura; plus emolumenti, acclivia montis Vesuvii latera adverunt, quam Potosus mons. Contemporary with those Englishmen, was the Italian,Giov. Botero, who called attention to the fact, that France and Italy were the countries of Europe richest in gold, although they possessed no mines of the precious metal themselves: Della Ragion di Stato (1591) p. 88 ff. AlsoSully, who called agriculture and cattle-breeding the breasts of the state, the real mines and pearls of Peru. (Economies royales I, ch. 81. See however, II, p. 381).Montchrêtien, Traité d'Économie politique (1615) 81, 172 seq. According toSir D. North'sDiscourses upon Trade, 1691, wealth is synonymous with freedom from want, and the ability to procure many comforts, whileTemple(ob. 1700, Works I, 140 seq.) looks entirely at the subjective side of wealth.Pollexfen,“England and East India inconsistent in their Manufactures”(1697), considers gold and silver as the only real wealth. To this definition Davenant (ob. 1714), opposes another. Wealth, according to him, is whatever places prince or people in a condition of superabundance, peace and security. See his Works, I, p. 381 seq. He even reckons intellectual powers, alliances etc., among the national wealth. CompareW. Roscher, Zur Geschichte der englischen Volkswirthschaftslehre 1851, in the acts of the royal Saxon Academy of Sciences, vol. III.Vauban(Dime royale 1707), Daire's edition, says:“The real wealth of a people consists in an abundance of those things, the use of which is so necessary to sustain the life of man, that they cannot at all be dispensed with.”By the wealth of a peopleGaliani, Della Moneta II, c. 2, understands the aggregate of all lands, houses, movable property, money, etc. which belong to them, but, that the chief element of wealth, and the condition precedent of all others, is men themselves. Hence, the process of the impoverishment of a people in their decline, takes the following course: money first emigrates, next, population diminishes, afterwards, the houses fall in ruin, finally, the land itself becomes a waste. According toBroggia, wealth isun avanzo osia valore di tutto cio che avanza al proprio consumo e bisogno, Delle Monete, 1743, IV, 307, 314; Cust.Palmieri(ob. 1794), also says:il superfluo constituisce la richezza. (Publica Felicità.) According toTurgot, Sur la Formation et Distribution des Richesses 1771, § 90, the wealth of a nation consists in the net proceeds of landed property capitalized at the ordinary price of land, and then of the aggregate of all the movable property of the country.Büsch, Geluumlauf III, § 27, considers a certain duration of the produce or revenue as an essential element in the idea of wealth.Lauderdale, Inquiry, ch. II, distinguishes national wealth and private wealth; the former embracing all that man covets as agreeable or desirable; while it is one of the marks of the latter, that there should be no general superfluity of it on hand. Several modern English economists call wealth only that, the production of which cost human labor. Thus,Malthus, Definitions (1827) p. 234.Torrens, Production of Wealth, 1821, ch. I. WhenRossi, Cours d'Economie politique, 1835, L. 2, says:tout chose propre à satisfaire aux besoins de l'homme est richesse, he demonstrates how the frequent inaccuracy of the French language stands in the way of a close analysis. The greater number of more recent definitions are true of resources rather than of wealth.Bastiatdistinguishes betweenrichesse effectiveandrelative, the former being based onutilité, the latter onvaleur. (Harmonies, ch. 6.)99.The national wealth of Athens, at the time of the hundredth Olympiad, is estimated byBöckh(Staatshaushalt der Athen, I, p. 636, 2d ed.) to have been from thirty to forty thousand talents, besides the non-taxable property of the state. That of Great Britain is estimated at about 8,000 million pounds sterling. (Athenæum 5 March, 1853.)Wolowskiestimated that of France at, at least, 116 milliards of francs, with an annual increase of 1-½ milliards, (L'or et l'Argent, 1870. Enquête, 59.)David A. Wellsestimated that of the United States, in 1860, slaves not included, at 14,183 million dollars, or $451.20 per capita, whereas in England, the per capita wealth was about $1,000. (Hildebrand'sJahib., 1870, I, 431.) The national wealth of the kingdom of Saxony is equal to 600 million thalers immovable, and 600 million movable, property. (Engel, Statist. Zeitschr. August, 1856). That of Würtemberg=2,710 million florins, of which 700 millions represent movable goods, and 100 million, claims on foreign countries. (Statistisches Handbuch, 1863.) Of course all these estimates are very inexact.100.Ch. Dupin, Forces productives, p. 82. Seeinfra, § 230.101.CompareMeidinger, Das britische Reich in Europa, pp. 79, 238, 261.102.Davenantconsiders an increase in the number of houses, ships and stocks of goods, as the surest sign of an increase in the national wealth; and on the other hand, a high rate of interest, a low price of land, small wages, a decrease of population, and an increase of uncultivated land, as the signs of national impoverishment. (Works, I, pp. 354, seq. II, p. 283.)Sir M. Decker, Essay on the Causes of Decline of Foreign Trade (1744), 3, gives as the signs of impoverishment, the following: a wretched condition of the poor and of manufactures, a low price of wool, long credit to retail dealers, frequent cases of bankruptcy, exportation of the metals, unfavorable exchange, few new coins, many cases of unpaid rent of leased land, and high poor rates.103.Storch, Handbuch, I, 45. Compareinfra, § 187.104.On the difference between human and animal economy, seeSchön, Neue Untersuchungen der N. Œkonomie, (1835), 4.105.CompareSchäffle, System, III, Aufl. I, 2, 28.106.Knies, in his Polit. Œkonomie vom geschichtl. Standpunkte, 1853, p. 160 ff., shows, very happily, how the love of one's self,—which must, indeed, be distinguished from self-seeking—is not in conflict with the love of one's neighbor; but that, in healthy natures, it is found allied with a feeling of equity, and of the common good. See, also,F. Fuoco, Saggi economici, Pisa, 1825, Nr. 7.Schutz, Das sittliche Element in der Volswirthschaft: Tübinger Zeitschrift für Staatswissensch. 1844, p. 132, ff.107.“That they should seek the Lord if haply they might feel after him.”(Acts, 17, 27. Compare Matthew, 6:33, also I. Timothy, 5:8.)Adam Müllerin his Nothwendigkeit einer theolog. Grundlage, 49 seq., is a strong advocate of all this, but a rather narrow one. The farmer, he says, should first work for the love of God, then for the fruit, that is, for the gross product, and lastly for the net product. His work is a trust.Müllerconsiders the business relations of men, as they exist at present, as“the comfortless mutual slavery of all.”(Nothwendigkeit einer theolog. Grundlage, 49 ff.) The economist,Ch. Perin, who writes from the Catholic politico-economical standpoint, substitutes for conscience,renoncement, as the force antagonistic tointérêt, an expression inappropriate, because merely negative, although in perfect harmony with the ascetic religiousness of the middle ages. (De la Richesse dans les Sociétiés chrêtiennes, 1861, II vol., passim) CompareRoscherinGelzer'sProtestant. Monatsblättern, Jan. 1863.Puchta, Institutionen, I, f. 8, opposes to individualism—or the impulse to distinguish ourselves from others, and which, when uncontrolled, leads to egotism, pride and hate—love and right, which are controlling powers over the former.108.Even the ancients conceived Eros as a world-building principle. According toSchön'sexpression, loc. cit., which it is not difficult to misconstrue, the feeling of the common interest manifests itself, both as law and force. And, in reality, it is necessary that, in order not to permit the drowsy conscience to fall too far behind self-interest, which is always awake, it should create lasting institutions and regulations above and beyond the caprice of the individual or of the moment; for instance, in the family, marriage, education etc.109.The more private interest ceases to be momentary, and becomes life-long and even hereditary, the better does it harmonize with the feeling of the common interest.110.Perinsays (1, 93), that the conflict of interest is reconciled in the seeking for the attainment of the supreme good, that is God,“who gives himself to all in equal measure, and yet always remains the same, and out of whose fulness all may draw, and yet no one's share grows less.”But the same is true of all ideal goods, and of every form of the feeling for the common interest, the highest of which is, indeed, religiousness.111.According toKant, Anthropologie, p. 239, the desire of comfort and well-being, and the inclination to virtue, when the former is properly restrained by the latter, produce the highest degree of moral, united to the highest degree of physical, good. It is well known, that during the middle ages, in all countries except Italy and, even up to the seventeenth century, the moral sciences were under a one-sided theological influence, whose ascetic condemnation of self-interest may have been well enough during a period of violence. By virtue of a very natural reaction, and as a protest of individualism against the constraint of absolute monarchy, the materialists of the eighteenth century endeavored to discover, even in the most exalted phenomena of human society, only the expression of an enlightened self-interest. SeeMandeville'sFable of the Bees, or private Vices public Virtues (1723), but especially,Helvétius, De l'Esprit (1758).Voltairesays, that, in all the celebrated maxims ofDe Rochefoucauld(1665) there is but one truth contained,que l'amour propre est le mobile de toutes nos actions. (But see, per contra,Pufendorf, Jus Naturæ et Gentium, 1672, II, 3, 15.) This tendency was opposed, especially by the English, who could not be blind to the influence exerted in public life by the feeling for the common good.David Hume, Treatise on Human Nature (1739), III, 54, is of opinion that the interests of others are, on the whole, in the case of nearly every man stronger than even his own self interest.Hutcheson, System of Moral Philosophy (1755), speaks of the innate principle of benevolence. Man is not a perfect whole; a part belongs to his own person, part to his family, part to the nation, part even to all humanity.Burke, Inquiry into the Origin of our Ideas of the Sublime and Beautiful (1756), distinguishes two fundamental principles of action, that of self-preservation and that of society. On the former is based the sense of the sublime; on the latter, of the beautiful. According toFerguson, History of Civil Society, (1767), I, 3, 4, the“sense of union”is frequently strongest where the advantage drawn from the connection is smallest; for instance, it is weakest in highly cultured commercial countries.Adam Smith, Theory of Moral Sentiments (1768), has been as one-sided in reducing everything to“sympathy,”as he has been in his Wealth of Nations in reducing everything to“self-interest;”but not without the consciousness, that to explain the reality, it is necessary to take both into consideration (Buckle). It would, indeed, be just as preposterous to base economy on self-interest alone, as to base marriage merely on the sexual appetite. Recently,Hermann, Staatswirthschaftliche Untersuchungen, 1st ed., part 1st, discovers in self-interest, and in the feeling for the common good, the two springs of all economy. He would even base the so-called theoretic Political Economy, on the study of self-interest, its practice in that of the common good.M. Chevalier, Cours d'Economie politique, 1844, II, 412 ff., understands something very like this by the contrast between liberty and centralization. TheantagonismeandassociationofBazard, Exposition de la Doctrine de Saint Simon (1829), p. 144 ff. Closer investigation will show, however, that self-interest, which must not be confounded with egotism, and the common interest, are neither coördinate nor exhaustive opposites. Compare the beautiful contrast drawn byGoethe(Pocket edition of 1833, vol. 46, 97), between“Pietät”and“Egoisterei.”112.Paul, I. Corinth. 12, gives the most beautiful model description of a social organism. Compare, however, the fable of Menenius Agrippa inLivy, II, 32.113.Excellent beginnings of a general theory of economies in common inSchäffle, N. Œkonomie, II, Aufl., 62 ff., 331 ff.114.The French and English, with their strong political bias, use the expressions respectivelyeconomie politiqueand Political Economy. In Germany, where the terms the people (Volk) and the state (Staat) are much less nearly coextensive, the wordsVolkswirthschaftandNationalökonomieare preferred. But evenHufeland, who first gave currency to the termVolkswirthschaft(Grundlegung, I, 14), called attention to the peculiarity“that the term economy suggests that there is one who economizes and guides, an economist in chief, and that such a one is, even according to the most correct opinion, wanting in the public economy of a people.”115.According toTh. Cooper, Lectures on the Elements of Political Economy, (1726), 1, 15 ff. 117, the wealth of society is nothing but the aggregate wealth of all the individuals that compose it. Each individual looks out best for his own interests, and, hence, that nation must be the richest, in which each individual is most completely left to himself. (If this were so, savage nations would be the richest!)Coopergoes so far as to disapprove of the protection afforded to commerce on the high seas by a national navy; no naval war is worth what it costs, and merchants should protect themselves. He says, too, that the word“nation”is an invention of the grammarians, made to save the trouble of circumlocution, a nonentity!Adam Smithis, as might be expected, far removed from such absurdities. (Compare Wealth of Nations, IV, ch. 2, and the end of the fourth book.) But, even he is of opinion that men, in the study of their own advantage are led“naturally, or rather necessarily”(IV, ch. 2), to the employment which is most useful to society. But hereAdam Smithoverlooks the fact, that every individual nation strives after earthly immortality, and is, in consequence, frequently compelled to make immediate sacrifices for the sake of a distant future, a thing which can never be to the private interest of the mortal individuals who compose it. And thus,D. North, Discourses upon Trade (1691), 13 seq., says, that in commercial matters, different nations stand in precisely the same relation to the whole world, that individual cities do to the kingdom, and individual families to the city. Similarly,Boisguillebert, Factum de la France, ch. 10, 327, Daire's edition.Benjamin Franklin(ob. 1790), Political Papers, § 4. AndJ. B. Say, Traité d'Economie politique (1802) I, 15: every nation is, in relation to neighboring nations, in the situation of a province in relation to neighboring provinces. Unfortunately, such doctrine is only too palpably refuted by every war!J. Bentham'ssaying:Les intérêts individuels sont les seuls intérêts réels(Traité de Législation, I, 229).Infra§98.Among those who, in antiquity, most energetically maintained that the idea of national economy is not a merely nominal one, isPlato(De Republ., IV, 420, I, 462); more recently,Fichte(Der geschlossene Handelstaat, 1800), although, in general, the socialists attach as little importance to nationality as their most decided opponents. Adam Müller is a writer who deserves recognition for his advocacy of national economy, and of the state as a whole, paramount to individuals, and even generations. He gives war the credit of causing the scientific knowledge of the state to cast deeper roots, and of enlightening individuals in the most forcible way, that they are parts of one great whole. (Elemente der Staatskunst, 1809, I, 7, 113). He calls public economy, as a whole, the product of all products. What, he inquires, is the use of all wealth, if it does not guarantee itself? And this, it can do, only through the organization of the whole people, that is, through the nation (I, 202).Adam Smith'stheory of labor would be correct if it considered the entire national life of a people itself as one huge piece of labor. (II, 265). And so, Müller directs his polemics against Adam Smith's premise of a merely mercantile world-market. (II, 290). Similarly, the protective tariff theoreticians,Ganieh, Théorie de l'Economie politique (1822), II, 198 ff. andFr. List, Nationales System der politischen Oek. (1842), I, 240 ff.Colton, Political Economy of the United States, 1853.Sismondi, Nouveaux Principes (1819), I, 197, ridicules the opinion which resolves the public interest into merely private interests: It is A's interest to rob B; B, the weaker, is equally interested to let himself be robbed, that he may fare no worse. But the state—?!116.National wars are really no mere operations of the will of the state! Since 1800, Ireland, and, since 1858, even British India, constitute one state with England, and yet how different are the economic tendencies of these different countries of which the individual husbandman or business man must take cognizance!117.One might also deny the reality of a stream, considered as a whole, since its bed, no one calls a stream, and its watery contents change every moment. And yet, it is well known to scientific geography that every stream has its own individual character.118.This would be to be guilty of explainingignotumperignotius. And yet, there are a great many modern writers who imagine that they have said something all-sufficient, when they have told us that the state is an organism. As early a writer asHufeland(N. Grundlegung, I, 113), enters his protest against such abuses. The person who would operate with this notion, should, at least, have read the acute observations, so well calculated to dissipate preconceived opinions, made byLotze, in his Allgemeine Physiologie des körperlichen Lebens, 1-165. The organic conception of national life, the life of a whole people, where the individual organs are free and rational beings, is evidently a much more difficult one to form than that of the animal or human body.119.I first called attention, in my work on the life-work and age ofThucydides, to the fact that that great historian always accounts for causes in the following manner: A. is produced by B., and B. by A. (Roscher, Leben Work und Zeitalter des Thukydides, 199 ff.; compare especiallyThucyd., I, 2, 7, seq.) Such a circle is not a vicious one. All first class historians have thus explained historical phenomena. The one-sided deduction of A. from B., and B. from C., etc., which the so-called pragmatic writers likePolybius, for instance, is the result of overlooking all reciprocal action.Scialoja, Principii (1840), p. 60, makes a somewhat similar observation for Political Economy.120.Whether we call the unknown and inexplicable ground back of all analysis, and which our analysis cannot reach, vital force, generic form, spirit of the nation, or God's thought, is for the present a matter of scientific indifference. All the more necessary are the self-knowledge and honesty, in general, which admit the existence of this background, and which do not, by denying it, deny the connection of the whole, which is, for the most part, much more important than the analyzed parts. But I must at the same time, enter my energetic protest against the imputations of heresy made by those who do not comprehend the sacred duty of science, by never ceasing investigation, to push farther back the bounds of this inexplicable background.121.WhenHildebrand, for instance, objects to the application of the expression“natural law”to the economic actions of man, for the reason that it conflicts with human freedom and man's capacity for progress (Jahrbücher der N. Œek. und Statistik., 1863, Heft., I), I cannot agree with him. I use the expression“natural law”wherever I observe uniformity, explicable in its broader connections, and not dependent on human design. That there are such uniformities there can be no question. I need only mention the philological law of the so-called“permutation of consonants,”which individuals follow when speaking—certainly not through compulsion,—and, by means of which, the progress of the speaking aggregate is made manifest. Or, I might call attention to the well known fact, that, in populous countries marriages and crimes, which are for the most part free, are divided among the different age-classes in a proportion much more uniform, from year to year, than are deaths, which are not free. I adhere all the more firmly to the expression“natural law,”because no one takes offense at or objects to the expression,“nature of the human soul.”But to this very nature of the human soul belong the freedom and responsibility of the individual, as well as the capacity of the species for progress. CompareA. Wagner, on Law in the Apparently capricious Actions of Man (Die Gesetzmässigkeit in den scheinbar willkürlichen menschlichen Handlungen, 1864, p. 63 seq.), in which, however, he only goes so far as to show that law and freedom coexist side by side as indubitable facts, while the seeming contradiction between the two remains.Drobisch'sMoralische Statistik und die menschliche Willensfreiheit, 1867, is an important contribution to the literature of this question.122.Whately, in his fourth lecture (Lectures, 1831), shows in a very clear way, how London is supplied and provisioned by men with no object in view but their own personal interest, each of whom is possessed of but a very limited knowledge of the aggregate wants of its inhabitants, and yet they work into one another's hands, in the interests of the whole, purely instinctively, and infinitely better, perhaps, than the operations of the most skillful governmental commission, organized for the same purpose.123.Alphonsus of Castile, the king astrologer of the thirteenth century, is reported to have said, that the universe would have been much better constituted, if the Creator had asked his advice beforehand. Astronomers like Newton and Gauss have, certainly, judged otherwise.124.MacCullochremarks, that there is an essential difference between the physical and the moral and political sciences in this, that the principles of the former apply in all cases, those of the latter, only in the greater number of cases—a thought very ably developed byKnies, loc. cit.,passim. If, withNewmarch, (London Statistical Journal, 1861, p. 460 seq.), we could grant, that there is no“law,”except where it is possible to predict each individual occurrence under it, there would be no such thing even as the“laws”of the probability of life. The word“element,”also, means something very different in Political Economy from what it does in chemistry: a combination which might be broken up, but which that science leaves it to other sciences to do. The“element”of Political Economy is Man. ComparePickford, Einleitung in die politische Œk., 1860, 17.125.It is in this sense thatAristotle(Polit., I, p. 1, 9 Schn.) says: φανερὸν, ὅτι τῶν φύσει ἡ πόλις ἐστὶ, καὶ ὅτι ἄνθρωπος φύσει πολιτικὸν ζῶον. According toL. Stein, Lehrbuch der Volkswirthschaft, 1858, 33, the political economy of a people begins at the point where the overplus of individuals begins.126.CompareK. L. von Haller, Restauration der Staatswissenchaft, I, p. 446 ff.127.AsSallustcharacterizes the political apogee of the Romans:Optimis moribus et maxima concordia egit populus Romanus inter secundum atque postremum bellum Carthaginiense.SeeAugustin(Civ. Dei II, 18).Puchta(Institutionen, I, f. 83), with a great deal of good sense, distinguishes in every people their individual character from that which they share in common with all mankind. The latter exists among savage nations, only as a germ buried under the overpowering weight of that which is special to them. The period of the perfect equilibrium of both elements is coincident with that of a people's real culture. In the further course of development, the latter, more general element becomes gradually over-powerful, destroys the individual, and thus dissolves nationality.128.Thus formulated, the principles of the two great parties, evidently, no more contradict one another than their ordinary watchwords,“freedom”and“order,”are in contrast with one another. Hence all the great statesmen of the best periods of history have adopted the middle course recommended by Aristotle.129.SeeLotze, Allgemeine Pathologie, 1842.Ruete, Lehrbuch der allgemeinen Therapie, 1852. These analogies, obviously, should not be pushed too far. One of the most essential differences between the two consists in this, that in the diseases of the body politic, physicians and nurses are themselves part of the diseased organism.130.SeeAhren'svery beautiful exposition, Organische Staatslehre, 1850, I, 77. National economy (Nationalökonomie=public economy); national economics (Nationalökonomik=the science of public economy). The latter term was first proposed, in Germany, in 1849, byUhde; the former was naturalized therein 1805:v. Soden, Nationalökonomie, 1805;Jacob, Grundsätze der N. Œk., 1806. In Italy,G. Ortesused it as early as 1774, in his Dell Economia nazionale, and in England it was employed, even in 1867, byFerguson, History of Civil Society, III, p. 4. Holland. Volkshuyshoudkunde. As a rule, outside of Germany, the term political economy,économie politique, one which is somewhat calculated to mislead the student, is used. (ThusMontchrêtien sieur de Vatteville, Traité de l'Economiepolitique, 165; laterJ. J. Rousseau, Discours sur l'Economie politique, later yet the Traités d'E. p.,Maillardère,PageandJ. B. Say, 1801-1803). Political Economy (Sir J. Stewart, Inquiry into the principles of P. E., 1767); also Public Economy (Petty, several Essays, 1682, 35);Economia politicaorpubblica(the latter byVerriandBeccaria). The titleEconomia civile(Genovesi, Lezioni, d'Ec. civ. 1769), has found few adherents. It has, however, been used recently byCernuschi: Illusions des Sociétés coöperatrices (1866). The term,Economie socialehas been used all the more in France (Dunoyer, Nouveau Traité d'Ec. soc., 1830), since recommended byJ. B. Say, and employed byBuat(Des vrais Principes de l'Origine et de la Filiation du Mot Economie politique, in the Journal des Economistes, 1852.)131.Stein, Lehrbuck der V. W., prefaces his“Science of Public Economy”(pp. 329-358), by a“Science of Economy”(pp. 96-328), which, however, treats individual economies only as the elements of the national economy. A science of household or isolated individual economy could, of course, treat only of the economic relations of anchorites. Those who object that Political Economy is not a real whole will be satisfied with the definition of it given byF. I. Neumann:“The Science of the bearing of household or separate economies to one another, and to the state as a whole.”(Tüb. Zeitschr., 1872, 267.)132.In so far as these various institutions are concerned, with objects beyond the human, or supernatural, only the manner in which they are accepted, or in which they are made use of, is an expression of national life.133.Thus,J. Tuckerthinks that religion, the state and commerce, are only the parts of one same general plan: no institution, therefore, can be called appropriate, within the limits of the province of any one of these, if it be clearly in opposition to the other two, because the harmony of God's work can not be broken up. (Four Tracts and two Sermons on political and commercial Subjects, 1774, Serm. I.)134.Riedel(National Œkonomie, 1838, I, p. 178 seq.), gives a good illustration of the difference between the manner in which law and Political Economy look at the same question. The law (to avoid strife, or to settle controversies) looks upon the debtor as the owner of the capital, and lets him run all the risk; Political Economy, on the other hand, looking deeper into the nature of the contract, reaches an entirely opposite result. The mere jurist has a dangerous tendency to undervalue the reign of the laws of nature; the mere political economist, just as readily, undervalues the element of free will. (Arnold, Cultur und Recht I, 97.) In this respect, the two sciences complement each other very well.Roesler(Hildebrand'sJahrb., 1868, II, and 1869, I.) shows, and he does not exaggerate the fact, that political economists have made altogether too little use of the results of the science of law.135.Jurists will always experience the want of divesting their isolated ideas of their purely accidental character, by grouping them together in such a manner as to make them constitute a complete and independent whole. One must be possessed of profound knowledge to perceive their necessary connection from an historico-juridical point of view. Political Economy, with its characteristic accuracy and practical utility, can best take its place, at the present time. It is in the greater number of legal questions, the systematically elaborated science of“the nature of the thing.”See the able beginnings of a policy of legislation and higher history of law, based on Political Economy, byH. Dankwardt: N. Œk. und Jurisprudenz, 3 Hefte, 1857, and my preface toDankwardt'sNationalökonomisch-civilistischen Studien, 1862.136.The intellectual power of a people depends upon the vigorous and harmonious development of all seven spheres of life.137.Montecuccoli, Besondere und geheime Kriegsnachrichten (Leipzig, 1736). A very similar judgment by Cæsar inDio Cass., XLII, 49.138.Bülan, Handbuch der Staatswirthschaftslehre, 1835.139.Thusv. Justi, Staatswirthschaft 1755.Kraus, Staatswirthschaft, published by Auerswald, 1808;Schmalz, Handbuch der Staatswirthschaft, 1808. More recently,Hermann, Staatswirthschaftliche Untersuchungen, 1832. In France, the expressionéconomie de l'état, is very seldom used.Gavard, Principes del'E. d'Etat, 1796.140.Pölitz, Staatswissenschaften im Lichte unserer Zeit, II, 3. CompareLotz, Handbuch der Staatswirthschaft (2d ed., 1837), I, 10 ff.141.Our view of Political Economy holds a middle place between opposed extremes. The view expressed byWhately, Lectures on Political Economy (1831), No. 1, and covered by the proposed term“catalactics,”is by far too narrow. Similarly,Macleod, Elements of Political Economy, 1858, I, 11. A like objection may be raised to the earlier title ofPritzwitz'sbook: Die Kunst reich zu werden,—the art of growing rich. On the other hand,Dunoyer, Liberté du Travail (1845), L. IX, ch. I, goes too far altogether:“not only in what manner a nation grows rich, but according to what laws it best succeeds, in the execution of all its functions.”And soStorch, Handbuch, translated into German byRau, I, 9. Many modern writers define Political Economy simply as the theory of society; for instance,Scialoja, Principj. dell'Economia sociale, 1840.Cibrario, E. polit. del medio Evo, III, 1842.142.For the many and various definitions of the police power, seevon Berg, Handbuch des Polezeirechts, I, 1-12;Butte, Versuch der Begründung eines System der Polezei (1807), 6 ff.;Rosshirt, Ueber den Begriff der Staatspolizoi (1817), 34 ff. One of the principal difficulties is, that the practical domain of the police power is, in consequence of the successive grades of civilization through which a people passes, subject to greater modifications than any other state power. We call attention especially to the expressions“without mediation, to prevent,”and“external order,”in our definition. The church, the school, the administration of justice etc., act mediately towards the prevention of such disturbances; and there are many other institutions which offer immediate protection to order of a higher and more intellectual nature.143.See the great number of earlier definitions collected inR. von Mohl, Gesch. und Literatur der Staatswissenschaften III, pp. 637 ff. There are two principal groups of them, the one of which considers it as the science of things of political note, the other as the science of actual or past conditions.144.SeeDufau, Traité de Statistique, 1840;Moreau de Jonnès, Elements de Statistique, 1847;Knies, Die Statistik als selbstständige Wissenschaft, 1850.B. Hildebrand, in his Jahrbüchern, 1866, I etc., but especiallyQuetelet'sworks. For the contrary view, seeFallati, Einleitung in die Wissenschaft der Statistik der St., 1843;Jonak, Theorie der Statistik, 1856, andHeeren, in the Gött. Gelehrten Anzeigen, 1806, No. 84, 1807, 1302.145.So thinksv. Rümelin(Tübinger Zeitschr., 1863, 653 ff.); and he recommends in place of statistics an independent branch of learning bordering on history and geography, to be called demography. His statistics is a science auxiliary to all the experimental sciences of man, just as criticism and hermeneutics are a methodological science auxiliary to many sciences, otherwise different. It would be difficult to justify the use of the name statistics for such a science, as such a science corresponds to neither of the two meanings of the wordstatus(state—condition).146.The ancients understood by the term καμάραcamera, covered places such especially as were vaulted, also vaults of the most varied kind. CompareHerod, I, 199;Diod., II, 9;Strabo, XI, 495;Arrian, Exp.Alex., VII, 5, 55;Dio Cass. XXXVI, 32;Sallust, B. C., 55;Cicero, ad Q. fratrem III, 1;Plin., H. N. XXX, 27;Seneca, Epist., 86;Tacit.Hist. III, 47;Sueton, Nero, 34. During the middle ages, the meaning treasure-chamber (Schatzkammer) became predominant:camera est locus, in quem thesaurus recoilligitur, vel conclave, in quo pecunia reservatur(Ocham, Cap. Quid sit Scaccarium). It gradually became synonymous with finance,—from the time of Charlemagne, or at least since Louis II. (Charter of 874). SeeDucange, Glossarium, v. Camera, andMuratoriAntiquitt. Ital., I, 932 ff.147.“A husbandman must plow and manure his land if he would reap a harvest from it. He must fatten his cattle if he would slaughter them; and furnish his cows with good fodder if he would have them give good milk. In like manner, a prince should begin by assuring his subjects healthy and abundant food, if he would take anything from them.”von Schröder, Fürstl. Schatz-und Rentkammer (1686), preface, § 11.Von Horneckbefore him, Oesterreich über alles wann es nur will, p. 220, ed. of 1707, had expressed the idea that the watchful solicitude for the public economy of the country was noparergon, noappendix, to the council (Kammer), but its real basis, and that it embraced many subjects which had nothing in common with the cameralia (“Cameralien”).148.Morhof, Polyhistor (1688), III.Thomasius, 1728, Cautelæ circa præcognita Jurisprudentiæ (1710), ch. 17. (Cautelæ circa studium œconomicum.) Also, in his lectures onSeckendorff's“Teutschen Fürstenstaat.”CompareRoscher, Gesch. der N. Œk. in Deutschland, 328 ff.149.WhileDithmar(1731) distinguishes economy-police and cameralistic sciences and restricts the latter to finance and taxation;Darjes(1756) comprises under the name of cameralistic science, economy (municipal and rural), and police, as well as cameralistic subjects in the strict sense of the term, that is, the public, domain and regal rights. WhileNau(1791), in his“Ersten Linien der C.,”treats only of the branches of private economy,Schmalz, (1797) treats also of national or public economy, andRössig(1792) divides cameralistic science into the doctrine of the public demesne and regal rights (cameralistic science in the narrower sense), and the doctrine of taxation and police.150.Thus, for instance, all that concerns domestic economy, book-keeping and private financial administration.151.John Stuart Mill, Principles of Political Economy (1848), I, p. 25, draws a distinction between the physical conditions which influence the economic situation of a people, and the moral and psychological conditions; which last have their origin in social institutions or in the fundamental principles of human nature. Only the latter belong to the domain of Political Economy. According toJ. B. Say, Traité, Introd., this science embraces at once agriculture, manufactures and commerce, but only in their relation to the increase or diminution of wealth, and does not concern itself with the means employed to reach the desired end. As a rule, saysArndt(Naturgemässe Volkswirthschaft, 1851, p. 16), it takes into consideration not so much things themselves as their exchange value.Lotz(Handbuch, I, p. 6 seq.), in like manner, defines Political Economy—the science of the one activity which constitutes the basis of all industries etc.F. G. Schulze(Ueber volkswirthschaftliche Begründung der Gewerbswissenschaften, 1826), characterizes Political Economy as the science of the fundamental conditions of the well-being of a people, in so far as they lie in human nature.WhenAdam Smith(book IV, c. II) says that the government in respect to matters of economy is inferior to the first best person engaged in industrial pursuits, he is right only from a technic point of view. And whenStewart, on the other hand, vindicates for the state the office of a pater-familias (book II, ch. 13), he evidently means only in national economical matters.152.See alsoRau(Ueber die Cameralwissenschaft, Entwickelung ihres Wesens und ihrer Theile, 1825);Baumstark(Cameralistische Enclycopädie, 1835).153.Xenoph.Œconom. I, 8 ff. Cyrop. VIII; 2, 23. He saw with equal clearness the moral light and shade of wealth. (Œcon. XI. 9. Conviv. 4. Memor. I, 6. Cyrop. VIII, 3, 35 ff. Hiero 4.)154.Thomas Aquinasvalues earthly goods according to the end they are made to serve; when used for a good purpose, they have a mediately true value. Hence it was an error of the stoics to despise them under all circumstances. (Summa Theol. II, 2. Qu., 50, 3. 58, 2. 59, 3. 125, 4.)155.Whateleyconsiders the savage much beneath the materialist, instead of superior to him. The latter possesses, although he frequently abuses it, the faculty of self-control and forethought, which is entirely wanting in the former. (Lectures, No. 6.)Dunoyer, De la Liberté du Traväil, liv. IV, ch. I, 8, an apology for the moral wholesomeness of civilization, since promotive of military prowess, favorable to the development of the sciences, and even poetical.Baudrillart, Manual d'Œkonomie politique, 1857, 24. SeeFallati, Ueber die sogennannte materiellen Tendenz der Gegenwart, 1842.156.See the inscription on the tomb of Sardanapalus: ταῦτ᾽ ἔχω, ὄσσ᾽ ἔφαγον καὶ ἐφύβρισα καί μετ᾽ ἔδωτος τέδπν ἔπαθον. (Strabo, XIV, 672.)Isaiah, 122, 13, 56, 12, and the book of wisdom (2) characterizes the view of the fallen Jewish people. In Greece, the Cynic and Epicurean schools were only different phases of the same degeneration.“Thirst, for money, and nothing else, will be the ruin of Sparta!”(Cicero, De Offic, II, 22, 77.) See the magnificent description by Demosthenes, in which he shows the over-estimation of material things to be the principal cause of the decline of Athens, and in which he lays great stress on the fact, that Athens, on its decay, had a larger population, more wealth, ships, and evidences of external power, than in its golden age. (Phil., III, 120 seq.) Also Phil., IV, 144, cautions us against the Manchester criterion of national prosperity. SeePlato, De Rep., VIII. In Rome, the principleommia venalia essewas a chief element in the total decline and fall of the republic. (Sallust, Cat., 10 ff., Jug., 8 ff.) In an age when people think they can do everything with money, the ruin of all things is the last end of mercantile, financial and political speculation. (Condillac, Le Commerce et le Gouverment, 1776, II, 18.)157.Under Pericles, the Athenian treasury of the state contained at most 9,700 talents. (Thucyd.II, 13.) On the other hand, Alexander the Great had a treasure of 180,000 talents accumulated in the citadel of Ecbatana. (Strabo, XV, 731); Ptolomy II. left after him 740,000 talents. (Appian.præf. 10,Droysen, Geschichte des Hellenismus II, 44 ff.) In Nero's time there was many a freedman's daughter who owned a looking glass worth a greater sum than the senate had appropriated as a dowry to the daughter of the great Scipio. (Seneca, Quæst. Natur. I, 17. Compare Cons, ad Helviam, 12.)McCullochsays that an intelligent despotism can enrich a nation as well as freedom. (In his Discourse on the Rise, etc. of Polit. Econ., 1825, 77 seq.)158.Bacon(Sermones, 56) says that youthful states distinguish themselves specially by their warlike instincts; mature states in literature; old and decaying ones in industry and commerce.Davenantvery happily remarks, that the development of commerce among a people has an ambiguous value. It, indeed, increases wealth, but, at the same time, it may introduce luxury, covetousness and fraud, destroy virtue, do away with simplicity of manners and customs, and then it inevitably ends in internal or external slavery. (Works II, 275.) The simplicity of the patriarchal state, however, cannot last always, if for no other reason, because of the emulation of foreign nations. (1, 348, ff.) The impoverishment of even the wealthiest nation is certainly inevitable when its morality declines. It is especially true, that the public economy of a people can be prosperous only where political liberty obtains, and this, independent of the fact that wealth without freedom has no value. (II, 336 ff., 380, ff., 285.) According toFerguson, private wealth, honestly acquired, used rightly and with moderation, managed with a sense of independence, may be to those who possess it, an element of self-confidence and of liberty, provided they loosen their purse strings not through vanity or for their personal gratification, but for commendable party purposes. But in periods of decay, even a greater amount of wealth is very far from producing these results. (History of Civil Society, VI, 5.)Whately, on the contrary, maintains that only personal wealth—never national wealth—has a disastrous influence on morals. Lectures, No. 2.159.“The method of a science is of much greater importance than any individual discovery, however wonderful.”(Cuvier.)160.Thus, for instance,G. Biel(ob. 1495), the“last of the schoolmen,”gives us his doctrine of Political Economy, in a work on Dogmatic Theology, in the chapter on Penance, his starting point being the inquiry, how the economic damage caused by the sinner may be repaired.Roscher, Geschichte der Nationalökonomik in Deutchland, 1074, I, 23. The Melittotheologia, Arachnotheologia of later times! A recent attempt in this direction has been made byAd. Müller, Nothwendigkeit einer theologischen Grundage der gesammten Staatswissenschaften und der Staatswirthschaft insbesondere (1819), i.e.,“necessity of a theological basis for all political science, and especially for Political Economy.”He divides political science into two parts: the science of law, and the science of wisdom, embracing under the latter denomination, politics, Political Economy, etc. Law emanates from God, as supreme judge; the science of wisdom from God, as our Supreme Father.161.Abstraction is indulged in on a large scale, when a number of elements which are always found combined in life, are here separated and examined apart. It is precisely thus that anatomy proceeds, dissecting each member of the human frame, separating the bones, ligaments and muscles from one another, thus becoming the necessary preparatory school to physiology.162.Thus, for instance,Canard, Principes d'Economie politique (1801). AlsoKröncke, in several of his works, andCount Buquoy, in his Theorie der Nationalwirthschaft (1816), p. 333 ff.;Lang, Grundlinien einer politischen Arithmetik, Charkow, 1811, and more especiallyv. Thünen, Der isolirte Staat, vol. I (1842), vol. II, 1850. See my criticism of his method inBirnbaum'sGeorgika, 1869, 77 ff.Voa Thünen'sfirst volume is an essay towards a geometrical exposition of the science. See alsoRau, Lehrbuch I, § 154, appendix;von Mangoldt, Grundriss der Volkswirthschaftslehre (1862);Cazaux, Elements d'Economie privée et Principes mathématiques de la Théorie des Richesses (1838);F. Fuoco, Saggi economici (1827) II, 61 ff.Walras, Eléments d'Econ. politique pure (1874).Jevonshas recently endeavored to give Political Economy a mathematical basis by reducing the objects of which it treats to the calculable feelings of pleasure (+) and pain (-). The duration of a feeling is treated as an abscissa, its intensity as the ordinate of a curve, and its quantity as the area. Future feelings are reduced to present ones, by allowing for their distance, and the uncertainty of their occurrence. All this, however, is rather curious than scientifically useful.163.Herbart, Ueber die Möglichkeit und Nothwendigkeit, Mathematik auf Psychologie anzuwenden; Kleinere Schriften, II, 417.164.How detrimental it is to ignore the psychological nature of Political Economy is evident from the errors ofKarl Marx, who personifies things in a manner almost mythological. Thus, according to him, modesty should be ascribed to a coat which exchanges for a piece of linen, and purpose to the linen, etc. (Das Kapital, 1867, I, 19, 22, seq.) The greatest fault of this intelligent but not very acute man, his inability to reduce complicated phenomena to their constituent elements, is greatly increased by his way of thus looking at things.165.CompareJ. B. Say, Traité I, introd. Thus, it would be certainly possible to describe every individual's physiognomy by means of a very complicated mathematical formula, and yet there is no one who would not prefer the usual mode of taking pictures. The simple motions of the heavenly bodies, on the contrary, are always treated mathematically. (Lotze, Allgemeine Physiologie, 322 ff.)166.WhenFawcettsays that all“principles of Political Economy are describing tendencies instead of actual results”(Manual of Political Economy, 1863, p. 90), our method, the historical, would give also the theory of the latter.167.This was lost sight of by most writers during the second half of the eighteenth century, because they looked upon that equality as the really oldest condition, and its restoration the ideal to be striven for. How much of this still clings to the present free-trade school; see inRoscher, Gesch. der N. Œk. in Deutschland, 10, 17 ff.168.Thus, for instance,Ricardoexamines, almost exclusively, the actual condition of things, while the socialists confine themselves, still more exclusively, to the investigation of how things should be. It has been very usual in Germany sinceRauwrote, to draw a distinction between theoretical and practical Political Economy. There are many who think that a good manual of practical Political Economy, dropping the introduction, demonstrations etc., would be also a good code of law, of universal application.Mercier de la Rivièrehas said that he wished to propose an organization which should be necessarily productive of all the happiness which can be enjoyed on earth. (Ordre essentiel et naturel (1767), Disc. prélim.) Compare, also,Sismondi, N. Principes, I, ch. 2.169.The word method is used in an essentially different sense, when the inquiry is, whether the inductive or deductive method is followed in Political Economy.J. S. Millcalls Political Economy, and, indeed, all“sociology,”a concrete deductive science, whosea prioriconclusions, based on the laws of human nature, must be tested by experience, either by comparing them with the concrete phenomena themselves, or with their emperical laws. It, in this, resembles astronomy and physics. (System of Logic VI, ch. 9. Essays on some unsettled questions of Political E., No. 5.) According to this, an economic fact can be said to have received a scientific explanation only when its deductive and inductive explanations have met and agreed.“Only those principles which, after they have been obtained by the one, are confirmed by the other method, can be said to have a scientific basis.”(von Mangoldt, Grundriss, 8.) While I agree to this view, it seems necessary to me to mention points wherein caution is necessary: A. Even the deductive explanation of economic facts is based on observation, namely, on the self-observation of the person accounting for them, who, consciously or unconsciously, must always inquire: If I had experienced or accomplished the same fact, what should I have thought, willed and felt? The man who cannot translate himself into the souls of others, will give a wrong explanation of most economic facts. In the question, for instance, of the determination of the price of an article, the person who can look into the mind of one of the contracting parties only, will give a one-sided explanation of the facts. B. Moreover, every explanation, that is, satisfactory connection of the fact seeking explanation with other facts which are already clear, can be only provisional. The wider our horizon grows, the deeper should our solution of all questions become. A hundred years hence, should science increase in the mean time, the solutions which are satisfactory to us will be looked down upon by our posterity, as the speculations of our fathers antecedent to Adam Smith's time are looked down upon by us.170.Tanquam e vinculis sermocinantur, saysBacon(De Dignit. et Augm. Scient., III, 3), of those who have written in a not non-practical way on the laws.Hugo, also (Naturrecht, 1819, p. 9), calls attention to the resemblance of the so-called laws of nature, to the positive law in force at the time. As to political idealism, seeRoscher: De historicæ doctrinæ apud sophistas majores vestigiis (Gött. 1838, 26 ff.). The only exceptions to this rule are the eclectics, who form their own system from the blossoms of all foreign ones, a system, indeed, without root, and which therefore must soon wither.171.In this place, naturally, such an assertion can be made only as a programme to be carried out, the proof whereof is to be sought in the rest of the work. By“the people,”we do not mean the governed, to the exclusion of the governing classes, but both classes together. We attach to the expression the most extensive meaning possible. We do not limit it to the present generation, but intend it to cover all the generations from the beginning of a people's history to its end.172.The custom, which has become general, of calling all democratic movements, and them only, revolutions (thusStahl: Was ist Revolution? 1852, and many other writers of an entirely opposite tendency, especially in France), is not warranted. It is true that democratic (and imperial) revolutions are more frequent than others in our times, just as aristocratic revolutions were in the middle ages, and monarchical at the beginning of modern history. The essence of revolution, however, is in the operation of change contrary to positive law, acknowledged as such by the consciousness of the people.173.Compare, especially, the first pages ofSir J. Stewart, Principles of Polit. Economy.174.SeeColton, Public Economy of the United States, p. 28, who, indeed, unwarrantedly, refers to the whole of Political Economy, what properly belongs to its precepts.175.Je n'impose rien, je ne propose même rien: j'expose.(Ch. Dunoyer).Cherbuliez, Précis de la Science économique, 1862, p. 7 ff., has exaggerated this idea in a strangely non-practical manner. That the historical method does not differ essentially from the statistical as recently recommended, seeRoscher, Gesch. der Nat. Œk., 1035 seq.176.Storch, Handbuch, II, 222.177.Ad. Müller, an essentially mediæval mind, is guilty of this same braggadocio in an opposite direction, when he calls the“present with its political disorders simply an intermediate state,—the transmission of the natural or unconscious wisdom of the fathers, through the inquisitiveness of their children to the rational acknowledgment of that wisdom by their grandsons.”(Theorie des Geldes, 1816, pref.)178.Thus, for instance, it can not be said that a model university is better than a model public school; and yet the former is higher, because the age to which it is adapted is doubtless intellectually higher.179.Knies(Polit. Œk., 256 seq.) remarks, that it would be a great mistake, and it is the mistake of the majority, to consider what has been achieved or striven for in the present, as the absolutenon plus ultra, and thus to look upon all future generations as called upon to play the parts of apes and ruminators; a remark worthy to be taken to heart.180.I have, myself, no doubt, that up to the present time, mankind, as a whole, has, from the beginning of historical knowledge, always advanced. In individual cases, their movement has been interrupted by so many pauses, and even by so many occasional retrogressions, that great care must be taken not to infer superior excellence from mere subsequency.181.Bucklewrites of people whose knowledge is about limited to that which they see going on under their eyes, and who are called practical, only because of their ignorance; and he adds that, although they assume to despise theory, they are in fact slaves of theory, of others' theories.182.Compare this whole chapter withRoscher, Leben Werk und Zeitalter des Thukydides, 1842, pp. 25, 239-275;Roscher, Grundries zu Vorlesungen über die Staatswirthschaft nach geschichtlicher Methode, 1843, preface;RoscherGeschichte der Nat. Œk. in Deutchland (1874), 882 f., 1017 seq., and D. Vierteljahrsschrift, ff. See alsoJ. Kautz'slearned and accurate Theorie und Geschichte der N. Œkonomik, vol. I, 1858, II, 1860. I find no real contradiction between the views here expressed and those ofKautz, when he (I, pp. 313 ff.) introduces history and ethico-practical reason with their ideals as sources of Political Economy, to the end that the science may be something more than simply a picture, namely, a model of economic life. Apart from the fact that it is only the ethico-practical reason that can understand history at all, the ideals of a period constitute one of the most important elements of its history. The aspirations of an age find in them their best expression. The historical political, economist as such, is certainly not disinclined to form plans of reform, nor can it be said that he is not adapted to the performance of such a task. Only, he will scarcely recommend his reforms as absolutely better than what they are intended to supplant. He will confine himself to showing that there is a want which may, probably, be best satisfied by what he proposes. SeeSartorius, Einladungsblätter zu Vorlesungen über die Politik, 1793.183.“There is a book which youth may use to grow old, and the old to remain young—History.”(K. S. Zaccharia).184.Especially when natural science begins to be“a practical science.”(L. Stein).185.The difference between the broader and narrower sense of production, corresponds essentially with that of gross and net income (§ 145). Compare also §§ 206, 211 ff.186.Von Mangoldtdistinguishes the coming into existence of free values of the production undertaken for an economic purpose. (Grundriss, 9.)187.Gioja, Nuovo Prospetto delle Scienze economiche (1815), I, 49 ff. Besides positive production, there is a latent production, which prevents the decay of goods. It is not possible to make as exact an estimate of the latter as of the former; and much more depends in the latter case than in the former on continuity and proper extension. Hence, latent production is especially a state concern. (Knies, Telegraph als Verkehrsmittel, 1857, 232.)188.SeeSchäffle, in the Tübinger Univ. Programm, September 27, 1862, on the disastrous effect on the community of idleness. The leading of a happy life the Greeks called very appropriately, εὐπράττειν (Garve).189.We use the expression“external nature”through the whole of this work in contradistinction not only to the soul, but also to man's body, designating his entire physico-intellectual activity by the term“labor-force”(Arbeits kraft).190.By the expression“natural forces,”we designate the economically useful changes of matter, changes of place as well as of composition, which are made without man's cooperation; for instance, the gigantic machinery which supplies the greater part of mankind with water to drink, for domestic and other purposes—the evaporation of the sea, the formation of clouds, rain, springs, rivers etc. SeeBastiat, Harmonies, 277. Thus the sun's rays are indirectly the cause, not only of vegetation, but also of all wind and steam forces.191.Spite of this“freedom,”it may well happen that these gifts of nature can be utilized, in many cases, only on condition of some expenditure. The photographer can compel the sunlight to work for him only by means of a camera obscura, and the smithy the atmosphere, only by means of a bellows. But neither will ever successfully make an item, in their accounts with their customers, of the services of the sun or air.192.The most important ocean currents may be explained by two causes: the flowing of the water from the polar seas to the equator (polar current), and the revolution of the earth about its axis (equinoctial current); besides which, there are the reflex currents produced by the horizontal form of the coast-lands. Thanks to these natural ocean highways, England is nearer to almost all the important mercantile coasts of the world by 300 geographical miles than the Eastern States of the American Union. The only exception is the Atlantic coast of America north of the Equator. North Americans to pass the line, or to double one of the two great capes, are obliged first to traverse the ocean as far as the Azores. On the other hand, the western coast of South America is very widely separated from Mexico, for instance, by its ocean currents. The colonization of America by Europe, instead of by China, is a consequence of the direction of ocean currents, as is also the fact that America has now the fairest prospect of influencing the civilization of China and Japan. What an influence the warm gulf stream has on the mild climate of north-western Europe!193.While the Mississippi has no ebb or flow whatever, the influence of the ocean is felt in the Hudson, which is 60 geographical miles long, a distance of 29 miles from its mouth.194.Thus,A. Young, Travels in France I, 293 ff., has defined, with approximate accuracy, the limits within which the vine, maize and the olive grow. And sovon Cancrin, Dorpater Jahrbuch IV, 1, distinguishes the ice zone, the reindeer-moss (a lichen on which the reindeer live in winter) zone, the forest zone, the zone within the limits of which cattle are raised; that in which the culture of rye begins, that in which it becomes permanent; the wheat, fruit-tree, vine, maize, olive, sugar cane and silk-worm zones. The United States are divided into cattle-raising, wheat-raising, cotton-raising, rice-raising and sugar-raising zones. Even in Europe, beyond the 60th parallel of north latitude, wheat can scarcely be cultivated; the polar limits of rye raising extend, at most, six or seven degrees farther. Towards the north, barley extends sometimes as far as the 70th degree. Here agriculture almost ceases, and the inhabitants are compelled to confine themselves to animal substances for food. On the other hand, these three cereals are not adapted to a tropical climate, while the bread-fruit tree, for instance, does not thrive at more than 22 degrees from the Equator, nor the banana at more than 35. CompareGrisebach, Die Vegetation der Erde nach ihrer klimatischen Anordnung. II, 1871.195.Thus rye and wheat thrive in many parts of Siberia (Iakutzk) at an annual temperature of - 7.50, while in Iceland no cereals ripen at an annual temperature of + 4°. But in the former place the summer heat is + 16.2°; the winter cold, - 39.2°; in Iceland, + 12° and - 1.6°. In England, the myrtle, laurel, camelia and fuchsia stand the winter well; while the vine no where ripens. On the other hand, Astrakan and Hungary are vine growing countries, although the former is as cold in winter as North Cape, and although the cold is more intense in Hungary than in the Faroe Islands, where neither the oak nor the beech grow any longer. No good wine is produced on the western coast of France, north of 47° 20' north latitude; in Champagne, north of 49°, or in the Rheingau, north of 51°. In Norway, the average heat is greater on the coast than in the heart of the country where, however, grain ripens, while it does not on the coast; for the mildness of the winter, no matter how great, can make no compensation for the want of heat. On the other hand, the cattle on the coast can remain much longer out of doors, and the sea seldom freezes in such a way as to interfere with the fisheries.Blom, Norwegen I, 39.Boussingnault(Economie rurale considérée dans ses Rapports avec la Chimie, II) has made some interesting attempts to calculate by a mathematical process the amount of heat necessary to vegetable, during the period of vegetation. Thus, for instance, wheat requires about 12° (Réaumur) of heat during 140 days; that is, nearly 140 x 12° = 1680° Réaumur. In Venezuela, the sugar cane requires a longer time to grow in a higher and therefore cooler position than in a lower and warmer, and the length of time required is in proportion to the height.196.Hence it is that the isothermal lines are not parallel with the equator or with one another. The greater number of these have two northern and two southern summits; the former on the western coasts of Europe and America, and the latter in eastern North America, and in the interior of Asia.197.The quantity of rain which falls every year is, at St. Petersburg and Pesth, from 16 to 17 inches; at Berlin 19, Mannheim 21, Tübingen 26: in the interior of France 16-24; on the French coast 25, on the eastern coast of England 24, on the western coast 35, in Milan 36, Genoa 44, on the coast of most tropical lands 70-120. On the political-economical influences of most climates, seeGobbi, Ueber die Abhängikeit der Populationskräfte von den einfachen Grundfstoffen, 1842.198.The snow limit at Mageröe in Norway is 2,200, in Iceland 2,900, in the northern Ural 4,500, in the Alps 8,200, in the Caucasus 10,400, and Quito 14,850 feet high. Hence it is that mountainous countries which produce nothing in the north, make magnificent vineyards in warmer countries.199.In central Germany, even a second crop can be produced after the corn harvest. In Arabia, the same seed produces three harvests, because the grain which falls at the time of harvesting to the ground, germinates immediately and suffices for new seed. (Niebuhr, Beschreibung, 154.)200.Thus in the northern states of the American union, wheat yields a return of only from four to five times the amount sown; in France, 5-6 times (Lavoisier): in Chili, 12 times; in northern Mexico, 17 times; in Peru, 18 and 20 times; in southern Mexico, 25 and even 35 times; in Germany, maize seed yields at best one hundred fold, while in the torrid zone there is a return of from three hundred to four hundred fold, generally.201.Andalusian corn produces in the mill only one-half as much bran-waste as Baltic wheat produces.Bourgoing, Tableau de l'Espagne, II, 155. Baltic wheat contains 6-7 per cent, of azote, and Algerian, 20-25 Per cent. (Kabsch, Pflanzenleben der Erde, 1865.)202.In Europe the blossoming season is retarded four days for each degree of northern latitude. (Schübler.) As we advance towards the north, the difference becomes less noticeable, but more so as we go towards the south. In mountainous countries a similar difference is observable, produced by a like climatic influence. It is from about 10 to 12 days, for a height of from 500 to 600 feet. (Wolff, Naturgesetzliche Grundlagen des Ackerbaues I, p. 332 ff.) In the cantons, in which the Swiss confederation had its origin, the pasturage of the Alps lasts generally thirteen weeks, but in the higher Alps it lasts only from six to seven weeks. (Businger, C. Unterwalden., p. 52.)203.In central Italy, winter wheat may be sown in October, November or December; summer wheat, in February or March. (Sismondi, Tableau de l'Agriculture Toscane, p. 35.) In Judæa, it was possible to harvest figs ten months in the year. (Joseph, Bell. Jud., Ill, p. 10.) On the other hand, there is Jemtland, where the peasant in many places surrounds the northern portion of his cornfield with fagots, and lights them in August when the north wind blows, to protect his land from the frost; and where the expression“green years”is used to designate those in which the harvest has to be reaped before it is ripe. (Forsell, Statistik von Schweden, 24.) In the valuation made of the lands of the kingdom of Saxony, for assessment purposes, the cost of supporting a yoke of oxen in the lowest country is estimated at only three-fourths of what it is in the highest localities, because in the former, 200 work days can be calculated upon in the year, in the latter only 159. In central Russia, the greater part of the labor of agriculture, sowing and harvesting, has to be finished within the space of four months. In central Germany, they are spread over seven months. Other things being equal, seven horses and ploughmen are needed in Russia where only four are called for in central Germany, (von Haxthausen, Studien I, 174.) On the impediments put in the way of agriculture by the climate of eastern Prussia, seeMeitzen, Boden und landwirthsch. Verhältnisse des preussichen Staats, 1868, I, Abschn., 6.204.“In both hemispheres, the zone in which the temperature decreases most rapidly lies between the 40th and 50th degrees of north latitude. This circumstance must have a happy influence on the culture and industry of the nation inhabiting the neighborhood of that zone. Here is the point where the regions of the vine touch upon those of the olive. Nowhere in the world, do the products of the vegetable kingdom, and the most varied wonders of agriculture, follow with such rapidity on one another. The great variety of products enlivens the commerce and increases the industrial activity of agricultural nations.”(Humboldt.) It is true, however, that tropical countries possess, also, in their mountainous parts, thetierra fria,templadaandcaliente, superimposed the one on the other.205.The aggregate coal supply of Great Britain (1869) was 2,180 millions cwt.; of Belgium (1862), 207 millions; of France (1868) 256 millions; of Prussia (1870), 600 millions, of Austria (1870), including brown lignite coal, 158 millions; of Russia (1868), only a little over 9 millions. The great English coal field, in the counties of Durham and Northumberland, embraces 732 English square miles; that of South Wales, 1,200, with a depth of 95 feet, so that the geographical square mile contains here 679 millions of tons, each of twenty cwt. To obtain the same quantity of combustible material as was furnished to Prussia, in 1865, by its coal, it would be necessary to use up 6,331 square miles of forest, (von Dèchen, inEngel'sZeitschrift, 1867, 258.) The supply of coal is, of course, exhaustible while, for instance, turf-fields replace themselves by slow degrees. CompareGriesbach, über die Bildung des Torfs, in the Göttinger Studien, 1845, vol. I. The importance of the coal-fields of the United States, which are twenty-two times as large as those of Great Britain, in the distant future, cannot be over-estimated.206.I need only call attention to the earth-fire (Erdbrand) for the purpose of forcing the growth of garden plants in the neighborhood of Zwickau, which is said to have existed since 1505.207.Thus, in Watt's steam engines of the larger kind, an hourly consumption of ten pounds of coal is needed to produce a force equivalent to that of one horse, while in the smallest machines of only one horse power, twenty-two pounds are needed. SeePrechtl, Technolo. Encyklopädie, III, 669.208.It is easy to see that it is the most important substances needed in industry which are mentioned in this section. Many political economists have considered the principal difference between agriculture and the industries and economies of towns to lie in the contrast here referred to. Thus,A. Sena, Sulle Cause che possono far abbondare li Regni d'oro e d'argento, dove non sono miniere, 1613, I, 3. See the description of the difference between land and machines inMalthus, Principles, III, 5;Senior, Outlines, 86. But it is nothing more than a difference of gradation. Even in the most active of businesses there is a limit which the accumulation of means of production cannot pass without a relative diminution of the income. This boundary is imposed by the limited nature of those organic beings which must contribute to production either actively or passively. Thus, for instance, a manufacturing establishment or commercial business can be enlarged with advantage only so long as it is still possible for one superintendent to conduct it. And so, when cattle are furnished with very abundant and substantial food, a pound of meat costs the producer a much higher price than when they are more moderately supplied: sometimes in the ratio of 1.95:0.98.Boussingault, Economie rurale, II. Where there is absolute over-feeding, the producer must suffer loss. But, even inorganic nature imposes its own limits here; as, for instance, when ships, machines etc., on account of the insufficient strength of the materials of which they are made, cannot be constructed beyond a certain size. But all these limits are much narrower than those imposed by the quality of immovability.209.Senior, Outlines, 26, 81 ff. SeeStewart, Principles, II, ch. 11;Ortes, E. N., I, 18, II, 18 ff. This most important principle in Political Economy is thus illustrated byJohn Stuart Mill, Principles, book I, ch. 12.“The limitation to production from the properties of the soil is not like the obstacle opposed by a wall, which stands immovable in one particular spot, and offers no hindrance to motion short of stopping it entirely. We may rather compare it to a highly elastic and extendible band, which is hardly ever so violently stretched, that it could not possibly be stretched any more, yet the pressure of which is felt long before the final limit is reached, and felt more severely the nearer that limit is approached.”This is, if possible, more obvious in building than in agriculture, both as to the construction of new stories and the excavation of deeper cellars.210.Ad. Mayer, Das Düngerkapital und der Raubbau (Heidelberg, 1869), sees the only conditions of production which man cannot increase at will exclusively in the sun's rays, the employment of which also depends on the quantity of land. Thus would he explainSenior'slaw.211.See the tables of increase inCotta, Anweisung zum Waldbau, p. 228.Count Buquoy, Theorie der N. Wirthschaft, p. 54, ridicules the absurd procedure of a great many farmers, as if by forcing the ploughshare deeper into the soil, they could compel it to produce a double return, and asks: if one should dig a square foot of land to the center of the earth and manure it, who would take it off his hands? As to the effect of manure,Kuhlmann'sinvestigations have shown that 300 kilogrammes of guano produced in three years an increase perhectarein the yield, of 2,469 kilogrammes of hay; while 600 kilogrammes produced an increase of only 2,870 kilogrammes.Schübler, found that where salt had been used for manuring purposes, 40 kilogrammes produced a maximum of fertility from which point forward every increase in the amount of salt was attended by diminished returns, and finally led to complete barrenness. SeeWolff, Naturgesetzliche Grundlagen, I, 408, 412, 502. Constantly increased irrigation would convert the land into a swamp instead of indefinitely adding to its fertility. Nor can abundant sowing be of any use when it reaches such a point that the plants stand so closely together as to interfere with their proper development.212.These differences correspond with the differences in the kinds of deterioration to which land is liable from rivers, floods, lava, etc., soil-exhaustion, and the growing wild of the land.213.From a technic point of view, it would, perhaps, be practicable, in most instances, to obtain the phosphoric acid immediately from the land and transfer it to other land; but the relation of the cost to the result makes it impossible from an economical point of view.214.It most certainly is always an uncommon advantage that certain kinds of soil, rich in kali and decayed vegetable matter, yield a long series of harvests without the addition of manure, provided, always, that a short interval is allowed to the process of decay to replace the exhausted plant-food. Thus in many volcanic regions. Compare on similar districts in the Deccan:Rilter, Erdkunde, V, 714.215.According toSchübler, the absorption of water by 100 parts of earth is, in the case of quartz-sand, 25 per cent. of its weight; for clay, 70 per cent.; for calcareous earth, 85 per cent.; humus, 190 per cent.; and for 100 parts of their value, respectively, 37.9, 66.2, and 69.2 per cent. The consistency of the four kinds of earth, in a dry state, is in the proportion of 0.100, 5, 8.7; their adhesion in a moist state, to iron agricultural implements, is in that of 0.17, 1.12, 0.65, 0.40. Of 100 parts of water mixed with these kinds of earth, the evaporation in four hours, at a temperature of 18° 75' (centigrade) is 88.4, 31.3, 28 and 20.5 per cent, respectively. The diminution of volume when the moist earth dries, under the same degree of temperature, is, 0, 18.3, 5 and 20. Their relative absorption of atmospheric moisture for 48 hours is as 0, 24, 17.5 and 55; their absorption of oxygen in 30 days is respectively 1.6, 15.3, 10.8 and 2.03 per cent.; and, lastly, their heat-holding power is in the ratio of 95.6, 66.7, 61.8, 49.216.In Austria, below the Enns, only 3.8 per cent. of the soil is barren; in the Tyrol, 29 per cent.; in Dalmatia, 48.1 per cent. (Springer). In the French Pyrenees, 43 per cent. is considered incapable of cultivation; in the Alps, in Landes and Morbihan, 42 per cent.; in the departments of Nord and Somme, 1.3 per cent. (Schnitzler).Fransciniconsiders 36 per cent. of Switzerland unfit for tillage. The idea“barren”is a very vague one, and hence a comparison of different countries on this point should not be made without great caution.217.Wolff, loc. cit., 353 ff. As to the manner in which soil and climate mutually improve or injure one another, seeSchwerz, Prackt. Ackerbau I, 12.218.In this respect, also, the fundamental difference between agriculture and industry is very important, inasmuch as the products of the former, equal in value to those of the latter, require a very large supporting or bearing surface; those of industry, a very small one. IfNobbe's“water-cultivation”should ever come to assume any great practical importance, agriculture would approach to industry in this respect.219.Wolkoffhas called special attention to mereemplacement: Lectures d'Economie polítique rationelle (1861), pp. 90 seq., 157 seq.Bastiat'srather broad and enthusiastic assertion, that no mere product of nature possesses value (in contradistinction to utility), an exaggeration of his very honorable contest with the socialists (1848!), is refuted by daily experience, as when, for instance, discoveries are made accidentally of metallic veins, coal-fields etc., which immediately acquire great exchange value.220.Aristotledistinguishes between ἀπολαυστικὰ and κάρπιμα. (Rhet., I, 5.)221.Humboldt, Essai politique, súr la N. Espagne, IV, 9, in which he estimates the relation of the culture of the banana to that of wheat, in respect of mere quantity, to be as 4,000 to 30,—“probably the best gift of nature to awakening man, and the object of the most ancient cultivation.”222.It was said that in Easter Island, three days' labor sufficed for a man's maintenance through the whole year. A similar gift of nature to tropical lands is the date tree. It is turned to so many different uses that the Arabs of the coast of the Persian Gulf say that it is possible to construct a ship, rig it, supply and freight it, from date trees. Houses are built of palm wood, covered with palm leaves, furnished with palm mats, lighted with palm chips, and heated with palm coals. The whole architecture of these countries is fashioned by the date tree. Date wine is the favorite intoxicating beverage. There is a proverb current there that a good housewife can vary the preparation of the date for her guests every day in the month. Even the pulp is eaten. Each tree yields an average of 50-250 lbs. of dates; and a tree may last over 200 years. An acre may contain more than 200 trees. The labor of cultivation is very slight, although it demands more care than the banana. CompareRitter, Erdkunde, XII, 763. An acre planted with the sago-palm yields as much nourishment as 163 acres of wheat land. (Reise der Frigatte Novara, II, 113.)223.SeeD. Hume, Discourses No. I (On Commerce). While in hot countries“the sun does more work for man, it diminishes human strength itself.”(M. Wirth.) That, however, such people, to their surplus of the natural means of enjoyment and the consequent laziness and absence of care, add the bright side of a joyous disposition, is well shown byGoethe, Werke (16 mo., 1840), XXIII, 246.224.Noticed even byThucyd., I, 2. See alsoEuripides'comparison of Sparta and Messina, inStrabo, VIII, 366.225.We find, in a great many countries, that their northern portions are endowed more sparingly by nature with means of enjoyment (Genussmitteln) than southern portions, but more abundantly with means of acquisition. (Erwerbsmitteln.) Hence, the former are latest to develop; but once developed, they assume a much higher place in civilization than the latter. This is true of Italy, Spain, Portugal, France, the Netherlands, and the United States, and of North America in general, as compared with South America. Something similar may be seen in the contrast between Austria and Prussia. The latter is colder and less fertile, but far superior to the former in extent of coast, in rivers, and fossilized combustible matter.226.The rule is not without its exceptions. Thus, for instance, Borneo and New Guinea are physically very like each other, but zoölogically two different worlds; the former belonging to India and the latter to Australia.227.Even language, which is the most general and most accurate expression of the intellectual genius of a people, presents a strikingly analogous contrast in mountainous and coast countries. Thus, compare the Ionic, Latin, Low German, Danish and Portuguese, with the Doric, Oscan, High German, Swedish and Spanish.228.SeeStrabo, II, 126. seq.229.The most striking instance, illustrative of the manner in which the nature of a country influences the character of a people is afforded by the difference in the development of the Aryans in India and Persia, especially when their sojourn in the territory of the Indus before that near the Ganges is looked upon as an intermediate stage.230.French writers, especially, have exaggerated the influence of nature over man. Thus,Bodin. de Repub. (1584), V, I;Montesquieu, Esprit des Lois, XVII, 6. XVIII, 1, 18.Cabanis, Rapport du Physique et du Moral de l'Homme (1805), IX, Mémoire, Influence des Climats.Comte, also, Traité de Législation (1827), is of opinion that“the degree of civilization which a people may attain does not depend on the degree of development of which they are capable by nature, but on that which their geographical situation permits them to attain.”See, also,Herodot., III, 106;Hippocr., De Ære etc., 71;Euripid., Medea, 820 ff.;Plutarch, De Exilio, 13. The proper mean has been found byE.M. Arndt, in his Anleitung zu historischen Characterschilderungen (1810), and byRitter, and his school. See, also,K.S. Zachariæ, Idee einer volkswirthschaftlichen Geographic als Grundlage der praktischen N. Œkonomie fur jedes einzelne Volk: Vierzig Bücher v. Staate, II, 79. See, also,Turgot, Géographie politique, 1750, Œuvres (ed. Daire, II, 611 ff.);Lueder, Nationalindustrie und Staatswirthschaft, III, 1800 ff.231.Malte Brun, Précis. de la Geographie universelle, VI. pr.232.Strabo, IV, 178. On the climate of ancient Germany, seeTacit, Germ, 2.233.Fraser, Travels in Koordistan and Mesopotamia, II, 5. See, also, the description of ancient Susiana inStraboXV, 731, with that of the new one byM'Kinneir, Geogr. Memoir of Persia, 92.234.Thus,Galenus, De Usu Partium Corporis humani, L. I. The animal nearest to man mentally, the elephant, is also possessed of a member more like the human hand than any other animal. Its trunk was calledmanusby the Romans. Hence the Indians call the elephant, the animal gifted with a hand.Buffon'sview is exaggerated by Helvetius in the interests of materialism.Aristotle, (De partt. anim. IV, 10), opposes the saying of Anaxagoras: διὰ τὸ χεῖρας ἔχειν φρονιμώτατον εἶναι τῶν ζώων ἄνθρωπον. CompareBell, On the human Hand, 1836.235.As to the imperfection of the ordinary division into agricultural, industrial and commercial labor, seeJohn Stuart Mill, I, ch. 2, 9. The division of all labor into mental and physical, is not more satisfactory; for even the basest labor is not wholly physical. SeeBuckle, History of Civilization, vol. II.236.DioscoridesandGalenwere acquainted with, at most, 600 plants;Linnæus, with 8,000. About 1812, about 30,000 had been described; in 1837, about 60,000; in 1849, about 100,000.Buckle, History of Civilization etc., II, p. 359.237.Industrie extractives, according toDunoyer. When nature's spontaneous gifts are exhausted, thisoccupationreadily becomesproduction.238.Industrie voituriére, according toDunoyer;industria traslocatricein opposition totrasformatrice, according toScialoja.Ortesdistinguishes only four classes:agricoltori,artefici,dispensatoriandadministratori, orraccoglitori,manifattori, anddifensori di bene(E. N. I, 2; III, 14).A. Walker, Science of Wealth (1867), p. 34, knows only three classes: transmutation, transformation, transportation.239.This is not to be understood in the sense, that there ever was a period in which these sciences were unknown. We need only mention the position occupied by the priest and knight in the middle ages. But, looked upon as economic labor, intended only for purposes of free commerce, they have become very important only within a relatively recent period of time. Thus, for instance, there was in Lower Austria, in 1866, one lawyer or notary to every 6,569 inhabitants; in Bohemia, to every 14,860; in Galicia, to every 22,361; in the whole of Cis-Leithanian Austria, 12,259. In 1865, there was in Prussia, one to every 11,149; in Bavaria, to every 7,350; in Hanover, to every 4,946; in 1862, in Baden, one to every 4,992; in 1867, in Saxony, one to every 3,048.Hildebrand'sTagebuch, 1868, I, 234. There was in Prussia, in 1871, one doctor to every 3,230 inhabitants; in Berlin, to every 1,100; in Heldesheim, to 1,803; in Cologne, to 2,120, in Marienwerder, to 7,240; in Gumbinnen, to 10,047.Engel, Preuss. Statis. Zeitschrift, 1872, 376. The verb“to plow”is, according to comparative philologists, of more recent origin than“to weave.”(Lassen, Indische Alterth. I, 814 ff.) And yet agriculture, in the sense above indicated, undoubtedly precedes industry.240.Observed byGeiler v. Kaisersberg. CompareSchmollerin the Tübinger Zeitschr., 1860, 483. Hour wages occupy a middle place between day wages and piece wages.241.Thus the introduction of piece wages into lower Silesia has increased the daily earnings of workmen by one-third, one-half, and even more.Engel'sStastist. Zeitschr. (1868), p. 327. The investigations of the German agricultural congress on the condition of agricultural laborers in the German empire (report ofv. d. Goltz, 1875) show that in all Germany on an average, the daily earnings of a contract workman (Accordlöhner) is to the daily summer wages of a day laborer as 15:10 (1420). On the other hand,Brassey, in the construction of a railway, found that the same workmen engaged in grading, digging, etc., cost 18 pence per yard when paid by the day, and 7 pence when paid by the piece. (Work and Wages, 266.) Swiss experience is, that production became 20 per cent. cheaper under the piece wages system. (Böhmert, Beitr., 109.)242.According tov. d. Goltz'sEnquête, the earnings of workmen by the piece, compared with the wages paid workmen by the day in summer, is especially high in middle Franconia (16.5:10); in the Leipzig circle of the German empire (16.6), in the Braunschweig plain (16.8), within the jurisdiction of Hildesheim (18.1), of the Bavarian Palatinate (18.6), in Rhenish Hesse (23.2), especially low in Stettin (13.2:10), in Stralsund (12.4), in Schleswig Holstein (12), in Osnabrück, (11.7.)243.According tov. Flotow, Anleitung zur Fertigung der Ertragsanschlage, I, 80, four days of serf labor are equivalent to only three of a free day laborer. According tov. Jacob, Ueber die Arbeit Leibeigener und freier Bauern (1815), 21, two day laborers are equal to three serfs, and one farm horse is equal to two employed by serfs. It is as impossible to obtain accurate general estimates here, as in the case of slave labor. As a rule, hope is not only a more humane but a sharper spur to action. But if force is employed at all, there is no doubt that the greater it is, the more effectual it is. Wherever the right of corporal punishment has been taken from the masters, the technic value of serfdom has uniformly decreased. In the English West Indies, formerly, philanthropic masters who treated their negroes with unwonted gentleness, obtained from them, as a rule, very poor economic results. While each of the slaves expressed the greatest indignation at the idleness of the others when they had“so good a master,”they were all equally and excessively lazy. The weekly production of a plantation sank rapidly under this system from thirty-three hogsheads to twenty-three, and finally to thirteen.Math. Levis, Journal of a West India Proprietor, 1834; Edinburg Review, XLV, 410. For the same reason, the negroes in the Spanish colonies, who were treated much more gently than those owned by other European nationalities produced much worse work. See, however,Columella, De Re rust., I, 8.244.According toHowlett, The Insufficiency of the Causes to which the Increase of our Poor Rate have been ascribed (1788), piece wages had become usual“a few years ago.”Very recently the trades unions have again restricted the system of piece wages (§ 176).245.This system is inapplicable in the case of domestic servants (Gesinde) who are a part of the household, and who afford to their masters, besides their services, the advantage of having a person at their disposal always about them, and whose wages are therefore in great part their board and lodging. Still less can it apply to the case of the family physician, whose services consist not simply in writing prescriptions, but who is also the professional family friend. The same may be said of the state official, clergyman etc., from whom it is demanded that he should sacrifice his entire life to the service of the public. Against adopting piece wages in the case of state officials, it may be further urged that no case at law, no act of public life is precisely similar to any other. It cannot be applied to that of soldiers, because they are called upon for action only after a long term of peace, during all of which they must keep themselves in readiness for war. (Schäffle, N. Œk., II, 388.) It has also been the practice of courts, until recently, on account of their dignity, to pay their mechanics not by the piece, wherever that was practicable, but by a fixed salary. An able professor in a university is of use to it not only by his lectures, but by his reputation and example etc.; hence, here, a combination of piece wages and of a regular salary is preferred. As to services, the permanency of which constitutes their essential character, remuneration is also wont to be permanent or hereditary, as in the case of very many public officers, while civilization is as yet unadvanced. Later, in proportion as the progress of civilization makes itself felt, this hereditariness is wont to be confined to the sovereign. For an opposite view, seeBoxhorn, Institutt. politt. (1663), 41.246.Thus, the Chinese, who, by a ridiculous exaggeration bordering on caricature of many of our recent tendencies, may afford us a warning reflection of ourselves in our present state of civilization, rarely labor efficiently when not watched. Only by means of piece wages or the share-system can they be induced to do good work.R. M. Micking; Recollections of Manilla and the Phillippine Islands, 1851.247.Day laborers, for instance, must be watched over during the harvest, to prevent their idling away their time, and piece-workers to prevent their continuing to work in spite of wet weather, binding sheaves, for instance, which causes the sheaves to rot. In England, it is considered almost an impossibility to induce laborers to cut wheat close enough to the soil. (Sinclair, Code of Agriculture, 102.) The haste of piece-workers, in the harvest of the rape, occasions great loss, by the fall of the seed. In Russia the removing of the hide from animals is paid for by the piece, and the laborers injure a very large number of skins in their haste.Steinhaus, Russlands industrielle und commercielle Verhältnisse, 425. Piece-wages are to be entirely discountenanced in the reeling of silk. SeeBernouilli, Technologie, II, 215. A yearly salary is to be recommended in the tending of cattle, because here a certain connection (Anschluss) with individuals is desirable. In building trades, contractors in England prefer a regular salary; but they employ model workmen, the so-called“bell horses,”to whom they pay a large salary, and who keep the others on the strain by their example, and who on that account are very much hated by their colleagues.248.Adam Smith, W. of Nations, I, ch. 8.Howlett, also, l. c., thinks that piece-wages increase the earnings of workmen, but at the expense of their capacity for constant labor.Count Görtz, in his Reise, 328, relates with what fatal effect piece-work in Demarara tells on white laborers and their horses. After the February Revolution, Parisian workmen demanded the abolition of piece-wages, and obtained it in several manufactories. Revue des deux Mondes, March 15, 1848.249.In several Swiss factories, understrappers receive a salary, whilemonteurswork by groupe-contract. (Böhmert, Arbeiterverältnisse und Fabrikeinrichtungen der Schw., II, 70.) Sub-contracting, where the contract is generally made with only one person, for the most part of more than average capacity, and this latter contracts with other workmen on his own account entirely, is considered by philanthropic employers of labor as one of the worst kinds of remuneration. The more democratic system of gang-contract is much better, although even here, it is very easy for the weaker members of a good gang to overwork themselves. (Edinburg Review, October, 1873, 365.)250.Especially important in chemical factories. The expense of greasing on the Rhenish railways fell, through premiums offered as rewards for saving, from 27,000 thalers to 5,000, in spite of an increase in the amount of traffic. (v. Mangoldt, Volkswirthschaftslehre, 349.) This was, besides, the most effectual way of controlling the theft of material.251.In the cachelot fishery, the captain receives one-sixteenth, the master, one twenty-fifth, the second master, one thirty-fifth, the boatswain, one-sixtieth, each sailor, one eighty-fifth of the profit. (Humboldt, N. Espagne, IV, 10.) This system is very common in North America. SeeCareyinJ. S. Mill'sPrinciples, V, ch. 9, 7. In heathen Iceland, mariners were always paid a certain quota of the profits.Leo, inRaumer'shistorischem Taschenbuch, 1835, 524. The same was often the case in China.McCulloch, Comm. Diction. v. Canton. In England, its employment was rendered very difficult by the laws of partnership, which made each individual, except in great chartered societies, responsible for all kinds of debts contracted by the rest of the firm.J. S. Mill, B. IV, ch. 7, 5.252.The house painter Leclaire, in Paris, obtained very high results in this respect.Leclaire, Répartition des Bénéfices du Travail, 1842. He retained for his own services as contractor the sum of 6,000 francs, and paid each workman the salary he had hitherto received. What remained was, at the end of the year, equally divided among all.Leclaireassures us that he was always satisfied with the system. The paying of a proportion of the general profits to laborers is advisable only in case their ability of surveying the whole is not much inferior to that of their employers. Where a special proportion is paid, in special branches of business, it is sufficient if their supervision extends over that particular branch. But a sharing in the profits of business always supposes a corresponding supervision of the business itself, and also the keeping of accounts.253.A very good remedy against indigence among the lower classes. (Umpfenbach, National Œkonomie, 1867, 214.) But whether it will ever be possible to make the remuneration of the navvy or that of a type-setter depend on the final success of his work,qnœre.254.Tournefort, speaking of the fatalism of the Turks, says that they always and everywhere leave the world as they found it. According to their own proverb, no grass grows again where the Osman has set foot.255.The experiments made with the dynamometer in 1800 ff. show that the averageforce manuelleof an inhabitant of Van Dieman's Land is to that of an inhabitant of New Holland, of Timor, of a French marine, and of an English colonist in Australia, in the ratio of 50, 51, 58, 69, 71 kilogrammes.Péron, Voyage de Découverte aux Terres australes, 2d ed., II, 417. It was found more recently in the American army, that the average lifting-power of white soldiers was 314 to 343 -lbs.; of white marines, 307; students, 308; negroes, 323; mulattos, 348; and Indians, 419.Gould, Investigations in the Military and Anthropolog. Statistics of American Soldiers, 1869, 458, seq. According to English manufacturers, an English laborer accomplishes almost as much again as a French one(?), and the latter in turn more than an Irishman. An English contractor, who had worked in French manufactories, expressed his opinion concerning the French to this effect:“It cannot be called work they do; it is only looking at it and wishing it done.”Senior, Outlines, 149. Thus, for instance, a good English spinner with a machine of 800 spindles could produce 66 lbs. of yarn, No. 40, while a Frenchman could produce only 48 lbs. (M. Mohl, Reise durch Frankreich, 535; compareDingler, Polyt. Journal, I, 63 seq.) That the Americans also are inferior to the English in strength and dexterity is attested by the AmericanHewitt. SeeBrentano, Arbeitergilden, II, 231. A Berlin wood-sawyer accomplished as much in ten days as a West Prussian from Labiau in twenty-seven days.J. G. Hoffmann.English farmers on the Hellespont prefer to pay Greek laborers £10 per year“besides their keep,”rather than £3 to Turkish laborers. (Lord Carlisle, Diary in Turkish and Greek Waters, 1854, p. 77 seq.) In Paulo-pinang, the Malayan agricultural laborer receives $2-½ per month, the Malabar, $4, the Chinese, $6; for which compensation they work respectively 26, 28 and 30 days.Ritter, Erdkunde, v, 54.256.Little light can be thrown on this subject by a comparison of different countries. Thus, in France, there are 614 persons in every 1,000 examined fit for military service; in Bavaria, 705; in Denmark, 523; in Austria, 498; in Prussia, 284; in Saxony, 259; in England, where the conscription is from among the lowest classes, 665; and in Württemberg, 490. (Wappäus, Allg. Bevölkerungsstatistik, II, 71, 140.)Massy, Remarks on the Examination of Recruits, 1854. (Memminger, Würt. Jahrb., 1843, 103.) The comparison of different parts of the same state is much more instructive. Thus, in Saxony, cities afford only 197, and the flat country only 265 per 1,000 (Sächs. statist. Ztschr., 1856, No. 4 ff.); and in France there are among those of illegitimate birth a very large number unfit for military service. (Journ. des Econ., 1850, XXV, 69.) According to the Austrian Annual of military statistics, there were in 1870, on an average, throughout the entire monarchy, 211 per 1,000 of those liable to enter the ranks of the military, fit for service; in the Innsbruck command, 325; in Lemberg, 179.257.M. Chevalier, Cours, I, 115.Adam Smith, B. I, ch. 8, noticed the great industry of well paid workmen. Among the uneducated, labor must almost necessarily be repulsive in proportion as it is illy remunerated.258.ThusA. Youngremarked that wages in Ireland are wretchedly low, while labor is far from being cheap. In his“Evidence in Respect to the Occupation of Land in Ireland,”II, 135, he says that a Scotch day laborer at 1s. per day is cheaper than an Irish day laborer at ½s. According toMcCulloch,“Statis. Account of the British Empire,”I, 666, industrial labor in Germany and France is dearer than in England, because in the former countries there are,ceteris paribus, twice as many laborers employed in most manufactures. SeeSenior, Lectures on Wages, 1830, 11, and the reports of the committees of parliament,passimon French manufactures (1825). The same has been experienced in the agricultural history of Schleswig-Holstein. SeeHanssen, Archiv. der Politisch. Œk. IV, 421.La main d'œuvre est chère en Russie dès qu'il s'agit d'une certaine capacité et d'un certain degré d'instruction professionelle, tandis que celle de l'ouvrier ordinaire n'est nulle part aussi bas.(Tégoborsky.)259.Thus evenColumella, R. R. I, 9.J. S. Mill, Principles, I, ch. 7, 5.260.Thus, for instance, the Lex Visigoth., VIII, 4, 16, graduates the fine to be paid by the murderer according to the age of his victim. It increases up to the 20th year in the case of males, and diminishes after the 50th. In the case of females, the maximum is attained between the ages of 15 and 40. Similarly evenMoses, Book III, 27.261.As to what concerns the two sexes, theforce rénaleof adult males is twice that of females in the human species. The difference between them in youth is not so great. The forcemanuelleof the two sexes at the age of 30 is as 9:5. (Quételet, Sur l'Homme II, p. 73 ff.) The numerical ratio of one sex to the other varies but little among those nations which have attained a certain degree of civilization. Seeinfra, § 245.262.It is of great importance to calculate here the number of days in the year in which the laborer is compelled to be idle on account of sickness.Fenger, (Quid faciant ætas annique tempus ad frequentiam et diuturnitatem morborum, Hafniæ 1840), finds the following result:Between 15 and 19 years, 7.2 days. Between 35 and 39 years, 7.8 days.Between 20 and 24 years, 10.3 days. Between 40 and 44 years, 8.3 days.Between 25 and 29 years, 9.5 days. Between 45 and 49 years, 11.6 days.Between 30 and 34 years, 7.6 days. Between 50 and 59 years, 14.1 days.According toVillermé, in the Annales d'Hygiène, II,At 60 years, 16 days. At 67 years, 42 days.At 65 years, 31 days. At 70 years, 75 days.The latter table is the result of a comparison made of the tables of seventy Scotch mutual aid societies. CompareDigler, Polyt. Journal, XXIV, 168.263.Tacit., Germ., 14.Leo, inRaumer'sTaschenbuch, 1835, 418.Maxime sua esse credebant, quæ: ex hostibus cepissent.(GajusIV, 16.) Roman auctionsub hasta! Similar views obtained among the Thracians. SeeHerodot., V, 6. In Sparta, even in the time of Agesilaus, economic labor was considered unworthy of a free man, (Plutarch, Ages, 26); while the Athenians, from the time of Solon, punished idleness, and from that of Pericles“knew no other festival but attending to their business.”Thucyd., I. 70. For some happy observations on this subject, seeRiehl, Die deutsche Arbeit, 1861.264.CompareErasmusColloq. (ed.Stallb.), 21 ff., 213 ff., 392 ff.265.Templelearned from the Dutch of his own age that the time of industrious men is the greatest home commodity of a country. (Works I, 129.)“A trader's time is his bread.”(Sir M. Decker, Essay on the Decline etc., 1744, 24.)Walpole, in his Testament politique II, 385, speaks of the inferiority of the Roman Church in this respect. I would allude to the medieaval prohibition“to sell time”as one of the chief grounds of the prohibition of usury. (SeeRoscher, Gesch. der N. Œk. in Deutschland, 7.)Economia di tempo equivale a prolungamento di esistenza.(Soialeja.)266.Douville, Voyage au Congo I, 239. Seev. Haxthausen, Studien, II, 439;W. Jacob, Production and Consumption of the precious Metals, II, 209. The division of the day into hours dates from the time of the sun dials of Alexandria. It was not known in Rome until after the year of the city 491. (Mommsen, Römische Geschichte, I. 301.)267.Pinckard, Notes on the West Indies, 1806, II, 107. In Spain it looks as if no one in the streets was in a hurry. What a contrast between thesans soucigait of persons at bathing places and the resorts of pilgrims and the precipitate haste in commercial centres!268.Meyendorff, Voyage à Boukhara, 246.269.The history of this idea affords a remarkable example of the confusion produced by the employment of scientific terminology in daily life. Until within a short time every possible meaning of the wordcapitalwas to be found in the dictionary of the French Academy, its scientific politico-economical meaning alone excepted. During the middle ages, the Latincapitalewas used to signify both loaned money and cattle. (Ducange, s.v.) When culture was at its highest in Greece,Demosthenesentertained very good ideas of the nature of capital which he sometimes calls ἀφορμὴ, sometimes ἔρανος, the meaning of which he extends also to the incorporeal capital of a good reputation. (Adv. Mid., 574; pro Phorm, 947.) The same may be said of the Roman in conception ofpeculium. SeeHildebrand'sJahrbb., 1866, I. 338. On the beginnings of the present idea of capital among the later schoolmen, seeFunck, Tübinger Ztschr., 1869, 149. The diary ofLucas Rems, 1491-1541 (ed.Greiff, 1861), calls commercial capital, in most instances, the chief good (Hauptgut) p. 37; alsoCavedal. The words money and capital, interest and the price of money are now confounded in daily life, as they were formerly by most writers. In the 17th century,ChildandLockemay be mentioned as instances.Hobbeshad some faint notion of the productive power of capital. SeeRoscher, Zur Geschichte der englischen Volkswirthschaftslehre, 49, 60, 102. Thus, also, in the 18th century,Law, Sur l'Usage des Monnaies, 697; Trade and money (1705) 117;Mélon, Essai politique sur le Commerce, 1734, ch. 22;Galiani, Della Moneta, IV, 1, 3;Blackstone, Commentaries, 1764, II, 456;Genovesi, Economia civile, II, 2, 18, 13;Stewart, Principles, IV, 1, ch. IV;Verri, Meditazioni, XIV;Büsch, Geldumlauf, V. 14;A. Young, Political Arithmetics (1774), 1, ch. 7.Hume, on the other hand, Discourses (1752), No. 4 (on interest), shows, that the rate of interest is dependent, not asLockesupposed, on the abundance or scarcity of money, but on the state of profit and on the relation between the demand and supply of capital. Similarly,J. Massie, An Essay on the governing Causes of the Rate of Interest (1750).Quesnay, Dialogue sur le Commerce, 173 (ed. Daire), shows that he had a very clear conception of the operation, and of the principal component parts of capital.Turgot, Sur la Formation et la Distribution des Richesses, § 14, 54-79, came very near the truth, and yet missed it. He recognized the necessity of advances which, as a rule, are the result of saving, in every case of production. He also distinguishes in the product of the soil, besides theproduit netand thesubsistance du laboureur, theprofitof the latter. He likewise points out a great number of differences between the“price of money”considered in its relation to trade, and in its relation to loans. He explains the interest on capital, asSchröder, in his Schatz-und Rentkammer, 231, andBenjamin Franklin, in his Inquiry into the Nature of a Paper Currency (1729) had done before, by the fact that the owner of capital can purchase a piece of land with his capital, and thus draw an income without working. Money, he said, was indeed not productive, but neither was any other thing that could be loaned or leased, with the exception of land and cattle.Adam Smithdeserves the greatest credit for his analysis of the idea of capital, although he opposes“capital”to what the Germans call capital-in-use, the“stock for immediate consumption.”WhenCanard, Principes d'Economie politique (1801) andJ. B. Say, Cours pratique, 1828, I, 285, included man's power of labor in capital, they took a retrograde step.“Labour is Capital, primary and fundamental.”Colton, 275. Every grown-up individual, saysMcCulloch, Principles, 1825, II, ch. 2, may be looked upon as a machine which has cost several years of continued care and a considerable sum for its construction. It is only another side of this same perversity, whenMcCullochseeks to force the results produced by animals and machines into the definition of labor.Schlozer, Anfangsgründe (1805), I, 21, goes so far as to call the soul, raw material, which receives productive power from the labor of the teacher! For a calculation of the money value of man in the different ages of life, see Statis. Journ. XVI, 43 ff. See, on the other hand,Malthus, Definitions, ch. 7; andRossi, in the Journal des Economistes, VI, 113. Nor does the view ofGanilh, Systèmes d'Economie politique (1809), I, 243; ofAd. Müller, Concordia, 93 ff., 211; ofHermann,“Staatswirth”Untersuchungen, No. 3; ofDunoyer, Liberté du Travail, L. VI; ofBastiat,Careyand others, who include pieces of land in themselves under the head of capital, seem to be better founded.Hermanndefines capital the durable basis of every utility possessed of value in exchange.Schäfflereckons land as nature offers it to us, amongfreegoods. From the moment that labor and capital are spent upon it, it becomes immovable capital, but he concedes that it still preserves many essential points which distinguish it from other capital. (N. Œk. Theorie der ausschliessenden Absatzverhältnisse, 1867, 65 ff., 89 ff.) These differences appear to me to be still more important than that which land and capital have in common; especially as the historic development of their relations proceeds for the most part in opposite directions. Thus, for instance, as civilization advances, land is wont to become dearer and capital cheaper. How difficult would it be to introduce clearness into the ideas ofintensiveandextensiveagriculture, if land were accounted capital! And it is not only always theoretically, but also very often, in practice, possible to separate the value of a given piece of land from the most durable capital-improvements (Kapitalmeliorationen) made on it. It is only necessary to call to mind the area of buildings.270.Marxmakes a very arbitrary assertion when he says that only the capital operating in trade, and even only that operating in trade where money is used as the instrument of exchange, can properly be called capital; and that, therefore, the modern biography of capital dates only from the 16th century, (Das Kapital I, 106 ff.)271.See, on the other hand,Wolkoff, Lectures d'Economie politique rationelle, 167.272.Hermann(II ed., 238 ff.) distinguishes especiallypreparatory contrivancesauxiliary to labor, such as stationary structures etc., vessels, tools, machines and instruments for measuring etc.273.Thus, for instance, the plow and the gun are machines, the spade and the blow-pipe are tools. A hammer may be considered as a hard, insensible fist; the bellows as a pair of very strong and durable lungs. Tongs take the place of fingers, just as a spoon does of the empty hand, and the knife the place of the teeth. A great number of machines, on the other hand, may be compared to a complete workman. Thus, the action of the mill which grinds grain has very little resemblance to the blowing of the wind or the running of the water, whereas the rising and falling of the pestle in the small mortar for throwing grenades corresponds to the motion of the arm. (Rau, Lehrbuch I, § 125.) The infinite number of functions of which our members are capable is related to their inability to attain alone the greater number of their ends. Hence animals which require no tools can undertake to achieve very few things.“Man is a tool-making animal.”(B. Franklin.)274.This is seen most clearly in the history of the grinding of corn. In the time of Moses, and even of Homer, there were only hand-mills, and originally only mortars. Later, mills set in motion by horse-power were employed. Shortly after Cicero's time, mills driven by water-power came into use.Brunck, Analecta, II, 119, Ep. 39. Mills built on pontoons do not date farther back than the time of Belisarius. Wind-mills have been known since the ninth century; Dutch wind-mills, only since the middle of the 16th century. SeeBeckman, Beiträge zur Geschichte der Erfindungen II, I ff.275.ComparePlato, Polit., 280.276.Thus,Ganilh, Théorie de l'Economie politique I, 133, calls the knowledge, talents and probity of merchants, as well as their reputation, valuable parts of their capital in trade. See, also,Möser, Patriot. Ph. II, 26. See some happy observations on the intellectual capital of nations, as consisting of“known and unknown preparatory labor through their history,”inLotze, Mikrokosomos II, 353 seq.277.CompareDietzel, System der Staatsanleihen (1856), 71 ff. And, earlier yet,Ad. Müllerhad looked upon taxes not in the light of an insurance premium, but as“the interest of the invisible and yet absolutely necessary intellectual capital of the nation.”(Elemente, III, 75.) Of course, the State is much more than a species of capital; just as a Gothic cathedral is something more than a piece of masonry, but does not on that account cease to be a piece of masonry.278.J. B. Say, Traité d'Economie Politique I, ch. 10. Only think of what is known in physiology as the change or transformation of matter (Stoffwechsel!).279.Productive capital has been rendered into German by the wordErwerbstamm, by the author of“Staatswirthschaft nach Naturgesetzen,”1819.Malthus, Definitions, ch. 10, andRau, Lehrbuch, I, § 51, call productive capital alone, capital. According toM. Chevalier, goods lose their quality of capital as soon as they come into the hands of a consumer.Schäffle, N. Œk., II, aufl., 59, calls capital in useGenussvermögen(resources intended for enjoyment) and productive capital,Kapitalvermögen(capital-resources). On the other hand,J. B. Say, Traité, I, 13;McCulloch, Principles, II, 2, 3,Hermann, Staatswirthschaft. Untersuchungen, p. 60 ff., andv. Mangoldt, Volkswirthschaftslehre, 122, divide capital into capital in use and productive capital, according as it provides the possessor with that which he may turn to account directly or indirectly by becoming the owner of goods through its means.Aristotledistinguishes between ὄργανα and κτήματα, the former relating to ποίησις; for instance, a shuttle; the latter to πράξις, as, for instance, bedding and articles of dress. (Polit., I, 2, 5.)280.Thus, for instance, class A embraces parks and forests; B, theaters, churches, manufactories, arsenals, granaries, public walks and roads. Walks can, besides, be used for the cultivation of fruit, and roads for pleasure trips.281.Translated“capital de consommation”by Wolowski, p. 96 of his Roscher's Principles.—Translator's note.282.Dead, or better, dormant capital is such productive capital as, for the time being, remains unused, and which, therefore, does not yield even personal enjoyment. The sum total of this kind of capital is very much diminished by the agency of savings banks. Loaned capital which has been employed unproductively evidently constitutes no longer a part of the wealth of a people. Seeinfra, § 189.283.Wolkoffis so far right, when in his Lectures, p. 142, he calls the return of capital in use notrevenu, butdéstruction graduelle.Schäffleis right, too, and entirely so, when he says that only such an increase of the property, intended for enjoyment simply, is anti-economic, as does not make the personal capacities of labor (Arbeitsvermögen) as much more productive than they would otherwise be. N. Œk., II, aufl., 224.284.Humboldt, N. Espange, II, ch. 17;v. Schlözer, Anfangsgründe, II, 109. Ausland, 140, No. 313. On the extraordinary wealth of even Russian peasant women in pearls, seev. Haxthausen, Studien, 87, 309.285.Townsend, Journey in Spain, I, 115, 310. In the patriarchal age of the Jews, there was a relatively very large quantity of ornamental objects in gold and silver:Michælis, De Pretiis Rerum apud Hebræos, in the Comm. Soc. Götting., III, 151 ff., 160. Conservative Sparta, in the middle age of its history, was certainly not rich, and yet it had more gold and silver than any other Grecian state:Plato, Alcib., I, 123. According toSt. John, The Hellenes, III, 142, the ancients had relatively much more of the precious metals in the form of objects for ornament than the moderns. The Romans, with their usual good sense, did not make use of silver as an article of luxury until they had attained great wealth. SeeCato, R. R., ch. 23, andSeneca, De Vita beata, ch. 21. Then the Carthaginian ambassadors railed at their hosts because they found the same pieces of table silver in all the houses to which they were invited. The younger Scipio, even, did not possess more relatively than 32 pounds of silver ware.Mommsen, Römische Geschichte, II, 383. The relatively great importance of the stores for domestic use, nevertheless, runs through the whole of Roman history. The titlede penu legato, in the Pandects (Digest, XXIII, 9), points to this, during the reign of the emperors, and in earlier times, the derivation ofpenatesfrompenu. SeeRodbertus, inHildebrand'sJahrbuch, 1870, I, 365. Immense importance of the ring in the old north countries:Weinhold, Altnord. Leben, 184 ff. The age of chivalry was very rich in silver plate, cups, basins, etc.Büsching, Ritterzeit und Ritterwesen, II, 137.Anderson, Origin of Commerce, a. 1386.Lord Burleigh, in the age of queen Elizabeth, left after him between fourteen and fifteen thousand pounds sterling in silver ware; that is almost as much as the rest of his whole estate; and, it would seem, that for a man of his rank, even this was not considered a great deal.Collins'Life of B., 44. According toGiustiniani, cardinal Wolsey owned articles of silver to the value of 1,500,000 ducats, and the greater number of the lords of the time were equally well provided with them.286.The Bedouins are fond of decorating their wives and children with all the jewels that they possess, both on holidays and other days, so that they sometimes have four or six bracelets on each arm and fifteen ear-rings in each ear.Burckhardt, Bemerkungen, 188.Wellsted(Roederer's translation), I, 224. In Asia Minor, girls wear their whole dowry in the shape of personal ornaments.Belgiojoso, Revue des deux Mondes, Feb. 1, 1855. In East India even the most wretched towns have their silver workers. The emirs of Scinde, with an annual income of £300,000, had a treasure worth £20,000,000, nearly £7,000,000 of which were in jewels.Ritter, Erdkunde VII, p. 185. On the upper Ganges more jewels and other ornaments are worn than on the lower, where the wealthy prefer to spend their capital on landed estates.Ritter, VI, 1143.287.The first beginnings of this division are to be found inQuesnay(Analyse du Tableau économique, 1758), in which he develops the difference betweenavances primitivesandavances annuelles. See alsoAdam Smith, W. of N., II, ch. 1, who, however, reduces the difference between them mainly to the relations of possession, and hence includes grain and seed in fixed capital.Hermann, Staatsw. Untersuch., 269 ff.;Ricardo, Principles, ch. 1, sec. 2;Schmitt-henner, Staatswissenschaften, I, 387, divides capital into I,infungible, that is, 1, fixed in the strict sense of the word; 2, transportation-capital; II,fungible, 1, transformable capital; a, material (raw material, auxiliary material etc.), b, formed products; 2, circulating capital; a, wares; b, money.A. Walker, S. of W., 57, calls circulating capital that which may be easily transferred from one branch of production to another; fixed, that which can be used with advantage only for the purpose for which it was originally intended.288.Old wood-work is burned; old iron utensils sold; also houses when pulled down.Emminghaus, Allg. Gewerbelehre, 1868, 175.289.If the Mongols, for instance, should despoil China of all its moveable property with the exception of its buried money, its immovable property would become productive only from the time that that money would be used to secure other moveable articles. In any case, the production would be proportioned only to the borrowed seed, cattle, etc. (Sismondi, Richesses commerciale, 1803, I, p. 61.)290.That the Athenians left everything in the lurch to oppose Xerxes, much more readily than under Pericles, even, the flat country of Attica.Büchsenschütz(Besitz und Erwerb im griech. Alterthum, 589) explains by the fact that in the interval between the two periods, fixed capital increased largely. In rude ages under the appellation of a community or nation was understood a number of men; and the state, while its members remained, was accounted entire. With polished and mercantile states, the case is sometimes reverted. The nation is a territory cultivated and improved by its owners; destroy the possession even while the master remains, the state is undone.Ferguson, Hist. of civil Society, V, 4;v. Mangoldt, Volkswirthschaftslehre, 159. Fixed capital is not so sure of being completely used up as circulating. On this point seeSchäffle, N. Œk., 53.291.If the aggregate productive activity of man be designated by the word labor (just as everything produced on a piece of land is inaccurately called its product), then all capital may be considered as the unconsumed result of labor. The recent socialistic theory that considers capital as the wages which have been earned but not paid, is a gross misconception of this truth. This is the origin only of the capital of oppressors and deceivers, and of theirs only in part. Seeinfra, § 189.292.“While we are clothed in our winter garments, the spring stuffs are already in the shops of retail dealers; the light material of next summer's wear is already manufacturing, and the wool for our next winter's clothing spun.”Think of the study in advance which the physician must have gone through, whom we summon to us at a moment's notice!Menger, Grundsätze, I, § 33. seq.293.Thus in dangerous callings, as for instance, among soldiers and sailors, there is very little saving. The same may be said of times of plague. SeeJ. Rae, New Principles on the Subject of Political Economy, 1834.294.That we keep our property under lock and key, while it was customary in Plato's time to seal it up, is in itself a great advance. SeeBecker, Charicles, I, 202 seq. Earlier yet, artificial knots were used.Homer, Odyss. VII, 443.295.CompareHearne, Reise, nach Prinzwalesfort, 43, 58, 119.Barrow von Sprengel, 282.Humboldt, Relation historique, II, 245. Ausland, 1844, No. 359; 1845, No. 84.Stein-Wappüus, Handbuch der Geographie, I, 310. For proof that the clergy by preaching self denial contributed largely to the creation of capital in the earlier part of medieval history, seeGuórard, Polyptiques d'Irminon Préf., 13.296.On the inevitableness of slavery, where capital is needed, and no one cares to save, seede Metz Noblet, Phénomènes économiques, I, 306.297.The origination of capital by“social connexions”(gesellschaftliche Zusammenhänge)Lassalle(Bastiat-Schultze, 92, 98) exaggerates into the absurdity that no capital was ever saved. This is in part related to his confounding land with capital (103 seq.). On the other hand,P. L.(v. Lilienfeld), Gedanken über die Staatswissenschaft der Zukunft (1873), distinguishes between the external and internal creation of capital in human society; the latter based on the condition of every organic being, by virtue of which the present is generated by the past, and generates the future. The intercellular substance of plants, the honey-comb of bees, and the blood in the animal body, correspond to the capital of a nation.298.Hermann, St. Untersuchungen, 289 ff.;List, System der politischen Œkonomie, I, 325 ff. Thus, for instance, capitalization among a race of hunters may be continued longest by the creation of herds; that of a race of shepherds by the building of houses, and by land-improvements; that of an agricultural people by the establishment of trades, artificial roads, etc. As to how, in general the accumulation of goods to any great extent, supposes exchange, and as to how, first of all, with exchange through the existence of a superabundance wealth may originate, seeHermann, loc. cit., II, Aufl., 25 ff.299.The annual increase of the capital of France during the later years of Louis Philippe's reign, was estimated at from 200 to 300 million of francs; during the best years of Napoleon III's reign, at 600 million. Journal des Econ., Nov., 1861, 170. The capital of the British empire, judging from the statistics of the income tax, increased from 1843 to 1853, in Great Britain alone, at least £42,000,000 yearly; from 1854 to 1860, in the whole empire, at least £114,000,000; and in 1863 alone by £130,000,000. London Statis. Journal, 1864, 118 ff. A war carried on on English soil would doubtless be more destructive of capital than one waged in Russia; but Russia would recover from one like that of 1854-55 with much greater difficulty because of the small tendency of its people to amass capital. In countries in which the middle classes preponderate, the influence of the amassing of capital on foreign politics is one that favors peace. In despotic or democratic countries, it may as readily favor war.300.The“absolute formation”of capital above described is, of course, the only one in the general economy of mankind. In the economy of individuals, we frequently meet with another which is only“relative,”as when the increase of one's resources is attended by as great or even greater decrease of another's. This is the case, for instance, where privileges or monopolies are granted. The same phenomenon is found also in the intercourse of economies of different nations.Supra, §64.301.ThusCicero, De Off., II, 3, 4. Nature may indeed produce mere value in use without the coöperation of labor, in the narrow sense of the word; as, for instance, a forest which protects a district from avalanches etc. But“everything which has been transformed into goods tends constantly to return to its natural state, and to withdraw itself from the life of goods.”Stein, Lehrbuch.302.CompareList, System der Polit. Œkon. But see also the very fine discussion ofJ. S. Mill, Principles, IV, ch. VI, 2, on the dreariness of nature, when taken exclusive possession of by man;“with every rood of land brought into cultivation which is capable of growing food for human beings; every flowery waste or natural pasture plowed up; all quadrupeds or birds which are not domesticated for man's use, exterminated as his rivals for food; every hedgerow or superfluous tree rooted out, and scarcely a place left where a wild shrub or flower could grow, without being eradicated as a weed, in the name of improved agriculture.”303.In Paris, in 1820, the necessary tools of a rag-gatherer cost 6-¼ francs.Garnier, Elements d'Econ.-polit., 43.304.It is not to be overlooked that all labor expended for a distant end also falls under the head of capital. SeeDroz, Economie politique, 1829, I, 6.305.For a good exposition as to how England has need of more agricultural products, the East Indies of more capital, and the West Indies of more labor, seeFawcett, Manual of P. E., 110.306.It is a very significant fact, that, at present, in certain European countries, in Germany for instance, the laborer is called ataker, and the capitalist agiverof work. The expressions employed byCanard,SayandHermann, teach a similar lesson.307.Schäffle, Kapitalismus und Socialismus, 124 seq.308.It is evident, that, absolutely considered, the predominating factor of an earlier period may continue to increase during the following: and, as a rule, it does continue to increase.309.I need cite only the instance of the slaves, who called out the hours, thus performing the functions of a clock:Martial, VIII. 67;Juvenal, X. 216;Petron.26; of the turning of water wheels, in Egypt and Babylon, by human hands.Strabo, XVI. 738, XVII., 807. Among the ancients, it required one shepherd, and shepherd boys besides, to take care of twenty sheep. (Geopon.XVIII, 1.) In highly cultivated regions, the number ran up to fifty. (Demosth., adv. Euerg. et Mnes., 1155.) It seldom passed eighty (Varro, De re rust., II. 10, 10. 2, 20), or one hundred (Cato, R.R. c. 10); while, recently, five men are sufficient to take care of eighteen hundred sheep. SeeRoscher'sdiscourse on the relation of Political Economy to classical antiquity, in the reports of the Royal Saxon Science Association, May, 1849. AlsoD. Hume, Discourses, No. 10.310.The productive power of each of the factors of production has been over-estimated by some schools. AfterGratian(c. i, C. XIII. qu. i), had clearly recognized the necessary coöperation of the three elements, there was in the one-sidedness with which the Reformers emphasized God's blessing as the only source of wealth, a great over-estimation of the factor nature. The Mercantile System over-estimated the factor capital, in one of its most obvious component parts, money. In later times again:“La terre est la source ou la matière d'où l'on tire la ichesse; le travail de l'homme est la forme qui la produit. Tous les hommes d'un état subsistent et s'enrichissent aux dépens des propriétaires des terres.”(Cantillon, Sur la Nature du Commerce, 1755, I. 33, 55.)La terre est l'unique source des richesses.(Quesnay, Maximes générales de Gouvernement, 1758, ch. 3.) In another place, indeed, the same writer says:les revenus sont le produit des terres et des hommes (Grains, p. 276, Daire), andMirabeaufrequently laid stress on the necessary coöperation of labor and capital. (Landwirthschaftsphilosophie, translation byWichmann,I, 5.)Turgot, Sur la Formation et Distribution des Richesses, § 7. For an excellent refutation of this“Physiocratic”one-sidedness, which, if all men are endowed by nature with equal rights, leads to socialism, seeCanard, Principes, 6. According toGioja, N. Prospetto, I. 35, the part played by labor, in the production ofParmesancheese, is a thousand times as great as that played by the soil; and in the production of a Dutch tulip, a hundred thousand times as great. The English are wont, similarly, to over-estimate the relative power of labor. (Ponocratie, afterAncillon, Essais philosophiques, 1817, II. 327.)“Commerce and trade first spring from the labour of men.”(North, Discourses upon Trade, 112.) Thus,Locke(1690), Of Civil Government, II, 5, 40 ff., is of opinion, that, at least 9/10 of the value of the products of the soil, useful to man, are to be ascribed to labor, and, in the case of most, even 99/100. And so,Berkeley(1735), Querist, No. 38 seq. This view is advocated in its boldest form,—a thing unusual in the case of the independent disciples of a great master—byMcCulloch, Principles, II, ch. i, that it is to labor, and to labor alone, that man owes everything that possesses any value in exchange. Similarly,J. Mill, Elements (1824), III, 2. The consequences which socialism might draw from these premises are self-evident.Karl Marx'swhole system, for instance, rests, without any attempt at demonstration, on the assumption that the Ricardo school is right. Much more moderate views are met with earlier. Thus,Hobbes, De Cive, XIII, 14, andLeviath., 24 (1642 and 1651), callslabor et parsimonianecessary sources of wealth;proventus terræ et aquæuseful ones; andPetty, On Taxes (1679), 47, says:“Labour is the father and active principle of wealth, as lands are the mother. Land and labour together are the sources of all wealth; without a competency of lands there would be no subsistence, and but a very poor one without labour.”Harris, Upon Money and Coins, 1757, P.I.Adam Smith, also, in spite of the well known passage at the beginning of his work, very frequently lays stress on“the annual produce of land and labour.”(See the passages collected inLeser, Begriff des Reichthums bei A.S., 97.) According toLeibniz, regionis potentia consistit in terra, rebus, hominibus. (ed. Dutens, IV. 2, 531.)Ricardo'sschool is wont to bring capital under the head of labor, as saved-up labor. This is about as correct as to say, that all that a grown man does, his parents had done. (Umpfenbach, Nat. Œk., 64.) There is only one way in which labor, and even then the expression is not exactly correct, can be looked upon as the only factor in production; and that is to presuppose the forces of nature as matters of course (als sich von selbst verstehend), and to call the aggregate use made of them by the human mind, labor. Or we might say with oldEpicharmos, that the gods sell all goods for labor. (Xenoph., Memor. II. 1.) Moreover, even in purely intellectual productions, in poetical productions for instance, nature, labor and experience, the culture inherited from former ages (a kind of intellectual capital) uniformly coöperate. But how almost completely valueless in literature are all entirely pure (empty!) productions of the fancy!311.Before the predominance of the Mercantile System,Montchrétienvery cleverly called all trades:parcelles et fragments de cette sagesse divine que Dieu nous communique par le moyen de la raisen. By means of the three estates;labourers, artisans, merchands, tout état est nourri; par eux tout profit se fait. L'utilité règle les rangs des arts. (Traité, 12, 45, 66.) The teaching ofP. Gregorius Tolosanos(ob. 1597) on the different classes of society and the different callings of men, is still more in keeping with the present doctrine of production; only, in the moralizing tone of the time, he speaks rather of their dignity than of their influence in creating wealth: De Rep. I, 195. See, also, the earlier views ofFranc. Patricius(ob. 1494), De Rep. I, 4, 7, 8.312.CompareA. Serra, Breve Trattato delle Cause che possono far abbondare i Regni d'Oro d'Argento, 1613.Th. Mun, England's Treasure by foreign Trade, 1664.Ch. King, British Merchant or Commerce Preserved, 1721. But, particularly,A.C. Leib, Von Verbesserung Land und Leuten etc. (1708), who, from the point of view of the Mercantile System, draws a very clear distinction between the productive and unproductive classes. See, also,infra, §116. First thoroughly refuted byW. Petty, Political Anatomy of Ireland, 67, 82. Quantulumcunque concerning Money (1682).D. North, Discourses upon trade (1691). SeeRoscher'sGeschichte der englischen Volkswirthschaftslehre, 77, 88, 138. And later, especially,Ad. Smith, W. of N. IV., ch. 1 ff.Adam Smith'sdoctrine of productive and unproductive labor is to be found already, in this period, inPetty, Several Essays, 127 ff. Political Anatomy, 185 ff; also, in the anonymous work, A Discourse of Trade, Coyn and Paper Credit, London (1697), 44, 159.313.Quesnay, Dialogue sur les Travaux des Artisans, 210 ff.; 289 éd. Daire;Turgot, Sur la Formation etc., § 8;Dupont, Correspondence avec J.B. Say, 400, éd. Daire.B. Franklin, Letter to Dr. Evans (1768), and Positions Concerning National Wealth (1769), Works ed. Sparks, VII and II. Similarly evenAristotle, Oec., I, 2, says, that commerce, wage-labor and war win from men, with or without their will; but that only agriculture obtains booty from nature. And soCicerosays of merchants:nihil proficiunt, nisi admodum mentiantur. De Off., I, 42. The same view seems to have prevailed during the middle ages. SeeThom. Aquin., De Rebus publicis, II, 3, 5 seq.Lutherentertained a like notion (Vom Kaufhandel und Wucher, 1524). He prefers agriculture to the trades. See the Irmischer edition of his works, XXII, 284; XXXVI, 172; LXI, 352.Calvinconsidered commerce both useful and honorable; so thatex ipsius mercatoris diligentia atque industria, its profit may be greater than that of agriculture. (Opp. ed. Amstelod, 1664, IX, 223.)Asgill, Several Assertions proved in order to create another Species of Money than Gold (1691):“what we call commodities is nothing but land severed from the soil; man deals in nothing but earth.”ConcerningCantillon, compare § 47, note 4. How violent an innovation the Physiocratic theory was in its time may be inferred from whatZinckewrites in the Leipzig Sammlungen, X, 551 ff. (1753), p. 20, XIII, 861.314.Quesnay, l. c., 189, does not ignore that many workmen earn more than the cost of their necessary subsistence; but he claimed that this was a result of a natural or legal monopoly of the same. The dearer labor was, the more productive it seemed. Per contra, seeDohmon the Physiocratic system, in the Deutsch. Museum, 1778, II, 313 ff.315.Gournay(compareTurgot, Eloge de G., in Guillaumin's edition, I, 266, 271 ff.), as well asRaynal, Histoire des Indes, vol. X, Livre 19, spite of the similarity of their and Quesnay's views, acknowledged on this account, the productiveness of industry. For some remarkable examples illustrative of how it may increase the value in exchange of raw material, see the anonymous work, Paying Old Debts without New Taxes, London, 1723. See alsoAlgarotti(ob. 1794), 318, inCustodi, Economisti classici italiani, Parte moderna, I. Thus a cwt. of coarse cast iron is converted, in a Berlin manufactory, into 88,440 shirt buttons worth 6-⅔ silver groschens each. Hence the value is raised from 1-2 thalers to 19,653 thalers. The increase of the value in use by industrial labor is self-evident.316.Quesnay, Dialogue sur le Commerce.317.Recognized very early byAd. Contzen, Politicorum, Lib. VIII, C. 10 (1629).318.This did not escape the notice of Frederick II.Von Raumer, Hohenstaufen, III, 535.319.Condillacacknowledges the productive power both of industry and of commerce; and that the service rendered by the state is at least economically indispensable. (Le Commerce et le Gouvernment, 1776, I, 6, 7, 10.)Beccaria, Economia pubblica (1769 ff.), IV, 4, 24.Boisguillebert(ob. 1714), Sur la Nature des Richesses, illustrated the utility of commerce by the picture of a number of men bound to pillars, one hundred steps apart, one with a superabundance of food but naked, a second with a superabundance of fuel, a third with a superabundance of clothing etc.; all of whom perish, because unable to exchange their respective surpluses with one another. According toLotz, Revision, I, 217,“buying dear,”apart from real fraud, means only a decrease of possible gain.320.Verri, Meditazioni, XXIV, instead of calling the merchant productive, calls him a mediator between producers and consumers. It would be just as reasonable to call the shoemaker a mediator between the production and consumption of leather; or the cloth merchant, who cuts the material from the piece, an assistant preparatory to the tailor. The labor of commerce is especially like that of the fisherman or the turf digger, because they produce only in so far as they transfer goods from inaccessible to accessible places. See, however,Rau, Lehrbuch, I, § 103. See the demonstration of the productive power of commerce in general, as well as of what is, by way of preference, called industry, inAd. Smith, W. of N., IV, ch. 9. A much more fundamental refutation of the Physiocratic Principle is to be found inJacob, N. Œk., 204 ff.321.In 1843, about 55,000 tons of ice were shipped from Boston. Less than 25 cents per ton was paid for the ice in the first instance. When packed on board ship, it was worth $2.55 per ton. The ultimate sale brought $3,575,000. Ausland, 1844, No. 278. The ancients were acquainted with a similar production of ice, the value in exchange of which might be almost entirely reduced to the labor of commerce. SeeXenoph., Memor., II, I, 30; Athen. III 97: Proverbs of Solomon, 25, 13.322.W. of N., ch. 3. See, however,Garnier'sFrench translation of Ad. Smith, Préf. p. IX and V, note 20. Similarly,Malthus, Principles, ch. 1, Lect. 21. Definitions, ch. 7, 10.323.Baconhad already said of the nobility, clergy and literateurs:sorti reipublicæ nihil addunt(Serm., 15, 29); in opposition to which,Hobbesjustly remarks, that even human labor may, like other things, be exchanged against goods of all sorts. (Leviathan, 24.) In the work, Discourse of Trade, Coyn and Credit, p. 44 ff., and p. 156, the absolute necessity of“head-work”as well as bodily labor, is conceded; but it is insisted that physicians, clergymen and jurists can never enrich a country, and that a relatively large number of them would even conduce to national poverty. (SeeRoscher, Geschichte der englischen Volkswirthschaftslehre, 138.)David Humeconsiders merchants as productive, but says that a doctor or lawyer can grow rich only at the expense of some one else. (Discourses, No. 4, On Interest.)Fergusonvery cleverly compares such a valuation of national wealth to that of a miser. Hist. of Civil Society, VI, I.324.SimilarlyLauderdale, Inquiry, 355;Lotz, Handbuch der Staätswirthschaft, I, § 39, andRau, Lehrbuch I, § 195, concede only indirect productiveness to commerce. It may be shown, in a great many instances, that such productiveness exists side by side with direct productiveness, on account of the thousand ways in which all economic threads are interwoven with one another. ThusPaleyremarks in his work on the Principles of Morals and Politics, that a tobacco manufacturer even may contribute indirectly to the cultivation of grain; an actor, to industry etc.325.ThusSismondi, Nouveaux Principes, II, ch. 1, and, earlier,MengottiColbertismo, 317. (Cust.) See, on the other hand,Hermann, Staatsw. Untersuchungen, 34 ff. EvenJ.B. Saydoes no manner of justice, in this respect, to personal services. He speaksof produits qui ne s'attachent à rien qui s'évanouissent à mésure qu'ils naissent, qu'il est impossible d'accumuler, qui n'ajoutent rein à la richesse nationale. Compare Catéchisme (3d ed.) 52 ff., 174 ff. On the other handDunoyer, Libertê du Travail, L.V., remarks that here labor and its result are made to change places; the former like all labor is very perishable, the latter as lasting as in the case of other kinds of labor. In the one case the utility is fixed in things, in the other in persons.Ad. Müller, Elemente der Staatskunst passim, calls special attention to how the kinds of labor, called unproductive byAdam Smith, preserve the state, and in that way, all individual exchangeable goods. Similarly,Storch, Handbuch, I, 347;Steinlein, Handbuch, I, 460.Lauderdale(443), however, is correct when he says, that the continued duration of the product of labor depends, usually, more on the caprice of consumers than on the nature of the labor.326.Garniercalls attention to the fact, that there is a great quantity of material products, such as laces, perfumes etc., that can scarcely be ever used in further production, and, generally speaking, one's resources for the most part are not kept in lasting goods, but are preserved by the change of technic forms in production.Hermann, I, Aufl., 115.327.WhenSchön, Nat. Œkonomie, 33, ridicules the idea of the productiveness of personal services, by citing the instance of prostitution carried on as a trade, he forgets that many material goods also may conduce to the moral damage of the purchaser of them. It is said that there are in France 3,500 retailers and colporteurs of immoral writings and pictures, who sell yearly nine million numbers or pieces, at a cost of six million francs! (Moniteur, 9 Avril, 1853.)328.CompareSchäffle, Theorie der ausschliessenden Absatzverhältnise, 1867, 135. seq.329.Many of the socialists take a retrograde step in this respect, in as much as they consider only manual labor productive.Fourier'sschool particularly, declaim passionately against the unproductiveness of commerce and of most personal services. CompareV. Considérant, Destinée sociale, 1851, I, 44.330.Besides the above, seeGioja, N. Prospetto, I, 246 ff.;Scialoja, 42;J. B. Say, Traité, I, ch. 2;Hufeland, N. Grundlegung, I, 42, 54;Gr. Soden, Nat. Œkonomie, I, 142 ff.Hermann, St. Untersuchungen, 20 ff., distinguishes three politico-economical points of view; that of the producer, that of the consumer, and that of the whole nation's economy. The producer calls his labor productive, in case he receives back his outlay of capital with the rate of profit usual in the trade of the country. To this point of view, therefore, every service which is paid for, according to wish, seems productive. On the other hand, the consumer ascribes productiveness to all those kinds of labor the achievements of which he may use, and which he can obtain at a convenient price. Whenever, therefore, he pays for a service voluntarily, he acknowledges its productiveness. Lastly, from a national-economical point of view, all labor is considered productive which increases the quantity of goods exposed for sale in the market; and this, personal services do. The technic productiveness, which depends on the execution of the technic ideas floating before the mind of the workman, must be distinguished from this economic productiveness. It is possible that, technically labor may be very productive, and yet cause economic loss; for instance, the fine arts and the so-called master pieces of the trades! SeeSeneca, De Benef., II, 33.H.(33) furnishes a very good refutation of the doctrine that a great deal depends on whether the labor has been paid from capital or from income.Eiselen, Volkswirthschaft (1843), 27 ff., remarks, that the laborer, for instance, who grows corn, must besides look after his health and the preservation of his house; this is a part of his necessary aggregate labor. Why, then, should it be called unproductive when such secondary labor is performed by particular persons? Otherwise the farmer would have no time whatever for his principal business! Edinburgh Review, 1804, IV, 343 ff.;Wakefield, An Essay upon Political Economy, 1804, who is concerned mainly with the theory of the productiveness of labor.L. Lauderdalesays, that when the nation's wealth is estimated according to its value in use, all useful labor is productive; and that when estimated according to its value in exchange, all labor that is paid is productive. (Inquiry, ch. 3.)Stein(Lehrbuch, 68; Tüb. Zeitschr., 1868, 230) conditions the notion of productiveness by the presence of a superfluity of values. But, it may be asked, does a family, which does no more than support itself, labor unproductively? (Compare, however, §30.)J. S. Milltook a surprisingly retrograde step in the doctrine on this point, in his Principles, I, ch. 3. Compare his Essays on some unsettled Questions of Political Economy, No. 3. A still more surprising exaggeration inde AugustinisInstituzzioni di Economia sociale (Napoli 1837), who goes so far as to call a person guilty of arson a productive person because he has produced for himself“the pleasure of destruction”! More recently,von Mangoldtdistinguishes between economic labor and the labor of culture: the latter is incorporated into the man himself, the former one employed on the external world, in order to transform it in a way corresponding to human wants. Viewed from the stand-point of Political Economy, the latter only is productive. (Volkswirthschaftslehre, 1865, 26 ff.)331.We might, indeed, compare original production, that which preceded all other, to eating; the trades, to digestion; commerce, to the movements of the several members of the body; personal services to inspiration, and yet all are equally necessary to the life of the body! Thus,Gamilhcompares agriculture to the root of a tree of which the service rendered by the state is the top. The growth of the latter contributes, as well as that of the former, to the nutrition of the whole, and is far removed from exhausting the tree. Théorie de l' E.P., II, 46 ff.“Natural production”would, indeed, accomplish very little without the legal protection guaranteed by the state, or without the tools furnished by industry etc. But it is, besides, in most instances, a distortion of the truth to speak of productive and unproductive men or classes of men. These expressions are proper only when applied to individual kinds of labor. SeeMurhard, Ideen über Nat. Œk., 88 ff. Persons seriously ill are temporarily unproductive, and children who die early, are unproductive for their whole life.332.Not, however, in the case in which the loser estimates the pleasure of the play higher than the loss.333.J. B. Say, Traité, I. ch. 1.334.v. Cancrin, Œkonomie der menschlichen Gesellschaften, 1845, 10, speaks, in this case, of privative production. Among the Socialists,Bazard'sexpressionl'exploitation de l'homme par l'homme, has found loud echo; instead of which onlyl'exploitation du globe par l'hommeshould be allowed to obtain. (Exposition de la Doctrine de St. Simon, 24.) Butvon Schröderhad already warned the world of“imagined food”which led only to idleness. (F. Schatz- und Rentkammer, 191, 363.)335.Therefore, there should not be too many nor too highly salaried offices. SeeStorch, Nationaleinkommen, 33 ff.336.Seev. Mangoldt, Volkswirthschaftslehre, 29 ff.337.Remained, and notbecome, poor, as is generally supposed; for the enormous wealth of Spain, under Ferdinand and Isabella, as well as during the early period of Charles V. is only afable convenue. Charles V. said: France has a superabundance of everything, and Spain is in want of everything. See also the embassy report ofNavagero(1526), Viaggio fatto in Spagna e in Francia (Venet., 1563), andRanke, Fürsten und Volker, I, 393 ff.338.The prize was won byArreta de Monteseguro. The author of the history of Portuguese Asia, translated byStevens, is of opinion (III, ch. 6), that commerce is not a proper subject for serious history to treat.339.There is a very fine description of this spirit inClenard, Epist. I. ad Latomum (1535 ff.) CompareJuvellanos, inLaborde, Itinéraire déscriptif, IV, 176.Townsend, Journey through Spain, II, 207, 117.Buckle, History of Civilization, II, ch. I. The census of 1788 gave the number of priests and monks, soldiers, mariners, nobles, lawyers, tax-gatherers, authors, students and domestics, at 1,221,000, in a total of 3,800,000 men; from which number there was a multitude of beggars, vagrants etc. to be deducted.Laborde, Itinéraire, II, 32 ff. The seventeen universities and the numberless small Latin schools, with their gratuitous instruction, and their many scholarships, misled a disproportionately large number to engage in study. At the beginning of this century, there were at least 200,000 priests, nuns (Geistliche), etc., in a population of from three to three and a half millions only. (Ebeling, Erdbeschreibung von Portugal, 66.)Seniorshows that the poverty of the Osman is caused by too many state employees, tax-farmers and retail merchants. (Journal kept in Turkey and Greece, 1857-58.) Thus, also,J. Tucker, Four Tracts, 1774, 18, contrasts men engaged in industry with rich idlers, whose increase, possibly by immigration, would make the people a nation of“gentlemen and ladies, footmen, grooms, laundresses etc.”Schmitthener, N. Œk., 656, calls a condition such as that of Spain,“national-economical phthisis.”340.Tucker, Progress of the U.S., 137. The following data also will serve for a comparison: In Belgium, in 1856, it was estimated that, leaving personssans professionout of consideration, 45.6 per cent. were agriculturists, 37.2 industrials, 6.7 in commerce, 2.8 in the liberal professions, 1.5force publique, 2.1propriétaires, rentiers, pensionnés, 3.7domesticité. In Prussia, in 1871, of the entire male population, 28.6 per cent. were engaged in agriculture, forest-culture, hunting and fishing: 32.3 per cent. in mining, industry, building, and in founderies: 8.56 in trade and commerce; 20.3 in personal services and handiwork not belonging to any of the groups above mentioned; 2.3 in the army and navy; 3.7 in other callings; 2.7 were renters, pensioners, and persons who lived by selling or renting houses, reserving lodgings for themselves therein, and persons who gave no account of their calling. (Preuss. statisc. Zeitschr., 1875, 32. ff.) It is, however, surprising thatEngel'sAmtl. Jahrbuch, III, 1867, gives only 48 per cent. as belonging to the first category, and 25 to the second. In the kingdom of Saxony in 1861, 25.1 per cent. of the population were agriculturists and foresters; 56.1 were engaged in industry; 7.7 in trade and commerce; 6.8 in art, science, the service of the state and of private persons; while 4.1 per cent were without any particular calling, or returned none. Bavaria, in 1852, had 67.9 per cent. of its population engaged in agriculture; 22.7 in the trades and in manufactures; 5.5 per cent., persons living on the interest of their money, and by performing the higher class of personal services; 1.9 in the army; and 2 per cent. of listed poor. InHermann, Beiträge zur Statistik des Königreichs Bayern. In France, according to the official reports, there were:Agriculteurs61.46 per cent. in 1851, 51.49 per cent. in 1866;Industriels et commerçants25.95 per cent. in 1851, 32.78 per cent. in 1866;Professions libérales9.73 per cent. in 1851, 9.48 per cent. in 1866.To which it must be added, that, in 1851, there were 2.86sans profession ou dont les professions n'ont pu être constatées; and that, in 1866, on the other hand, there were 2.87 per cent. inprofessions se rattachant à l'agriculture, industrie et commerce. (Legoyt.)In England and Wales, leaving the domestic class out of consideration (women without an independent means of employment, school children, servant girls etc.), and also the“indefinite class,”there were, in 1861, 25.3 per cent. of the population engaged in agricultural pursuits; 60.7 in industrial; 7.8 in commercial; and 6.06 in professional pursuits. In Italy, omitting housewives, children and infirm persons, there were, in 1862, 57.4 per cent. of the population engaged in agriculture; 22.9 in industrial pursuits; 4 in commerce; and 3.9 per cent. in the army and in the liberal professions. (Annali univ. di Statistica, Febbr., 1866.) On Holland, in the middle of the 17th century, seeJ. de Wit, Mémoires, 34 seq.341.Csaplovics, Gemälde von Ungarn II, 1.Torrens, The Budget: On commercial and colonial Policy, 106 ff.342.Precisely as there are more people ruined by spirituous liquors than by bread. Time thieving is also more frequent among servants. There is scarcely anything in agriculture analogous to the lazzaroni who wait all day to help a gondola to land, to unload a coach, etc. There is more in the chase, in the fisheries, or in the cattle raising.343.CompareBastiat, Harmonies économiques, ch. 17. HenceSismondiaccounts it one of the chief merits of the constitutional state, that in it, thepopulation gardiennedoes not regulate its own remuneration. (N.P., I, 144.)Saint Simon, indeed, says that the French members of theChambre, in his time, drew a revenue from the state, three times as large as from their own resources, and were, therefore, deeply interested in increasing the budget. (Vues sur la Propriété et la Législation, 1818.) I would call attention also to the national over-estimation and over-crowding of learned callings from which Germany suffered, even as far back as the time of Louis XIV. (v. Schröder, Fürstl. Schatz-und Rentkammer, 302 ff.); to the disproportionate number of keepers of public houses, which is related to the system of popular assemblies, and is a regular attendant upon Democracy (Bronner, Der C. Aargau, I, 451.) Taxation-legislation may here become a good means of popular education.344.This was recognized very early byGregor. Tolsan, l.c.Ad. Müller, Elemente, II, 255.Storch, Handbuch, II, 229 ff. (Schleiermacher, Christ. Sitte, 668.)A. Smith,W. of N., II, ch. 5, ascribed greater productiveness to agricultural than to industrial labor; in the former case, not only human labor was put in operation, but the forces of nature were compelled to coöperate with them. Similarly,Malthus, Additions (1817) to the Essay on the Principle of Population, B. III, ch. 8-12. Principles of P. E., 217 ff. Both thus explain the rent of land, and so far as products, which have only value in exchange are concerned, they are right. Hence it is all the more surprising thatCarey, the zealous advocate of a protective tariff and opponent of rent, comes back in this to Adam Smith. Principles of Social Science, 1858, II, 35, and passim. Compare alsoJ. B. Say, Traité, II, ch. 8;Sismondi, N. P., II, ch. 5. For the best refutation of this view, seeRicardo, Principles, ch. 2, 3. Does not all labor put the force of nature in operation?Ad opera nihil aliud potest homo, quam ut corpora naturalia admoveat, reliqua natura intus transigit.(Bacon.) Similarly,Verri, Meditazioni, III, 1. An expression escapes evenRicardohimself (ch. 7), to the effect, that capitalists are the producing class.345.Relying on very superficial statistics of England and France,Ganilhadvocates a theory of the productive forces of the several branches of economy the very reverse ofAdam Smith's. He places foreign trade first; then follow wholesale trade, industry and agriculture. (Théorie, I, 240 seq.)346.Ausland, 1846, No. 54. Expressions still used in Europe, such asSpindelmagen(spindle-relation),Kunkellehen(apron-string-hold) etc., for instance, suggest this most ancient and purely family division of labor. The lower classes of the population, even in the most civilized countries, are wont to preserve some of the peculiar customs of very primitive times. Hence it is that among proletarians, the division of labor between males and females is still very small. The employments usual at different stages of life among men, and the costumes worn by them are much more uniform than among the higher classes. SeeRiehl, Die Familie, 1855, passim.347.AsDankwardtshows, thejus civileof the earliest Roman time is based on the condition of isolated labor, the laterjus gentium, on the division of labor. N. Œk. und Jurisprudenz, 1857, Heft. I.348.Saxo Gramm., Hist. Dan. V, 101.Turner, Hist. of the A. Saxons B. VII, ch. 11. Nibel., 351 ff. There is a French proverb:du temps que la reine Berthe filait. Queen Bertha was a mythic daughter of Charlemagne. It may be that the character meant is the old German spinning goddess Berchta. Concerning the daughter of Otto the Great, seeDithmar, Merseb. II.Homer, Od. V, 31 ff.; X, 106; XXIII, 189 ff.Herodot., VIII, 137.Livy, I. 57.349.Eden, State of the Poor I, 558 ff. In the interior of Peru, the priest is also usually a shop-keeper (Pöppig, Reise, II, 365); in Canada, as in many of the villages of the Alps which are not often visited, a hotel keeper. In countries with an unadvanced civilization, the little division of labor that exists is also very awkwardly regulated. Thus in Russia, weak children are very frequently put to work on farms, while powerful men are found in the city offering all kinds of eatables and the pictures of saints for sale. (Storch, Gemälde des russischen Reichs II, 364.v. Haxthausen, Studien I, 335.)350.Babbage, Economy of Machinery, 1833, 201.L. Faucher, Angleterre II, Ch.“la Ville des Serruriers.”The industrial statistics of Paris, furnished byH. Sayin 1847 and 1848, show that in that city alone there are 325 different branches of industry, 17 of which are concerned with the production of food; 21 with building; 32 with the manufacture of furniture; 21 with that of clothing; 36 with that of thread and tissues; 7 with skins and leathers; 14 with vehicles, saddlery, and military equipment; 33 with chemicals and pottery; 33 with working in metal, glass etc.; 35 in that of the precious metals and jewels; 27 with printing, engraving and paper; 15 with that of wooden-ware and wicker-ware; 34 witharticles de Paris. Journal des Economistes, Janv., 1853, 107. According to the industrial almanac of Birmingham, there are in that city manufacturers of buttons in gold, silver, metal, mother-of-pearl etc.; manufacturers of hammers, ink-stands, coffin-nails, dog-collars, tooth-picks, stirrups, fish-hooks, spurs, pack-needles etc.351.And so with the subdivisions. Flannel is manufactured almost exclusively in Halifax, woolen blankets between Leeds and Huddersfield etc.352.The same division of labor was developed among the Dutch in the 17th century, and excited then the wonder of the English. SeeSir W. Temple,Observations upon the U. Provinces, 1672, ch. 3. Works, I, 128, 143. In 1615,Montchrêtienheld up the Flemish as a model to the French, in this respect.353.On the bees, seeVirgil, Georg.IV, 158.354.The principle of the division of labor was known to the ancients:Xenophon, Cyri Discipl., VIII, 2, 5.Plato, de Rep., II, 369, III, 394, IV, 443;Isocrat., Busir., 8.Aristot., Polit., II, 8, 8. Among the more modern writers, compareThomas Aquin., De Reg. pr., I, 1, II, 3.Luther(Works by Walch, I, 388), in his Commentary on Genesis, 3, 19.Petty, Several Essays, 1682, p. 113. Considerations upon the East India Trade, London, 1701.Roscher, Geschichte der englischen Volkswirthschaftslehre, 118.Mandeville, The Fable of the Bees, enlarged edition of 1723, p. 411.Berkeley, Querist, 1735, No. 415, 430, 520 ff., 586:“What is everybody's business is nobody's.”Harris, on Money and Coins (1757), I, 16.J. J. Rousseau, Emile (1762), L. III.Turgot, Sur la Formation et la Distribution des Richesses, § 3, p. 50, 62, 66.Diderot, Encyclopédie de l'Art, s. v. Art.J. Tucker, Four Tracts (1774), p. 25 ff.Boccaria, Economia pubblica, I, 1, 9. But the author to whom we owe most on this score is undoubtedlyAdam Smith. To him we are indebted almost entirely for our knowledge of the natural laws developed in §59seq.355.According toAdam Smith, a nailer can make 2,300 nails (Rausays 3,000 shoemaker's tacks in the Odenwalde) per day; a smith who is only occasionally employed in the manufacture, from 800 to 1,000; and smiths who never made nails before, from 200 to 300. A clever filer makes 200 strokes in a minute; a skilled comb-maker can make in a day from 60 to 70 combs of such fineness that there are from 40 to 48 teeth to the inch in them; eight Liege brick-makers, working together, produce 4,800 bricks per day; children employed in a needle manufactory, in making the eyes of needles, grow so skillful at it that they can make a small hole in the finest hair and draw another hair through it.Rau, Lehrbuch I, § 115. The old proverb,“practice makes perfect,”is followed even by thieves in their great division of labor. SeeThiele, Die jüdischen Gauner I, 87.Fregier, Des Classes Dangéreuses.356.Children, with their thinner fingers, can point twice as many needles in the same time as a grown person.357.The manufacture of English needles demands, on the part of workmen, degrees of skill so different that their pay varies from 6 pence to 20 shillings per day. If the most skillful workman were to manufacture whole needles alone, he would partly be obliged to be satisfied with one-fortieth of what he might otherwise receive.Babbage, loc. cit.358.In the case of machines and in the chemical branches of industry, the labor increases in a much smaller ratio than the material used in production.359.In opposition to monopolies, and to practical constraint which has its source in ignorance etc.360.HenceTorrenscalls foreign trade the“territorial division of labour.”(Essay on the Production of Wealth (1821), 155 ff.)361.SeeBastiat, Harmonies, ch. 1, for a very beautiful exposition of the doctrine that each man receives much more from society than he accomplishes on his part, for it.362.The working together of a great number of persons is often carried on to the detriment of agriculture, for each then waits for all the others to work, throws all the blame on them etc. (Columella, I, 9.) As many a housekeeper must have observed, two seamstresses or ironers accomplish, in a day, less than one, in two days. Of course, this rule does not apply in the case of work which cannot be performed by one man, under any circumstances, or the magnitude of which would easily discourage him, and in which mutual aid is easily obtained; as in the raising of heavy loads, the construction of roads, dikes etc.363.Ad. Smith, B., II, Introd.Hufeland, Neue Grundlegung, I, 215. In many instances, a division of labor, of course, favors the saving of capital. If every workman needed all the tools necessary to the work in which he participates, three-fourths of them would have to lie idle at present.J. Rae, New Principles on the Subject of Political Economy, 164.364.This necessity is observable, although in a peculiar form, even where what has been called the“despotic organization of labor”prevails, instead of freedom.365.In the highlands of Scotland, in Adam Smith's time, there were no smiths who manufactured nails only; for the reason that no smith had a market for more than 1,000 nails a year, that is not for so many as might be manufactured in a single day.366.It is of course very different when there is question of a foreign market, even if it be only indirectly. Thus, for instance, there are in the Hartz mountains, persons who are simply post-makers, trough-makers, chess-wood-makers, block-hewers, shingle-makers etc.367.Too much should not be inferred from the existence among the Egyptians of physicians, specialists for the several members of the body.Herodot., II, 84. Something analogous is to be found even among barbarous nations; but it is accounted for entirely by the superstition of the people. SeeKlemm, Kulturgeschichte, I, 266.368.In the whole of Hesse, there were under Philip the Magnanimous, only two apothecaries, one at Cassel and one at Marburg.Rommel, Gesch. v. Hessen, IV, p. 419, note. And there were no bakers among the Romans before the time of the war with Perseus. All the bread needed by the family was baked by the wife or by female domestics.Plin., H. N. XVIII, 28. The common oven in new towns marks the period of transition. Even yet, in the central part of France, there are localities where each family bakes its own bread for a whole month in advance; and, in the Alpine departments for even a year in advance.M. Chevalier, Cours II, 366.369.It is obvious from the foregoing that, in decaying nations, in which the market contracts and capital decreases, the division of labor also must grow less.370.According toArago, a horse uses the same amount of force to draw 20 cwt. along an ordinary road that he does to draw 200 over a railroad track, or 1,200 on a canal. He could carry scarcely 2 or 3 on his back! Moniteur, 1838, No. 116. It is, however, certain that the introduction of our railroads has somewhat detracted from the advantages of coasts.371.CompareHumboldt, Essai politique sur l'Ile de Cuba, II, 205.372.Strabo, II, 121 ff. In Europe, there is one mile of coast to every 31 square miles in the interior; in North America, to 56; in South America, 91; in Asia, 100; in Africa, 142. (Humboldt.)373.If the original connection of the Caspian sea and the sea of Aral with the Frozen Ocean were still in existence, it is probable that an Asiatic Scandinavia would have been formed in consequence.374.What is true of the sea in this respect may be claimed, also, though in a less degree, for the streams that carry the civilizing fruits of the coasts far into the interior. Nearly all large cities not situated on the harbors of coasts derive their importance from rivers; especially when they have been built on spots adapted by nature to the transhipment of merchandise. That Venice finally eclipsed Genoa is to be ascribed, in greatest part, to its control of an important stream, the Po. The economic importance of Holland, of Hamburg and Bremen will, in the long run, bear the same relation to one another as the geographical importance of the valleys of the Rhine, Elbe and Weser. As nothing is more disastrous to a nation than the loss of its coast (we need only cite the efforts of the Lybian kings and, later, of Philip of Macedon to conquer the Greek colonies on their coasts; and in more recent times, of Russia before Peter the Great, or of the Zollverein without the shores of the German sea), so, also, the economic and political influence of a stream increases as one approaches its mouth. Hence the justification of the great interest taken by Germany and Austria in the question of the Danubian principalities. The United States recognized this fact when they purchased Louisiana for 80,000,000 francs.Bignon, Hist. de France III, 111 seq. Readers of history are familiar with the important part played by the three Asiatic Mesopotamias: that between the Euphrates and the Tigris; that between the Ganges and the Brahmapootra; that between the Hoang-Ho and the Yang-tse-Kiang, to which finally the Punjab might be added. This relation is recognized by popular consciousness, in the case of the Ganges, by the belief in the sacredness of the stream. No river has had so much influence on civilization as the Nile: its periodical risings have made the labor of agriculture extraordinarily easy; their extent and regularity favored the progress of astronomy; the flooding over of the land led to geodesy; the hydraulic labors necessitated by the rising of the waters produced a school of architecture to which the river furnished an excellent means of transportation for the enormous masses to be moved.K. Ritter, Erdkunde, I, p. 880 seq; VI, p. 1,168 seq. In this matter, also, America and Europe have the advantage over Asia and Africa. While the Danube is, in places, scarcely three German miles from the Rhine—which, however, flows in an almost opposite direction—in Asia, the eastern streams are separated from the western, and the northern from the southern, by a strip of land difficult to be traveled, and about 300 German miles in extent. Besides, the principal streams of northern Asia have their exit into the Frozen Ocean, a fact which diminishes their importance greatly. The source of the Missouri is only about one mile distant from the Columbia river, although the two flow towards opposite seas.375.The law governing the march of civilization from the mountain to the plain and to coast lands was observed even byStrabo, XIII, 592, and partly byPlato, De Leg., 677 ff.376.Thus, for instance, that all the customers of a shoemaker together form a shoe-association etc.Dunoyer, Liberté du Travail, L. IV, ch. 10.377.Storch, Handbuch, III, 188 ff. The Dutch traveler,Usselinx, speaks in a similar way of the imitativeness and many-sidedness of the Swedes (Argonautica Gustavica, 20). Chilian servants (peones) are a good combination of the cook, the muleteer, builder, courier etc. Once they have passed over a road, they never forget it. A knife stands them in stead of most tools, and pieces of leather in stead of nails.Pöppig, Reise, I, 171 ff.378.von Haxthausen, Studien, I, 63, 113. In 1827, a Russian hatter got 12 rubles for a hat, a German one 35 (Schön, N. Œkonomie, 78).379.See the report of a large manufacturer inKohl, England und Wales, p. 332 seq.380.Raynal, Histoire des Indes (1780), L. XV. And soRousseau, Discours sur l'Inegalité (1754), who also declaims against all kinds of capital; were there no ladders, men would climb better; and throw a stone better if they had no slings. There is certainly a misunderstood truth in this saying. It is assuredly very salutary, in the actual state of society, in which every one's business is transacted for him by some one else, that a time should occasionally come when no one can take our place, and a man can only call upon himself. And herein lies the immense value which just war, when not much prolonged, but which is brought to a happy termination, sometimes has upon the life of a people.381.The American savages are, on an average, weaker than the whites. In a fist-fight the Kentuckians and Virginians showed themselves far superior to the Indians. SeeLawrence, Lectures, 403,supra, §40.382.For a very unprejudiced estimate of the dark and bright sides of the divisionof labor, even before Adam Smith's time, seeFerguson, History of of Civil Society (1767), IV, I, V, 3 ff. AlsoGarve, Versuche, III, 41.Adam Smithwas not blind to the dark side of the divisionoflabor, which, in part, he would remove by popular instruction at the expense of the state, and by a species of compulsory education. W. of N., V, ch. 1, 3, art. 2. One of the chief peculiarities ofJ. Möser'sPolitical Economy is his great opposition to all highly developed division of labor. Patr. Ph., I, 2, 21, III, 32, 34.383.von Ledebur, Reise in Altai, I, 384. The working together of wife and child, introduced recently by manufacturers, cannot be considered as a higher grade of the division of labor, but only as a very unfavorable change in the kind of it; inasmuch as it were better to employ the women in their domestic avocations and to leave children to their studies and their sports. Among the higher classes, it should be made the part of female education, to counterbalance, in the family, the effects of the ever increasing division of labor among the male portion, by the development of that which is universally human—art, sociability, house-keeping etc.384.Schleiermacher, Christliche Sitte, 465 ff., 676 ff., 154 ff. From a similar feeling, although much exaggerated, the Greeks of the classic age proper considered all callings followed for gain dishonorable, not excepting even those of the physician and of the teacher.Plato, de Rep., I, 347 ff.Aristot., Rhet., I, 9, 27: μηδεμίαν ἐργάζεσθαι βὰναυσον τέχνην, ἐλευθέρον γάρ τὸ μὴ πρὸς ἄλλον ζην.385.As, for instance, the superintendent of a manufactory must have a better general training, but can get along with less of a special, than his workmen.386.Thucydidessays of the contemporaries of Pericles:“The same men devote themselves, among us, in part to domestic and political business; in part, others who busy themselves with agriculture and industry have no mean knowledge of the affairs of state. We call those who take no part in the former not people loving their ease, but useless men.”(II, 40.) During the succeeding period, Athens was destroyed mainly by the ever increasing division of labor between citizens and soldiers. For,“to separate the arts which form the citizen and the statesman, the arts of policy and war, is an attempt to dismember the human character, and to destroy those very arts we mean to improve.”(Ferguson.) We know fromValerius Maximus, that the Roman soldiers from the time of Marius had, doubtless, a better technic training than their ancestors who who defeated Hannibal; but was it in a military or political sense that they were thus better trained? The beautiful definition of Cato intimates something of the same nature; the good orator wasvir bonus dicendi peritus. (Quintilian, XII, I.) And soGarve, Versuche, IV, 51 ff., expects from the political elevation of citizenship, of those possessed of the right of citizens, not only usefulness in a particular direction but the development of the whole man, a thing hitherto expected only of the nobility.387.As one's peculiar calling does not take up all his life, we must draw a clear distinction between the one-sidedness of labor and the one-sidedness of life, (von Mangoldt, Volkswirthschaftslehre, 227.) Only the last is to be avoided at all hazards; and we find it in the middle ages, with its limited divisions of labor, perhaps more frequently than where civilization has attained a higher stage. During the middle ages, it was not unusual to make feelings which every one should cultivate at times, if only temporarily, the lasting calling of some. Thus one prayed his whole life long, or was engaged in contemplation, and relieved others of the necessity of performing these duties. The consequence was, that the latter sank as deeply in worldliness and want of the interior spirit as the former were plunged in idleness and hypocrisy. But, on the other hand, when, in our day, the printer relieves the writer of a portion of the labor which might be his, the personal development of neither suffers.388.L'uomo è un' tal potenza, che unita all' altra non fa un eguale alla somma, ma al quadrato della somma.(Genovesi.) As to how the action of every individual man is a species of division and union of different kinds of labor, seeStein, Lehrbuch, 24.389.CompareAd. Müller, Elemente der Staatskunst, III, 1809.Fr. List, System der polit. Œkonomie, 222 ff., 409 ff.Wakefield, in his edition of Adam Smith, distinguishes two degrees of coöperation, simple and complex. In the case of simple labor, the same sort of work is performed at the same time and place by several individuals, as, for instance, by a lot of hod-carriers in building. In the other case, there are different kinds of work performed at different times and places, but all intended for the one greater end. Agriculture affords room for the first especially, and it is known also to a great number of animal species.390.Flemish weavers in England, French refugees in Protestant countries; German miners in Spain, Scandinavia, Hungary and America.391.This, so very largely developed in Egypt and India, where the principle of caste obtains, is very little developed in the despotisms of Asia. The great princes, in the latter countries, build largely from vanity only. Hence their successors seldom complete their works, and scarcely repair them. Nowhere else are there so many half completed and yet decaying buildings.Klemm, Kulturgeschichte, VIII, 86.Riedel, N. Œkonomie I, 259, very correctly remarks that such kinds of coöperation as contribute most to the propagation of skill, both in commerce and manual labor, have less real division of labor, and vice versa.392.CompareLeplay, La Réforme sociale en France (1864).393.Concerning association in general, seeM. Chevalier, Cours, III, Leçon, 24, 25. On this subject so much talked of in our day, see, more in detail, concerning its application to agriculture, my work, Nationalökonomik des Ackerbaues, 4, § 39, 47 ff.; 68, 133 ff.; on its application to industry, especially where there is question of the relation of handiwork and manufactures to large factories; seeRoscher, Ansichten der Volkswirthschaft, II, Aufl., 1861, Abhandlung, IV, V.394.Adam Smithremarked that the laws of the division of labor obtain also in intellectual works; and indeed, among all nations in a very low grade of civilization, the germs of all art and science are found connected with theology; and later, the germs of all poetry and history with the epic. The expression:non defuit homini, sed scientiæ, quod nescivit Salmasius, is a clear proof of the insignificance of the science of the time. Think of the increase during the last hundred years of the branches of study in our German universities. There are now thirty-four regular professors in the Leipzig philosophical faculty, where then there were only nine. But here also the principle proves true, that an excessive division of labor, where the broader connection and the deeper foundation of all sciences disappear from the consciousness, undermines intellectual health and freedom. And the injury here is greater and more irreparable than in the domain of mere physical labor. SeeHufeland, N. Grundlegung, I, 207 ff. If we have just become Alexandrians, we have, however, no Aristotle to hope for.Jurisprudentia est divinarum atque humanarum rerum notitia, justi atque injusti scientia(Ulpian). It is remarkable that nations who possess no real national literature of their own, when they once get beyond the bounds of utter barbarism, learn foreign languages etc., most easily.395.The socialistic utopia ofCh. Fourier(Théorie des quatre Mouvements, 1808. Théorie de l'Unité universelle, 1822. Le nouveau Monde industriel et sociétaire, 1829) are based upon the following fundamental ideas. A. The present civilization is that of a topsy-turvy world, especially in so far as it ascribes a“moral”(a word always used by him in an ironical sense) self-government to man. In Fourier's world, on the other hand, every man is supposed, at all times, to give free rein to everypassion; and the play of these gratifications constitutes theharmonie, in which the poorest find more enjoyment than do kings at the present time. (See § 207 of this work.) B. The main thing to further this is a radical reform in the division and cooperation of labor as they exist at present. Instead of the present villages and cities, we should have only phalansteries, each with 2,000 inhabitants, and situated in the center of the land cultivated by them. Instead of the present nations and states, we should have a universal confederate republic, hierarchically graded, with French as the universal language. According to the demands of thepassion papillonne, each one should carry on the most different kinds of business side by side, and each one of them at most two hours per day; i.e., every one should be a dilettante, no one a master, and everything should be done as badly as possible.Proudhon, Contradictions économiques, ch. 3, objects to this, that a workman must, in some way, be held responsible for his work.Fourierhimself calculates that, in hisharmonieall pleasures are productive labor; and that by this constant change, one might be satisfied with from 4-½ to 5-½ hours of sleep, and that even children 2-½ years old might take part in the work. Thus, there would be a great rivalry between apple-growers and pear-growers, so great“that more intrigues in attack and defense [passion cabaliste] would arise there than in all the cabinets of Europe,”in the settling of which the growers of quinces would act as intermediaries. There are, in addition to all this, wonderful aids; a fructifying crown of light rises over the north pole; oranges bloom in Siberia; the sea becomes as delicious as lemonade; dangerous animals die, and in their stead anti-lions and anti-whales come into being, animals useful to man, which draw his ships for him during calms. These ideas are by no means retracted inFourier'slater works, See Nouveau Monde (Oeuvres) IV, 447. The propositions ofRobert Owen, A new View of Society (1812), have much similarity with those of Fourier. They differ only in the absence of the French barrack-like character of the phalanxes, and the fantastic character of the presentation of the doctrine. He would have all the land divided into districts of 1,000 acres each; each district to have a four-cornered town with 1,000 inhabitants, following a system of production and consumption in common, but not with full equality; carrying on both agriculture and other business. A principal feature here is an entirely new system of education. The author says that man has hitherto been the slave of an execrable trinity: positive religion, personal property and indissoluble wedlock. (Declaration of mental independence.)396.CompareTacitus, Histor., II, 44.397.SeeIselin, Geschichte der Menschheit (1764), III, 7.Bazard, Exposition de la Doctrine de Saint Simon, 1831, 153. Among negro nations deprivation of freedom is one of the most usual punishments for crime; but the criminal has the option of substituting his wife or child for himself.L.A. de Oliveira Mendez, in the Memor. econom. of the Royal Academy of Lisbon, vol. IV, I, 1812. As to slavery on account of crime among the Germans, seeGrimm,D. Rechtsalterth., 328 seq.398.Loss at play was a frequent cause of slavery among the ancient Germans.Tacit., Germ., 24. For the principal causes of slavery among the Israelites, see the books of Moses, II, 22, 3; III, 25, 39; IV, 21, 26 seq.; among the Indians, Laws of Menu, VIII, 415. The first serfs of Russia were prisoners of war and their children. The laws of Jaroslaws recognize, besides, the following causes: insolvency, contracting marriage with a slave, the illegal breach of a contract for service, flight, unconditional contract for service.Karamsin, Russ. Gesch., II, 37.399.At least seed and the means of subsistence until harvest time.400.Cases of voluntary slavery to escape famine.Papencordt, Geschichte der Vandalen, 186;Victor, Chron., V, 17; Tur., VII, 45; Lex Bajuv, VI, 3; L. Fris, XI, I. According to the Edictum Pistense (a., 864), c., 34, one could free himself again by paying back the purchase money and 20 per cent. in addition. It frequently happened that people spontaneously accepted the condition of a vassal in order to enjoy the protection of a powerful personage. SeeStüve, Lasten des Grundeigenthums, p. 74. In 1812, a young Himalayan offered himself to the traveler Moorcroft as a slave in order to obtain food during the famine.K. Ritter, Erdkunde, III, p. 999. The same fact occurred, but in greater proportions under Joseph in Egypt.Moses, I, 47, 18 seq.401.Cæsar, B.G., VI, 13.402.Solonwas the first to prohibit this commerce in Athens.Kindlinger, in his Geschichte der deutschen Hörigkeit, p. 621, speaks of a child promised as a slave before its birth, by its parents, as a species of farm-rent. (See the Edictum Pistense, inBaluz, II, 192.) In Chili, the poorest country people who were not entirely white, sold their children in the towns, where they grew up with the families of their masters, and were then kept as servants in a state of semi-serfdom. There is, it is true, no law governing this condition of things. (Pöppig, Reise, I, 201 ff.)403.Ritter, XIII, 727. For instance, men in South America used for the purpose of riding.M. Chevalier, Cours, I, 251;Lœwenstern, Le Mexique, Souvenirs d'un Voyageur (1843); andStephens, Travels in Yucatan (1841), show how, even yet, in Central America, although the Indians are legally free, yet, by their senseless way of running into debt, a number of legal relations, amounting virtually toglebæ adscriptio, arise. But compare, however,Humboldt, Neuspanien, IV, 263. This condition of things has been produced in Peru, also, by the payment of one or two years' wages in advance. (Pöppig, Reise, II, 225.)404.ThusForbonnais, Eléments du Commerce (1854) I, 364, says of trade with savages:il fait naître dans ces nations le goût du superflu et des commodités, qui multiplie le, échanges et leur donne le goût du travail.405.In very uncivilized nations, among whom serfdom is not known, we generally find the slavery of woman and the temporary bondage of the son-in-law in order to secure the daughter in marriage. This is still the case among the Laplanders.Klemm, Kulturgeschichte III, p. 54. Slavery was unknown among the Greeks in the very earliest times.Herod., VI, 263.F. A. Wolf, Darstell. der Afterthumswissenschaft, III, doubts whether any great advance in the higher development of the mind would have been possible without slavery.406.In Russia, where free peasants and serfs lived side by side, it has been remarked that the latter were never so rich and never so poor as the former. (Kohl, Reise durch Russland II, 8, 300.) The Livonian peasants have become poorer since their emancipation. (Cancrin, Œkonomie der menschlichen Gesellschaften, 41). Many of the serfs refused to accept emancipation. (Büsch, Geldumlauf, Einleitung, § 6.) And soMartius, Reise in Brasilien II, 552 ff., assures us that the negro slaves in Brazil are as a rule a very merry set. He is also of the opinion that they are better clothed, lodged, fed and employed than in their own country. For the remarkable official defense of North American slavery directed byCalhoun, to Lord Aberdeen, see the Allg. Zeitung, 1844, No. 145. In this document, we find a comparison instituted between the free negroes of the north and the slaves of the south. In the north, there was one deaf-mute, a case of blindness and of insanity in every 96; in the south, in every 672; a pauper, invalid and prisoner in every 6 at the north, in every 54 at the south. In Maine, 1/12th of the negroes were afflicted by disease; in Florida, 1/1105th(?). The fact that the slave population of the United States increased, between 1840 and 1860, from 2,873,698 to 4,441,830, while the free negro population of Jamaica, between 1833 and 1843, underwent a frightful decrease, is to the same purport. However, too much must not be inferred from all this, as the negroes in America are very far from being the children of the soil.407.The servants in the Odyssey who cared for hogs and cattle etc. were certainly in a better condition in many respects than the peasants of Attica, who were free, but buried in debt until the time of Solon. Concerning the mildness of the treatment of slaves in very early Roman times, seePlutarch, Coriol., 24, andCato, I, 3, 20 ff.;Cato, de Re rust, 5, 56 ff.;Macrob., Stat. I, 10 ff. On the state of the serfs among the Germans, seeGrimm, Deutsche Rechtsalterthümer, p. 339 ff.; among the ancient Scandinavians etc.,Dahlman, Geschichte von Dänemark, I, 163. SeeTacit., Germ., 25.408.Compare Landnamabok, I, 6.409.The opinions of the ancients for and against slavery are found inArist.Polit. I, 2. See especially the beautiful passages inPhilemon:Meineke, Comicorum jr., 364, 410.Aristotleeven thinks that there are cases in which master and slave might be brought together by a mutual want, each of the other. The former wants hands to execute the work of his brain; the latter a guiding brain for his hands. Where the degree of dependence corresponds exactly to the difference of ability,Aristotle, leaving its abuses out of the question, declares slavery to be just. See, also, Eth. Nicom., VIII, 11. Similarly the PythagoreanBrysoninStobœus, Florid. LXXXV, 15. ButAristotlewould hold up emancipation to all slaves as a reward they might have in prospect. Polit VII, 9, 9; Œcon. I, 5. It is characteristic of the many testaments of philosophers, found inDiogenes Laertius, that they contain declarations giving slaves their freedom. The Essenes and Therapeutics condemned slavery under all circumstances.Philo., Opp. II, pp. 458, 482, Opp. I. SeeSeneca, De Benef. III, 20. Thejus naturaleof the age of the Cæsars recognized the freedom and equality of man. Digest, XII, 664., L. 17, 32. The New Testament does not reject it absolutely, but would sanctify it as well as all other relations in life. Compare Luke, 17, 7; Eph. 6 5 ff.; Coloss. 3, 22; Tit. 2, 9. More especially, I Timothy, VI, 1 ff. It was not until the ninth century that the opinion that slavery was anti-Christian because men were all made in the image of God, arose.Planck, Geschichte der kirchlichen Gesellschaftsverfassung, II, 350. Sachsenspiegel, III, 42. A writer as recent asPufendorfexplains slavery as arising from a free contract;faciam, ut des.Jus naturæ (1672) VI, 3. More recentlyLinguet, Théorie des Lois civiles (1767), V, ch. 30, andHugo, Naturrecht, § 186 ff. have endeavored to prove that slaves are in a condition preferable to that of poor free men. And soMöserPatriot Phantasien, II,. p. 154, seq. Those who withThaerseparate the element of production,“labor”from that of“intelligence,”justify slavery on the same principle that Aristotle did, without knowing it. Per contra, seeF. G. Schultze, N. Œkonomie (1856), 418.410.Turgot, Sur la Formation etc., § 21. The universal empire of the Romans demonstrated this. Then it was, for instance, that during the wars of Lucullus, a slave cost only four drachmas. (Appian., Bell. Mithr., 78.)Sardi venales: on account of the glutting of the market with Sardinian slaves, made through the victory of Tib. Gracchus, 177, before Christ. Many of the lesser wars of the Romans can be looked upon only as slave-hunts. But the great wars also were followed by uprisings of slaves on account of the many new slaves which they made. Thus 198 in Latium, 196 in Etruria. (Bücher, Aufstände der unfreien Arbeiter von, 143-129, v. Chr., 1874.) During the relatively peaceful periods which preceded many of the Roman revolutions, pirates delivered over great masses of slaves. It frequently happened that several thousand slaves were led to Delos and sold in a single day. (Strabo, XIV, 668.) As emancipation was a measure which people could not make up their minds to adopt, these pirates satisfied a“want”for a time, and this partly explains the otherwise incomprehensible forbearance of the state towards them.411.Gregor. Turon., III, 15.412.Grimm, D. Rechtsalterthümer, 323. It is a strange fact that prisoners of war were in several remarkable instances sold as slaves in Italy during the fifteenth century. (Sismondi, Hist. des Républiques italiennes, IX, p. 312 seq.; XI, p. 138 seq.) And even in the sixteenth century, the pope allowed those of states opposed to him to be treated in this way.Sismondi, supra, XI, 251; XIII, 485.Raynold, Ann. eccl. 1506, § 25 ff.413.This graduation of slave, serf and workman, has been carried out especially bySaint Simon, Oeuvres, 328 ff. EvenProudhonadmits that the condition of the lower classes is better now than formerly. (Contradictions économiques, ch. X, 2.) CompareM. Chevalier, Cours, I. Leçons 1 and 2, where he shows that our productive power has increased during the last four or five centuries in the production of iron in the proportion of 1 to from 25 to 30; in the preparation of flour since the time of Homer in the proportion of 1:144; in the production of cotton during the last 70 years in the proportion of 1:320.Aristotlepredicted, long ago, that“when the shuttle would move of itself, and plectra of themselves strike the lyre, we should need no more slaves.”Polit., 2, 5. Every step of true progress brings us nearer the fulfillment of the prophecy.414.The North American planters employed coarse tools rather than fine ones, mules rather than horses, because their slaves took so little care of them.415.It can never obtain as much labor from the slave, as the fear of losing his situation and of not being able to obtain another, will from the free workman. (Hume.)Marlo, Weltœkonomie, 1848, I, 2, 38, grants this to be true only where all the forces of nature are appropriated by occupation, and the number of workmen is greater than the want of workmen.416.Even in Brazil, only free men are, as a rule, employed as sugar refiners, distillers, teamsters etc. (Koster, Travels in Brazil, 1816, 362.)Storch, Russland unter Alexander I, Heft, 23, p. 255, cites the opinion of an eminent Russian manufacturer, that it would first be necessary to liberate the serf factory-hands. Masters have generally given up employing their own serfs in manufactures, allowed them to seek work for themselves, and only required them to pay them a species of tax. When this plan was adopted, it was found that they worked much better, (v. Haxthausen, Studien I, 61, 116.) It was a consequence of slavery that, in antiquity, the very wealthy purchased so little:omnia domi nascuntur! (Petron., 38.)417.ThusHomer, Od. XVII, 322, in whose time even there were day laborers, θῆτες or ἔριθοι. (Od. IV, 644; X, 85; XI, 490; XIV, 102.Hesiod, Opera, 602.) AndVarro, De Re rust. I, 17, advises that difficult labor should be performed rather by day laborers.Coli rura ab ergastulis pessimum est et quidquid agitur a desperantibus.Plin., H. N. XVIII, 7.Omne genus agri tolerabilius sub liberis colonis, quam sub villicis.(Columetta, De Re rust I, 7.) It has been estimated, that, in the West Indies, a negro slave performed only one-third of the work performed by an Englishman in his own country. (B. Edwards, History of the British West Indies, II, 131.) During the one afternoon, in every week, in which the negroes were allowed to work on their own account, they accomplished as much as on other entire days. Edinburgh R. IV, 842. CompareBentham, Traité de Législation I, 319.Ch. Comte, Traité de Législation, 1827, Livre V.;Cairnes, The Slave-Power, its Character, Career and probable Designs, 1862;Olmsted, Journeys and Explorations in the Cotton Kingdom, 1861.418.While the older tyrants had prohibited idleness, Draco and Solon even under pain of degradation (see places inBüchsenschütz, Besitz und Erwerb, 260).Socratescalled the ἅργια the sister of Freedom (Aelian, V.H.X, 14), and the σκολή the most beautiful of all professions.419.B. Franklin, Observations concerning the Peopling of New Countries etc., 1751.420.Monument erected toBernstorffby his peasants, 8, 15. TheZàmoiskiestates yielded, 17 years after emancipation, three times as much as they did when serfdom prevailed.Coxe, Travels in Poland, I, 22. The transformation of the serfs into hereditary farmers costCount Bernstorff100,000 thalers; but the revenue derived from his lands increased in consequence, in twenty-four years, from 3,000 to 27,000 thalers. An English mower can mow a field two and three times as great as a Russian mower in a given time. If the former receives daily wages equivalent to seventy pounds of wheat, and the latter to only twelve, the Englishman's labor is still the cheaper; for he turns out 100 pounds of hay while the latter turns out only eight.Jacob, 43 seq. But the hiring out of serfs in the large cities of Russia yielded less to their masters than in the interior.Storch, Handbuch, II, 286.421.Tucker, Progress of the United States, 1843, pp. 111 ff. We need not call attention to the inaccuracy of these figures, nor remark how little serviceable for our present purpose an average obtained from the density of population in different parts of Russia, where such densities are themselves so very different, would be.422.The Spartans seemed to have counted on an adult free man for twice as much coarse food as a bondsman. (Thucyd., VI, 16.)423.Stewart, Principles, I, 7, in accordance with historical data, says, that the peasantry in our days work for other people, because they have wants which can be satisfied only in this way; because“they are slaves of their own wants.”The unquestionable superiority of free to slave labor, in point of economy, has been dwelt upon especially byTurgot, Sur la Formation et la Distribution, § 28, and byAdam Smith, Wealth of Nations, I, 8, III, 2. But seeJ. B. Say, Traité, I, ch. 19, andStorch, Handbuch, II, 184. WhenHume, Discourses, No. 11, Populousness of ancient Nations, demonstrates the greater cost of slavery from the fact that the master of slaves must either breed or buy them, he forgets that in the case of free workmen he is obliged to provide also for the support of the workman's children. Only, the slaveholder has, indeed, to advance the whole at once.424.Humboldt, Cuba, I, 177.Ashworth, Tour in the U.S. Cuba and Canada, 1861. The slaves in Louisiana were so overworked that they lived, on an average, scarcely seven years. Edinburg Rev., LXXXIII, 73. Even the Stoics were not agreed, whether it was right, in case of shipwreck, to sacrifice a cheap slave in order to save a valuable horse. (Cicero, de Off. III, 23.) Whether the self-interest of masters is an inducement to the mild treatment of their slaves depends on the price for which fresh slaves may be obtained. This is a strong reason why a high degree of civilization, where there are not counteracting influences, must make slavery less endurable. The more valuable slaves are, the worse is their condition. In the unfertile Bahamas, the price was £21; in Demarara, £86. In the former place they were required to do little work and were well fed and well clothed. Hence their numbers have increased there, while in Demarara they have decreased. (Edinburgh Rev., XLVI, 496, 180.)425.Proverb:quot servi totidem hostes.(Macrob., Sat. I, 11, 13.)426.Jefferson, Notes on Virginia, 212. The chastity of both parties especially suffers. Thelenoof ancient comedy was a slave trader! Compare L. 27, Digest, V, 3. In the English negro colonies, it was not unusual for the guests of the planters, even in the best families, on retiring, to ask the accompanying servant for a girl, with as little concern as they would in England for a light. (Negro Slavery, or a Creed of ... that state of Society as it exists in the United States and in the Colonies of the West Indies, London, 1823, 53.)427.Even the law of Upland forbade the sale of Christians. The children of a slave and of a free person were born free. Emancipation was considered a Christian act, to be performed for“the salvation of one's soul.”Voluntary slavery was prohibited in 1266, and Magnus Erichson forbade slavery generally from the year 1335. SeeGeijer, Geschichte von Schweden, pp. 157, 185, 273.Estrup, inFalcksN. Staatsburg Magazin, 1837, 179, ff.428.L. Alam, 137, 1. L. Fris., 17, 5. Decree of 960 concerning the abolition of the trade in Christian slaves between Germany, Italy and the Byzantine Empire.Tafel und Thomas, Urkunden der Staats-und Handelsgeschichte von Venedig, I, 18 ff.429.Tacit. Germ. 25. In the Legg. Walliæ 206 (Wolton) we read:“Hero eadem potestas in servum suum ac in jumentum.”430.The council of London in 1102 forbade men to be sold like beasts. (Concil., ed. Venet. 1730, XII, 1100, No. 27.)Guérard, Polyptiques d'Irminon, Prolegg., 220, describes a pedagogical model emancipation by the Church of its own serfs. On the whole, the church contributed more towards the emancipation of the serfs of others than of its own. See ch. 39, C. XII, qu. 2; c. 3,4; De Rebus eccl.431.In Flanders since the end of the twelfth century.Warnkönig, Flandrische Staats und Rechtsgeschichte (I, 244).432.In what relates to Germany, compareSugenheim, Geschichte der Aufhebung der Leibeigenschaft in Europa, 1861, p. 350 ff. The destruction of the old manorial system (Hofwesen) in the fifteenth and sixteenth centuries, was often unfavorable to bondmen and favorable to serfs.Maurer, Gesch. der Frohnhöfe, II, 92. In Poland, where all were originally equal land-owners, many sank gradually through poverty to the condition of the so-calledkinetes, who, although personally free, were not very far removed from slaves. Beginning with the thirteenth century, a great number of immunities, after the model of those accorded in Germany, were granted, by means of which they lost, for the most part, their direct subjection to the emperor and the empire alone. This was soon followed as a consequence by their personal oppression. (Röpell, Geschichte von Polen, I, p. 308 seq., and p. 570 seq.) In Bohemia, the old form of serfdom had so far disappeared in the fourteenth century, that it might be said it was known only to history. But during the reign of the weak king, Ladislaus II, a new species of serfdom came into vogue, the result of the preponderance of the aristocratic element.Palacky, Gesch. von Böhmen, II, p. 33 seq.; III, 31 seq. Aristocratic Denmark, before the peasant war of 1255-1258, subjected the free peasantry who had been leaseholders for a term of years to unlimited socage duty. Waldemar III, reduced to the same kind of service the land-owning peasantry, which especially from the date of Margaret's reign, developed into a species ofglebæ adscriptio. From the sixteenth century, when the royal power almost disappeared, these public privileges were abandoned to the nobility to such an extent that, in 1650, there were scarcely 5,000 free peasants.Dahlmann, III, p. 73 seq. However the severity oftraeldommade way in the fourteenth century for thevornedskap(modified bondage), a milder species of vassalage. SeeKolderup Rosenvinge, Grundriss der dänischen Rechtsgeschichte, § 94.433.The French expressionmainmortecomes originally from the deprivation of the right of inheritance. In Beaumanoir's time, 1283, it was customary, after a number of serfs had lived together for a year and a day, for their chattels movable to become the common property of the community. (Warnkönig, Französische Rechtsgeschichte, II, 157.)434.In France, Louis X. made it a fiscal speculation to sell serfs their liberty in whole districts, even against their will. His edict, Ordonnances, I, 583, recognizes that all men are by nature free, and that France is not without reason called the land of the Franks etc. Even in 1298, Philip IV. had exchanged the serfdom to the crown of several provinces for a land duty. The last ruler of Dauphiny gave all the serfs of the crown their liberty gratis, in 1394. (Sugenheim, p. 130.) When the so-calledcoutumeswere written, there were only nine provincees in which by local law serfdom was permitted. The defeat of thejacquerieinjured the cause of emancipation in France in the same way that the suppression of the war of the peasants did in Germany. About 1779,mainmortewas abolished in all lands of the crown, and its proof made almost impossible in all others. (Warnkönig, II, 151 seq.) Yet it is said that there were 150,000serfs de corpsin France in 1789. (Cassagnac, Causes de la Revolution, III, 11.) Koloman, who died in 1114, forbade the slave trade in Hungary, and labored to raise all Christian slaves toconditionarii(renters). But the right of migration was abolished in 1351. King Sigismund, and still more, Matthias Corvinus, restored it, after the suppression of the war of the peasants, but in 1514 it was again lost until 1586. Further progress was arrested until the Urbarium of Maria Theresa.435.In Italy, Frederick II. liberated all the serfs of the crown. (Constitutt. Regni Sicil., 164.) A model instance of emancipation at Bologna in 1256. The serfs of the state were simply set at liberty; the freedom of those of private persons was purchased with the money of the state, and a small corn-tithe laid on the emancipated as a compensation for the expense incurred in their behalf. In the future, there was not to be a bondman on Bologna territory. The motives which led to this measure are a strange admixture of Christianity and Democracy. (Muzzi, Annali di Bologna, 1840, I, 479.) Italy, at the end of the fourteenth century, was entirely free from Christian serfdom. (Muratori, Antt. Ital., I, 798.) In the canton of Berne, Switzerland, slavery was gradually abolished, the process commencing about the beginning of the fifteenth century. It continued, however, in the case of ordinary masters until 1798.Sugenheim, p. 530 seq. In England, Alfred the Great's efforts towards the gradual abolition of slavery (Wilkins, Leges, 29) remained without result. The steps taken by William I, towards a much narrower end, however, seem to have been more successful. (Leges Will. Conq., 225, 229;Turner, Hist. of England, I, 135.) From the time of the Norman conquest, prisoners of war ceased to recruit the ranks of slavery. Under Henry III and Edward I, socage tenants became more and more frequent; but, before long, their duties became less onerous, and might be discharged by others hired for the purpose, instead of by themselves. The first remarkable vestige of a class working for wages is met with in the law of 1351, which may be considered an effort made by the nobility to oppose the tendencies in favor of emancipation, which were a consequence of the development of cities. (Eden, State of the Poor, I, 7, 12, 30, 41,)Infra, § 175. Although the peasant war under Wat Tyler and Straw, who wished to abolish servitude at a blow, failed of its object, we find that there were a great many instances of emancipation by individuals in the fourteenth and fifteenth centuries when death or sickness overtook them, in which they declared the moral unfitness of slavery. (Wycliffe:“When Adam dalve and Eve span, who was then the gentleman?”) Elizabeth liberated the last serfs of the crown. Compare 12 Charles II, ch. 24, 1660. Emancipation in the lowlands of Scotland was completed in 1574. (Tytler, Hist. of Scotland, II, 260.)436.Modern Emancipation Laws: in Prussia, 1719, 1807, 1819; Lausitz; 1820, Westphalia; in Austria, 1781 (Bohemia and Moravia), 1782 (other German countries and Galicia); 1785 (Hungaria); Schleswig-Holstein, 1804, after many of the landed gentry had voluntarily emancipated their own serfs; in Bavaria, in 1808; in the kingdom of Westphalia, in 1808; in Hessen-Darmstadt, in 1811; in Württemberg, in 1817; in Baden, in 1783, 1820 in newly acquired countries; in Mecklenburg, in 1820; in the kingdom of Saxony, in 1832; in Hanover, in 1833. The law of 1702, abolishing serfdom in Denmark, was evaded until 1788, and in part, even until 1800 by theSchollband(clod-bond) introduced in its stead. The only Christian people in Europe, who, until recently, kept serfs, was the Russian. The serfs of Russia, in 1834, numbered 22,000,000, i.e., about 40 per cent. of the entire population. In the meantime, the law of February 19, 1861, passed after four years of preparation, fixed the date of emancipation at the beginning of the year 1863. Slavery has been abolished in the United States since January 1, 1863; first of all in all portions of the country engaged in rebellion.437.There is a very interesting discussion in the Journ. des Economistes for June 1863, of the question whether the owners of serfs are entitled to compensation on their emancipation, byLaboulaye,Wolowski,Lavergne,Garnier,Simonand others. In the United States it would have required $2,000,000,000 to fully compensate the slave-holders for depriving them of their slaves. (Quart. R., Jan., 1874, 142.) Compare my view,Roscher, Nationalökonomi des Ackerbaues, § 124.438.Leave a new-born child to its“natural freedom”for twenty-four hours, and it will in all probability be dead at the end of the time!439.Compare Edinburgh Review, LXXXIII, 64 ff., April, 1851, 333.Klein'sAnnalen XXV, 70, ff. Even in the fifth book of Moses, 15, 13, ff., we see that experience had taken into consideration that a freed serf without capital or landed property might very readily be in a worse condition than he was before. In the United States, the anticipation that the emancipated negroes might diminish in numbers has not been realized. The census of 1870 showed a negro population of 4,880,000, nearly ten per cent. more than in 1860. The increase of the number of churches, schools and savings banks also bears testimony to the prosperity of the negro. (R. Somers, The Southern States since the War, 1871.)440.J. S. Mill, Principles, 10, ch. 7.441.As to the Jews, seeEwald, Geschichte von Israel, I 2, p. 198. In general, seeH. Wallon, Hist, de l'Esclavage dans l'Antiquité, II, 1847.442.Thucyd.IV, 27;Xenoph.De Re. rep. Art. I, 10 ff.,Aristoph.Nubes, 6;Antiph.De Caede Herod, 727. In the“Frogs”of Aristophanes, the relation between the slave Xanthias and his master is eloquent testimony to the good treatment he received. Slaves enjoyed great freedom of speech. (Demosth.Phil. III, iii.) Concerning masters accused of cruelty, seeDemosth.Mid. 529, 7. Athen. VI, 266. The slave who had been ill-treated might seek refuge in a temple, after which his master was compelled to sell him. (Schol. Aristoph.Equitt. 1309.Plutarch, Thes. 36.)443.Slaves might purchase their own freedom with theirpeculium. See Petit. Legg., Art. II, 179. There were many who lived entirely on their own account, paying a certain duty or tax to their masters, and who were well able to make savings.R. F. Hermann, Privatalterthümer, § 13, 9, 58, 11 ff. See the instance inPlato, De Rep. VI, 495, where a slave who had grown wealthy asks the daughter of his former master in marriage. Moreover, there was a general indisposition to hold Greeks as slaves. (Philostr.Apoll. VIII, 7, 12.) The case cited inDemosth. adv. Nicostr. 1249 ff., is all the stronger on this account.444.Under Cleomenes, many purchased their freedom with their own means.Plutarch, Cleom. 23. At an earlier period, men like Lysandros, Gylippos, Kallikratidos had belonged to a class composed of the children of slaves brought up as citizens.445.Cicero, pro Muræna, IX, 22.446.Think of the subterraneanergastula, the fettered door-keepers and the gladiatorial exhibitions.447.Even from the time ofPlautus, theservi honestioreswere wont to keepvicarios, or subordinate slaves.Plaut.Asin. I, 4,SenecaDe Tranq. Anim. 8. CompareCicero, Parad. V, 2. Of the slaves of the state, the public scribes were sometimes found in excellent circumstances.448.The peculium was fully developed in the time of Plautus and Terence. CompareTerent., Phorm. I, 1. It was customary to promise slaves their freedom as soon as they had acquired a certainpeculium. (Dionys. Hal., Antt. Rom., IV, 24.Tac., Ann., XIV, 42.) Humane masters permitted their slaves to dispose freely of theirpeculiumby will. (Plin., Ep., VIII, 16.) There were many of the Romans who gave their slaves a fixed salary, from which they could make savings. (Senec., Epist., 80, 7.) Shepherds raised some sheep for themselves alone. (Plaut., Asin., III, 1, 36;Varro, R. R., I, 17, 7.) Premiums were offered for certain products (Athen., VI, 274 d), and there were cases even in which businesses were farmed out to slaves. (Corp. Inscr. Gr., No. 4,713 f.) Theservi publicihad the right to dispose of the half of what they owned, by will. (Ulpian, XX, 16.) Contracts of loan were sometimes made between master and slave. (Plut., Cato, I, 21, L., 49, § 2, Digest, XV, 1.)449.CompareTacit., Ann., XIII, 26 seq. During the time from 356 to 211 A.C., it seems that there were, on an average, 1,380 slaves emancipated yearly. (Dureau de la Malle, Economie polit. des Romains, I, 290 ff.)450.Concerning the highly educated slaves of Atticus, of the like of whom the Greeks had formerly few examples, seeDrumann, Geschichte Roms., V, 66. The high prices, 100,000, and even 200,000 sesterces, paid for slaves, suppose a very high degree of education. (Martial, I, 59; III, 62; XI, 70;Seneca, Ep., 27.) But evenCicerowas ashamed of his affliction over the death of an exceptionally clever slave. (Ad. Att., I, 12.)451.At an earlier period, even the censor had punished cruel masters. But most of what was done to prevent the arbitrary condemnation to death of slaves, their castration etc., and to give them rights against their masters for libidinous acts towards them, for cruelty and insufficient support, or the furnishing them with bad food, was done after the time of Hadrian. (CompareSeneca, de Benef., III, 22; de Ira, III, 40,Sueton., Claud, 25, Dom., 7;Spartian., Hadr., 18;Gaius, I, 53; L., 1, § 2, Digest, I, 6; L., 1, § 8, D., I, 12; L., 1, § 2, D., XLVII, 8; L., 1; Cod., IX, 14; Contra, seeDio Cass, I, V, 17.) However, thevitæ necisque potestasexisted in the time of Justinian. (Zimmern, Geschichte des röm., Privatrechts, I, 2, 661 ff.)452.Salvian, De Gubern. Dei, V, 8.Theod., Cad. V, 4.Eumenis, Paneg Coast. 8, 9.Trebell, Poll. Claud., 9.Justin.Cad., XI, 26, 47. Comparev. Savigny, Ueber den romischen Colonat. Berliner Akad., 1822-23.453.The figures given inAthen., VI, 103, concerning the number of bondmen in Greece are almost incredible. For Attica alone, the estimates vary between 110,000 (Letronne, in the Mem. de I'Académie des Inscr., 1822, 192, ff.) and 400,000 (Athen.1. c.), while the free men are estimated at from 130,000 to 150,000. In Rome, during the time from the expulsion of the kings until the destruction of Carthage, the number of the slaves remained about the same. (Blair, State of Slavery among the Romans, 1833, 10, 15.) On the other hand,Dureau de la Malleis of opinion, that in 576 B.C., the number of slaves was to the number of free men as 1 to 25, and in 225 B.C. (including the metics), as 22 to 27. (Economie polit. des Romains I 270 ff., 296.) CompareCato, de Re. rust. I, 3, IV, X, 1 XI; 1, XVII, XVIII, 1. In Germany, the number of bondmen, from the eighth to the tenth century, was estimated to be at least as great as that of free men. (Grimm, D. Rechtsaltherthümer, 334.) Among the Anglo Saxons, before the Norman conquest, it was much higher, even three-fourths of the entire population. (Turner, Hist. of the A. S., VIII, 9.) Compare on the subject of this whole chapter my paper in the Archiv. der polit Œkonomie, N. F., IV, 30 ff.454.Klöntrupp, Abhandlung der Lehre vom Zwangsdienste, 1801. Frequently, the lord had only a right of preference in case the children of the tenant desired to abandon the parental roof and take service elsewhere.455.InAdam Smith'stime, in England, the presumption was that a servant had been hired for a year. (I, 2, 15 ed., Bas.) Frederick the Great's ordinance of 1769, on this subject, forbade any one to enter into service for a shorter time than this (II, § 1 ff.), while the Saxon ordinance of 1835, on the same matter, allowed engagements by the month, in cities.Darjes, Erste Gründe der Cameralwissenschaften, 2d ed. (1768), p. 432, demands that servants should always hire themselves for at least four or five years, and that their masters should have, during the whole of this time, the right to enforce the contract. In North America, however, service by the month has become customary and general, and no notice of the dissolution of the contract is, as a rule, required. (Deutsche Vierteljahrsschrift, 1853, II, 191.) In Switzerland, contracts for service by the week are frequently made even by country servants. (Böhmert, Arbeiterverhh., II, 157.)456.In the south of England, farm hands were used to change service only at Michaelmas. The choice of such a date made farmers very dependent on them, as it fell in harvest time. (Marshall, Rural Economy of the Southern Countries, II, 233.) A similar complaint in Cleves. (Schwerz, Rheinischwestphälische Landw., 21 ff.) In Jülich, a half year's notice was required, during which time the servant who had received it, performed his work with disgust, and stirred up his fellow servants against their master. (Schwerz, II, 87.)457.The families of day laborers, to whom the owner of the land gives the use of a house, small garden, a cow etc., constitute such a transition; and also, workmen who are fed. In Brandenburg, in 1644, only married persons or widowers with children were permitted to work as day laborers. (Mylius, C. C. March., V, 1, 3, 11.)458.Wakefield, Swing Unmasked, or the Causes of rural Incendiarism, 1831.459.By means of the former, the number of independent small householders was much increased in the country. Masters feel indisposed to hire young men liable to be subjected to military duty, because they may be called away at the moment their services are most needed. The returning soldier, as a rule, feels above doing menial service. (Schwerz, passim, I, 191 ff., 236.) On this account, servants' wages in Cleves rose much higher than those of day laborers. (194.) In Belgium, a farm hand cost, on an average, 400 francs a year; a day laborer, counting 300 working days to the year, only 339 francs. (Horn, Statist. Gemälde, 175.) In the Palatinate, day laborers who receive nothing but their wages cost their masters less than those who receive only their food; and servants are the dearest of all. (Hanssen,Archiv der Politischen Œkonomie, N. F. X, 243.) If servants were relatively more poorly paid in 1813 than day laborers (Lotz, Revision, III, 147), it was because of the at least temporary retrogression of civilization which every great war causes.460.Engel, Preuss. Statist. Jahrb., II, 261. Services which contribute to personal convenience are naturally committed much less frequently to independent day laborers than those which aid in production proper. Hence it is, that, as civilization advances, house-servants, especially of the female sex, constitute an ever-increasing portion of the total number of servants. In Prussia, in 1816, the number of servants who ministered to personal comfort was only 4.19 per cent. of the total number of servants engaged in industry; of female servants, it was 13.4 per cent. In 1861, on the other hand, the percentages were 8.4 and 37.2. In Great Britain, of the total number of servants over 20 years of age, only 2 per cent. were engaged in personal services. In 1841, they were 3-½ per cent. (Meidinger.) In France, in 1851, 2.5 per cent. of the whole population were indomesticité. (Stat. off.)461.In England, now more especially, out of farm-hand day laborers: Edinburgh Rev., April, 1862.462.A chief element in the earlier“organization of labor.”So, also, in the Magdeburg Gesindeordnung (service-regulation) of 1789.463.SaxonLandesordnungenof 1482 and 1543. Cod. August. I, 3, 23. TheGesindeordnung(service regulation) of Frederick the Great, threatened with the house of correction the receivers, and under certain circumstances also the givers of wages higher than the fixed rate of wages; but as a“matter of course,”the payment of wages less than this was permitted. (V, § 7) Great care was taken that wages greater than the law allowed should not be evaded by the payment ofarrhaor payment in produce. The same law forbade the deprivation of the servant of his right to determine the service by making of loans to him on long time (II, § 7.) Evenv. Berg, Handbuch des deutschen Polizeirechts, calls it a duty of the public authorities charged with the protection of property and of the public security, to see to it that there be no lack of good servants, and that the public (as if those who sell their services were not a part of it) should not be made the victims of exorbitant demands in the matter of servants' wages.Jung, more humane, demands that the authorities shall protect, especially, the weaker party. (Grundlehre der Staatswirthschaft, 1792, 700.) In Prussian legislation, the Silesian rescript of March 13, 1809, is the beginning of the new order of things. (Rabe, Samml. preuss. Gesetze, X, 59 ff.) TheObertribunal, or high court, decided, in 1874, that the bringing back of absconding servants by the police, which the law concerning servants of 1810 provided for, should not be allowed to occur any more.464.Ordinance of the elector of Saxony of 1766, prohibiting the inhabitants of cities to take an apprentice from among the peasantry, unless he had served at least four years as a farm hand, beginning with his fourteenth year. Similarly, in Prussia in 1781.465.In Berlin, even before the“populationistischen”period:Fidicin, Histor. diplom. Beiträge zur Gesch. der Stadt Berlin, I, 101. (From the year 1397.)466.I Peter, 2, 18 ff.; I Timoth., 6, 12; Ephes., 6, 5; Philem., 15 ff.467.In the German colonies of Mennonites in Russia, every youth serves a few years in the family of some other peasant. This is considered a sort of school. Wages are of course very large, and the treatment very mild.v. Haxthausen, Studien, II, 185. Southwestern Germany where small landed proprietors are many, something very analogous to this continues. (v. d. Goltz, loc. cit., 452.)468.For a masterly exposition of the doctrine that the right of prescription or limitation is related to the politico-economical necessity of property, seeJohn Stuart Mill, Principles, 3, II, ch. 2, sec. 2.469.Locke, On Civil Government, II, §25-51; and soL. Mendelssohn, Jerusalem (1783), 32;Thiers, Du Droit de la Propriété (1849).470.Modern writers, in their attempt to find a philosophical basis for the right of property, have taken two principal directions, the first a juridical, the second a political one. The axiom,res nullius cedit primo occupanti(compare L. 3, Digest, XLI, 1), explains only the smallest part of the relations of property, and that only because of a very fortuitous circumstance. According toHobbes(Leviathan, 24), property has its origin in the recognition of it by the power of the state, by theautorité publique, thegouvernement(Bossuet, Politique tirée de l'Ecriture, Sainte, L. 3, 4), or asMontesquieu(Esprit des Lois XXVI., 15) more mildly expresses it, in the laws. The application of this principle would, on account of the extreme changeableness of the laws of every state, lead to most extreme insecurity, and to a steady oscillation from one Utopia to another, from one revolution to another, if it were not, at the same time, recognized that each one had a just title to the acquisitions he had made, not because the law, for the time being existing, acknowledged the right, but because they were the product of his labor and saving. The theory which bases the right of property on contract cannot be objected to with as much reason. Thus,Hugo Grotius, Jus Belli et Pacis, II, 2, who even justifies the occupation of things without an owner, on the supposition of the existence of an implied contract. It is very characteristic of the English, that in their political language, the words“liberty”and“property”are so frequently found in each other's company. In one of his classic speeches made by Fox in 1784, he gives a definition of liberty which begins with the words,“It consists in the safe and sacred possession of a man's property”etc. The recent doctrine, not unfrequently to be met with, that every man has a right to an amount of property corresponding to his wants, may be used to sanction all kinds of socialistic inferences. An entirely bewildered and bewildering description is to be found inProudhon'sQu'est ce que la Propriété, 1848, as the precursor of whichBrissot'sRecherches philosophiques sur le Droit de Propriété et le Vol, may be considered. In medieval times, there are always a multitude of other titles to property besides production and saving. The title which is held in highest esteem for the time being is always because of this very extreme vis-a-vis of all other titles, strengthened and made general.471.The word socialism brought into use byL. Reybaudis as ambiguous as the word communism is simple and intelligible. But most socialists agree that actual“society”(which is indeed to be distinguished from the state) is, together with its foundations, the existing relations of property and the family, entirely wrong. A radical reconstruction, they say, is needed to remove forever the chief evil of this system, viz.: the glaring difference between the rich and the poor, the educated and the uneducated. The difference between the doctrines of the socialists and of Political Economy does not, by any means, consist in this, that the former concerns itself more with the welfare of the lower classes, or even that it gives wider scope to economy in common. But socialism is, indeed, a living or housekeeping in common (Gemeinwirthschaft), which goes far beyond the feeling for the common interest (Gemeinsinn). Such economy in common is always opposed to freedom, and, at its first introduction, contrary to law. It can guarantee no compensation to those who have suffered from violence or force, because it leads to a thoughtless and wasteful exhaustion of the nation's resources, inasmuch as it weakens the incentive to industry and frugality. Political Economy, on the other hand, recommends anexpropriationwhen the incentives to industry and frugality are thereby strengthened; and the increased resources thus obtained serve it, as full compensation to those whose property has beenexpropriated.472.SeeRoscher, Betrachtungen über Socialismus und Communismus, Berliner Zeitschrift für Geschichtwissenschaft, 1845, III, 422 ff.473.Vivre en travaillant ou mourir en combattant—the device on the flags of the mutinous silk-weavers at Lyons, in 1832.474.We are so assured byVauban(Dime Royale, 34 seq), of the later years of the reign of Louis XIV, that nearly 1/10 of the French people begged, that 5/10 could give no alms, because they were themselves on the very brink of indigence; 3/10 werefort malaisés, embarassés de dettes et de procès; scarcely one per cent. could be said to befort à leur aise. How much better off is the present Parisian workman! And yet, at that time, there was not the least spread of communistic doctrines. It is indeed seldom that completely down-trodden men react against their wretchedness with great energy.475.“If mycapricebe the source of law, then myenjoymentmay be the source of the division of the nation's resources.”Stahl, Rechtsphilosophie, II, 2, 72.476.That the socialism ofPlato, De Repub., V, was no mere fancy, is proved by the polemic whichAristophanesdirects against it in his Ecclesiazuses. See alsoAristot., Polit., II, 2, Schn. In the contemporary practice of the Greeks, with the increasing democratization of the state, it became more and more usual for it to bear the expense of the outlay for the means of subsistence of the great crowd. (SeePlutarch, Cimo, 10.) Every act of public life was paid for. Citizens were paid for attending popular meetings three oboli per day, while the pay of the soldiers was six, and that of the sailors three. (Thucyd., III, 17; VII, 27; VIII, 45.) The pay of the commonest day laborer was from three to four oboli per day.Aristophan., Eccl., 310, andPollux, VII, 29. The number of magistrates was very large, in order that as many as possible might participate in this species of remuneration. Thus, in Athens, when it had only about 20,000 inhabitants, there were 6,000 judges. In addition to all this, there were numberless feasts, plays, banquets etc., which were offered to the people gratis. The wealthy who were compelled to meet all the expense thus incurred, lived in such a state of terror of the populace, that they considered their own impoverishment as a species of deliverance. (Xenoph., Conviv., 4, andLysias, pro Bonis.)Isocratescalled it much more dangerous to be rich than to commit a crime, since in the latter case one might obtain a pardon or a mild punishment. (De Permut., p. 160.) (Lysias, De Invalido, de sacra Olea, seq.) There is little difference between this state of things and a semi-community of goods. Only that, indeed, the great mass of the slaves were excluded from enjoying them. The contrast which somewhat later distinguished the Cynics from the Cyreno-Epicureans affords a striking analogy to that which, in our own times, exists between the pure socialists and the worshipers of mammon after the fashion of Doctor Ure. Concerning the Utopia ofIambulos, seeDiodor., II, 55 ff.477.Our sources of information concerning the division of the Roman republic into a moneyed oligarchy, and the proletariat are very numerous. Compareinfra, § 205. The speeches of the Gracchi (e.g.Plut., T. Gracchus, 9), and still more the violent discourses of Catiline's conspiracy (Sallust, Cat., 20, 23, 37-39), remind us very forcibly of the shibboleths of modern socialism. We very frequently meet with the expression of a longing desire to return to the most uncivilized and hoary past, when there was no money and no wealth—an aspiration which lies at the very foundation of communism. ThusVirgil, Geo., I, 125, ff.,Tibull.I, 3, 35, ff.Propert.II, 13, III, 5, 11;Seneca, Epist., 90;Senec., Oct. II,Hippol., II, 2;Plin., H. N. XXXII, 3. On the other hand, the practice of supporting the populace at the expense of great candidates or of the state, was developed to a very great extent. The masses lived very largely by the sale of their right of suffrage to the highest bidder. At the election of consuls in the year 54, 500,000 thalers were offered to the century called on to vote first. (Cicero, ad Quintum II, 15; ad. A.H. IV, 15.) EvenCatohad a part in such bribery. (Sueton., Caes., 19.) In the social reform of the younger Gracchus, besides the limitation of large land-ownership, the principal points were the following: the sale of wheat under the market price, but only to the inhabitants of Rome itself; the construction of great highways in Italy; colonization at the expense of the state, and the increase of soldiers' pay. (Ritsch, Gracchen, 392 ff.) The socialistic plans of Rullus went much further. Were his agrarian laws put in execution, he would have confiscated very nearly the entire country in the interest of the poor, and of their demagogues! (Cicero, De Lege agrar.) Rome twice experienced a social revolution of the most frightful character, one by which a great portion of all private goods fell into the hands of the propertyless (soldiers), who knew nothing of how to turn it to account or to invest it—under Sulla, and then under the later Triumviri. (CompareAppian, Bell, civil., V, 5, 22.) Complaints concerning the latter, inHorat., Epist., I, 2, 49;Virgil, Buc., IX, 28;Tibull.I, 1, 19, IV, 1, 182;Propert., IV, 1, 129. The elder Gracchus had promised compensation to the last possessors.Tabulæ novæof Cinna, Catiline, Cælius, Dolebella. Clodius introduced the distribution of wheat, which according to Cicero pro Sext., 25, ate up almost one-fifth of the public revenues. About 320,000 persons were, in this way, supported for a long period of time (Sueton., Caes, 41,Dio C., XLIII, 21; L. LV, 10), but only in such a manner as to keep them from starvation. (Sallust, 268 ed. Bip.) To all this was soon added distributions of salt, meal and oil, also free baths, numberless public plays, colossal banqueting, payment of one year's rent etc.Panem et circenses!(Juvenal, X, 80 seq.) The mere distribution of money under Augustus, in which from 200,000 to 320,000 men participated, cost each time from 2,500,000 to 6,000,000 thalers. (Monum Ancyr., 372 Wolf.) Extraordinary assistance was, by way of preference, accorded to colonies of the poor. (Sueton., Caes, 42.) Concerning this entire policy, seePlin., Paneg., 26 ff. Even in Constantinople, at the time of its foundation, large distributions of bread were made at the expense of Egypt, although there could scarcely be any real pauperism in that new and flourishing city. (Theod., Cod., XIII, 4, XIV 16;Socrat., II, 13.) I can only allude to the plan proposed by the emperor Gallien by the neo-platonist Plotin, to found a city in which the ideas of Plato's republic should be carried out. (Porphyr., V, Plotin., 8.)478.During the two centuries of which the Reformation constituted the middle point, the transition from the peasant system of agriculture to the large farming system of modern times bore very heavily on the inferior classes. Such, too, was the operation of the fall in price of the precious metals. (§140.) The suppression of the many monasteries caused an increase in the wretchedness of the poor; and the numerous poor-laws enacted in England, Spain etc., were not sufficient to supply a remedy. The feeling of the people during this period of tribulation found expression in the War of the Peasants, in the sect of Anabaptists, in the many reformations and counter-reformations, in the revolt of the Netherlands, in the conflicts for the crown in France and England etc. In Italy, the contrast existing between the moneyed oligarchy and the proletariat had been developed several centuries, but from the middle of the sixteenth century, it had become much more oppressive by reason of the universal impoverishment of the country. For an account of the pantheistic“Brethren and Sisters of the Free Spirit,”with their community of goods and of women, seeUllmann, Reformatoren vor der Reformation, II, 18 ff. They were very numerous from the thirteenth to the fifteenth century in Italy and France, as well as in Germany, and lead us to the Adamites in the Hussite war. (Aschbach, Geschichte K. Sigismunds, III, 109.) Earlier yet, we have the sect of the Giovannali, who had their property and women in common, and who, in 1355, had won the third of Corsica, but who were afterwards suppressed by Genoa and the Church. (Lebret, Geschichte von Italien, VI, 208 ff.) The coarse socialist,John Balle, bears about the same relation to Wycliffe, that Münzer and Bockholt did to Luther. (Walsingham, Hist. Angliæ inCamden, Scriptt., 275.) Hans Böheim of Würzburg, 1476, seems to be the direct precursor of Münzer. (Ullmann, I, 421 ff.) It was almost as usual in Luther's time, as in 1848, or in our day, to hear of the deep demoralization of trade—theFuggereiof the Germany of the time—and of the universal system of fraud that prevailed. See the citations inHagen, Deutschland's Verhältnisse im Reform-Zeitalter, II, 313 ff. Münzer's fundamental principle:Omnia simul communia!Sebastian Frank, Chronica, Zeytbuch und Geschychtbibel etc., 1551, fol. VI, 16, 27, 116, 194, 414, 433. John Bockholt's life presents us with a striking contrast. While they were bringing his perfumed women, sparkling with jewels, to his rose-covered bed, hung with curtains of gold cloth, on which he was reclining, his subjects were a prey to the horrors of famine, to such an extent that they were compelled to salt the bodies of children who had died of starvation. How frightful the end of this communistic benefactor of mankind! Libertine community of goods and women. (Calvin, Instructio adv. Libertinos, cap. 21.) English communists in the age of the reformation. (J. Story, Comment. on the Constitution of the U.S., I, 36.) Even under Cromwell, there were many Englishmen who believed that farmers were no longer obliged to pay rent to land-owners. On the sect of Levellers, seeWalker, History of the Independency, II, 152. Even inErasmus, we find some sympathy with communism. (Enchirid. milit. Christ, 80.)Contra, seeMelanchthon, Prolegg. in Cic. de Off., Corp. Reform, XVI, 549 ff. The most remarkable systematic works of this period areThomas More's, Utopia, 1516, andCampanella'sCivitas, solis, 1620.Thomas Morebluntly says that all existing governments are in fact only permanent conspiracies of the rich to further their own interests under the mask of the common good, and to despoil labor. The abolition of money, which should be continued in use only to carry on foreign war, would, he contends, remove all misery. There was no really private property in his Utopia. There should be a rigid superintendence of all work by the public authorities, whose duty it should be to see to it, that no one should abandon agricultural pursuits. All should eat at a common table and dress after the same fashion. Internal commerce should give way to a mutual exchange of gifts under the supervision of the state.Campanella, besides a community of goods, recommends continually varying occupation, to last not more than four hours daily; education in common, especially by means of pictures, popular encyclopedias etc., all under the supreme guidance of a despotism to be composed of the wise, some secular and some spiritual, operating through the confessional. Socialists nearly always succeed better in the critical part of their works than in the positive. CompareR. Mohl, Geschichte und Literatur der Staatswissenschaften, § 1, 165 ff.479.Considering the aversion exhibited against private property byJ. J. Rousseau, and the unlimited power which he accords to the majority for the time being in the state (Contrat Social, 1761, II, ch. 4), it cannot be denied that his freedom and equality contain, to say the least, germs of communism by no means insignificant. But, he would, in the present state of civil society, have a feeling of respect for the rights of property implanted in the mind of the child very early, and even before the feeling of liberty is developed. (Emile, 1762, Livre II.) About the same timeMorellypublished his Basiliade ou Naufrage des Iles flottantes, 1753, a political romance in the interest of communism. See the same author's Code de la Nature, 1755.Mably, in his two works, Doutes proposés aux Economistes, 1768, and La Législation ou Principes des Lois, 1776, recommended the abolition of all inequality and a real community of goods. The introduction of property seems to him,une faute qu'il était presque impossible de faire. EvenBeccariacalls property a dreadful but perhaps a necessary right which has left to the unfortunate nothing but a naked existence. (Dei Delitti e delle Pene, 1765, cap. 22.) The French Reign of Terror came pretty near carrying these ideas into effect. We need only refer to the abolition of the census, the payments made to the workingmen who attended the section meetings, two francs per diem, the enormous extension of confiscation, requisitions and forced loans, the revolution effected in the fortunes of individuals by the system of issuing assignats, the maximum affixed to the price of all the necessaries of life, the abolition of indirect taxes, and of what remained of the economic institutions handed down from the middle ages. According toSt. Just:l'opulence est une infamie; il ne faut ni riches ni pauvres. The Cahier des Pauvres demands, first of all, that salaries“should no longer be estimated in accordance with the murderous principles of unbridled luxury.”See Forster's letter dated November 15, 1793. (Sämmtl. Schriften, IX, 125.) On the conspiracy of Baboeuf, who was executed in 1796, and who wanted to see the completest equality and community of labor, of enjoyment and education, the abolition of large cities etc., seeBuonarotti, La Conjuration de B., 1821. This book contributed powerfully towards the revival of communistic ideas after the July revolution. Among modern communists who are to be distinguished from the more ancient, especially by the industrial coloring given to their theories,Cabet, Voyage en Icarie, 1840, II, holds a very prominent place. He declares the abolition of religion, of the family and of the state, to be open questions, and desires to bring the practice of a community of goods to a successful issue only through the peaceful channel of conviction.CompareReybaud, Etudes sur les Réformateurs contemporains ou Socialistes modernes, 1840.L. Stein, Der Socialismus und Communismus des heutigen Frankreich. See, also, the learned history of socialistic systems inMarlo'sWeltökonomie, I, 2, 435 ff.; and in what concerns the most recent time,R. Meyer, Der Emancipationskampf des vierten Standes, II, 1874, seq.; a book which, in spite of its many defects, both doctrinal and journalistic, is as rich in thought, and in the knowledge of the subject it treats of, as it is permeated by a love of truth regardless of consequences. Among the opponents of socialism and communism,Malthus, On Population, B. III, ch. 3, andB. Hildebrand, Die Nationalökonomie der Gegenwart und Zukunft, vol. I, 1848, hold a very distinguished place.J. S. Mill, Principles, II, ch. 1, 3, calls attention to the fact that hitherto the principle of free property has never been consistently carried out. The first social arrangement of modern society was almost everywhere the result of conquest and violence, large traces of which yet remain. Things have always been made property which ought not to be property. Governments have endeavored to intensify the darkness of the dark side of property, and favored the concentration instead of the diffusion of wealth etc. Hence, no one can claim that the social wrongs, so-called, had their origin in property as such.Schäffle, Kapitalismus und Socialismus, 1870, has made a very note-worthy effort to recognize whatever of truth there is in socialism, and to combat its errors.480.Saint Simon'sreproach to the liberals, that their fundamental principle was:ôte-toi de là, que je m'y mette, is well known.481.CompareMalthus, Additions to the Essay on Population, 1817, IV, ch. 7.482.Thetravailleurs égalitaireswished to murder not only the king, the court, and the ministry, but also the Liberals and all owners of property.483.As soon, indeed, as this true love disappears in the married state, the community of goods even there degenerates only too easily into a spoliation of the better party by the worse.484.The community of goods of the first Christians at Jerusalem, so frequently cited and extolled (James, I, 1), was only a community of use, not of ownership (Acts IV, 32), and, throughout, a voluntary act of love, not a duty (V. 4), least of all, arightwhich the poorer might assert. Spite of all this, that community of goods produced a chronic state of poverty in the church of Jerusalem. Hence, Paul had collections taken up for them on all sides, without, however, anywhere establishing a similar institution. (Romans, 15, 26; I. Corinth., 16, 1.) CompareMosheim, De vera Natura Communionis Bonorum in Ecclesia Hierosol., in his Dissertatt. ad Histor. Eccles. pertinentes, II, 1 ff. As to whetherBarnabas(Epist., 19) desired to say anything more, compare Epist. ad Diognetum, 5. For a real recommendation of a community of goods, on economic grounds, seeJoh. Chrysostom., in Acta Apost., Hom. XI. AlsoClemens Rom.c. 2 C. 12, qu. 1. Community of goods among the Essenes:Philo.Opp. II. 457 ff.Joseph. Bell, Jud., II. 8.Bellermann, Geschichtliche Nachrichten über die Essener. (1821.) In many monasteries, there has been and is a species of community of goods. There was once a singular contest on this subject, carried on between the Minorites and the Pope, in the time of Louis of Bavaria. The Minorites claimed that property was a thing, so much to be condemned, that even food, at the moment of eating it, did not belong to the person using it. The Pope taught on the other hand, that even Christ and the Apostles possessed property, part personal and part in common. (Raynaldi, Ann. eccl., XV, 241, 285 ff.) Community of goods of the Homiliates, later of the Brothers of Common Life, after the manner of the monks, but of a much higher kind. (Ullmann, Reformatoren v.d. Reform, II, 62 ff.) The first settlers of New Haven, Connecticut, held their property in common. Land was divided among families in proportion to the number of persons in them, and of the number of cattle they had brought with them; and all sales and purchases were made on account of the whole community. And so in Massachusetts during the first seven years of the colony's existence. (Ebeling, Geschichte und Erdbeschreib. der Vereinigten Staaten, II, 391, I, 557.)Herrnhutcommunity of goods in Pennsylvania, from 1742 to 1762, but which was done away with when the number of colonists became too great. (Ebeling, IV, 717.) Community of goods of the Shakers and Lutheran Rappers. (Buckingham, Eastern States, II, 214, 427.Prinz Neuwied, Reise in Nord Amerika, I, 136, ff.) Russian sects with community of goods. (v. Haxthausen, I, 366, 407.)Harless, christliche Ethik § 501, distinguishes very well between the“anti-christian”and“pseudo christian”stand point, from which it is sought to establish the doctrine of a community of goods. The Christian view of this subject (compare Ephes., 4, 28, I; Thess., 4, 11, II, 3, 12; Matth., 6, 24; Pet. 4, 10; Matth., 26, 7-11) is accused of hypocrisy by many socialists. It is very easy, they say, when one is himself in comfortable circumstances, to represent to the poor that their poverty is a school for heaven, and to preach a contempt for riches etc. They entirely forget, that the first promulgation of the Gospel was made at a time when the worst kind of pauperism prevailed; and that even the Master Himself, and the greater number of His Apostles belonged to the lowest stratum of society.Luke, 9, 58. Many of the Fathers of the Church, however, in their exhortations to benevolence, used language in which modern Socialists have found a rich mine which they have sedulously worked. (CompareVillegardelle, Histoire des Idées sociales, 1846, 61 ff.)485.EvenAristotlesays that what is common to many is a matter of little concern to any one. (Polit., II, 1.)Bastiatremarks:“We compete to-day to see who works most and best. Under another regime, we should emulate one another to see who should work least and worst.”(Harmonies Econ., ch. VIII.) When the first settlers of Virginia, in 1611, gave up the system of common labor and of joint-stock companies, as much work was performed in a day as formerly in a week, or as much by three workmen as formerly by thirty. (Purchas, Pilgrims, iv, 1866.Bancroft, History of the United States, I, 161.) Even in New England, therefore among men both steady and accustomed to labor, who for conscience sake had sacrificed so much, a community of goods was accompanied uninterruptedly by famine. A change for the better took place, for the first time in 1623 with the introduction of the institution of private property which was followed in 1624 by the right of inheritance. (Bancroft, I, 340.) The military colonies of Algeria, also, in which husbandry in common was carried on, begged, at the end of a year, that the system should be abandoned, for the reason that it was good for nothing but to generate idlers; and yet, these colonists were all powerful men of about the same age, and accustomed to order and service in common. They were, moreover, assisted by the nation with pay and food. CompareBugeaud'saccount: Revue des deux Mondes, June 1, 1848.“The French associations (after 1848), whose object was labor in common, have nearly all died out.”M. Chevalierin the Journal des Débats, Feb. 3, 1851. In the United States, sixteen phalansteries of Fourierites, founded between 1840 and 1846, had all collapsed in 1855. (D. Vierteljahrsschrift, October, 1855, 205 ff.)486.Even in New Harmony, the members considered the task which they had to perform to obtain food, clothing and shelter, as villeinage in the worst sense of the term. (H. Bernhard v. Weimar, Nordamerikan. Reise, V, 134 ff.; 151, 310, ff.) It is very inconsistent in socialists to continue the proprietorship and heirship of the state. To be consistent they should give both these rights only to mankind as a whole. CompareKiraly, Ueber Socialismus und Comm., 1868, 35.487.It would not be entirely fair to take a partisan view of theateliers nationauxof 1848, and claim them as a practical refutation of socialistic utopias, since no serious experiment was made with them. CompareE. Thomas, Histoire des Ateliers nationaux considérés sous le double Point de Vue politique et social, 1848.488.Socialists generally overlook the fact, that the greater number of enjoyments from which the poorer classes are excluded, by the right of property, would not exist at all were it not for that very right. (Spittler, Politik, 356 ff.) This remark may also be made ofHugo'singenious objections. (Naturrecht, § 208 ff.) One of the most effective pieces of socialistic declamation is that the lower classes have a much shorter average of life than the upper. Hence the institution of private property is charged with being a species of spoliation of the poor of so many years of life, and the entire“present society”condemned on that account. Here again it is not borne in mind, that a few centuries ago the general average of life was probably still smaller; and that it was precisely the growth and development of“present society”that lengthened the days of the poorer classes even, although it may have lengthened those of the rich in a still greater proportion. See § 246.489.But a community of goods would not, by a great deal, accomplish as much as is generally supposed. In Prussia, for instance, in 1867, only about three per cent. of the entire number of families in the community had a yearly income of 1,000 thalers; only nine per cent. had 500 thalers or more, and only 6,465 returned an income of more than 4,000 thalers, while only 590 returned one of 16,000 thalers. (Preuss. statist. Ztschr, 1868, 83.Held, Die Einkommensteuer, 197 ff) How little, therefore, could the poor here gain by the spoliation of the rich! Besides, the purely personal consumption of the rich is, after all, not so great; and if all luxury were abandoned, an innumerable number of men would lose their gains. (CompareAd. Smith, Wealth of Nations, I, ch. 11, 2.) It would be to kill the hen that had hitherto laid the golden egg in order to divide its flesh a little more equally.490.Babeufdeclared all arts and sciences to be evils. He would have no one learn anything but Reading, Writing, Arithmetic, and a little of the Geography of France; and have the strictest censorship enforced to keep every one within these limits. Compare the able criticism ofProudhon, Contradictions, ch. 12.491.According toUmpfenbach, Nationalökonomie, 201, where a community of goods obtains, there can be but the alternative, viz.: whether each person or each family shall receive just the same amount. (The former would be more in harmony with principle, but what an over-population would be the consequence!) Precisely so, too, if each person were to come and take his own portion (anarchy!), or if it were parcelled out to each by a board of distributors (despotism!).492.This expression came into vogue, principally, throughL. Blanc, Organization du Travail (1841), the leading ideas in which work are the following: The suppression of competition by the establishment of state industries; equality of remuneration for labor; equality and legislative determination of the rate of interest; the choice of superintendents by the workmen. With many modern socialists, the shibboleth is not so muchlibertéassolidarité. Besides,Fichte'sNaturrecht (1796), and his geschlossener Handelsstaat, are, without doubt, among the most remarkable works favoring an“organization of labor.”They aim at the destruction of the present social system, which, at most, needs only to be reformed and rejuvenated; and to galvanize the dead body into a new and different life (Medea's magic cauldron!). CompareCorvaja, Bancocrazia o il gran Libro sociale, 1840.493.Cabet's Icarian colony in America numbered 298 adults and only 107 children. Yet spite of this condition, so favorable to production, it did but a very sorry business. Its government was very similar to that of a house of correction or a penitentiary. Even in religious matters, spite of all pretended toleration, those members who did not agree with Cabet were described in the official weekly paper asdes infames ou des aveugles. (D. Vierteljahrsschrift, 1855, October, 205 ff.)494.An eastern sage says, that land possesses the ideal of legal security through which a beautiful woman, decked with pearls, might travel without danger. What would such a sage say of a European country, in which even orphan children have their property not only preserved to them, but find it increased from having been placed at interest, as soon as they reach their majority? (Barrow.)495.“The equality of communism is the worst species of inequality, because it guarantees to one for two hours of poor labor as much as it does to an other for four hours of good work.”(Bastiat, Harmonies économiques, ch. 8.)496.Proudhon, Qu'est-ce que la Propriété, 283, says, very justly, that“a community of goods is the spoliation of the strong by the weak.”497.Called a negative community of goods, byZacchariä, Vierzig Bücher vom Staate, IV, 146, in contradistinction to the positive and universal community of gain, as desired by the communists.498.Community of goods and of women among the Ichthyophages on the Red Sea, who lived in caves, went naked for the most part, plundered all shipwrecked people, and never reached an advanced age.Diodor., III, 15 ff.Peripl., Maris Erythr., 12. Concerning the Scythians, seeStrabo, VII, 300; the Spaniards,Plutarch, Marius, 6; the Rhetians,Dio Cass.LIV, 22; the Triballi,Isocr., Panath., § 237; the Kilici,Sext., Empir. Pyrrh. Hypot. III, 24. Community of goods among the Caribs who performed all their work in common, and had, at least in the case of males, a common table and common stores with supplies. (Petr. Martyr, Dec. VII, 1.Rochefort, II, c. 16.B. Edwards, History of the West Indies, I, 43 ff.) Among the Kuskowimers of Russian America, all the able-bodied men of the tribe live together. (v. Wrangell, Nachrichten, 129.) Among the inhabitants of the Aleutian islands, at least in times of scarcity of food, the produce of the fisheries is divided according to their need. (V. Wrangell, 185.) The organization of labor is rigidly enforced among the Otomacs, on the banks of the Orinoco, and they are, nevertheless, more civilized than their neighbors. (Depons, Voyage, I, 295.) A community of goods must, however, be considered an advance, in the case of an isolated people; and it is an error to look upon it as the most primitive condition, as does, for instance,Ambrosius, De off. Minist. I, 28, andFrederick II, in the preface to his general code. (Allgemein. Gesetzbuche, 1231.) The hospitality of the inhabitants of the Friendly Islands borders on a community of goods. (Mariner, Freundschaftsinseln, 75, 81.Klemm, Kulturgeschichte, IV, 398.) Concerning the beginnings of property among the Esquimaux, SeeKlemm, II, 294.499.Οὐκ ἄδοξον ἧν παρὰ τοῖς παλαιοῖς ληστεύειν, ἀλλ᾽ ἔνδξον. (Didym., ad Odyss. II, 73, IX, 252.)500.In Mexico, the Spaniards found land ownership among the most distinguished of the natives, but only a species of possession in common and common store houses among the peasantry. (Robertson, History of America, § VII.) Hence, the agriculture of the country was so unimportant that the little army of theconquistadoresfrequently produced a famine by their marches.501.The Tcherkesses considered robbery honorable provided the robber was not caughtin flagrante. CompareKoch, Reise in den kaukasischen Isthmus, I, 370 ff.Bell, Journal of a Residence in Circassia, I, 181, II, 201. The organized robber bands of ancient Egypt, when it was so highly civilized (Diodor., I, 80) may, on the other hand, be accounted for by similar conditions actually existing in the large cities of our own day.502.What a frightful organization of labor we find in Sparta, combined with a community of goods! Let us recall the exposing of children authorized by law, the mode of education which must have cost the life of all whose constitution was weak, thecryptia, the stern hierarchy of age etc.Plut., Inst. Lac. 2, appreciates the bad taste of the black broth at its true value. The Cretan community of goods was based chiefly on the unnatural relation created by the authorities known as paiderastia; and which was a very efficient means to prevent over-population. (Plat., De Legg, I, 636.Arist., Polit. II, 8.)503.Remarkable reasons therefor inCæsar, Bell. Gall., VI, 22.504.There are, especially in Russia, a multitude of such institutions among the inhabitants of the country still. SeeRoscher, Nationalökonomik des Ackerbaues, § 71 ff.505.In the Corpus Juris Canonici, that crown of medieval theology, politics and jurisprudence, the ideal of a community of goods occupies a place almost as prominent as in the works of modern socialists. The only difference is, that in the former the opposition to private property arises from a one-sided religiousness and contempt of the world, while, in the latter, it arises generally from irreligiousness and over-estimation of worldly goods.506.This does not include the cost of the schools, churches and benevolent institutions.507.According toLassalle, System der erworbenen Rechte, 1861, § 259, history shows that law, as civilization advances, curtails more and more the proprietary sphere of private individuals, inasmuch as it tends more and more to place a greater number of objects outside the circle of individual ownership.508.Saint Simonism is a warning example of this tendency. Saint Simon never lost an opportunity to give vent to his utter contempt for the liberals, and for constitutional government—ce bátard du régime féodal et du régime industriel; and to counsel the crown, after the example of Louis XI. to place itself at the head of the working class, and in opposition to the middle class. (Oeuvres deSaint Simon, éd. 1841, 44, 148, 209.)Bazard, Exposition, 76, demanded that all antagonism between the temporal and spiritual powers, all opposition for the sake of freedom,méfiance organiséeof parliaments, and all competition, should cease. Even education he would have bestowed according tocapacité, which he would have determined by thechefs légitimes de la société(280). To the criminal court should be referred all cases ofdelicts, that is, all inopportune acts, even in the scientific and artistic departments. They should be tried after the manner of the“courts of trade;”that is, in a summary way, without appeal, and by experts (317 ff). All the relations of property should be determined by thedécision arbitrale des chefs d'industrie(326).Bazardeverywhere insists that the reign of genius and of self-sacrifice on the one hand, and on the other of confidence and obedience, is the only true policy (330). Saint Simonism was nearly related to Bonapartism.509.Schäffle, Nat. Œk., III, Aufl., I, 61.510.If we remove in thought, all injurious elements from a community of goods, and add to it all the incentives and restraints necessary to be added, we shall have a state of things entirely similar to that in a nation whose public and private affairs are carried on in accordance with the principles of a healthy system of Political Economy as understood to-day. (Edinburgh Review, January, 1851.)511.How true freedom is accompanied by whatBastiatcalls“true Saint Simonism and true communism,”seeinfra, § 210.512.The experiments of a community of goods, which have proved successful in practice, were all based on the more or less complete celibacy of the members of the societies. CompareHermann, Staatsw. Unters., II, Aufl., 45.513.ThusProudhon(Contradictions, ch. 5) says that the many socialists, who would construct their societies after the type of the family, as themolscule organique, are all wrong. The family has a“monarchical, patriarchal”character. In it, the principle of authority is formed and preserved. On it, ancient and feudal society was based; and“precisely against this old patriarchal constitution, modern democracy protests and revolts.”Fouriercalls marriage,un groupe essentiellement faux: faux par le nombre borné à deux, par l'absence de liberté et par les dissidences du goṅt, qui éclatent dès le premier jour. (Nouveau Monde, 57.)514.On the Indians of North America, seeSchoolraft, Information respecting the Indian Tribes of the United States, II, 194; on the South Americand'Orbigny, Voyage, IV, 220, and passim, on the South Sea Islanders, the Novara-Reise, II, 418; on the ancient Albanians,Strabo, XI, 503.515.The hereditary transmission of property to posterity has an obvious tendency to make a man a good citizen. It ranges his passions on the side of duty, and induces him to make himself profit the common good, and it assures him that his reward shall not die with himself, but that it shall be handed down to those to whom he is joined by the dearest and most tender feelings. (SeeBlackstone'sCommentaries, II, 11.) Without the right of inheritance, credit is scarcely possible, since with the death of the debtor the only stay of the creditor would cease.516.Testamentary freedom (which obtained in places there about the beginning of the eighteenth century) prevails completely in England at present, contrary to the principle of the Roman law requiring an obligatory portion (la légitime) to be left to the heirs, which is still binding in France, but in a very much developed form. The consequence is that last testaments are as frequent in England as they are rare in France. There were, in Paris, in 1825, 7,649 judicial, and only 1,081 testamentary partitions of property. (Monnier.) In Great Britain, in 1838, the number of testamentary alienations of property taxed stood to those in which there was no will, in the proportion of 8:3; and the values of the alienated property as 10:1. (Porter.) Among a people noted for their high moral tone, testamentary freedom is a powerful means of strengthening paternal authority on the one hand, and of keeping alive, in the minds of parents, on the other, a sense of responsibility for the future of their children. CompareHelferich, Tübinger Zeitschr., 1854, 143, ff.517.Polyb., XX, 6. Hence it was, that all (?) the wealth of Thebes, when it was destroyed by Alexander the Great, was only 440 talents. (Athen., IV, 148.)Drumann, Gesch. Roms. etc., VI, 333 ff.Cicero, Phil., II, 16.Hoeck, Röm. Gesch., I, 2, 118.Sueton., Octav., 66. An especially scandalous instance inPetron., 140. For a masterly theory of legacy-hunting, seeHorat., Sat., II, 5. CompareLucian, Dialogues of the Dead, 5-9.Petroniusspeaks of aturba hæredipetarum. (124.)518.Even the revolutionary shibboleth,paternité, really means nothing more than the equal right of inheritance of all, i.e., the abolition of the right of inheritance! (R. Meyer.) The strongest attack, from a scientific point of view, made on the right of inheritance in more recent times, comes from Saint Simonism. The founder himself, after a life rich in experience but poor in action, spent in the search of much but in the finding of little, succeeded only in arraying the industrial and proprietary classes against each other, in declaring the poorest class to be the most important of all, and in basing the newreligion of loveon the emancipation of labor. His disciples went further. In order to abolish all the privileges of birth,Bazard, Exposition de la Doctrine de Saint Simon, 1831, p. 172, ff., taught that it was not enough to distribute public employments according to merit, and in the interest of the people generally, but that the distribution of property should be made in accordance with the same principle. The inequality of ownership should correspond with the inequality of merit. Every one may, during his life, keep what he had acquired himself, but give it to the state at death. Thus would a reconciliation be effected between the general interest and private interest; and the public revenue, supplied in this way, might easily be employed in place of the revenue raised by such taxation as weighs most heavily on the inferior classes.F. Huet, also, Le Regne social du Christianisme, 1853, III, 5, would have all private property, after the death of the owner, fallégalement à tous les jeunes travailleurs. The practical consequences of this system may now be seen in Turkey. There, the principal military fiefs are held in this way. Hence it is, that the Turkish owner of such a fief builds as little as possible. When one of his walls threatens to fall, it is kept standing by means of props. If it falls in fact, the only consequence is that there are fewer rooms in the house, and the owner settles beside the ruins. (Denon, I, p. 193.) In the Butan, there exists a species of practical Saint Simonism.Robinson, Descriptive Account of Assan, 1841.519.It was chiefly fear of the consequences of the declamations of the socialists and their declamation against“monopoly”that inducedBastiatto reduce all the value of landed property to that of the capital employed in its manuring, improvement etc. (Harmonies, ch. 9.) We may, however, unreservedly grant him that, as a rule, until the time of its original possession by man, land had novaleurwhatever (278).520.Kantthinks the very contrary: Metaph. Anfangsgründe der Rechtslehre, (Werke, IX, 72 ff).Contra,Grotius, J. B. et P., II, 2.Graswinkel, in his Schriften für die Freiheit des Meeres, 1652 ff., inLaspeyres, Geschichte der niederländischen N. Œk., 12.Hufeland, Neue Grundlegung, I, 307.521.“A district of Tartary of ten square miles, in which several hordes pasture their flocks, may contain between 400 and 500 shepherds, who find employment in this mode of production.”In Brie, in France, on the same area, 50,000 peasants who own no land, live and draw their sole income from their labors in the fields (J. B. Say).522.Schubert, Reise durch Frankreich und Italien, I, 188.523.“Without labor, the earth bestows nothing on man but a stopping place. Hence, the reasons for private property do not extend so far as to prove that the great land and water highways should not be reserved as common property, and as a home to every man.”(Zachariä, vom Staate, VII, 43.)524.This is the practice in Taway.Ritter, Erdkunde, V, 130. And so in ancient Germany.J. Grimm, Rechtsalterthümer, 92. Right of the“dead fire”in Spain and Portugal during the middle ages.S. Rosa de Viterbo: Elucidario das Palavras etc., I, 470. In many parts of Persia, the land belongs to anyone who has provided it with water by canals or wells. (Fraser, Journey in Chorasan, ch. 7.) Especially after the Mongolian devastation about the beginning of the fourteenth century, it was decreed that land which had remained uncultivated for a long time should belong to the person who made it productive. (d'Ohsson, Hist. des Mongols, IV, 418.) Similarly, in the time of the ancient Persians (Polyb., X, 28, 3), the harvest for the first five years belonged to the person who first irrigated the land. On the upper Euphrates, likewise, the land is very often neither sold nor leased. Anyone who will till it and pay one-tenth of the produce to the bey may have it for nothing. (Ritter, X, 669; compare VIII, 468; IX, 900.) So, too, among the Fulah and Mandingo negroes, and even among the Tscherkessans. (Klemm, Kulturgeschichte, III, 337 ff.) As the latest stages of development so often present instances of a reversion to the earliest, we find that Theodosius and Valentinian decreed that theagri desertishould, after two years' cultivation, belong to the possessor. L. 8, Cod. Just., XI, 58.525.Thus anyone may burn his own coat or throw it in the water; but no one may set fire to his own house or drown his land by the destruction of a dam. Even the non-user of a large area, in a thickly populated region, would scarcely be permitted. The taking of property by the state, at the present day in times of peace, is confined almost exclusively to land.526.ThusP. v. Arnim, in a work entitled“Ideen zu einer vollständigen landwirthschaftlichen,”Buchführung, 1805, a treatise on“agricultural book-keeping,”considers the farmer as a state official who should cultivate whatever he believed in conscience, or what the state declared to be, most necessary. He suggests that the state should subject all new purchasers of land to an examination to ascertain whether they are rich and noble enough to act in this way.527.Thus, for instance,Herbert Spencer, Social Statics, 1851, 114 ff., and to some extentSpinoza, Tract. polit., VI, 2. There are now in England several Land-Tenure-Reform-Associations, some of which would“expropriate”all land and vest the title in the state. The programme of the others embraces not only opposition to the right of primogeniture, to familyfidei commissaand the assertion of the right of freedom of trade in land, and of a more democratic use of common lands, but also the appropriation by the state of the increase in the rent of land which is caused by no labor of the landlord, but solely by the increase of population and of the wealth of the community or of the nation.Newmarch, on the other hand, very correctly remarks, that since it is impossible to draw a line of demarkation showing the increase of the value of land growing out of the increase of population etc., the owner of land in making improvements would never know whether he made them for himself or for the state. (Statist. Journal, 1871, 488 ff.) CompareWolkoff, Sur la Rente foncière, 1854, andH. H. Gossen, Entwickelung der Gesetze des menschlichen Verkehrs (1854).528.In Congo and on the gold coast of Guinea the land, in whole villages, is tilled in common and the harvest distributed among the families per capita. Wherever absolutism reigns, the prince is also the owner of all the land. (Klemm, III, 337.) In China, where the original tenure in common of the land by all was broken through in the third century before Christ, all the land of the country now belongs, strictly speaking, to the state; and the possessor of land who permits it to go untilled is punished. (Plath.in the phil.-hist. Sitzungsberichten der Münchener Akad., 1873, 793 ff.) In Corea, private property in land is unknown; arable land is divided by the state according to the number in a family. (Ritter, IV, 633.) The example, on the largest scale, of a country without private property in land is the British East Indies. Compare the paper byCh. Campbell, in the Essays published by the Cobden Club; System of Land Tenure in various Countries, 1870.529.The legal and economic difference between property in land and property in capital is well defined byJ. S. Mill, Principles, II, ch. 2, 6.“The reasons which form the justification, in an economical point of view, of property in land, are only valid in so far as the proprietor of the land is its improver. In no sound theory of private property was it ever contemplated that the proprietor of land should be merely a sinecurist quartered on it.”He here alludes specially to Ireland. The Fourierist,Considérant, distinguishes accurately between the capital produced by labor and saving, and the increase of the value of land caused by capital and labor, and its original value. Only the first two elements can justly be made property. But as, for prudential reasons, it is necessary to grant individuals the right of private property in land, those who are not such proprietors must, as a compensation for the common property which they have lost, be guaranteed the right to labor. (Théorie du Droit de Propriété et du Droit au Travail.) In England, the opinion that the compulsory support of the poor was introduced in compensation to them for the establishment of private property in land has met with considerable favor.Bishop Woodward, On the Expediency of a Regular Plan for the Maintenance of the Poor in Ireland, 1775. CompareEden, State of the Poor, I, 413. However, the poor rates, in a country like England, are much more than an equivalent of what its soil could produce without the assistance of capital.530.The principal classical work on this subject isNebenius, Der öffentliche Credit, 1820, 2d ed., 1829. Previously,Salmasius, De Modo Usurarum, 1639; and evenDemosthenes, adv. Dionysiod, 1283. Compare furtherSchäffle, in the Deutsch. Vierteljahrsschrift, No. 106, II, 289 ff.531.Compulsory loans by the state, for instance, occupy an intermediate position between taxes and credit-operations, properly so called.532.Besides loans proper, all payments in advance, or delays made in the payments of earnest-money, all leases and lettings, whichCourcelle-Seneuilcallsun médiocre degré de crédit, insurances and even all contracts for wages where the payment is delayed for a long period of time, are species of credit. For a nice distinction between leasing (Pacht) and letting (Miethe), seeKnies, Tübinger Ztschr., 1860, 180 ff., and the Freiburger Univ. Programm., 9. September, 1862.D. Wakefield, Essay upon Political Economy, 1804, 35, distinguishes between“loan-credit”which is given to a poor man in the hope of his paying it by means of his labor, and“exchange-credit,”or credit between property owners.Cieszkowski'sdefinition:le crédit c'est la métamorphose des capitaux stables et engagés en capitaux circulants et dégagés. (Du Crédit et de la Circulation, 2d ed., 1847.) According toKnies, Tübinger Ztschr., 1859, 568, every credit-operation is an exchange or sale of services, one of which is to be performed in the present, and the counter-service of the other party in the future. According toMacleod, it is“a sale of debts.”533.Personal credit, of course, preponderates in commerce. Hence it is, that in mercantile life, information concerning the personal status, reputation etc. of his colleagues, plays so important a part with the merchant. This information was made more accessible in England by the Lloyd institution. On similar North American institutions, seeTellkampf, Beiträge, I, 51. Credit given on security is a modification, sometimes of personal and sometimes of real credit. Compare,infra, the theory on bankers, brokers etc.534.In despotisms, credit is almost entirely personal.MontesquieuEsprit des Lois, L.V., 15. In New York, saysM. Chevalier, a merchant with resources worth 200,000 francs, can do a business of from 1,000,000 to 1,500,000 francs. In Paris, under similar circumstances, the same man would find it difficult to be credited to the extent of 500,000 francs. In Holland, two hundred years ago, a person who hypothecated his property was obliged to pay a higher rate of interest than in business (Becher, Polit. Discurs, 1763, 699), while the stationary period, one hundred years ago, made personal credit extremely difficult. In Zurich, it was encouraged by the prohibition of loaning money out of the country. (Büsch, Geldumlauf, III, 40.)535.Schäffle, Nat. Œk., II, Aufl., 112.536.Schäffle, according to the purpose which it is intended to subserve, divides credit into production-credit (investment of loans in immoveable property and in moveable property engaged in industrial operations), consumption-credit and clearing-credit, or loans made to pay respited purchase and earnest money, inheritances etc. (Kapitalismus und Socialismus, 552.)537.Pinto, Traité de la Circulation et du Crédit, 1771, considers loans bearing interest as new portions of the resources of a country (p. 161), and that government loans not made in excess of its powers areune alchymie réalisée dont souvent eux mêmes qui l' opèrent n' entendent pas tout le mystère, (p. 338.) Similarly and earlier,v. Schröder, F. Schatz-und Rentkammer, 238 ff;Mélon, Essai politique sur le Commerce, 1734, ch. 6; next,Hamilton, Report to the House of Representatives on the subject of Manufactures, Dec. 5, 1791;Von Struensee, Abhandlungen, 1800, I, 259. See infra, § 210. More recently,St. Chamans, Nouvel Essai sur la Richesses des Nations, 1824, 83 ff. To some extent, evenDietzel, System der Staatsanleihen, 1855, 200. This is a dangerous error, since to every credit there is a set-off in the nature of a debit of an equal amount; and the evidences of debt are nothing but claims on the future revenue of the state. This was fully recognized byCantillon, 291 ff. One of the principal advocates of that view among writers on Political Economy is the vivacious, acute and practically not unskillful, but sophistically superficialMacleod. (Elements of Political Economy, 1858, ch. 3, Dictionary, 1862, v. Credit.) The creditor's assignable right of demand, he considers immaterial capital. While bills of lading, warehouse receipts, dock yard receipts etc., only represent goods, the bank note is new goods. Even metallic money has only a credit-value, inasmuch as it can be used only to effect exchanges. To the - of the creditor may correspond a + of the debtor; but the latter is negative only in the sense that we speak of negative electricity, a negative thermometrical degree. When an estate is leased, the owner has, in his demand for rent, a vendibleplus; but the lessee no correspondingminus. (Not so. To the same extent that the proprietor has his future payments on the lease discounted, the present sale-value of his estate is diminished; or if it is not sold, the last party obtaining the discount has made his available capital as much less by the advance as that of the lessor has been increased.) The“discounting of the future,”that is, the apparent capitalization of hopes, so much in vogue at the present time, may be a great spur to production as it may also be to baseless extravagance.538.Many theoreticians ascribe a direct creation of new capital to credit, in so far as the capacity of the evidences of debt to circulate as a medium of exchange effects a real saving, and permits the former very costly and intrinsically valuable instruments of exchange to be used in some other way. (§123.) CompareRicardo, Proposals for a secure and economical Currency (1817).J. S. Mill, Principles, II, 174 and 36.McCulloch, Commercial Dictionary, art. Credit. And so it was in the first four editions of this book of mine. But here, too, there is, immediately, only a transfer of already existing capital. The person, for instance, who accepts a bank note for payment, loans a part of his capital to the bank; and the advantage to the whole community of such credit-operations consists chiefly in this: that so large a quantity of cash-capital which lay idle in banks etc., may be used more productively.539.WhenRoeslersays that credit is capital, the product of saving, and very serviceable in further production (Grands., 300), he confounds credit itself with the foundations of credit, which are, indeed, in large part material or moral capital.540.Compare Discourse on Trade, Coyn and Paper-Credit, London, 1697, 72 ff.541.CompareBuron, Guerre au Crédit, 1868.Schäffle, Tüb. Ztsch., 1869, 296 ff. With a thorough understanding of its politico-economical bearing,O. Michaelis, (Berliner V. Jahrsschr. 1863, IV, 121,) says: The capital-value of my credit is not equal to the nominal value of my evidences of indebtedness [notes etc.], but to the capitalized amount of the extra surplus which I have obtained in my business by means of credit, after deduction is made of the costs and of the risk-premium.542.We shall, in the books to follow this, inquire with great care, what are the means best calculated to remedy this dangerous tendency. We need only remark here, that it is to be found in a judicious association of small capitalists, and also in the capitalization, so to speak, of personal qualities. A well organized society of work-men, without capital, may indeed obtain credit, as for instance, the Schultze-Delitsch societies, the Russianartel-schnicks(market-aid societies) etc. prove. (Frühauf, Die russ. Artels inFaucher'sVierteljahrsschrift, 1868, I, 106 ff.) We may also mention the greater credit accorded to a land-owner the moment he becomes a member of a land-loan association as compared with what he could obtain before he had joined it. The popular belief of the ancient Egyptians afforded them a very great instrument of credit in the pledging of the remains of their ancestors. (Herodot., II, 136.)543.B. Hildebrandis of opinion that the Political Economy of the future may be characterized as credit-economy, in the same way as the Economy of the present may be called money-economy, and that of the past as barter-economy of barter. (National Œkonomie der Gegenwart und Zukunft, I, 276 ff.)Hildebrand'sview is correct in so far as that, with every advance in civilization, credit comes to have absolutely and relatively an ever increasing importance, although in the middle ages, especially under feudal forms (Lehensformen), there were numberless operations in credit. Otherwise, however,Hildebrand'sthree kinds of economy are, by no means, coördinated. While barter and purchase through the instrumentality of money, in every instance, entirely exclude each other, it is impossible to imagine a credit-transaction of which the promise of a barter-performance or of a money-performance does not constitute the base. During a“money-economical (geldwirthschaftlichen) period”[i.e., one during which money is the medium of exchange, and not notes; and when barter does not obtain.—Translator.] the service rendered by money as a medium of exchange may, for the most part, be supplanted by credit. Money, as a measure of value, still remains the substratum of credit itself. (SeeKniesin the Tübinger Ztschr., 1860, 154 ff.; and in the Freiburger Programm, 9 Sept., 1862, 19.) Earlier yet,A. Wagner, Beitr. zur Lehre von den Banken, 1857 ff. Among the most practical propositions of Saint Simonism is that of asystème genéral des banques, intended to administer all the goods of the nation, and to loan them to individuals engaged, in production. (Bazard, 205 ff.)544.It is destructive of credit to allow the debtor to await several decrees or judgments before his liability is established; to allow him, on easy terms, delays, reversals of judgment, the costs of the case etc. The term within which a creditor might bring in his claim before the meeting of creditors in the Amsterdam Boedel-chamber was formerly thirty-three and a third years. (Büsch, Darst. der Handlung, Zusatz, 82.) In the presidency of Bengal there were, in 1819, 81,000 cases in arrears, and in 1829, 140,000. Westminister Review, XIX, 142.545.And yetMelonis of opinion that the state should favor the debtor as much as possible. (Essai politique sur le Commerce, ch. 12, 18.) This was the view entertained on this subject by the older practitioners. In Bengal, thedhura, a species of“judgment of God,”in which the party who could hold out longest against hunger was declared the victor, was the only means to compel a debtor to pay his debt. As a consequence, the Bengal peasant could not borrow money at less than 60 per cent. per annum. Edinburgh Review, XXII, 67. On the damages attending the credit-laws and credit-courts of Russia, by which all foreign goods are rendered exceedingly dear, seev. Sternberg, Bemerkungen über R., 100 ff. In a country in which a great many powerful personages are above the laws, an incorporated loaning bank may be an indispensable necessity. (Storch, Handbuch, II, p. 23 ff.) In Naples, even as recently as 1804, no debtor could be arrested during the last six months of the queen's pregnancy. At a previous period, one might fail in business there and escape all punishment by exposing the hindermost part of himself in a nude state publicly before a column of theVicaria. (Rehfues, Gemälde von Neapel, I, p. 203 seq., 222.) In Schwytz, the rate of interest is so high, because the law allows the debtor to pay his creditor, whether the latter will or not, in articles of household furniture, clothes etc., estimated at a very high value. (Hermann, Staatsw. Untersuchungen, 202.) It has now become quite usual in the United States, on account of the many delays granted to the debtor by“democratic”laws introduced there, instead of mere mortgage, to give full warranty deeds when capital is loaned. By this means, the creditor is in danger, when misfortune overtakes him, to see himself compelled to let his property go at one-fourth of its value.546.See the Heliast oath inDemosth., adv. Timocr., 746. The Roman system of credits in the time of Polybius was much better than the Carthaginian.Polyb., VI, 56, XXXII, 13.547.Sachsenspiegel, III, 39.J. Grimm, Deutsche Rechtsalterthümer, 612 ff.Dahlmann, Dänische Gesch., II, 245, 339.Hermann, Russ. Gesch., III, 357. On slavery for debt among the Malays, see Ausland, 1845, No. 157.548.Beaujour, Tableau du Commere en Grèce, II, 176.549.C. 2 X. De Pignor. An appropriate provision in a priestly government.Diodor., I, 79.550.Staying in a place by the debtor until the creditor is satisfied, and other degrading stipulations, which, however, were prohibited by the police regulations of the Empire in 1548, art. 17.551.Marten'sUrsprung des Wechselrechts, 1797. Statuta Mediol., 1480, fol. 238 ff. The municipal law of Florence unconditionally imprisoned the father or grandfather for the debt of the son, when the latter engaged in industrial pursuits with their consent. (Stat. Flor., I, 201.) In Bologna, the brothers of a bankrupt who had constituted one household with him were held responsible for his debts. (Statuti dell' Università de Mercantati della Città di B., 1550, fol. 110.) The law of Geneva excluded from all positions of honor the son who had left his father's debts unpaid.Montesquieu, E. des Lois, XX, 16. The consequence was, that among the higher classes not a creditor lost anything for centuries. (K. L. v. Haller, Restauration der Staatswissenschaften, VI, 519.) Compare the“Nurenberger Reformation”of 1479, fol. 61 and 68 of the edition of 1564.552.Compare the R. P. O. of 1548, art. 22. And so, by the Code de Commerce, III, 4, I, even the simple bankrupt in contradistinction to the fraudulent bankrupt is punished, and every person unable to pay his debts is declared asimplebankrupt, who, among other things, has made excessive household expenses, or lost considerable sums by play etc. CompareSully, Mémoires, Livre XXVI, who declares it to be his most wholesome law, that fraudulent bankrupts should, like thieves, be punished with death, and that all their fraudulent assignments, gifts, etc., should be declared void. Further, Ordonn. de Louis XIV., sur les Failletes, art. 11;J. de Wit, Mémoires, 77 ff;v. den Heuvel, Sur le Commerce de la Hollande, 110 ff. Frederick William I., in 1715, threatened with the galleys all light-headed bankrupts, and, in 1723, all those who, knowing their insolvent condition, should effect further loans.Mylius, Corp. Const. March. II, 2, 31, 40. For China, seeDavis, The Chinese, I, 247 ff.Gr. Soden, Nat. Oek., III, 231, demands that, in case of doubt, the guilt of the bankrupt should always be presumed.553.In England only one-tenth of the number of bankrupts are considered innocent.Elliot, Credit the Life of Commerce, 1845, 50 ff.554.Thecontrainte par corpsof debtors was abolished in France in 1792, but restored in 1797. EvenTurgotremarked that since slavery had ceased there was no further fear (?) that the poor would be oppressed by imprisonment for debt. (Sur le Prêt d' argent, § 31.) According toDroz, the question is not one of weighing“freedom”against“miserable money,”but the deprivation of a few of that freedom and the non-fulfillment of obligations entered into, that is against the destruction of public confidence.555.A similar development among the Greeks:A. Rigorous slavery for debt, which Kypselos moderated at Corinth. (Pausan., V. 17, 2), and Solon abolished in Athens. (Plutarch, Sol., 15.Demosth., de fals. Legat., 412.)B. The reckless creation of debts as seen in Aristophanes; while outside of Athens slavery for debt lasted yet a long time. (Hermann, Griech. Privatalterth., § 57, 20.) In the time of Demosthenes, the merchant in arrears in the payment of his debts was cast into prison, and the bottomry-debtor who deprived his creditor of his security might be punished with death, (Demosth.adv. Pharm., 922, 958), and this although thecessio honorumwas introduced.Hermann, § 70, 3. CompareXenoph., Vectigg., 3,Demosth.adv. Apat., 892; adv. Lacrit., and adv. Dionys. In Corinth, the state superintended expenses made by parties. This was part of its credit-policy. (Athænæus, VI, 227.) For a remarkable Rhodian law relating to debts, seeSext.Emp., Hypot. I, 149.In Rome:A. The chief characteristic of the ancient law in this matter was the eventual sale of the person of the debtor on the getting of the loan (nexum); the power of the creditor to put theaddictusto death or to sell him in foreign parts; finally, thein partes secanto, in the concourse of creditors. Without these rigorous provisions, the borrower might easily have evaded his debts, by the emancipation of his son and turning over his property to him. (Niebuhr, Rom. Gesch., II, 770 ff;Savignyin the Abb. der Berliner Acad., 1833.Zimmern, Gesch. des röm. Privatrechts, III, 131 ff.)B. Later, we find nothing of the execution of the debtor, or of the sale of his person; but he might be compelled to do slave labor for his creditor without any protection against ill-treatment. Slavery for debt was restricted by the Lex Poetelia. (Niebuhr, III, p. 178;Mommsen, III, 494.) The Prætorian law introduced the custom of putting the creditor in possession of the goods of the debtor, with power of sale, which proceeding rendered the debtor infamous. See several passages inWalter., Röm Rechtsgesch, 763 ff;Tertull., Apol., 4; Tab. Herac. I, 115 ff. Later, Cæsar's Lex Julia permitted the honest debtor to escape imprisonment by the assignment of his goods.C. The moneyed oligarchy which prevailed in Rome caused the adoption of exceedingly severe measures against delinquent debtors. (Plut., Lucull., 20.Cic., ad. Att. V. 21, VI.), although its members themselves incurred debts in the most reckless manner. Cæsar, in the year A.C. 62, excluding his active (activen), owed debts to the amount of 25,000,000 sesterces; M. Antonius, in the year 24, 6,000,000; in the year 38, 40,000,000; Curio, 60,000,000; Milon, 70,000,000. (Mommsen, Römische Geschichte, III, 486.) CompareGellius, XX, 1, XV, 14.556.Whenever a new shop-keeper, who sells goods on monthly credits, settles in a district, the number of poor persons invariably increases. (McCulloch, Commercial Dictionary.) The ruinous credit given by the Jews to the Westphalian peasants begins with an account for the goods which they have succeeded in pressing upon them, after five or six years have elapsed. The Jew seldom sues accounts at law; but he besieges the debtor and discovers where his last head of cattle and his last little supply of provisions are to be found. As he is willing to accept everything that has any value, sometimes in payment of arrears, and sometimes in payment for some new piece of trash, he is sure to obtain his dues in the end, but not until his victim, who is sunk deeper and deeper in the abyss of debt by every“accommodation,”is entirely ruined. (Schmerz, Rheinish-Westphäl. L.W., 396 ff.)557.In the lower and middle stages of civilization, we find a multitude of laws by which minors, students etc., but especially land-owners are limited to a minimum of credit, which, however, varies very much with the person, and is subjected to a number of embarrassing forms, the consent of a third person, for instance etc. (Compare Bayerische L.O. von 1553, fol. 83.) Such laws, however, give as much room to the play of dishonesty as they take away from that of want of reflection.558.On the municipal regulations (Städteordnungen) of the 14th and 15th centuries, which compelled Jewish creditors especially to have their evidences of indebtedness redeemed within from every two to five years, seeStobbe, Juden im Mittelalter, 129. Compare further the Würtemberg L. O. of 1515, Statut. Ferrar, ed. 1650, lib. II, rub. 37, 289. According to the other provisions of the laws in North America, some book accounts were required to be sued on within six and others within seventeen years. (Ebeling, Gerchichte und Erdberschreibung der v. Staaten, II, 247, 298.) The Prussian law of March 31, 1838, provides a period of limitation of three years for all ordinary commercial debts. A similar law was passed in the Kingdom of Saxony, in 1846. In London, there has been found a great number of hatters, tailors, boot and shoe dealers etc., whose books showed credits of more than £4,000, most of them not to exceed over £10. How much of all this must be lost entirely, and how that loss must increase the sums paid for boots, shoes and hats by the prompt payer! (McCulloch, v. Credit.) We find, even in Athens, that the period of limitation was shortened in the interest of credit, and that in the case of minors, it did not exceed five years. (Demosth.adv. Nausim., 989.) Security for a debtor not over one year. (Demosth., adv. Apatur., 901.) The prohibition of Zaleukos to issue any evidences of debt whatever goes much farther. (Zenob., Proverb. V, 4.)559.Compare the report of the Dresden Handelskammer, 1864, 11.560.A. Mayer, inFaucher'sVierteljahrsschrift, 1865, IV, 65.561.We learn from the debates in the English parliament of February 9, 1827, that, in two years and a half, there were, in London and its environs, 70,000 cases of imprisonment for debt, the costs of which were from £150,000 to £200,000. In 1831, there were in one debtors' prison 1,120 prisoners, who owed on an average £2 3s. 2d. (McCulloch, l. c.) There was, in 1792, a case of a woman who, for a debt of £19, remained in prison 45 years, and others like it. (SeeArchenholtz, Annalen, IX, 87 ff; X, 169 ff, XIII, 125.) In England in 1844, arrest for sums less than £19 was prohibited.Johnsonhad already proposed a similar provision. (Idler, 1758, Nos. 22 and 38.) Imprisonment for debt was abolished in France, England and Austria in 1867; in the North German Confederation, on the 29th of May, 1868, but arrest for security's sake was retained.Sismondifinds fault with nearly all laws in the premises, because they attack the person of the debtor rather than his personal property, and his personal, rather than his immovable, property. He would have all this just the contrary of what it is. The first interferes with the very source of wealth, the productive power of labor; the second causes goods to be sold much below their value. Neither of these evils attends the last. (N. Principes, I, 250.)562.A law of the North German Confederation allows the pledging of future wages, only in the case of public officers, and those holding permanent places in the service of private parties, whose salaries are over 400 thalers per annum. The original draft had excepted only the things necessary to workmen and those directly depending on them; while the law as passed makes the prohibition general. This was undoubtedly done for the convenience of employers as well as of courts; as for instance in the circuit of Dortmund, there were, in one year, 10,000 cases in which wages were garnisheed. (Annalen des N.D. Bundes und Zollvereins, 1869, 1071 ff.) But the recklessness of those workmen whose wages are below the average, might have been just as well guarded against without dragging those whose wages are above the average down to their level, if a distinction had been made between production-credit and consumption-credit, and the latter had been limited by providing that no suit should be instituted for supplies made to public houses, taverns etc.563.In the second book ofMoses, 22, 25 ff., and the fifth, 24, 6. A very old Norman law provides that in actions for debt, execution should not issue against effects of the debtor which are indispensably necessary to him to maintain his position, such as the horses of a count or the armor of a knight. (Dialog. de Scaccario.) Magna Charta extended this provision so as to include the agricultural implements and cattle of the peasantry. The moment these laws, in consequence of a false principle of humanity, except anything but what is absolutely necessary, they injure credit. Thus, for instance, in Brazil, a law of 1758, providing that nothing immediately employed in or directly necessary to the production of sugar should be seized on execution, caused great injury to the production of sugar. (Koster, Travels in B., 1816, 356 ff.)564.§ 2, Cod. De Prec. Imper. Off., I, 19. The diets of the Empire had granted such letters in the fourteenth century. (Wachsmuth, Europ. Sittengesch., IV, 690.) They were granted, as a rule, only with the previous knowledge of the Emperor, by the police ordinances of the Empire of 1548, art. 22.565.So in Austria, Saxony, Brunswick, the electorates of Hesse and Baden. In Prussia, they could be granted only after a juridical decree to that effect; and an appeal to a superior court was allowed to reverse or affirm it. CompareMittermaierin the Archiv. für civilist. Praxis, XVI, and alsoP. de la Court, Aanwysing der politike Gronden en Maximen van Holland etc., 1669, I, ch. 25. Nürnberg obtained as a privilege, in 1495, that nomoratoriumshould be valid as against its citizens. (Roth, Geschichte des Nürnb. Handels, I, 86.)566.Compare the discussions in the French National Assembly, in the month of August, 1848. It is much less disadvantageous in times of great commotion, when all business is brought to a stand still, to extend the time in which bills of exchange etc. are payable. Such a measure prevents a number of bankruptcies which the real balance of debts due to one and owing by him does not render necessary.567.In the persecution of the Jews in the middle ages, the so-calledBrief-todten(letter-killing), or the destruction of titles, was very common. In 1188, the French government released all crusaders from the payment of interest on their debts, and granted them an extension of three years' time to pay off the principal. (Sismondi, Hist. des Français, VI, 82.) Similar compulsory measures were provided against the Jews and usurers in 1223 (Ibid, VI, 539 ff.); and in 1299 (Ordonnances, I, 1331), on the formal request of the nobility. (Ordonnances, II, 59.) Again, in 1594, there was a release of one-third of the interest on all national and private debts. (Sismondi, XXI, 318.) The generalmoratoriumof the Milanese for a term of eight years, introduced in 1251, after their war with France, was of an essentially different character. (Sismondi, Geschichte der italienischen Republiken, III, 155.) The same is true of the generalindultgranted by Philip II. in Belgium. (Boxhorn, Disquisitt. politicæ, 241 ff.)568.The abolition or release of debts, so frequent in ancient revolutionary times, reminds us, in many ways, of the crises precipitated in modern times by paper money and produced by the state. The ancestors of Alcibiades and Hipponikos laid the foundation of an immense fortune, in Solon's time, by purchasing land in large quantities with money borrowed from several citizens, a short time before the abolition of debts. (Plutarch, Sol., 15.)569.Enormous consumption of wax in the churches of the middle ages. In the cathedral of Wittenberg alone, a short time before the Reformation, more than 35,000 pounds of wax candles etc. were burned yearly. At the same time, honey was generally used instead of sugar. How much more important, therefore, at that time must bee-culture have been, considered from the point of view of circulation as compared with what it is to-day. And so in Catholic countries, a difference in the external manifestation of religion causes the relative importance of the consumption of fish to increase and decrease. In 1803 there was little demand in France for ivory crucifixes, rosaries etc. In 1844, the demand for them and forprie-Dieufor the bed-room etc. was increased. (Mohl, Gewerbwissenschafliche Reise, 101.) To engage successfully in the sale of sugar in Persia, it is necessary to know that in that country it is liked only in little hat-shaped lumps, which are used only as semi-voluntary gifts; and that, in such case, custom fixes the number of lumps. (Steinhaus, Russlands commercielle etc. Verhh., 151.) In the Levant, workmen prefer bars of iron which are small and of varied form because they find it difficult to manipulate the large ones. The English bear this in mind much better than the Russians. (Steinhaus.) A merchant sending wood to Southern France must be acquainted with the form of the staves used in the manufacture of barrels there. CompareBüsch, Geldumlauf, VI, 2, 2.570.The circulation of goods compared to the circulation of the blood: byMirabeau, Philosophie Rurale, ch. 3.Turgot, Sur la Formation etc. § 69.Canard., Principes, ch. 6.571.Eiselen, Volkswirthschaftslehre, 98 ff. If in ancient times commerce played a much less important part than it does among the moderns, it was, asMontesquieusays, because the whole commercial world was then more uniform in climate and the character of its products than it is now. (Esprit des Lois, XXI, 4.)572.Of the successive steps, sheaves, corn, flour, bread,—flour has the greatest capacity for circulation. And, indeed, the last operation of labor on a great many goods, because of their consequent more narrowly specialized utility, is accompanied by a decrease in their capacity for circulation. As an illustration, we may mention ready-made clothing as compared with cloth. The capacity for circulation of a commodity is very much advanced when the demand is wont to increase with the supply, as is the case with gold and silver, but not with learned books, optical instruments etc. Many commodities have but little circulating capacity, because no one desires to purchase them but at first hand. SeeMenger, Grundsätze, I, 245 ff.573.Knies., Die Eisenbahnen und ihre Wirkungen, 1853, 79.574.CompareSchmitthenner, I, who calls attention and with reason to the importance of loans on chattel mortgages. ButBerkeley, Querist, No. 265, remarks that a squire with a yearly income of £1000 can,“upon an emergency,”do less good or evil than a merchant with £20,000 ready money.575.A very important difference between Russia and England.576.Storch, Handbuch, I, 273 ff. There is also a useless circulation which is not calculated to promote the division of labor, but to employ idle time or idle capital, as in the case of games of hazard, speculation in stocks, wheat etc. Even impoverishing consumption may produce rapidity of circulation, as in Germany during the war years 1812 and 1813. (F. G. Schulze, N. Œkonomie, 1856, 667.) Relying on this fact,Hume(1752) on Public Credit, Discourses, No. 8, argues in favor of the old opinion, that all circulation is wholesome and to be encouraged.Boisguillebert, Traité des Grains, I, 6, went so far as to laud war because it accelerated the circulation of wealth. On the necessity of acirculation sans repos, see ibid., II, 10. In a similar wayLaw, Trade and Money, 1705, andDutos, Réflexions Politiques sur le Commerce, over-valued the circulation of wealth as such. Concerning the Mercantile System, see § 116.Darjes, Erste Gründe der Cameralwissenschaft, 1768, 531. And evenBüsch, Geldumlauf, I, 29, 32 ff., III, 96, who in other places nearly always overlooks real production and sees only the circulation of money caused thereby. Thus he calls the poor when they are helped in money, and spend it, useful members of society! (IV, 32, 39. Similarly,v. Struensee, Abhandlungen, 1800, I, 282 ff., 400 ff.)577.As, for instance, happened in France in 1577, when all commerce, and in 1585 all industry, were declared to bede droit domanial. Louis XIV. was of opinion that the king was absolute master of all private property of priests and people. (Mémoires histor. de Louis XIV., II, 121.) CompareDuclos, Mémoires, I, 14 ff.578.Compare Theod. Cod., V, 9, 1; Just. Cod., X, 19, 8; XI, 47, 21, 23; XI, 50, 51, 52, 55, 58. How full the really classic period of the Roman jurists was of the idea of freedom of competition, we see inPaullus: L. 22, § 3, Dig. XIX, 2. The provisions concerninglœsio enormisappear first in the time of Diocletian. (Just. Cod., IV, 44, 2.)579.Benjamin Franklinsays that the freer the form of government is, the more the people show themselves in their true aspect. Ancient Rome, with the early development of its rational disposition, soon learned to favor freedom of commercial intercourse. CompareMommsen, Römische Geschichte, I, passim. This was, certainly, an element of its greatness, but also of the proletarian evils developed in it an early date, and which were weighed down only by the absolute growth of the state and the development of its economic interests during centuries.580.Nor must it be forgotten that competition raises prices as well as lowers them. The expressions higher price and lower price denote only different sides of the same relation.M. Chevalieris of opinion that our present breathless competition is characteristic only of a period of transition prolific in new inventions, a competition soon to be followed by peace. (Cours, II, 450 ff.)581.Ἀγαθὴ ἔρις: Hesiod., Opp., 10 ff.582.“Whoever speaks of competition suppresses the existence of a common aim,”saysProudhon, although he adds, afterBileam'sway, that to cure the evils of competition by competition, is as absurd as to lead men to liberty by liberty, or to cultivate the mind by cultivation of the mind.583.CompareBastiat, Harmonies économiques, ch. 10.584.If all classes were protected against competition, no class would derive any advantage from it, since a“universal privilege”is an absurdity. If only certain classes or individuals are protected, it is done at the cost of all others.585.The question should not be formulated thus:“Caprice or rule?”but“Rule of morals, or rule of law?”Schmolleragainstv. TreitschkeinHildebrand'sJahrbb.586.Concerning the arguments by which the commercial restrictions of the middle ages were defended, see below. They were, for the most part, well founded for the age in which they were advanced. A judicious education will often be compelled to provide limitations, but always with the intention, by this means, of making possible a really greater independence. Thus the current of commerce may be too weak in a poor and thinly settled country in order that supply and demand should always and everywhere meet and be satisfied. Under such circumstances, their artificial concentration at certain points is among the most efficient means of promoting the economy of the whole people. The policy of freedom of commerce was recommended even in the seventeenth century byJ. Child, byNorthandDavenant. W. Roscher, Zur Geschichte der englisch. Volkswirthschaftslehre, 65 ff., 85 ff., 113 ff., 142 ff. And earlier yet, in Holland, bySalmasius, De Usurus, 1638, 583 andde la Court. Compare Tübinger Ztschr., 330 ff. ThusBoisguillebertsays:Il n'y avait qu'à laisser faire la nature et la libertê, qui est le commissionaire de cette même nature. (Factum de la France, 1707, ch. 5.) See, also, Dissertation sur la Nature des Richesses, ch. VI; Détail de la France, 1697, II, ch. 13; Tr. des Grains, II, 8. For the most part dictated by a reaction against Colbertism.See further,Mélon, Essai Politique sur le Commerce, 1734, ch. 2.M. Decker, Essay on the Causes of the Decline of Foreign Trade, 1744, 31 ff, 106 ff.J. Tucker, Essay on the advantages and disadvantages which respectively attend France and Great Britain with regard to Trade, 1750.Forbonnais, Elémens du Commerce, 1754, I, 63.Genovesi, c. I, 17, 3, is of opinion that at least in case of doubt, commerce stood more in need of freedom than of protection.Verri, in his Meditazioni, goes still farther. The Physiocrates, with theirlaissez allerandlaissez fairerecommend competition as the best means to increase the net income of a people. According toDupont, 147 ff, éd. Daire, the province of legislation is confined to declaring the laws of nature. His motto is:liberté and propriété.Adam Smithasks that the state should do only three things: insure protection against foreign states, the administration of justice at home, the establishment and maintenance of certain institutions of advantage to the whole community, but which private interest could not establish for want of means to cover the expenses attending them. (Wealth of Nations, V, ch. I, 2.) Hence he demands (III, ch. 2) the abolition of all kinds offidei commissa, of royalty in mines (I, ch. 11, 2), of all corporate and exclusive privileges, of all protective duties etc. (IV, ch. I ff), but especially of the colonial policy hitherto in vogue. (IV, ch. 8.)The attacks of the Socialists on freedom of competition were begun byFichte, Geschlossener Handelsstaat, 126, in which it is called a robber-system or system of spoliation. He would have the state have more solicitude for human industry than if men were so many swallows. See further,Sismondi, N. Principes, passim, who everywhere demands the protection of the government for the weaker.Fourier, N. Monde industriel, 396, who thinks thatle monopole généralis always apreservatif contre le commerce.Bastiat, Harmonies économiques, ch. 10, has a very valuable refutation of these follies. Recently,Rodbertus, Hildebrand's Jahrbücher, 1865, II, 272, is of opinion that“social individualism”has ever had in history the task of dissolving decaying societies, as, for instance, under the Cæsars.587.Whoever would sell to others must purchase of them. (Child., Discourse of Trade, 358.) SimilarlyTemple, Works III, 19, andBecher, Polit. Discurs, 1547. This view seems to have become the national one first in Holland. Compare alsoQuesnay, 71 andMirabeau, Philosophie rurale, 1763, ch. 2.588.We often hear it said:“nothing sells because there is no money.”But the real cause here is, in most instances, not a want of money, but a want of other goods which might serve as a counter-value. In bad times, for instance, there is many a weaver who would consider himself fortunate, even if he could get no money for his cloth, to obtain instead, meat, bread, wood, raw material etc. If money only were wanting, that might easily be as favorable a symptom in commerce, as when there are not enough shops, steamers etc., to carry on the business of the country. CompareNorth., Discourses upon Trade, 1691, 11 seq., but especiallyJ. B. Say'scelebrated theory of Markets, traité I, ch. XV.589.SeeHumboldt'sobservations as to how, in Spanish America, agriculture in the vicinity of the mines increases and decreases with the wealth of the latter. (N. Espagne, III, 11 ff.) See alsoHarrington(ob. 1677), On the Prerogative of a Popular Government, I, ch. 11;Cantillon, Nature du Commerce, 16. And soStein., Lehrbuch, 122 seq., points out how great enterprises produce especially for the consumption of the small householder without capital, and how, therefore, the flourishing condition of the one determines that of the other.590.Those indeed who live by the spoliation of others, as robbers, deceivers etc. are interested in the economic prosperity of the latter only so long as their spoliation of them is not endangered. Only to this extent can it be claimed withFr. Listthat the nobility of the Middle Ages, in obeying the selfish calculation which led to the oppression of the peasantry, engaged in as bad a speculation as a manufacturer of our day would who should feed his steam-engine with nothing but saw-dust or scraps of old paper. The cities of the middle ages had a much more undoubted economic interest in the emancipation of the peasantry as a class than the nobles or the clergy.591.Such exceptions there certainly are, even if it were not true“that the most godly cannot rest in peace unless he is acceptable to his ungodly neighbor.”Nations that furnish the same products as we do may, indeed,“spoil our market,”just as at home the selfish shoemaker may desire the prosperity of all wearers of shoes, that is of all other industries, but not that of all other producers of shoes. The view that long prevailed, that one man's gain was always some other man's loss (Th. Morus, Utopia 79, ed. Colon. 1555;Baco., Sermones fideles, cap. 15;quid-quid alicubi adiicitur, alibi detrahitur;M. Montaigne, EssaisI, 21:les prouficit de l'un est le dommage de l'autre) prevailed much longer in international affairs where observation is much more difficult than in national affairs; although even here,P. de la Court, Maximes politiques, 1658, contrasts the economic interest of Holland with that of the rest of the Netherlands and prefers it to theirs. EvenVoltairesays:“The desire of the greatness of the Fatherland includes the desire of evil to our neighbor. Evidently no country can gain except what another loses.”(Dict. philosophique, v. Patrie.) Compare, however, thepeut-êtrein his Histoire de la Russie, I, 1, on the occasion of the English-Russian treaty of commerce. Similarly,Galiani, Della Moneta, I, 1, IV, 1;Verri, Opuscoli, 335, and recentlyv. Cancrinwho says that“in every-day life, property is acquired only at some other person's expense.”(Weltreichthum, 1821, 119. Oekonomie der menschl. Gesellschaft, 1845, 23.) The cosmopolitan view (Xenoph., Cyrop., III, 2, 17. Hier., 10) which prevails in Adam Smith's school was introduced byHume, Essays, 1752, On the Jealousy of Trade.Quesnay, Encyclopédie, v. Grains, 294, ed. Daire;A. Smith, Theory of moral Sentiments, 1759, p. 6, sec. 2, ch. 2.Pinto, Lettre sur la Jalousie de Commerce, 1771, andJ. Tucker, Four Tracts on commercial and political Subjects, 1776, 34 ff and 42 ff.“The system of states exercises no influence whatever on the world's commerce.”(Lotz, Handbuch I, 11.) More recently,R. Cobden, in his Russia, Edinb., 1836, among others argued, that the conquest of Turkey by the Russians would be useful to England, because then more (?) English products would probably be sold there. Russia would become no stronger thereby, as conquests always injure the conqueror more than they benefit him. The idea of European equilibrium is therefore a chimera, because no state can be prevented from having an internal growth, as great as may be. Thus, in the summer of 1853, we heard the London Times sometimes preach that every cannon-shot fired by the English at the Russians might kill an English debtor or an English customer. The Venetians entertained a similar view at the beginning of the fifteenth century. CompareM. SanudoinMuratori, Scriptores, XXII, 950 ff. See above, §12.Moreover, Malthus had recognized that there were natural rivalries between nations which produced exceptions to Tucker's laws. (Principles, Preface.) SimilarlyGarve, in Cicero's Pflichten (1783), III, 146 ff.592.B. Franklin, Works, vol. III, 49.Sismondiclaims for all civilized nations the right of interfering with the governments of other nations with whom they have or might have commercial relations, and of insisting that they shall have a good government under which commerce may freely develop. (N. P. VII, ch. 4.)593.As for instance when theami des hommessays that he felt towards an Englishman or a German as he did towards a Frenchman with whom he was not acquainted.Mirabeau, Philosophie rurale, ch. 6.594.Thus, for instance, the Stoic, Zeno:Plutarch.De Alex, fort, 1, 6.595.Compare evenLauderdale, Inquiry, 274 ff.596.How well, for instance, the English sustained Napoleon's continental blockade, the evils produced by which were intensified by several bad harvests. Its worst time did not, indeed, coincide with that of the struggle with the United States. The ancient Athenians, during their contest with Philip of Macedon, considered the question of the supplies from the Bosphorus etc. as one of life and death. But this can be looked upon only as a cogent proof of the small development which their commercial talents had received at the time. How easily might they not, according to our ideas, have obtained corn from Sicily or Egypt.597.According to the acute analysis of language made byF. J. Neumann, Tübinger Ztschr., 1872, 317 ff., the word“price”has reference to an actual purchase or sale, while the expression“value in exchange,”generally called simply value, is based upon a valuation, or intimates in a general way that an object possesses value; value in exchange is, so to speak, the average of several price-determinations. Price, according toSchäffle, is the external consequence of value in exchange, a means of representing the latter. (N. Œk., III, Aufl., I, 218.) Only through the difference between value in exchange (universal possibility) and price (special reality) is thelaesio enormisof the jurists possible. (Schmitthenner, Staatswissenschen, I, 416.)598.By market price,prix courant, is meant the money-price of commodities, determined by competition.599.A problem very similar to that of the motion of bodies in space.600.Lotz, Handbuch, 50 ff., calls those commodities costly which are obtained only at a high cost of production, and dear, those whose price is above the cost of production.601.CompareCanard, Principes d'Economie politique, ch. 3. Almost simultaneously,H. Thornton, 1802, Paper-Credit of Great Britain.602.SeeJackson'sAccount of Morocco, 284, for cases in which, in the Sahara, when the burning winds of the desert had dried up the water in the leathern bottles of the caravan, a drink of water cost from $10 to $500.603.The North American aborigines very frequently consent, in their exchanges, to take any offer made to them by their equals, however insufficient it may be, because they fear revenge.Schoolcraft, Information etc., II, 178. As to the effects of cunning, the Tungusi, when they get a glass of brandy from the Russians, grow almost idiotic, and give away their goods at mock-prices in drink. (v. Wrangell, Nachrichten, I, 233.) In the higher stages of civilization, on the other hand, very distinguished people are, by no means, privileged because of their position, in the struggle for prices. In modern times, claims (reclamen) have taken the place of greater physical or political power. CompareE. Hermann, Leitfaden der Wirthschaftslehre 1870, 91 ff.604.ThusGalianisays, that before one of the two parties has expressed his want to buy or to sell, the pans of the scales are in equilibrium. The first that speaks breathes on one of them, and it drops. (Dialogue sur le Commerce des Bleds, 1770, No. 6.) This has been verified in a striking manner in California, where the most valuable commodities were often purchased at auction at the lowest prices, while when purchased from merchants and even the most wretched shopkeepers, they were sold enormously dear. (Gerstäcker, in the Allg. Zeitg., May, 1850.) Thus there were harvested in France, in 1817, 48,000,000 hectolitres of wheat, valued at 2,046,000,000 francs, in 1820, 44,500,000 hectolitres valued at 895,000,000 francs. (Cordier.) This vast difference in price existed, because in 1817, the whole world was still trembling under the impression made by the failure of the crops in 1816, while in 1820, the feeling of comfort and security caused by the rich year 1819, still prevailed. Low prices at forced sales under decree etc. See below, § 5. That travelers are so frequently taken advantage of in effecting changes of money is explainable partly by their urgent wants, which are well known to the opposite party, and partly by their supposed ignorance in the matter. And so, at auction sales, out-bidding one another has something very seductive in it for ignorant or hot-headed purchasers.605.It was considered immoral by his contemporaries, when William the Conqueror introduced the custom of farm-letting to the highest bidder. (A. Thierry, Conquête de l'Angleterre, II, 116, éd. Bruxelles.) It is repugnant to poetic and delicate minds to think that everything has a price exactly fixed. (§ 2.) I need only refer to the picture of Helen which Zeuxis exhibited for money, which act of his was characterized, by his cotemporaries, as a species of prostitution.Val. Mac, III, 7.Ælian, V, 4, IV, 12.Socratesjudgment on the payment of the sophists.Xenoph., Memor., I, 6, 13.606.Competition has only a negative influence on prices, inasmuch as it modifies the extreme operation of the other grounds of their determination.Thornton, Paper Credit.Lotz, Revision, 1811, I, 74 ff, 241 ff.607.The expression,“intensity of demand,”inMalthus, Principles, ch. 2, sec. 2. As early a writer asSir J. Stewartcalls attention to the difference between large and high and small and low demand. A high demand will always raise the price, as when, for instance, two wealthy virtuosi compete at an auction.Paucorum furore pretiosa, as Seneca says. An English penny of the time of Henry VII, once sold, on such an occasion, for £600. In 1868, at the Lafitte auction, seven bottles of wine sold to Rothschild at 235 francs a piece after theMaison doréehad offered 233. (N. freie Presse, Dec. 17, 1868.) A great demand has frequently no result but to increase the supply, and the price rises only in so far as the demand is too sudden to permit a parallel growth of the supply. (Principles, Book II, ch. 2, 10.) The present price of tea could not remain unaffected, if ten different private merchants, competing one with another, or the agent of a privileged commercial society, should send orders to China for an equal quantity of tea. (Verri, Meditazioni, IV, 8 ff.)608.Immense weight laid on theæqualitas permutationis(afterAristot., Eth. Nicom., V. 7,) in the ethics and economics of the scholastic middle ages, and in the time of the Reformation. CompareMelancthon, in Corp. Ref., XVI, 495 ff, XXII, 230.609.A very barbarous theory of price inXenoph., De Vectigg., 4. The ancients made little progress in this respect, although there are not wanting ingenious observations on certain phenomena of prices. (SeeAristot., (?) Oecon. II;Cicero, De Off. III, 12 ff.)Mariana, De Rege et Regis Institutione, 1598, III, explains price as the relation of value to quantity. According toLocke, the price of a thing is determined by the relation between“quantity”and“vent”: the increase or diminution of its useful qualities influences it only so far as it alters that relation. (Considerations on the Consequences of the Lowering of Interest etc, 1691, Works II, 20 ff.)Law, on the contrary, says that the“vent”can never be greater than the“quantity,”but that the“demand”may be. Wherefore, he proposes the formula: quantity in proportion to the demand. (Trade and Commerce considered, 1705, ch. 1.) In chap. 6,Lawdistinguishes three elements in price: quality, quantity and demand. The expression“quantity”is, certainly, very unsatisfactory. How many examples does notTooke(Thoughts and Details, on the high and low Prices of the last thirty Years, 1823, part IV) give to illustrate how, when the supply was smallest, prices were lowest andvice versa! It was so almost always after the market was over-filled, when a great many speculators had lost and no one dared to purchase anew.Montanari(ob. 1687) furnishes us with an excellent theory of prices. (Della Moneta, 64 ff., Custodi.) And a still better one,Sam. Pufendorf, Jus Naturæ et Gentium, 1672, V. 1, who must be considered the best authority on the laws of prices beforeStewart.Boisguillebert, Traité des Grains, II, 1, 10.Galiani, Della Moneta, I, 2, knows only the factorsutilità, andrarità, although in his exposition of the latter, he discusses many points which would be called the cost of production in our time. The wisdom of Providence has granted us the most useful things in the greatest abundance to make them cheap.Stewart, Principles II, 2, 4, rendered a great service to the theory of prices, tracing back supply to the cost of production, demand to want and ability to pay; and his deserves to be called the immediate predecessor ofHermann'sremarkable theory. (Hermann, Staatsw. Untersuchungen, 66 ff.) For a peculiar theory of prices, seePaganini, Saggio sopra il giusto Pregio delle Cose, 189 ff.Neri, Osservazioni, 1751, 127.Gust. Menger, Grundsätze, I, 179 ff., has made an interesting attempt to explain the formation of prices in its simplest shape, in the supposition of a monopoly in the seller, and by then going over to the subsequent modifications introduced by the competition of many sellers.610.“Instead of separating, in the same matter, the points of view of the buyer and seller, we may distinguish the consideration of the thing to be acquired and the thing to be given by one and the same person.”(Rau.) The possessor of the more current commodity appears especially as demanding, that of the less current as offering or supplying, (v. Mangoldt.)611.This is for free goods=0, for monopolized goods=1/0.612.The obvious fact that every price supposes a comparison of two commodities, and that every buyer is, at the same time, a seller, has been overlooked by only too many writers. And henceDutot'sopinion, that, as all men buy and few only sell, the state, in case of doubt, should favor the buyer. (Réflexions sur le Commerce et les Finances, 1738, 962, éd. Daire.) And so the often-mooted question whether universal dearness or cheapness is more useful: the latter advocated, for instance, byHerbert, Police générale des Grains, 1755;Verri, Meditazioni, V; the former byBoisguillebert, Traité des Grains, I, 7, II, 9; and by the Physiocrates. (Quesnay, Maximes générales, Nr. 18 ff., I, Problème Économique; also byA. Young, Polit. Arithmetics, ch. 8.) The laity in Political Economy understand by dearness only the general cheapness of the medium of circulation or exchange, andvice versa.613.Thus, even a poor man in Naples sometimes requires a glass of ice-water. The introduction of the extensive use of snow into Sicily improved the condition of the public health. (Rehfues, Gemälde von Neapel, I, 37 ff.) On the other hand, furs, in the far north, are articles of prime necessity. Newspapers in a free country satisfy a want much more urgent than in countries which are not free. And so,Seniorsays that shoes are“necessaries”to all Englishmen, since without them, their health would suffer. To the lower classes of Scotland they are“luxuries.”Custom permits them to go barefoot without hardship or degradation. For the middle classes of the same country, they are“decencies.”Shoes are worn there, not to protect the feet but one's civil position. In Turkey, tobacco is a decency and wine a luxury. The reverse is the case in England. (Outlines, 36 ff.)614.As to the relativity of the opposites of“temperance”and“excess,”every person should attend to the following points: a, not to exceed one's income; b, to provide for one's self and one's family; c, to lay by something for a rainy day; d, to place one's self in a position to care for the poor; e, to indulge in no pleasure injurious to body or mind; f, to give no bad example. (Tucker, Two Sermons, 29 ff.)Menger, Grundsätze, I, 92 ff., endeavors to compare the value in use of different commodities from the point of view, that the means of gratification of a less urgent want, when the more urgent wants of the present are satisfied completely, should be preferred to the means of over-gratifying the latter.615.Thus the price of many dark articles of apparel rises in a moment of unexpected universal mourning. A very remarkable case in Paris, at the death of Henry II. (Montanari, Delia Moneta, 85, Custodi.) On the other hand, a change of fashion may greatly depress the price of many commodities. Such a change may take place even in the case of precious stones; as, for instance, now in London, a perfect emerald is most highly prized. (King, Precious Stones and Metals, 1871.) The rise of many drugs in times of cholera, and of leeches, for example, in Paris, 600 per cent. Rise of the price of powder, horses etc. at the outbreak of a war, and of the price of iron caused by extensive railroad building. In Circassia, a good shirt of mail was formerly worth from 10 to 200 oxen: but since it was discovered not to be a protection against cannon balls, its price fell 50 per cent. (Bell, Journal of a Residence in Circassia, I, 403.)616.On“connected”(connexen) goods, the use of one of which supposes the use of the other, as, for instance, sugar and coffee, wood and stone used in the construction of buildings, seeSchäffle, Nat.-Oek, II. Aufl., 179.617.Observed byNecker, Sur la Législation et le Commerce des Grains, 1776. CompareRoscher, Ueber Kornhandel und Theuerungspolitik, 1853, 1 ff. In Athens, for instance, themedimnosof wheat cost ordinarily five drachmas, but during the siege by Sulla it rose to 1000 drachmas. (Demosth.adv. Phorm., 918.Plutarch, Sulla, 13.) Compare II. Kings, 6, 25, 7, 1. In Paris during the siege by Henry IV. it rose to 5000 per cent. of the ordinary price. (Lauderdale, Inquiry, 60 ff.) During the siege of Breisach, in 1638, a mouse was finally worth 1 florin, the quarter of a dog, 7 florins, a quarter of wheat, 80 thalers. (Röse, Leben H. Bernhards, M., 11, 269.) CompareStrabo, V, 248 seq.618.Wheat is still more indispensable than meat. Hence, in the ten principal markets of Prussia, the price of rye rose much more from 1811 to 1860 than the price of beef; the former between 0.32 and 1.03 silver groschens and the latter between 2.32 and 4.94 silver groschens. (Annalen der preussischen Landwirthschaft, 1869, No. 9.) And so in the Rhine district, the wine harvests have undergone much greater changes in price than the prices of must, although the years differed very largely in the quality of the yield. Thus the crop of 1830 was only 225, that of 1868, 10,845 pieces, and yet the minimum price between 1831 and 1865 was only from 3 to 58 flr. per ome. (Engel, Preuss. Statist., Ztschr., 1871, 168 ff.)619.In England, the price of wheat has not unfrequently risen from 100 to 200 per cent. when the harvest was from one-sixth to one-third under the average, and when a supply from abroad had modified even this condition of things. (Tooke, History of Prices, I, 10 ff.)Tookeis of opinion that in a country with poor-laws like those of England, a deficit of one-third in the wheat crop, if there were no stores remaining and no importation from abroad, would cause the price of wheat to rise, 500, 600, and even 1000 per cent (p. 15.)620.SeeDavenant, Political and Commercial Works, London, 1771, II, 224. Tooke was somewhat acquainted with Davenant. According to this law, a deficit in the harvest of 10 per cent. would raise the price of corn 30 per cent.; one of 20 per cent. would raise the price of corn 80 per cent.; one of 30 per cent. would raise the price of corn 160 per cent.; one of 40 per cent. would raise the price of corn 280 per cent.; one of 50 per cent. would raise the price of corn 450 per cent.621.In England, it is 38.8 per cent. of the supply that comes to the market. (Quart. Review, XXXVI, 425.) In Belgium 40, and in Saxony at least 50 per cent. (Engel, Jahrb. der Statistik etc. von Sachsen, I, 276.) In Germany, the farmers consume on an average two-thirds themselves. (v. Viebahn, Zoll.-v-Statist., II, 958.) With thisPlato, De Legg., VIII, agrees remarkably well.622.On the difference in this respect between England, Germany and northwestern Norway, seeHermann, p. 71.623.Hence it not unfrequently happens that grain grows dear not from any real want of it, but because it is generally supposed that such want exists. For an explanation of why it is that wheat and similar commodities have an almost invariable price, when the average is taken of a long series of years, seeinfra§129.624.Case in Naples in which after a poor harvest the price of corn remained very low, because the oil-harvest had also failed, and the poor could earn nothing in that industry in which they were largely employed, andvice versa. (Galliani, Della Moneta, II, 2.) ThusAdam Smith, Wealth of Nations, I, ch. 7, distinguishes between“effectual”and“absolute”demand. SimilarlyJ. Steuart, Principles I, ch. 18. Care should be taken to distinguish in this respect between desire and demand.625.Thus, in the famine in Ireland in 1821, during which potatoes rose to fabulous prices, but wheat scarcely at all, and had therefore to be exported.626.InTooke, History of Prices (2d edition of the Thoughts and Details etc.), we meet repeatedly with the assertion that when the price of wheat rises, the price of colonial products and manufactured articles sinks, andvice versa. Thus, in England, the price of the evidences of national debt increases from two to three per cent. in fruitful years above what it is after a bad harvest. (Lauderdale, Inquiry, 93.) The British nation paid for the cotton it needed for their own consumption in 1845 over £19,500,000; in 1847 only £9,500,000. (Banfield, Organization of Industry, 162.)627.HenceJ. B. Sayhas said that the disposable wealth of a people is like a pyramid, with the scale of prices of the various commodities inscribed on its side. The higher a commodity is in this scale of prices, the smaller is the corresponding section of the pyramid. CompareSir W. Temple, Essay on the Origin and Nature of Government, Works I, 23 ff.628.This fact, in connection with the preceding, explains the well known puzzle, why the remnant of a piece of goods is comparatively cheaper than the whole piece, while a small share in the public debt is dearer than a large one. (Lauderdale, ch. 1.)629.Rhode Island was, it is said, bought from the Indians in 1638 for a pair of spectacles. (B. Franklin, Political ... Pieces, 1707.) According toChalmers, it was bought for 50 threads of coral, 12 hatchets and 12 overcoats. (Political Annals of the U. States.) CompareEbeling, II, 108. Holland cloths and opium were exchanged for a long time at Sumatra for gold dust worth ten times their value. (Saalfeld, Geschichte des holl. Kolonialwesens, I, 260.) The Hudson Bay Company realized, it is said, at the beginning of this century, in trading with the Indians, a profit of 2000 per cent. (Anderson, Origin of Commerce, a. 1751.) When Altai was discovered, the natives gave as many sable-skins for a Russian kettle or boiler as could be crammed into it. With 10 rubles in iron it was an easy easy matter to gain 500-660 rubles.Storch, Gemälde des russ., R., II, 16;K. Ritter, Erdkunde, II, 557. Similar cases among the Germans:Tacit., Germ., 5.630.A seller not actually engaged in the business of selling for a livelihood, and who has not purchased or produced with the intention of selling, is apt to consider instead of this the market price, towards the determination of which those actually engaged in trade have coöperated. Somewhat inaccurately, the amount of the cost of production is called byAdam SmithandRicardo,“natural price,”byJ. B. Say,prix naturel, alsoprix originaire, because the commodity at its first entrance into the world cost so much.SismondiandStorchcall itprix nécessaire, andLotz, Kostenpreis. P. Cantillon, Nature de Commerce, 33 ff., understands by theprix intrinsiqueof a commodity, the amount of land and labor, taking the quality of both also into consideration, necessary to its production.631.The cheapest cotton thread is numbered from 60 to 80. The coarser is dearer on account of the quantity of raw material in it, and the finer because of the greater amount of labor in it. (Babbage.) For similar reasons, the Venetian chains cost perbraccio, No. 0, the finest, 60 francs; No. 1, 40 francs; Nos. 2 and 3, 20 francs; No. 24, coarsest, 60 francs. (Rau.)632.If a person engaged in production has himself furnished certain of the elements of production; if, for instance, he has worked with his own hands, employed his own capital etc., he is wont to charge as much for these as they would be worth, if he hired himself out or loaned his capital.633.The greater number of political economists consider the cost of production only from the standpoint of the individual engaged in production. ThusDarjes, Erste Gründe, 218 seq.;Ad. Smith, Wealth of Nations, I, ch. 6.J. B. Saycalls even production an exchange in which the productive services of natural forces, of labor and of capital are parted with in order to obtain products. The estimate put upon the value of these services is the cost of production. For some interesting examples as to how the cost of production, in this sense, is calculated, seeHermann, I ed., 136 ff.634.Jacobtranslated bySay, 1807, II, 450.Hufeland, N. Grundelgung, I, 309.635.CompareL. Lauderdale, Inquiry, 124, against the Physiocrates. (Riedel, Nat.-Oekonomie, 1838, I, 68.) A country which possesses advantages over other countries, in respect to the cost of production of a commodity, can offer it in the market cheapest. Where, for instance, with the employment of the same amount of capital, a specially large quantity of wheat can be produced, whether it be because of the unusual fertility of the soil, or because of theextensivenessof agriculture (farming over a large area), wheat will, the demand being the same, be specially cheap, whatever the proportion of the three branches of income may have been. If relatively a great number of workmen have been employed in its cultivation, each will receive smaller wages, andvice versa.636.Copper and steel engraving affords an example of the different kinds of wear of fixed capital, and the influence it may have on prices.Canard, Principes, ch. IV, considers that one of the most important elements in the cost of production is the length of time that capital must“stagnate”for the sake of production.637.On this risk depends, for instance, the high price of vanilla (Humboldt, N. Espagne, IV, 10,), sparkling wines and articles of fashion.638.Mangoldt, Lehre vom Unternehmergewinn, 1855, 81 ff. Comparev. Thünen, Der isolirte Staat, II, 1, 80 ff.639.Wool and mutton, brandy and fattened cattle, calves and milk, honey and wax, gas and coke, hens and eggs etc.640.Adam Smithhimself remarked that all artificial lowering of the price of skins or wool must necessarily raise the price of the meat, andvice versa. (Wealth of Nations, I, ch. 11, 3.) For a very elaborate theory on this subject, seeJ. S. Mill, Principles, III, ch. 16, § 1. Thus Australian wool did not rise as much in price as the production of gold there might have led us to suppose, for the reason that mutton rose to an exceedingly high price.641.It is an important and correct remark ofCarey's, that the price of a commodity depends much more on the cost of producing its like than on its own cost of production, which already belongs to the past.642.CompareJ. S. Mill, III, ch. 3, § 1. A much too high price, caused by speculation, or a much too low one, by depreciation, is regularly followed by an ebb or flow just as much too great. (Tooke, History of Prices, III, 55.) AndLaw, Trade and Money, 41, remarks that the price of a commodity always tends to coincide with the“first cost.”This factAdam Smithexpresses by saying that the cost of production is the center about which the market price always gravitates. (I, ch. 7.) But here there is still the error lurking, that the producer's profit is a part of the cost of production. CompareMalthus, Definitions, ch. 6.643.The English view, one very characteristic of the people, is that the equilibrium of prices depends on this, that all commodities should have a value equal to that of the labor they have cost. (CompareAristot., Eth. Nicom., V, 5.) The same doctrine is to be found in its germinal state inHobbes, Leviathan, 24, 1651, andRice Vaughan, Discourse of Coin and Coinage, 1675. More exhaustively inPetty, Treatise of Taxes and Contributions, 1679, 24, 31, 67. (CompareLocke, Civil government, II, § 40 ff.;B. Franklin, Inquiry into the Nature and Necessity of a paper Currency, 1729; Works, ed. Sparks, vol. II.)Adam Smithadmits this to be true only of the first beginnings of society, before the origin of property in land and in capital. (Wealth of Nations, I, ch. 5.) Most largely developed inRicardo, Principles, ch. I, 4, 30.Marx, Zur Kritik der polit. Œkonomie, 1859, 6, endeavors to improve on this by calling all values in exchange“a determinate quantity of thickly curdled working-time,”meaning by work an averagedqualitätslose, social work of production.Per contra, compareHufeland, N. Grundlegung, I, 134, 156 ff.; andMalthus, Principles, ch. 2, secs. 2, 3, who claims very earnestly that price is not determined by the cost of production, but by the relation existing between demand and supply, the cost of production influencing it only to the extent that it influences this relation. He calls attention to the poor-rates by which the cost of production of labor is raised, but its wages decreased; also to the case of bank notes etc. (Tooke, History of Prices, V, 49 ff;J. S. Mill, Principles, III, ch. 16, 2.) For a very marked case of reaction against Adam Smith and Ricardo, seeMacleod, Elements, ch. 2, who, however, is much too one-sided in considering only the amount necessary to the purchaser, and his means. EvenCondillachad said:une chose n'a pas une valeur, parcequ'elle coûte, mais elle coûte (du travail ou de l'argent), parcequ'elle a une valeur. (Commerce et Gouvernement, 16.)Ricardo'sdoctrine is more tenable than appears at first blush. We need only to interline his theory of rent, admit that capital is accumulated labor, subtract all objects constituting a natural monopoly, and not forget that the intrinsic value of labor is one of the causes of the difference of price of different sorts of labor.Ricardodoes justice to value in use evenen passant. A strange effort byMcCullochto make labor the cause of the non-use of capital. (Principles, III, ch. 6, 2.)McCullochhas not unfrequently exaggerated the half-truths of his doctrines to such an extent as to produce unwittingly areductio ad absurdum. According toTorrens, before any separation of capitalists from workmen, price depends entirely on the work done, and afterwards on the capital expended, inasmuch as wages, rent etc. are covered by the capital of the person who engages in the enterprise. (Production of Wealth, ch. 1.)644.Ce que l' on appelle chereté, c'est l' unique remède à la chereté.(Dupont de Nemours.) Tenders of division in common, in England, increase and decrease according to the higher or lower price of corn during the preceding year. (Tooke, Thoughts and Details, III, 105 ff.) The cotton famine after 1861 increased the price of flax-yarn in a short time fifty per cent., although the raw material of flax did not rise in price, but only because care was not taken to increase the number of flax-spinners. (Ausland, I, 1865.) However, there were in 1864, 490,000 flax-machine spindles in course of erection. (Report of the Chemnitz Chamber of Commerce, 1864, 101.)645.By the discovery, for instance, of new natural forces, the invention of machines, improved division of labor, improved roads etc. In France, in consequence of technic improvement, a quintal of saltpeter fell from 100 to 9 francs. See a similar instance inChaptal, De l' Industrie française, II, 64, 70, 434.646.Hermann, Staatsw. Untersuchungen, 212.647.The highest but unattainable ideal of such progress would consist in this, that all products should be obtained without cost. If this ideal were attainable, every one would be infinitely rich and all wealth would be free, like the air and the sunshine. (CompareJ. B. Say, Traité, II, 2.) The complete victory of mankind over nature would consist in that all men should be free and all the forces of nature the slaves of man. (Smitthenner.)Careyintimates something similar when he says that, with the advance of civilization the tendency is for men to become more and more valuable and commodities to have less of“value.”648.We might here speak of an aristocratic and democratic principle of the determination of prices. The greater utility of the latter is advocated in the Discourse of Trade, Coyn and Credit, London, 1697.Baconhas a good word to say for the maxim:“Light gains make heavy purses; for light gains come thick, whereas great come now and then.”Similarly,GurnayinCliquot de Blervache, Considérations sur le Commerce etc., 1758, 48, 54. As to how Morrison, the celebrated merchant, became rich by adhering to the principles:“to sell cheap as well as to buy cheap,”and“always tell the truth,”seeChadwick, in the Statistical Journal, 1862, 503. Compare the related opinion ofAdam Smith'scontinuator in an ethical direction,Garve, zu Cicero's Pflichten, III, 100. The contrary principle, the cunning of the Judæans, according toStrabo, XVII, 800, was followed by the Dutch East India Company, when it, in 1652, caused the greater number of the vegetable roots on the Moluccas to be destroyed.Saalfeld, Geschichte des holländischen Kolonialwesens, I, 272. Also, when great quantities of roots were destroyed by burning in the East Indies. (HuysersBeschryving der Oostindischen Etablissmenten, 1789, 22.) For a clever argument against such practice, seede la Court, Anwysing der heilsame Gronden, 1663. The principle similar to that of the patent, mentioned in the text, works at the same time democratically and aristocratically, both words understood in their best sense.649.This is true, first of all, in those industries which are intimately connected with one another, or of those which are carried on with scarcely any fixed capital; also in lower stages of civilization, where the lights and shades caused by a highly developed division of labor are not very intense. On the numerous difficulties overlooked by Ricardo in every other case, seeSismondi, N. P., II, ch. 2. The workman thereby loses his former skill, that is his principal capital, and can certainly not wait until he has acquired other and different skill.650.When a lowering of prices is expected, demand is less than consumption:“postponed demand;”whereas, an expectation that the price will rise, produces“anticipated demand.”Tooke, History of Prices, II, 155.651.Thus, for instance, if the workmen were exposed to starvation, or were likely to take their departure; if great stores of raw material were in danger of spoiling; if fixed capital of great value were engaged in one industry and could not be easily transferred to another. The first and third causes are frequently met with in mining, and give rise to the mode of carrying on the operation known asZubusgruben, that is, a species of working mines upon shares. In England, after the spring of 1862, cotton yarn was not so much dearer than raw cotton, that the loss caused by the decline could be made up. (Ausland, 24 Sept., 1862.)652.Besides, in the time immediately following, the price lowered by too great a supply, may produce a species of desperation among producers, which would lead them, in the hope of covering their losses, to increase the supply still more, until many of them were ruined. Generally, when a time of high prices is followed by a time of low prices, we find an interval during which sellers endeavor to defend themselves against the decline, and during which, as a consequence, scarcely any business is transacted, while high prices are nominally continued. And sovice versa.Tooke, History of Prices, II, 62.653.Thus, for instance, when the change of fashion brought about the disuse of long periwigs in every-day life, their price did not cease to fall until they had entirely disappeared. But, if a person wishes to have one made to-day for a masquerade, for the stage, etc., he would pay as much for it as its former price. On the other hand, the price of whalebone has never been again as high as it was in the time when hooped petticoats were worn.654.The great plague in the time of Edward III. caused during the first year, on account of the decreased consumption, an extraordinary cheapness of provisions. In the following year, however, they became alarmingly dear, because there were few producers, especially among the humble classes. A quarter of wheat cost in 1348, 4s. 2d.; in 1349, 5s. 5d.; in 1350, 8s. 3d.; in 1351, 10s. 2d.; while in 1346 and 1347, its average price was 6s. 8-7/8d.Rogers, History of Agriculture and Prices, I, 232.655.As for instance when new taxes or excises are imposed. Generally when the cost of production has largely increased, purchasers do not wait until a decrease of competition among sellers compels them to exact higher prices, but meet them half way, especially when many greatly desire the commodity, and the increase of the cost is only small. (Rau, Handbuch, I, § 163.)656.Under this rule fall, according to §33, most products of industry properly so called.“If we lose a market for a year, we generally lose it for all time,”said an experienced manufacturer before the parliamentary hand-loom weavers' committee, 1840-42. Of course the cost of transportation as far as the market must be estimated as part of the cost of production. In consequence of this, as well as of the difference of taxation duties etc., the superiority of one producer to another may be more than overcome. In the case of colonial commodities, which go into the interior of a country from different sea-ports, the territory supplied from each port is determined for the most part by these data. Thus, in Switzerland, for instance, we find the districts supplied by Havre, Genoa and Rotterdam; in Austria, the districts supplied by Hamburg and Triest contiguous, but the boundary line subject to many changes. (Rau, Lehrbuch, I, § 164.) It must be understood that we do not here speak of abnormal expenses made by producers individually, whether in consequence of want of skill or because of accident.657.This is true especially of agricultural production, in which, as a rule, beside the most fertile and most advantageously situated land, the worse must be used. WhatWhatelycalls“surplus-profit”appears here in the form of rent, whereas, in other cases, it takes the shape of unusually high wages, or profit on capital. This is very beautifully and systematically developed bySchäffle, N. Œk., II; Aufl., 192 ff. According toSenior, Outlines, 15, the price-relation of two commodities to each other depends not on the quantities of them which come to market, but on the relative power of the difficulties which stand in the way of an increase in these quantities. If the same producers can pursue the cheaper mode of production which does not suffice to supply the market, as well as the dearer, we have, generally, a price which is the mean between the two costs of production. The same is true in the case of“smuggled”goods which ought to have paid duty. (Hermann, loc. cit., 83, seq.)658.To this section belong the secrets of production which may be taken advantage of eitherad libitumor within certain limits. In agriculture, advantages of production can seldom remain secret. Compare, however, the case mentioned inGarnier'stranslation ofAdam Smith, V, 119, and that of the orchards which yielded £1,000 yearly for every 32 acres, and which were a result of the recent introduction of the culture of the cherry in Kent, in the reign of Henry VIII. (Anderson, Origin of Commerce, a, 1540.) There is therefore, a certain odium attached by agricultural producers to keeping secret a means of agricultural improvement.659.CompareBoisguillebert, Traité des Grains, II, ch. 2.John Stuart Millspeaks of an equation: the price of a commodity in a given market is always high enough to produce a demand corresponding to the present supply, or to an expected supply. The price of such commodities only which may not be increased to any desirable extent depends on supply and demand. In the case of all others, on the other hand, demand and supply depend on the price, and this on the cost of production. Supply and demand always tend to an equilibrium which is never really attained where the price is high enough to cover the cost of production (?). (Principles, III, ch. 2, § 4; ch. 3, § 2.)Schäffle'stheory of prices is topped by the proposition that all competing sellers and all competing buyers, after an economic fashion, do not wish to sell below individual cost-value, nor to rise above individual value in use, in purchasing. Hence, in a throng of competition of supply the costliest productions step out of the field of competition in a descending cost-value series; and in a throng of competition of demand, the most wearied cravings in an ascending value-in-use series; until the quantities offered in supply and asked for cover each other without loss, and have placed each other in quantitative equilibrium. (N. Œk. Aufl., I, 188 ff.; compare 173, 185.) It is, however, to say the least, an instance of baseless solicitude, whenWade, History of the middle and working Classes, 214, says that one unemployed workman might depress the aggregate wages of labor, almostad infinitum.660.Hufeland, N. Grundlegung, I, 78;Ricardo, Principles, ch. 31.661.Dunoyer, Liberté du Travail, VIII, ch. 4;Rau, Lehrbuch, I, § 158.662.For a good classification of monopolies, seeSenior, Outlines, 103 ff.Menger, Grundsätze, I, 195, shows that no monopolist can arbitrarily determine the extent of the market for his monopoly-product when the price is fixed, nor when the extent of the market is known, the height of the price. Moreover, the price may remain longer above than under the cost of production, for the reason that it is easier to abandon a business than to begin one, and that the fear of loss is more frequently an incentive to action than the hope of gain. Hence the price of corn, when everything else is very dear, is more apt to vary from the average price, than in times when everything is very cheap. For instance, the Munich prices from 1750 to 1800 show that its highest price was 147 per cent. above, and its lowest 47 per cent. below the average of twenty years. (Rau, Lehrbuch, § 162, 182.)663.Chance plays a great part here. Thus, Murillo's Conception which Marshal Soult had offered several times for 150,000 francs, but in vain, was sold in May, 1852, for 586,000 francs. Paul Potter's young bull at the Hague, which cost 625 florins in 1748, was valued before the middle of the nineteenth century at 200,000 florins. (Dethmar.)664.The purchaser resolves to do so because it would, in all probability, cost him more to go to India or Brazil in search of precious stones. Besides after the working of the Brazilian mines in 1728, and again after the French Revolution, the price of diamonds fell greatly; in the one case, from an increase of the supply, in the other from a decrease of the demand. (Ritter, VI, 355, 365.)665.Thus, the Champagne and Johannisberg grapes, when transplanted to the Crimea, lost most of their native taste. On China's practical monopoly of tea culture, and Ceylon's, especially in its southwestern part, of cinnamon, at least so far as the peculiar aroma is concerned, compareRitter, Erdkunde, VI, 123 ff. The small deer of Angora no sooner leave the little district of Asia Minor to which they belong, than they are in danger of degenerating. (Revue des deux Mondes, May 15, 1850.) Indian birds-nests cost no more than 11 per cent. to gather, dry etc., of the market price. (Crawfurd, East India Archipelago, III, 432 ff.;Hogendorp, Sur l'Ile de Java, 201.)666.Poor material for fuel, poor day-laborer work—dwellings, medical attendance. (Menger, Grundsätze, I, 116.)667.Thus sea fish, oysters etc. were formerly much cheaper during the summer than during the winter, at Ostend and Scheveningen, because during winter they could be sent to a distance. At Billingsgate market, in the mackerel season, fish cost per hundred 48 to 50 shillings at 5 o'clock in the morning, 36 shillings at 10 o'clock, and 24 shillings in the afternoon. (H. Schulze, Nat-Œkonomische Bilder aus England, 1853, 241.) In the Rhine country, the price of fruit does not vary so much as in Saxony, because it is customary there to employ the surplus in the manufacture of cider, of preserves etc., thus making it transportable and durable. Frequently, after a very abundant crop of grapes or olives, under-prices prevail, sometimes on account of a want of vessels, cellar-room etc.; they must, therefore, be sold rapidly.668.CompareAdam Smith, Wealth of Nations, I, ch. 7.;Tooke, History of Prices, I, 97. Furs vary very much in price, sometimes 300 per cent. in a year, because, in the case of this entirely natural product, every thing depends on the stores of them, on the temperature etc. (McCulloch, Commerc. Dict., s.v.) On the other hand, the price of coffee usually varies only after periods of a number of years, because new plantations produce only after a lapse of years. (Ibid.) Pigs vary much more than cattle in price, because the former may be made ready for the slaughter house in one-third of the time required for the latter. (Thaer, Rationelle Landwirthschaft, IV, 374.)669.Thus the rent of farms, where a numerous proletarian population will live exclusively from agriculture, depends on scarcely anything but the number of people and the extent of the land. (J. S. Mill, Principles, III, ch. 2.) In retail trade, where personal want comes in question, prices are much more subject to be modified by small circumstances, than in wholesale trade, where both parties are only intent on“doing business.”(J. S. Mill, III, ch. 1, § 5.Tooke, II, 72 f.)670.Hucksters, butchers, dealers in corn, inn-keepers etc. A remarkable case where Parisian dealers in hare-skins attempted to ruin the new fashion in silk hats by distributing a great number of them among the rabble, at mock-prices. (Hermann, 1st ed., 91.) The author witnessed a similar but unsuccessful attempt in Berlin in 1838-39, by the tailors against the so-called Macintosh coat. On the conspiracy of the English dealers in second-hand goods against auctions, see Athæneum, Dec. 5, 1863. It is one ofMcCulloch'scharacteristic exaggerations, that he says that conspiracies to raise the price of a commodity by artificial means, are broken just as soon as they begin to obtain their object by the interest of the individual members to profit by the advanced prices. (Edition ofAdam Smith, Edinb., 1863, p. 59.)671.J. S. Mill, Principles, II, ch. 4.672.Monopolies universally prohibited: L. un. C. De Monopol. (IV, 59.) Police-order of the Empire, 1548, tit. 18.673.Privileges which the purchaser voluntarily accords to the seller are wont to be useful to both parties. (Hermann, loc. cit. 155, 158.)674.Besides, guilds, castes, corporations etc. may, when the vent diminishes, produce under-prices as readily as they may monopoly-prices when the vent is very good. (SeeAdam Smith, Wealth of Nations, I, ch. 7.)675.Thus, for instance, the traveler who wanted to cross a stream, would find himself delivered over to the tender mercies of the ferry-man, without protection of any kind against his demands. But repeated impositions in the matter of prices would have for effect to bring a point into disrepute as a place of crossing, and would induce the public to seek another. Similarly in the case of hackney-coachmen and carriers in large cities, and in that of innkeepers, at hotels and postal termini etc.676.Fixed prices by governmental authority were soonest attempted after bad harvests, but, indeed, with a strange ignorance of the natural grounds of the increase in price of bread-stuffs. Thus in the time of Charlemagne. (Capitul. a, 805;Baluz, I, 423.) Similarly in the case of other articles of universal necessity, when oppressively but necessarily dear. (See § 175.) During the last centuries of the middle ages, with their multitude of actual monopolies, and at the beginning of the modern era, fixed prices became more and more general. The earliest instance in the history of England of a fixed price for bread was in 1202 (v. Raumer, Hohenstaufen, V, 372), and in 1266, 51 Henry III. The earliest in Prussia was in 1393. (Voigt, Geschichte von Preussen, II, 659.) Many instances of fixed prices in the Rhine provinces of Austria in 1530. InMylius, Corp. Const. March, V, 2, 587 ff., we find an ordinance of 1653 fixing prices in Berlin, and including 72 industries. There is a very complicated system of fixed prices in the police ordinance of the electorate of Saxony of 1612, and in the decree concerning the coin of 1822. As to how, in Saxony in 1578, an attempt was made to ascertain the cost of the production of shoes by shoemakers, seeJoh. Falke, Gesch. des Kurf. August in volkswirthschaft. Beziehung, 1868, 252. There was an enormous extension of governmental fixing of prices under Philip II.; one of the principal causes why Castile was so far behind Aragon economically. (Townsend, Journey through Spain, II, 221.) Sometimes these measures were adopted to prevent distress-prices; as in Hochheim, in favor of the vintners. (Becher, Polit. Discurs, II, 1652.) The predilection especially of German authorities for the fixing of prices by governmental power, in the sixteenth and seventeenth centuries is very remarkable. ThusLuther, vom Kaufhandel und Wucher, 1524;Calvin, Leben Calvins, byHenry, II, Beilage, 3, 23;Bornitz, De Rerum Sufficientia, 1625, 246;Seckendorff, Teutscher Fürstenstaat, 5th ed., 1776, 210;Becher, II, 1823 ff.;Horneck, Oesterrich über Alles, wenn es will, 1684, 123;Leibniz ed. Dutens, VI, I, 250;Thomasius, Göttl. Rechtsgelahrtheit, 1709, 209; evenFrederickthe Great,Mylius, N. Corp. Const. March, I, 190. Similarly,Mariana, De Rege et Regis Institutione, III, c. 9. Compare, however, III, c. 8, andBacon, Serm., 15; Historia Henrici, 1037, 1040. On the other hand,Child, 1690, andNorth, 1691, reprove all such measures.Roscher, Zur Geschichte der englischen Volkswirthschaftslehre, 65, 90 f. Earlier yet,Salmasius, who would allow the freefori ratioto govern. (De Usuris, 1638, 583.) For a very rigorous price-tariff in the old Indian laws, by which,inter alia, the price of provisions was to be fixed anew every fourteen days, seeMenu, Laws, VIII, ch. 401 ff.677.Where trade is free, thefilet de boeuf, for instance, is worth four times as much as the flesh of the ox's neck or throat; but prices fixed by a government can scarcely take cognizance of the difference. How easily might not a fixed price for beer, for instance, be evaded by diluting that beverage with water, or fixed prices for inn-keepers by dealing out portions smaller in quantity or of an inferior quality. Moreover, as early a writer asDe la Court, Polit. Discoursen, 1662, c. 4, remarks that the establishment of fixed prices by governmental authority raises the average price of all commodities rather than lowers it, for the reason that the few who are sellers by trade can do more to influence the authorities than the many buyers, whose interests are divided among numberless different commodities.678.Schäffle, Nat.-Œkonomie, II, 384 f.679.Banfield, Organization of Industry, 120.“Where the economic life of a people is still undeveloped, and the production of one enterprise is not from the first based on the estimated consumption of another, the circulation of goods brings with it great profits and great losses; whereas, profits and losses grow smaller, but at the same time more uniform and regular, in proportion as the circulation of goods increases in rapidity and regularity.”(Stein, Lehrbuch, 212.)680.In Belgium, during the last forty years, the price of wheat has become more constant every year, while the price of rye has become more variable; for the reason that rye has gradually ceased to be an article of popular consumption, and therefore to be an important article in trade, and is consumed almost entirely and directly by its producers. (Horn, Statist. Gemälde von B., 1853, 185.)Rodbertusrightly conjectures that the price of wheat was much more variable in ancient times than it is with us. (Hildebrand'sJahrb., 1870, I, 36.) That it was so may be inferred from the surprisingly large family supplies which were laid in, as appears from Digest, XXXIII, De Penu legato.681.In Würtemberg even officials etc. buy their own wine almost always directly from the vintner. This causes prices there to be exceedingly variable, frequently from hour to hour. (v. Reden, Statist. Zeitschrift, Nov. 1847, 1008.) How greatly the mere presence of a regular market has contributed to make prices more constant, may be seen in the suburbs of Hamburg, where fish offered for sale on the street are sold in the evening for one-third of the price asked for them in the morning. Besides, purchases made with a view to speculation may increase the variations of price, if the speculation is unskillfully conducted, especially when a low rate of interest, and of the profit of the person engaged in it, has produced a blind race among the speculators. Here the price of a commodity rises, not from any natural cause, but because it once rose before, andvice versa. (Senior, Outlines, 17 ff.;Hermann, 90 ff.)682.That fixed prices suppose that men are engaged in the production of the commodity in question, as their calling in life, seeGarve, Zu Cicero's Pflichten, III, 64 ff. Chess-like commerce of colporteurs, and in caravans etc. Concerning the dreadful higgling of the Bedouins, seeWellsted, Reise in Arabien,Rödiger'stranslation, I, 147; and the still worse bantering in Cashmere, where the merchant, in the first place, always denies that he possesses the desired commodity, then begins to search for it, in order to discover what value the purchaser puts upon it etc. (K. Ritter, Erdkunde, III, 475.) On the practices in Indian fairs, seeTh. Skinner, Excursion in India, 1832, I, ch. 6; on the bazaars in Asia,Andree, Globus XII, 7, 211.Herbersteinsays of the Russians in the sixteenth century:mercantur fallacissime et dolosissime nec paucis verbis ... mercatores nonnunquam non uno tantum aut altera mense suspensos detinent, verum ad extremam desperationem perducere solent. Hence the great variations in prices and commodities. (Rerum Moscov. Commentt., ed. Starczewski, 39 f.) Similarly also, in 1674, according toKilburger: Büsching's Magazin, III, 249. But, on the contrary, it is said of the Plescovers, educated by intercourse with the Hanse;tanta integritas ... in contractibus, ut uno tantum verbo res ipsas indicarent omni verbositate in fraudem emptoris omissa. (Herberstein, 52.) In the England of the present day, the custom of marking each piece of goods with its price is very general. Concerning the rapidity and the paucity of words with which prices are settled in that country, where business men do not even salute their customers, nor customers the business man, seeC. G. Simon, Observations recueillies en Angleterre, 1835, I, 129 f. The Athenian laws (?), that fixed prices should be asked, and that sellers should not sit down that that they might sell more rapidly, points to something similar. (Athen., VI, 226 f.Plato, De Legg., XI, 916 f.) Athenian law prohibiting mendacity in the markets. (SeeDemosth., Lept., 459.)683.Thus the German book-trade has fixed prices. Many merchants never make an offer to their educated customers who are wont to do so with peasants etc.; because they are aware that the latter purchase only after they have compelled the seller to come down greatly from his first proposed price. Among the Quakers it has been a rule from the beginning, never to ask more for their wares than they were determined to accept. (Hume, History of England, ch. 62.)684.Sir William Temple, Observations upon the Netherlands, Works I, 134, compares honor in trade to discipline in an army. Similarly,Law, Trade and Money, 209 f.Ferguson, History of Civil Society, III, 4. Where the seller is not obliged to make known the existence of certain defects in his wares to the purchaser before sale, there is always scope for fraud. Compare Digest De Edict. aedilit., XXI, I. On the meaning of the German legal maxims:Hand muss Hand wahren, andEin Wort, ein Mann, seeEisenhart, Deutsches Recht in Sprüchwörtern, 311 f., 319 f. It is a principle in matters of business, that the person who through malice or carelessness recommends a man of whose probity there is already some doubt, should bear the damage caused by his recommendation. (Martens, Grundriss des Handelsrechtes, 24 ff.) Many attempts at dishonesty are prevented by laws which in important contracts, especially in sales of land etc., require the presence of witnesses, and this particularly in the lower stages of civilization. (MeierandSchömann, Attischer Process, 522; Roman, Emancipatio;Grimm, Deutsche Rechtsalterthümer, 608 f.), or even a public proclamation before the assembled community, at least written documents invested with all legal formalities as practiced among civilized peoples. On Greek laws of this nature, see especially,Theophrast., inStobaeus, Sermon., XLIV, 22. Very remarkable in Sparta.Schol. Aristophan., Aves, 1284.685.CompareLotz, Revision, I, 255 ff. In England the price of wheat scarcely ever varied more than from 1 to 2. In Ireland the price of potatoes varied from 1 to 6. (McCulloch, Comm. Dict., v. Potatoes.) CompareEngel, Jahrbuch für Sachsen, I, 491 ff. The custom of asking enormous prices with the expectation of being beaten down, is usual in Italy and carried to a frightful extent, and related to the bad custom prevalent there of begging a little after-payment to every little gratuity or drink-money which has been received.686.Storch, Handbuch, I, 311.J. B. Say, Traité I, ch. 16. As to how commerce, when fully developed, is wont to be more moral than when only half developed, seeGarve, loc. cit., and Versuche IV, 149 ff. How fortunate for the public economy of nations that the prices of corn especially have been growing more steady all the time since the middle ages. SeeRoscher, Ueber Kornhandel, 56, 61.687.Trade by barter was very general in several states of the American Union about the close of the eighteenth century. In Vermont, for instance, it was usual for a doctor to exchange his medicines against a horse, and for the printer to buy corn, butter etc. with a newspaper. (Ebeling, Geschichte und Erdbeschreibung, II, 537.) In Maryland, the Assembly fixed by law the relative proportions at which tobacco, pork, corn and wheat should be exchanged the one against the other. (Ebeling, V, 435 ff.Douglas, Summary of the British Settlements in N. America, 1670, V, 2, 359.) Even as late as 1815, children were wont to run the streets of Corrientes, crying:“Salt for candles, tobacco for bread etc.”It was commerce with England that first led to trade by money in the United States. (Robertson, Letters on South America, 1843, I, 52.) Similarly in Rhokand until the end of the eighteenth century, where the cities, as a consequence, presented the appearance of a fair the whole year round. In the beginning of this century, the khan introduced the use of copper money made from Persian cannons; and much later yet, there were scarcely a million rubles in money to a million men. (Ritter, Erdkunde, VII, 753.)Basil Hallfound the uncivilized inhabitants of the Loo-Choo Islands ignorant of the use of money. (Voyage of Discovery, 1818.) Concerning trade by barter in the Homeric age, see the Iliad, VII, 472 ff. A supposed law of Lycurgus prohibited the use of money in purchases, and allowed barter only. (Justin., III, 2.) According toPausan., III, 12, only barter existed in India (?) in his time.688.The person who has been used to paying for four pounds of meat with twenty pounds of bread, and is asked to give twenty pounds of bread in exchange for some other article, must of course have some unit of measure in his mind to serve as a means of comparison between the value of that article and that of four pounds of meat. In Denmark, during the rule of the aristocracy, there were fixed prices sanctioned by the tradition of long usage, in accordance with which the prices of all commodities were estimated in relation to a ton of barley or rye—a natural consequence, apparently, of the want of a common measure to govern in the greater number of transactions.Bergsoe, Archiv der Polit. Œk., IV, 314;Graugan'sIcelandic Code contains a remarkable fixed price of this nature in the supplement to theKaupa-Balkror Commercial Code, I, p. 500. Similarly among the ancient Persians.Reynier, Economie publique des Perses, 308.689.That is, (200x(200-1))/2. CompareRauinStorch, Handbuch, III, 253. The“at least”has reference to the fact, that in barter, the many different kinds of most commodities has to be borne in mind. (Knies, Geld und Credit, I, 218.)690.This transportation of values supposes an equality of values of the money in two places, while the transportation of goods supposes different values of the same kind of goods in both places. (Knies, Geld und Credit, I, 218.)691.While the wordspecunia,danaro,dinero, andargent, are all derived from unessential qualities, the German word for money,Geld, corresponds with the essential quality of money, since it denotes that which is of value everywhere (gilt). On the other hand,nummusand νόμισμα from νόμος, (Bœckh.Metrolog. Unters., 310.),moneta(the English, money), are from the temple of Juno Moneta, in which the Roman coins were for a long time stamped. In old German, the word for money,Geld, means everything that is paid by any one. (Grimm, D. Rechtsalterth., 382.) The present meaning of the word is to be met with in a very old document of 1327. (Arnold, z. Geschichte des Eigenthums in den deutschen Städten, 89.)692.The wrong definitions of money may be divided into two classes: those which convey the idea that it is more than a commodity, and those which imply that it is less.This was a point which was contested even among the Greeks. There were many who claimed that wealth consisted exclusively in the possession of much money; as we find, for instance, in the pseudo-Platonic dialogue Eryxias; while others insisted that money was something purely imaginary (λῆρος), and the creation, exclusively, of human laws. (Aristot., Polit., I, 3, 16, Schn.) Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (Plato, De Rep., II, 371.)Anacharsiscompares money to counters. (Plutarch, De Profectt in Virtute.)Aristotle, himself, subscribed to the second opinion, although he saw clearly, that only useful and current things (χρείαν εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3, 14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.)Xenophonascribed properties to money which no other commodity possessed; especially when he said that it could never be too plentiful, and that its price could never fall. (De Vectt. Ath., 4.) The finest ancient explanation of the nature of money is that of the jurisconsultPaullus, L. I.; Digest, XVIII, 1; and it well deserves the long commentary devoted to it byP. Neri, Osservazioni etc., inCustodi, P.A., VI, 324, ff.Among the moderns,Melancthon., Corp. Ref., XVI, 498, andSeb. Frank, Chronik., 760, consider money as a mere symbol. On the other hand, the over-estimation in which the precious metals were held by the adherents of the Mercantile System was owing, without doubt, to their very superior utility as money; for we very frequently find that the adherents of that school insist that the precious metals must circulate. (See §9and § 210.)v. Schröder, Fürstl. Schatz- und Rentkammer, III f., considers new copper coins as an increase of the national wealth, but not other copper which is merely a commercial commodity. He frequently calls money, thependulum commercii, and expresses ideas concerning it as enthusiastic as they are obscure (p. 86.)Horneck, in his Oesterreich über Alles wenn es will, 1864, calls gold and silver“our best blood, the very marrow of our strength,”and“the two most indispensable universal instruments of human activity and existence.”(p. 188.)Th. Mun, England's Treasure by forraign Trade, 1664, (ch. 2) considers cash-money and resources as synonymous in every way. Only, he says (ch. 4) that it is sometimes advisable to allow one's money to remain in foreign countries, and to use bills of exchange, banks etc., at home, as a substitute.F. Gee, Trade and Commerce of Gr. Britain, edition of 1738, laments the“stiff-necked folly of those who think money a commodity like any other.”It is one of the most common demands of the adherents of the Mercantile System that the home mines of gold and silver should be worked at no matter what sacrifice, since the money employed in working them continues to remain in the country and the newly coined precious metal is clear gain. CompareSchröder, loc. cit. 109 ff., 181.Horneck, loc. cit. 173.Broggia, Della Monete, 1743, cap. 33;v. Fusti, Staatswirthschaft, 1755, I, 246:Forbonnais, Finances de France, 1758, I, 148.Ulloa, Noticias Americanas, 1772, ch. 12. We seldom meet with the correct view on this subject in the seventeenth century.Sully, of whom Henry IV. said that he never found anything to be possessed of beauty which cost double its real value, had it at times. (Economies royales, LXXIII.) So hadv. Seckendorff, Teutscher Fürstenstaat, 1655, 5th edition.It is in accordance with the usual course of human development that the exaggerations of the Mercantile System led to a reaction characterized by an exaggeration in the opposite direction. EvenDavanzati, Sulle Monete, 1588, traces the value of money back to human convention and refuses to find it in nature. A natural calf, he thinks, ispiù nobilethan a golden one; although he elsewhere expresses his admiration of the precious metals, calls themcagioni seconde della vita beata, and lauds them because they procure ustutt'essi beni(20, 21, Cust.)Montanari(ob., 1687) demonstrates from the use of leather money etc., that the authority of the state is the only power which gives money its character as money. (Della Moneta, 35.)Davenant(ob., 1714) carries his inclination to call money“the servant of trade, measure of trade,”so far as to compare it to a ticket or counter. (Works, I, 355, 444.) Strongly asLaw, himself, opposes the convention theory (Trade and Money, ch. I; Sur l' Usage des Monnaies, 1720, p. 1.), his discipleDutot, in his Réflexions polit. sur le Commerce et les Finances, 1738, 905, éd. Daire, contrasts not only paper money but also gold and silver as representative wealth, with real wealth.Berkeley, Querist, 1735, teaches that the real notion of money is not that of a“commodity, standard, measure, pledge, but [No. 23] ticket or counter, entitling to power and fitted to record and transfer such power.”(441, 475.) Even if the names,livre, shilling etc., remain, and the metal is dropped, every article may still as well as before be counted and sold, industry promoted and the course of commerce preserved. (p. 440.) According toMontesquieu, Esprit des Lois, XXI, 22, gold and silver are arichesse de fiction ou de signe. Compare Lettres persanes, II, 18.Benjamin Franklinalso maintains that the value of gold, for instance, is principally a credit-value. Remarks relative to the American Paper-Money, 1765, Works, II, Sparks' edition.Forbonnais, Finances de France, I, 86 f., calls money, simply a means to put commodities, which alone have value originally, in circulation. Hence it is, in itself, a matter of indifference whether, for a given quantity of coin, a person gives one thaler, or ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a distinction betweenrichesses naturelles(raw material),artificielles(manufactured products), andrichessesde convention (money.)von Schlözer, Aufangsgründe, 1805, 100, 138, calls money something imagined; andTh. Smith, Essay on the Theory of Money and Exchange, 1807, asserts, that true money is only an ideal measure of value, of which coins in turn are only the representatives. Compare, however, Edinb. Review, Oct., 1808.Oppenheim, Die Natur des Geldes, 1855, grants that in the beginnings of trade, money possessed the character of a commodity; but says that as soon as the services of circulation of the money-commodity prevailed over its services in consumption, it lost all its importance for the latter purpose, and that all relations dependent thereon ceased. At present, he claims money is only the representative of commodities, but no commodity itself. See, on the other hand,Roscher'scritical analysis in the Literarisches Centralblatt, 1855, December.The true doctrine was advocated in a classic form byNicolaus Oresmius(ob. 1382). See his Tractatus de Origine et Jure nec non et Mutationibus Monetarum, newly edited byWolowski: Paris, 1864. SeeRoscher'sessay in the Comptes rendus of the Académie des Sciences morales et politiques, vol. 62, 435 ff. Based on the latter we haveGabr. Biel(ob. 1495), De Monetarum Potestate simul et Utilitate, 1542, andG. Agricola, De Re metallica, 1556, I, 4 ff. This true doctrine was acclimated earliest in England and Holland, and before the mercantile system invaded them. CompareHobbes, Leviathan, 24, in which theconcoctio bonorumis described by means of money, and the full and clear chapter 12 ofSalmasius, De Usuris (1638), who, among other things, shows how Midas, who turned everything into bread, died of thirst.Pettyshows very clearly that national wealth does not consist exclusively nor mainly in money. Every country, he says, needs a certain quantity of money to carry on trade. It would be a waste to increase the former, the latter remaining the same. But the precious metals, by reason of their durability and universally recognized value, possess the character of wealth in a higher degree than other commodities.On the whole, the use of money in a nation is like the use of fat in the individual. (Quantulumcunque concerning Money, 1682.) CompareRoscher, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.DavanzatiandHobbeshad compared it to the blood, as has recentlySchmitthenner, Staatswissenschaften, 1839, I, 459.Northcalls money a commodity of which there may be an excess as well as a want. (Discourse on Trade, preface and postscript.) CompareLocke, Considerations on the Lowering of Interest, 1691, Works II, 13 ff., 19.Galiani, 1750, Della Moneta, IV, holds a very happy middle place between the alchymists and the philosophic contemners of gold. See, further,Quesnay, éd. Daire, 64, 75 ff.Turgot, Sur la Formation des Richesses, § 30 ff, had many clear views on this subject.Verri, Meditazioni, 1771, II, 1, calls money the universally current commodity. The expressions, measure of value, pledge, representative of all commodities might be true also of all other wares. It cannot, however, be denied that most modern political economists have not borne sufficiently in mind the peculiarities which distinguish money from all other commodities, as is apparent from the doctrine of the balance of trade prevalent in Hume's and Adam Smith's time. To this extent, therefore, the semi-mercantilistic reaction instituted byGanilh, Théorie de l'Economie politique, 2822, II, 380 ff., 426;St. Chamans, N. Essai sur la Richesse des Nations, 1824, ch. 3; andColton, Public Economy for the United States, 1849, 203 ff., who bring into relief the difference between“money as the subject”and“money as the instrument of trade,”was not wholly unfounded.Ad. Müllerexaggerates a correct thought, and causes it to degenerate into a species of mystic pleasantry, when he calls every individual in the state and every commodity that possesses value, in exchange or a social character, money.The highest object of the state is to develop this money-character more and more. (Elemente der Staatskunst, II, 194, 199.) The statesman, he says, should be money. (III, 206.) A very valuable monograph on this subject isM. Chevalier'sDe la Monnaie, 1850, constituting the third volume of his Cours d'Economie polititique.Knies, Geld und Credit, I, 1873, is here most thorough and acute, especially in keeping separate, by well defined lines of demarcation, the five different functions of money: measure of value (by proper division into parts: price-measure), instrument of exchange, means of transportation of values, and means of storing up and preserving values.693.Kniesshows how the making of money legal tender by the state, although of only secondary importance, is by no means an irrelevant matter, since persons must then have it, even if they do not want it for purposes of use or exchange, to discharge their liabilities thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)In all these cases, barter-economy (Naturalwirthschaft) meets with greater and greater difficulties as civilization advances. How, for instance, could 50 days annually of socage-service or labor be redeemed by the achievement at one time of 1,000 days of socage-service or labor? The rich man requires money principally as a means of payment, the poor man as a medium of exchange. The requirement or need of a people of media of payment is much more susceptible of extension or contraction, than that of media of exchange, made especially so by the intervention of claim-rights instead of money.(Knies, loc. cit, 200 ff.)Ravit, Beitr. z. Lehre vom Gelde, emphasizes this feature of money altogether too much after the manner of a jurist. But he is entirely right in adopting the exclusion of therei vindicatioagainst the honest possessor as necessary to the completion of the idea of money.694.Sismondi, N.P., I, 131, very rightly remarks that this has made practice as much easier as it has theory more difficult.695.Law, Trade and Money, 19. Hence, before the invention of money, scarcely anything but the things most indispensable to existence were produced. Were there no money, there would be very few scholars, artists etc.; for the classes who produce most of the things indispensable to existence make but few demands for them.Büsch, Geldumlauf, I, 11 ff., 36, II, 54.696.Turgot, Formation et Distribution, § 48 ff. Commodities which perish rapidly could be produced by persons devoting themselves to their production as a business only after the invention of small coin. (Lueder, N. Œk., 1820, 283.)697.CompareKnies, Geld und Credit, I, 219.698.CompareSchmitthenner, loc. cit., I, 457. One of the principal advantages of money consists in this, that every producer can discover what there is an over-supply or under-supply of in the nation, by means of the relation of the price in money of his products to the cost of producing them, estimated in money, (v. Thünen, Isolirte Staat, II, 2, 235.)699.Hence it is that so many socialists attack money.Th. Moreassures us that with the simple abolition of money, vice and misery would, for the most part, disappear of themselves. Hence in his Utopia, criminals are bound in golden chains and the chamber-pots are made of gold and silver in order to make these metals contemptible. (Ed. 1555, ff., 197 ff.) Similar views among the over-cultured Romans. (Compare §§79, 204.)Auri sacra fames.Virgil, Æneid, III, 56.Pliny, too, would recall the days of trade by barter. (H. N., XXXIII, 3.) Even inBoisguillebert, Factum de la France, ch. 4, we find, together with many correct views on the nature of money, passionate declamation against it because of its darker side.Argent criminel. (Détail de la France, 7. Dissertation sur la Nature des Richesses etc.) More recently this darker side has been dwelt upon byF. Möser, Patriot. Phant., I, 28;Ortes, Economia nazionale, II, 17, and the would-be restorer of the middle ages,Ad. Müller. While the latter writer lauds the feudal system as a“sublime fusion of person and thing”(Elemente I, 221), the present system of wages, because it is a system of compensation, he blames, and prefers the feudal for the opposite reason (?).“The onlymeritwhich the state recognizes in our day is oneof service.”(III, 259.)Kosegarten, Geschichtliche systematische, Uebersicht der N. Oek., 1856, 146 ff., is no friend to the economic system to which money gives a distinctive character.Per contra, compareBastiat, Maudit Argent, 1849.700.Mirabeau, Philosophie rurale, 1763, ch. 2, adds as the third great invention thetableau économiqueof the Physiocrates. For a comparison of money and language, seeHamann, Werke, II, 135 ff., 509.Hehn, Kulturpflanzen und Hausthiere, finds it characteristic of the race, that wine, writing with letters, and money, all owe their origin to the monotheistic stem of the Semitic people.701.Where every man becomes a merchant, and the society itself a commercial society.Ad. Smith, Wealth of Nations, I, ch. 4.702.Just as descriptive is the German wordbillig(equitable) for cheap. Here it is plain that language takes sides with the possessor of money!703.The contrast between barter-economy and money-economy is of great and fundamental importance. It repeats itself with so much regularity in the history of every highly developed nation, that political economists gifted with perception for the historical, could not possibly overlook it. Thus,Aristotle, for instance, establishes with the utmost care and accuracy the difference between οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and artificial economy, corresponding to the difference between value in use and value in exchange. (Polit., I, 3, Schn.) SimilarlyD. Hume, who allows a period of luxury, culture, industry, of trade and manufactures, of freedom and circulation of money, to be preceded by one in which the feeling of wants is not awakened, in which coarseness and idleness prevail, one in which agriculture is alone pursued, and monetary economy and freedom decline, and trade by barter obtains. (Discourses, passim, especially On Interest and on Money.) A similar contrast we find frequently, and as one of his fundamental thoughts, inJ. Steuart.As to how the transition from barter-economy to monetary-economy is generally effected, seeF. G. Hoffmann, Lehre vom Gelde, 1838, 176 ff. In the Tyrol, as late as 1820, the greater portion of purely mechanical work, such as that of the smith, the carpenter, and the washerwoman, were purely feudal duties. On the other hand, payment in money was the rule, in the beginning of the fourteenth century. (F. Beidermann, Technische Bildung in Oesterreich, 3.) Yet, for a long time after, the functions of a measure of value were performed by pieces of land, and those of an instrument of exchange by cattle and natural products. (Arnold, Gesch. des Eigenth., 207.) In France, money-economy, i.e., trade by money, had grown to importance earlier. (Nitsch., Ministerialität und Bürgerthum, im 11. und 12. Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated the rent of land in“cauldrons of victuals.”(Moryson, Itinerary, 1617, III, 155.) In ancient Italy, during the first three centuries of Rome, there was, with the exception of the Greek colonies, only trade by barter.Mommsen, Römische Gesch., I, 293, shows that the oldest ases were not money in the higher sense of the word, but belonged rather to the stage of barter-economy. On the other hand, we find in the time of the classic jurists, much as slavery had limited the sphere of action of money, the principle:pecuniæ nomine non solum numerata pecunia, sed omnes res, tam soli quam mobiles, et tam corpora quam jura continentur. (L. 222, Digest L. 16; compare 4, 5, 178.) Similarly inCicero, Top. 6. De Invent, II, 21. De Legg, II, 19, 21; III, 3. CompareDionys. Hal., N.R. IV, 15.704.Were money nothing but a measure of values in exchange, it should on that account, if on no other, have value in exchange itself, as a measure of length must necessarily have length itself. (We measure time on a clock by means of the revolution of the hands on the dial.) Again, value in exchange supposes value in use. The so-called“money of account,”such as the East Indianlac de roupies, the Portuguese reis, and the earlier Englishpoundsterling are no imaginary magnitudes, which would disappear with the figures of our system of counting (seeHufeland, N. Grundlegung, II, 33, in reply toStruensee, Abh., III, 501); but real coin-values which can not be represented by only single pieces of coin, units of value for the most part no longer recognized by the state, but which the people still retain. SeeM. Park's(Travels, 27) refutation of the fable circulated byMontesquieu, Esprit des Lois, XXII, 8, that the regular standard money of the Mandingo negroes was a mere imaginary standard.Hobbes, Leviathan, 24, exhibits a very good knowledge of this subject.705.CompareP. Neri, Osservazioni, 1751, VI, 1.Lord Liverpool, Treatise on the Coins of the Realm, 1805. The person who takes money as such must always harbor the hope of being able to dispose of it again as money. Hence, such an acceptance always supposes the existence of a certain amount of commercial confidence. The savage Goahiros, between Rio de la Hacha and Maracaibo, are too“distrustful”to take anything in trade but commodities fit for the most immediate use. (Depons, Voyage dans la Terrefirme, I, 314.) Similarly in the twelfth century, the heathen Laplanders. (Arndt, Liefl. Chronik, II, 3.) Commodities which barbarians can consume immediately are objects of the first necessity, whereas more civilized people, who are in a condition to undergo greater expense, look more to the technic qualities of money, such as divisibility, capacity for transportation and durability.v. Scheelshows in a very happy manner how, as commerce increases, money comes to be, as it were, subjected to a process resembling that of distillation: first mere increase of stores for use, next preponderating values in exchange, lastly mere orders for the same possessing no independent value.Hildebrand'sJahrbb., 1866, I, 16.706.The last circumstance continues to be one of great importance for a long period of time in the frigid zones. Thus, the beaver-skin continues still to be the unit of measure of trade in much of the territory of the Hudson Bay Company. Three martens are estimated to be equal in value to one beaver, one white fox to two beavers, one black fox or a bear to four beavers, a rifle to fifteen beavers. (Ausland, 1846, No. 21.) The Esthonian word,raha, money, means in the related language of the Laplanders, fur. (Krug, Zur Münzkunde Russlands, 1805.) Concerning skin-money in the middle age of Russia, seeNestor,Schlözer'stranslation, III, 90. The old wordkung, money, means marten. By degrees it came to pass that instead of whole skins, only two“snouts”were given or other pieces of leather about a square inch in size, which were probably stamped by the government and redeemed in whole skins at the government magazines. Hence, there is here supposed a species of assignats, and of disturbances of credit. The Mongolian conquerors would not recognize them, and they therefore became suddenly valueless. In Novgorod and Pskow, the system continued some time longer, for the reason that these places had little trade with the Mongols. In the rest of the kingdom it now became necessary to introduce silver money, and in the north to return to real squirrel and beaver skins.Karamsin, Russ. Gesch., I, 203, 385; I, 96, 191 f. Voyage de Rubruquis, inBergeron, Voyages I, 91.Herberstein, Rer. moscov. Commentt, 58 ff. Even in 1610, a Russian military chest was captured by the enemy, and in it were found 5450 silver rubles, and 7000 fur rubles. (Karamsin, XI, 183.)707.When the Danes progressed so far as to practice agriculture, they used grain instead of cattle, in quantities corresponding to the value of one cow or one sheep, for money, to the end that their idea of a unit of measure might not become obscured. (Ravit, Beiträge, 3.)708.Homeric determination of prices in oxen. Iliad, II, 449; VI, 236; XXI, 79; XXIII, 703 ff; Odyss., I, 431. Compare, however, II, VII, 473 ff. In Draco's time, money-fines were imposed in cattle (Pollux, IX, 60 ff.), and in Athens, before Solon's time, even the metal coins were, for the most part, stamped with the figure of an ox.Plutarch, Theseus, 25.Böckh., Metr. Uuntersuch., 121 ff. Among the most ancient Romans (Cicero, de Rep., II, 35) the imposition of fines in property, the coins first stamped by Servius,boum oviumque effigie(Plin., H. N., XVIII, 3,Cassiodor., Var., VII, 32), and the wordspecunia,peculium,peculatus, derived frompecus, point to something analogous. (Varro, De L. L., V, 19; De Re rust., II, 1;Cicero, De Rep., II, 9;Ovid, Fast., V, 281;Plutarch, Publicola, 11.) Old German fines in cattle, inTacitus, Germ., 12, 21; Lex Ripuar, 36, 11; Lex Saxonum, 19.Ulfilastranslates αργύριον δοῦναι (Mark, 14, 11),faihu giban. Very old German documents, of the seventh and eighth centuries, name horses as purchase-price. (Grimm, Deutsche Rechtsalterth., 586 f.) Otho the Great imposed cattle-fines. (WidukCorb., II, 6.) Similarly, in King Stephen's laws of Hungary (Wachsmuth, Europäische Sitturgesch., II), in the old Irish Brehon laws (Leland; History of Ireland, 36 ff.), as well as in the Scotch collection of laws,Regiam Majestatem, of 1330. (Honard, II, 263 f, 537.)Viva pecuniaof the Anglo-Saxons in the laws of William I. In ancient Sweden, all property was estimated infä=cattle (Geijer, Schw. Gesch., I, 100), just as now, in Icelandic,fe=property. In Berne, the Germanvieh, cattle, is used to express commodities. Among really nomadic races this is, of course, still more the case. Thus the Kirghises use horses and sheep as money, and wolf-skins and lamb-skins for small change. (Pallas, Reise durch Russland, 1771, I, 390.) Among some of the Tartar tribes, everything is stipulated for in cows. (v. Haxthausen, Studien, II, 371.) Among the Persian nomads, sheep are used as money; or when they are held in subjection in the cities, corn, straw and wool. (Ritter, Erdkunde, VIII, 386.) Oxen in use as money among the Tscherkessens. (Klemm, Kulturgeschichte, IX, 16.)W. B. Hermanndoubts, however, whether cattle were ever used as a medium of exchange. He thinks rather they were employed only as a measure of price. (Münchener Gel. Anz., 580.)709.That of vanity which presents itself among some people sooner than that of clothing.710.In Genesis, 1, 24, gold appears only as a valuable ornament. Abraham paid for his purchases in silver.711.For this reason, zinc-money is just as natural with the Malays and Chinese as iron-money with the Senegambians. (Mungo Park, Travels, 27.) And soPlutarch, Lysand., 17, may be right when he calls iron the earliest universal means of payment. In Sparta, too, where industrious efforts were made to maintain the lower stage of culture, this medium of payment was longest maintained. Compare, however,St. John, The Hellenes, III, 260 ff. The first copper coins were stamped a short time before Philip, father of Alexander the Great. (Eckhel, Doctr. Numm, I, XXX ff.) On the other hand, Italy, partly because it had mines of its own, and partly because of its intercourse with Carthage (Cyprus), had become, at a very distant period, so rich in copper that the circulation of copper, or to speak more accurately, of bronze, was naturally introduced. CompareNiebuhr, Röm. Gesch., I, 475 ff. (Aes alienum, obæratus, ærarium, æstimare.) Copper was all the more adapted to this end the more frequently it was found unmixed. It was generally used in preference to iron because of the greater facility of working it. (Hesiod., Opp., 150 f.;Lucret., V, 1285 f.) In modern nations copper money seems to have been employed only after silver money. Thus, it was not stamped in England before the time of James I. (Adam Smith, I, ch. 5), nor in Sweden before 1625. (Geijer, Schwed., Gesch., III, 56.) Money was struck from the metal of molten bells during the French Revolution!712.In Russia, between 1763 and 1788, there were 76 million rubles of gold and silver coins struck, against 54 million of copper rubles. (Hermann). On the other hand, in France, between 1727 and 1796, there were struck only 40 million francs of copper, 10 million ofbillonor base coin, and 3967 million of gold and silver.713.Michaelis, De Pretiis Rerum apud veteres Hebræos, 183.714.Strabo, VIII, 358. Hiero, tyrant of Syracuse, found it exceedingly difficult to obtain gold. When the Spartans wished to make an offering of gold at Delphi they were obliged to have recourse to Crœsus. (Herodot., I, 69;Theopomp., inAthen, VI, 231 ff.)Aristoph., Ranae, 720, calls gold“new”in contradistinction to the“old money,”that is, silver.715.Plin., H. N., XXXIII, 13. Compare, however,Dureau de la Malle, Economie polit. des Romans, I, 69, afterVarro, apud Charisium, I, 81. (Putsch.) It is certain, however, that when Italy was conquered, the Romans had introduced a circulating medium of silver, and that it was the prevailing medium; but in the time of Cæsar and Augustus, a gold circulation was the prevalent one. Yet the state treasure was deposited in gold during the period of silver circulation, because gold was, without question, better adapted to storing up and transportation.716.Muratori, Antiquitt., IV, Diss., 28.717.Henry was obliged to issue an order to the mayor and sheriffs of London, to get his gold into circulation; but he soon saw himself compelled to desist from executing his design. Edward III. was able only after a voluntary circulation of them had continued for a long time, to prohibit any one's refusing the rose-nobles. (L. Liverpool, loc. cit.)718.German., 5. Still more striking is the example cited byHerbelot, Bibliothéque Orientale (1697), 485.Rubruquis, Voyage, ch. 13. In the time of Nadir-shah, the Kurds gave, without the slightest hesitation, a pound of gold for a pound of silver or copper. (Ritter, Erdkunde, VIII, 395.)719.Recommended even byAdam Smith, ch. 5, and for Germany byF. G. Hoffmann, Drei Aufsätze über das Münzwesen, 1832. In Egypt, also, for a long time the wealthiest country of the middle ages, the circulation of gold prevailed until the twelfth century. (Macrisi, Historia Monetae Arab., cap. 3 ed.,Tychsen.) Harun Alraschid's income was estimated at about 7,500 cwt. of gold. (Ritter, Erdkunde, X, 235.) Something similar related of the Carnatic,“the land of ancient emporiums.”Ritter, Erdkunde, V, 564, afterFerishta.720.The use of thecauris(Cypræa moneta) in India this side and beyond the Ganges, in upper Asia, and in southern Africa depends on their employment for purposes of ornament, on their greater uniformity, and on the rarity of copper which would otherwise be better suited to purposes of change. In Calcutta, 1280caurisare equivalent to about half a shilling. (McCulloch.) CompareK. Ritter, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III, 233, 739; IV, 53, 420;Salin, III, 62;Botz, in the Tübinger Ztschr. Similarly among the fishing population of Northwestern America. (Stein-Wappäus, Handbuch I, 352.) Salt as money on the Chinese-Birman boundary (Marco Polo, 38), but especially in the interior of Africa, where nature does not at all produce it, but into which it is brought by caravans from the deserts, where salt is found in great quantities.M. Polo, Travels, 305, found the current price of a salt-tablet, two and a half feet long, one foot, two inches broad, and two inches thick, to be equal to the value of two pounds sterling among the Mandingos. In Abyssinia, the salt-bars are generally six inches long, three inches broad, one and a half inches thick, and they are bound with an iron ring to protect them against fracture. Sixty of them are worth one thaler. (Ausland, 1846, No. 35.) Slaves used as money:Barth, Reise, III, 338, 344. Tea-blocks in upper Asia and Siberia; and they are given by the Chinese to the Mongols as pay for troops. (Ritter, Asien, III, 252,) In Keachta, a tea-block is equal in price to one paper ruble. (Ausland, 1846, No. 20.Timkowski, Reise nach China, 143.) Date-money in the Sivah oasis. (Hornemann, Reise, 21.) Also in the Persian date-country, where, formerly, the lowest silver piece of money was coined in the form of a date (Ritter, Asien, VIII, 752, 819.)The ancient Mexicans used as money cocoa-nuts, in bags of 24,000 pieces, cotton-stuffs, small pieces of copper, and gold dust in quills. (Humboldt, N. Espagne, IV, 11.) Cocoa-beans are still used as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes weighing one pound are used. (Smyth, Journey from Lima to Para, 1836.) Among the ancient inhabitants of Rügen, linen (Helmold, I, 39); and still among the Icelanders, the so-calledVadhmâl. During the middle ages, 120 ells ofVadhmâlwere equal in value to one milch cow or six milch sheep, or two and a half ounces of silver. (LeoinRaumer'shistor. Taschenbuch, 1835, 515.) That the ancient northern mode of valuation, by theVadhmâland in cows is older than by themarkis shown byWilda, Gesch. des deutschen Strafrechts, I, 331. The cod-fish money used by the Icelanders was, on account of its great commercial importance as an article of export, an advance upon the use of theVadhmâl. Among the Caffirs, besidescauris, mats, javelins, glass corals, but particularly brass rings, are used as money. From three to four hundred of these rings are strung together, and two such strings are equal in value to one cow. (Klemm, Kulturgeschichte, III, 308, 320 f.) Ivory used as money in the neighborhood of the Portuguese colonies in Africa. (Martius, Reise, II, 670.) In Logone,Denham(1822) ff., had met with pieces of iron as a medium of circulation; but on the other hand,Barth(1849), with small strips of cotton from 2 to 3 inches in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.) In colonies, money of this nature is continued for a long time. Thus cod-fish used in Newfoundland, sugar in the English West Indies (Adam Smith, I, ch. 4), tobacco in Maryland and Virginia. (Douglas, V, 2, 389;Ebeling, V, 435 ff.) The last was related to the inspection and storage of the tobacco intended for exportation. Payment was made in orders on the stored and inspected tobacco, even as late as the end of the eighteenth century. In 1618, the forced circulation of tobacco was decreed in Virginia, and under severe penalties. (Gouge, History of Paper-Money and Banking in the United States, ch. 1.)721.When the caravans no longer touched at the oasis Agades, gold and silver money fell into disuse, and grain, stuffs etc. did service as instruments of circulation. (Barth, Reisen und Endeckungen, I, 144.)722.Ad. Müllersays very pertinently, but in a very mystical vein, that the precious metals combine in a very high degree and yet in a very simple manner, the principal qualities in which man's greatness finds expression: rarity, flexibility, uniformity, mobility, durability and beauty. (Elemente, II, 266.) In another place, he says, the highest ideal good is God, the highest material good, gold! (III, 65.) The mysticism of gold was most highly developed among the alchymists of the sixteenth and seventeenth centuries.723.Iron beds are worked only when they contain at least 18 per cent. of metal. Generally it is estimated that the furnace should yield 30 per cent. In the copper mines of Mansfield, Norway, Agordo and Venice, it goes as low as from one to three per cent. On the other hand, silver mines which yield 0.17 per cent. of metal are considered worth working. Lastly, gold is so rare that generally it can be extracted only from time to time by the ordinary mining processes. As a rule, men are content to gather it where nature has charged itself with its refining. The extreme limit of the working of gold appears, according toPlattnerandHaussmann, at Goslar, to be reached when in 5,200,000 parts of mineral earth there is one of gold. Spite of this, however, by reason of their great ductility, the precious metals have been able to penetrate even into the meanest huts in one form or another. It has been estimated that a silver leaf may be attenuated by beating to a thickness of only 0.00001 of an inch, and a gold leaf to 0.0000035 of an inch. An ounce of gold spread on a silver thread may attain a length of 13,000 English miles. (McCulloch.)724.How easily, for instance, could leather-money, such as was used by the ancient Galls (Cassiodor., Varia, II, 32,) be increased to any desired quantity, and thus its price brought down.725.Engel, at the usual tariff for land and railroad freight (10 and 5pfennigsper mile and hundredths of a mile) estimates the enhancement of the price of the following commodities, for one mile of transportation of a custom-hundred-weight (Zollcentner) at the following percentage of their average value:Gold, value 47610 GermanReichsthalerper cwt., 0.000007 by land, 0.0000035 by railroad.Silver, value 3000, 0.00111 by land, 0.00055 by railroad.Cotton, value 45, 0.074 by land, 0.037 by railroad.Tin, value 24, 0.1389 by land, 0.0694 by railroad.Lead, value 8, 0.416 by land, 0.208 by railroad.Iron, value 2.5, 1.333 by land, 0.666 by railroad.Rye, value 2, 1.666 by land, 0.833 by railroad.Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.Coal, value 0.12, 27.777 by land, 13.888 by railroad.Their great specific gravity, also, makes the precious metals easy of transportation. ThusCazeaucalculates that a given value of gold is 17,222 times as easy to transport as the same value in wheat. But as, where the weight is the same, the labor of transportation is inversely as the volume, this number must be multiplied by 26, and we therefore have 447,772 times. In the case of silver, the relation to wheat is as 1:15,554. Concerning copper, seeStorch, Handbuch 1, 488.Chevalier, Cours, III, 17 ff.726.This, at bottom, is also true, of the various kinds of copper; only, here, complete refining is impracticable on account of the relation between the cost of production and the product-price.727.On the other hand, copper, and still more zinc, tin and lead lose much of their value in the fire. Pearls may lose their entire value by fire, and diamonds more than half of it.728.Aqua-regia, a mixture of nitric and muriatic acid, dissolves gold. Chlorine and bromine attack it. It has been noticed to vaporize at a very high temperature. A gold thread vaporizes when a strong electric current is passed through it. A small ball of gold gives off a great deal of vapor if placed between two carbon points and subjected to the action of a powerful galvanic pile. (K. F. Naumann.)729.CompareHatchett, Experiments and Observations of the various Alloys, On the specific Gravity and comparative Weight of Gold, 1863. The French five-franc pieces wear away, on an average, in a year, 0.00016; the English crown, 0.00018; the half crown, about 0.00173; and the shilling, about 0.00456. (L. Liverpool, Treatise on the Coins. 204;M. Chevalier, Cours, III, 128 ff.) The wear from use of the south German gulden is 0.292 per 1,000. (Rau, in the Archiv. N.F.X, 256.) According toJacob, the average wear of coin is 2.38 per 1,000. (Historical Inquiry into the Production and Consumption of the Precious Metals, ch. 23.)730.Adam Smith, Wealth of Nations, I, ch. II, Digr.731.Solera, Sur les Valueurs, 1785, 271 ff.;Custodi. Half an ox, for instance, is worth half the value of a whole one only for a few well defined purposes. As to how much the value of the diamond varies with the size etc., seeDufrênoy, Traité de Minéralogie, II, 77 f. On the other hand, the separated parts of a piece of metal are very readily reduced to a whole.732.In the case of the ox, it is impossible to imagine a mark which might not be eluded by its losing flesh.733.The cost of coinage since 1849 has been ¾ of 1 per cent. in the case of silver, and in that of gold not quite 2 per 1,000. (M. Chevalier, Cours, III, 110.)734.Platinum possesses many of the properties necessary to an instrument of exchange in as high a degree as gold and silver,—great value in exchange, great specific gravity and great durability. On the other hand, its pliability as to form is very small, and therefore the cost of coining it would be high. The conversion of platinum coins into utensils, and of utensils into coin, which would contribute to the supply of money when needed, and to a diminution of that supply when the demand decreased, would be much more difficult on this account; and also because of the small degree of beauty possessed by that metal, which renders it little adapted to purposes of luxury. Under these circumstances, the rarity in nature of the metal is a great drawback; for the discovery of a new mine would create a great perturbation in prices. For this reason, the Russian platinum coins have been generally very much undervalued since 1828 in the commercial world, and the whole experiment was given up in 1845-46. CompareJ. Schòn, National Œkonomie, 128 ff. Aluminum, discovered by Wöhler, and which can be prepared from argillaceous earth, is capable of manipulation in a very high degree (malléable et ductile à peu près sans limite, excessivement fusible), almost as indestructible as the precious metals, but easily distinguished from silver by a fine bluish color, which has been compared to that of tin; by its small specific gravity, from 2.5 to 2.67, and its ring like that of iron. Hence it is very doubtful whether aluminum can be made to play the part of a substitute for silver, and still more so whether it can be used for coining.735.Lingot, bullion. In India, beyond the Ganges, and in China, bars are very much used. (Sycee.) In the latter country, besides these bars, there is no coinage except that of a mixture of copper and lead, for small change. (Th. Smith, An attempt to define some of the first Principles of Political Economy, 31.Timkowski, Reise nach China, III, 366.) Concerning Brazilian trade by bars, seeSpix und Martius, Reise, I, 346 f. They are stamped with the national coat of arms, the sign of the mint, the number by which registered, that of the year and of the degree of fineness. Concerning the Persian bars, thelaries, seeNoback, Handbuch der Munzverrh., III, Taf. 29.736.Concerning the utility of the precious metals for purposes of money, seePliny, A.N. XXXIII, 3;Oresmius, De Mutatione Monetarum, ch. 2;Law, Sur l' Usage des Monnaies, 683 f.Daire, where we read that before the invention of money, silver had served all kinds of useful purposes, but that now it served its most important purpose, namely the making of the best material for money on many accounts. YetLaw'sbook, Money and Trade considered (1705) is based mainly on the idea that pieces of land are much better adapted for purposes of money than the precious metals (185)!Galliani, Della Moneta, 1750, I, 3, 4, andP. Neri, Osservazioni, 1751 ff, Cust., have very correct ideas on this subject.737.North, Discourses upon Trade, 16. The capacity of money to act as a storer of wealth has been as much over-estimated by the so called Mercantile System, as its capacity to transfer wealth has been by the so called currency-school.738.Adam Smithcompares money to a large wheel, by means of which a due share of the means of subsistence and of enjoyment is distributed to each member of society. Elsewhere he compares its utility to streets and roads. (Wealth of Nations, II, ch. 2.)Hume, On Money, Pr., prefers to compare it to the oil with which the wheels of circulation are greased.Sismondicompares money to porters. (N. Principes, II, ch. 2.)“Money is to commerce what railways are to locomotion, a contrivance to diminish friction.”(J. S. Mill.) According toSchmitthenner, 455, it bears the same relation to other commodities that the written language of a people's literature does to their dialects.739.Law'sviews on money are, in part, excellent. Thus, for instance, he says that the debasement of the coin from financial necessity is as great a folly as it would be to try to enlarge a piece of goods too small for the purpose for which it was intended, by diminishing the length of the yard-stick. (Sur l'Usage des Monnaies, 697.) A country entirely isolated from all others could get along as well with one hundred pounds sterling as with a million. (Money and Trade, p. 88.) Elsewhere, he confounds money and capital to such a degree that he considers every increase of the amount of money in a country as an enrichment of the people, a means to give employment to the poor, to carry on manufactures etc. (Money and Trade, 23, 26 ff., 168.) A given quantity of money is capable of giving employment at most only to a certain number of men. (21.) A nation's power and wealth depend on the population and its stores of goods, these on commerce, and commerce in turn on the amount of money. (Pp. 110, 220.) The advice given, in 1848, to the National Assembly of France, but which it had the good sense to reject, to overflow all France with the so-calledbons hypothécaires, is akin to Law's practical propositions.M. Chevalier, Cours, III, 8, rightly ridicules the literal construction of the words:l'argent est abondant, when merchants find it easy to obtain credit, and considers it as well grounded as it would be to infer from the maxim:l'argent est le nerf de la guerre, that rifles and bullets were made of silver.740.Adam Smithwas not entirely clear, in his own mind, on this point. Thus inconsistently enough, he calls money unproductive—“dead stock,”for the reason that it leaves no material traces behind it of the goods which it has transferred from one hand to another. (II, ch. 2.) Is not the same true of trade itself? And yet Adam Smith calls trade productive. His error is doubtless a remnant of the Physiocratic doctrine, to which Smith still held. CompareQuesnay, 94, éd. Daire. EvenTwisssays that money employed as money is unproductive, but that, when employed as a commodity, it is productive. (View of the Progress of Political Economy, since the sixteenth Century, 1847.) Besides it is not a peculiarity of money alone, that, after it has served the purposes of production, it comes out of the product unaltered. The same is true of quicksilver employed in amalgamation. (Hermann, 2nd edition, 302.)741.Senior, Three Lectures on the Value of Money, 1840, is, in so far, not wrong when he says that the value in exchange of the precious metals is still ultimately determined by the want of such commodities as are luxuries. This last determines to what extent the production shall be extended by the working of the poorest mines, whereas the wants of circulation can be met as well by small as large quantities of the metals.742.The good or bad result of this production depends on many different elements which may compensate on another. In California and Australia gold is to be found in large quantities, and is easily mined; but the workmen make large demands which the nature of the country renders it difficult to meet. In the Harz mines, where the cost is scarcely covered, (Lehzen, Hannover's Staatshaushalt, 1853, I, 139), the shafts are sometimes 175-½ fathoms deep, but this is made up for in a measure by the moderate demands of the workmen and their skill in mining. Among the Mandingos, the auriferous material is so rich that ⅓ per 1,000 of the weight of the sand is washed out into pure gold in ten minutes (M. Park, Journal, 53 ff., addenda, XIX), while in Europe, where the proportion is only 1/100 per 1,000, mines are still considered worth working. But then, what workmen there are there! In Peru, the burdensome height of the mines above the level of the sea and the want of combustible material more than counterbalance many favorable advantages, while in Norway the cheapness of wood compensates for a great many disadvantages. Another thing which contributes towards the uniformity of the price of the precious metals is the circumstance that the great amount of fixed capital required in the greater number of mining enterprises, postpones for a long time the working of good mines as well as the abandonment of poor ones.743.Older writers have estimated the amount of money necessary in a country at 1/5, 1/10 (Petty), 1/15, and even 1/30 of the yearly income of a people (Adam Smith, II, ch. 2.) According toCantillon, Sur la Nature du Commerce, p. 73, it is from 1/6 to 1/10 of the annual gross production of a nation.744.Davanzati, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that all terrestrial things which serve to satisfy the wants of men are, by virtue of agreement, equal in value to all the gold, silver and copper; and that the parts comport themselves as the whole. The price of a commodity is based on this, that men find in it as much of theirbeatitudineas is afforded them by a given quantum of gold etc. Similarly,Montanari, who adds as a limitation the quantity of moneyspendibile in commercio. (Della Moneta, 45, 64, Cust.) The same opinion leadsLocketo the singular conclusion, that, as there is now in the world, ten times as much silver as there was previous to the discovery of America, each single piece of silver, separately considered, and taken in relation to such commodities as have not varied, is worth only one-tenth of what it was then.Locke, here, starts out with the gross assumption, shared even byGanilh, Théorie, II, 386 ff., that in the case of money the demand is always, relatively speaking, equally strong and just as great as the supply, or as the amount in the market. (Works, II, 23 ff.) Further,Montesquieu, Esprit des Lois, XXII, 7, 8. Per contra, however, seeMontesquieu, ibid. XXII, 5, 6, andHume, On Money and on the Balance of Commerce, Essays II, 1752.Hume knew perfectly well, that only circulating money and circulating commodities operated on price, but failed to take the rapidity of circulation into account. Similarly,Forbonnais, Eléments du Commerce, II, 212; evenCanard, Principes, ch. 6;Fichte, Geschloss. Handelstaat, 93 ff., andStein, Lehrbuch, 58. Contested byLaw, Trade and Money considered, 140, a work directed especially against the Mercantilistic essay, Britannia languens; 1680, byMélon, Essai politique sur le Commerce, ch. 22;Genovesi, Economia civile, 1764, II, 1, 15;Steuart, Principles, II, ch. 28;Verri, Meditazioni, XVII, 3 ff.;Büsch, Gedlumlauf, II, 40. The simple taking of an inventory of most private resources which possess so much greater value in other commodities than in money is enough to demonstrate the error ofDavanzati'sdoctrine. Thus, in France, in Necker's time, the cash money in the kingdom was estimated at 2,200,000,000 livres, and the average value of the wheat crop alone at 1,000,000,000.Necker, Législation et Commerce des Grains, 1776, I, 215. Recently,Michel Chevalier, estimated the amount of money in France at from 3-½ to 4 milliards, while the official estimate of its immovable property alone was over 83 milliards.745.When money becomes dearer, less of it is of course needed; and when cheaper, more, for the same purpose.746.In contradistinction to presents, acts of spoliation, but especially to barter.747.The discoverer of this truth is supposed by many to beBandini, Discorso economico, 1737, 141 f., Cust.Berkely, however, in the Querist, 1735, 477 f, writes:“A sixpence twice paid is as good as a shilling once paid.”Much earlier yet, in 1797,Boisguillebert, Détail de la France, II, 19, had the germ of this doctrine, but he confounds circulation with consumption. AndLocke, Considerations, II, 13 ff., presented it in 1691 with great clearness, although he did not always remain true to his theory. CompareQuesnay, éd. Daire, 64;Cantillon, 159 ff., 382.748.If the number of annual exchanges effected by 1 dollar = u; the total number of dollars in the store of money = m; the rapidity of circulation, that is the number of exchanges effected on an average by each dollar in a year, = s: then is u = m s, s = u/m, m = u/s.749.Since good money is so easily stored away and preserved, no one is in haste to get rid of it.St. Chamans, N. Essai sur la Richesse des Nations, 122 ff.750.Among the Kurds, all the money in their camps is used for head-ornaments for their women. (K. Ritter, Erdkunde, X, 887.)751.Thus,Sir David North, Discourse on Trade, 1691, Postscr.752.Lotz, Handbuch, 377, is of opinion that even in England £100,000 employed in trade in land can scarcely effect exchanges to the amount of £1,000,000 in a year. The same sum employed for the same purpose in London, in stocks and in the trade in commodities, will effect exchanges to the amount of £160,000,000.753.Cernuschi, Mécanique de l'Échange, 1865, 132 ff.754.ThusPetty(ob. 1687) is of opinion that England needed as much money as ½ of all its ground-rents amounted to, as the ¼ of all house-rents, and 1/52 of all the wages of labor for a year; for the reason that ground-rents are paid semi-annually, house-rents quarterly, and wages weekly. (Several Essays, 179; Political Anatomy of Ireland, 116.)Locke, on the other hand, assumes 1/50 of the wages of labor, ¼ of all the revenue of land owners, and 1/20 of the amount cash money taken in in a year by merchants. Of these amounts, there should be always, at least, one-half in ready money on hand, if commerce would not be brought to a stand-still. If leases were to be paid for on short terms, a great saving of money would be possible. (Works, II, 13 ff.)Pinto, Traité du Crédit et de la Circulation, 34, calls special attention to the case of Tournay, in which the commandant, during the siege of 1745, made 7,000 florins serve him for seven weeks to pay the garrison; by borrowing that sum anew every week from the inn-keepers etc.; which they, again, had received from the soldiers.755.If all were to commit their payments to the care of the same banker, it would be possible to do with almost no money. But even now, if 100 separate merchants were obliged to keep each 3,000 dollars in their money-chests for unforseen contingencies, a banker might accomplish the same for them with 50,000 dollars, because it is not probable that the unforseen contingencies in question would occur to all at the same time.756.In the London Clearing-House, in 1839, £954,401,600 were paid by means of the use of £66,275,600 as a circulating medium, for the most part notes of the Bank of England. (Tooke, Inquiry into the Currency Principle, 27.) From May, 1868, until May, 1869, £7,068,078,000. (Statist. Journal, 1869, 229.) The New York Clearing House, in 1867, effected payments to the amount of £5,735,031,900 (Ibid., 1867, 577), and in 1868, $30,880,000,000. (Hildebrand'sJahrb., 1869, II, 168.)757.This system began in the middle of the seventeenth century. (A Discourse of Trade Coyn and Paper Credit, 64.) As early a writer asSir J. Child, N. Discourse on Trade, 46, says, that for some time, every man who had from £50 to £100 in money, sent it to his banker, and that since that time, all the money flowed towards London and the country was deprived of it. (127 ff.) As a rule, the goldsmiths were also bankers. One such smith had at the time of the Great Fire of 1666, emitted £1,200,000 in notes. (A Discourse etc., 67.) The Bank of England, as a money center, dates from 1694. The London banks developed into intermediaries principally before the time of the French Revolution. (Thornton, Paper-Credit of Great Britain, 1802.) This remarkable institution had grown to vast dimensions even in Thornton's time, although it has been much enlarged since 1825. (Tooke, History of Prices, 152 f.) Similar conditions among almost all highly civilized peoples. Thus in Greece, compareBecker, Charicles, I, 294. Concerning a person who had 14 talents' worth of resources, 26 minæ, and therefore three per cent. in cash, see Lysias, adv. Diog., 6. In Rome, comparePolyb., XXXII, 13.Cicero, pro Font., I, 1. For Italian analogous cases, part of which may be traced back as far as the twelfth century, seeLobero, Memorie storiche della Banca de S. Georgio, 1832; or the Dutch“cassiere”Richesse de Hollande, I, 376, ff. In France an ever increasing centralization of the money-trade is to be noticed in Paris (M. Chevalier, Cours., III, 418); and now of the money-trade of Germany in Berlin.758.CompareFullarton, On the Regulation of Currencies, 1845. Among the Dutch, the custom of using all commercial commodities as much as possible, as a basis of the circulating medium, was much earlier developed. (Child, Discourse on Trade, 65, 264 f.) In Great Britain, the aggregate amount of bills of exchange put in circulation was, in 1839, £528,000,000, which sum has been increased annually at the rate of about £24,000,000. (Tooke, Inquiry into the Currency Principle, 26.) Between 1828 and 1847, there circulated at the same moment, on an average, £79,127,000 in bills of exchange in England, and in Scotland, £17,380,000 (Athenæum, 1850, No. 175), and in Great Britain and Ireland, from £180,000,000 to £200,000,000. (Tooke, History of Prices, VI, 588,) According toMacleod, the bills of exchange and promissory notes together amounted to £500,000,000; bills of exchange, bank-notes and bank-credits, to over £600,000,000. (Elements, 12, 325.)Macleodcalls the currency the sum total of all debts due by every individual in the country. (Elements, 43.)759.A case in England, in 1857, in which a house with £10,000 capital failed with liabilities amounting to £900,000. (Report of the select Committee on the Bank Act, 1858, XV.) Or where a speculator with £1,200 made purchases on credit to the amount of £80,000, and then failed with a deficit of £16,000. (Fawcett, Manual, 442 f.)760.Remarked by as early a writer asDavenant, Works, IV, 106 ff. Compare, however, II, 238.Quesnay, éd. Daire, 75 ff.Lord King, Thoughts on the Effects of the Bank Restriction, 1804, 17 ff. Exhaustively treated byChevalier, Cours., III, 397 ff. He very much laments the fact that the customs of France cause it to need from 3½ to 4 milliards of cash money, while England does a much larger trade with 1,200 millions. (I, 207 ff.) In France, it is said that the amount of money, in 1812, was 1,500,000,000 francs(?). (Peuchet, Statistique élémentaire, 473.) In Prussia, in 1805, it was 90,000,000 thalers. (Krug, Betracht. über den Nationalwohlstand des preuss. St., I, 244.) The annual amount of production in the former country was, 7,036,000,000 francs; in the latter it was estimated at 261,000,000 thalers, so that in Prussia the relation of money to national income was, as 1:2.9; in France, as 1:4.69.761.It is scarcely possible to determine exactly the amount of money in a country; for the reason that, outside of the suppositions of bankers etc., there is no authority which can be safely relied on, unless it be the reports concerning the coinage, and of the emission of paper money. The information, no less necessary, to be derived from the statistics of the importation and exportation of money, the melting down of coin by gold smelters etc., can never be exactly obtained. In England, at the end of the sixteenth century, the circulating medium was estimated at £4,000,000 (Hume, History of England, ch. 44, App.); under Charles II., at £6,000,000, when the population was 6,000,000. (Petty, Several Essays, 179.) About 1711,Davenant, New Dialogues, 11 ff., mentions £12,000,000 as the amount; andAnderson, Origin of Commerce, a., 1659, £16,000,000 in 1762. The circulation of gold, shortly before 1797, was estimated byRoseat, at least, £40,000,000; by LordLiverpool, at £30,000,000; byTooke, at only £22,500,000. (History of Prices, V, 130 ff.)Moreau de Jonnés, 1837, assumed £43,500,000 (Statistique, I, 329), andHelferich(Schwankungen der edlen Met., 1843, 147), £45,000,000.Sir Robert Peel, estimated the amount in 1845 at £59,000,000, to which was to be added an average of £28,000,000 in bank notes, after deduction made of the metallic reserve. According toJevons, the amount of British money is now £80,000,000 in gold, £14,000,000 in silver, £1,000,000 in copper; the sum total, including bullion and bank notes, after the deduction of their metallic representatives, £134,000,000. (Economist, December, 1868, July, 1869.) In France,Vauban, Dîme royale, 104 (Daire), estimated the cash money at about 500,000,000 livres, over 750,000,000 francs, with whichVoltaire, Siècle de Louis, XIV, ch. 30, agrees so far as the year 1683 is concerned. In 1730,Voltaire, assumes the amount to be 1,200,000,000 of the coins of that time.Necker, Administration des Finances, III, 66, estimated it, in 1784, at 2,200,000,000 livres;Mollien, about 1806, at 2,300,000,000. The valuations in Louis Philippe's time varied from 2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13, 1847), and 4,000,000,000. (Blanqui.) The valuations of 1870 were, according toWolowski, 4 milliards; and toBonnet, from 5 to 6 milliards. CompareWolowski, L'Or et l'Argent, 383 ff., Euquête, 42. The German Zollverein is said to have had, at the beginning of 1870 (Soetbeer) 480,000,000 or 520,000,000 thalers (Weibezahn) cash money.In Wirtemberg,Memminger, 1840, estimated the resources of the country at 1,600,000,000 guldens, of which 36,000,000 were cash; and the yearly gross income at 179,000,000 guldens; so that the money was 20 per cent. of the latter and 2¼ per cent. of the former. The annual sales = 226,000,000. Therefore the coin currency must have circulated on an average between six and seven times in a year. In the electorate of Hesse, there wereper capita4 thalers, 18 sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers, paper-money. (B. Hildebrand, Statist. Mitth., 1853, 185.) The amount of money in Naples, in 1840, was estimated at 42,000,000 ducats. (Scialoja.) It has been estimated that, in 1830, Spain possessed 1,725,000,000 francs. (Barrego von Rottenkamp, 330.)762.Montanari, Della Moneta, 52 ff.763.David Hume'svery influential essay on the balance of trade does not give expression to this error, but he certainly was the occasion of making a great many of his disciples advocate it. It is related to the error mentioned in §123.Quesnay, 101 (Daire) saw this point in a much clearer light. So didGraumann, Gesammelte Briefe vom Gelde (1762), 12 ff.; 73 ff.764.This is seen, for instance, when paper money is issued, in times when trade is thriving, and is withdrawn when this conjuncture ceases.765.Very well elaborated byFullarton, On the Regulation of Currencies, 71 ff., 139 ff. Compare, however,Becaria, Economica publica, IV, 4, 27. When England on the occasion of the removal of the bank restriction in 1821 and 1822, caused £9,520,759 and £5,356,788 to be stamped, this powerful demand scarcely affected the gold-agio in Paris. (M. Chevalier, Cours, III, 157.) And, on the other hand, the system of assignats, developed during the first French Revolution, on so large a scale, had no influence on the price of silver in the rest of Europe. (Lord King, Thoughts on the Bank Restriction, 1804.) And so,Tooke, History of Prices, I, 205, describes a very large increase of the medium of circulation, after which the prices of commodities remained unchanged, corn fell, colonial products rose in price, both as they had done before, and from causes inherent in the commodities themselves. During the first years of the bank restriction, 1799-1801, grain rose very rapidly in price, while all trans-Atlantic products sank. (Tooke, I, 232 ff.) The unusually large importation of wheat from January 1, 1846, to January 14, 1847, was paid in France by a decrease of the bank metallic reserve (encaisse) to the extent of 172,000,000 francs. (M. Chevalier, Cours, III, 470.) An experienced practitioner in England is of opinion that an increase of bank notes to the amount of about £5,000,000 would not raise prices nor increase the tendency to speculation, but only enlarge the deposits of the bankers. But, if on the other hand, £5,000,000, by any sudden contingency, were to be put into the hands of the working classes, this money would, for the most part, enter immediately into circulation; the price of commodities would, therefore, rise and continue to rise until that amount had come into closer fists, as it would after some time. (Tooke, III, 156 ff., II, 323.)766.This explains the high price of gold in Farther Asia, which was formerly separated from America, the principal source of supply of the precious metals, by a journey around the earth, the then usual course of the world's trade.The precious metals are generally higher in country places than in large cities, and in the interior than on the sea-coast. Since the public highways etc. in Germany have been so much improved, the difference in the value of money in upper and lower Germany has almost disappeared. (Rau, in the Archiv der polit. Oek., III, 338.)767.Happy beginning of this doctrine inHume, On the Balance of Trade. Further,Thornton, The Paper Credit of Great Britain, ch. 11.Adam Smith, on the other hand, claims that gold and silver, because they are costly superfluities are uniformly paid most dearly for, in the richest countries. (Wealth of Nations, I, ch. 11, 3: Digr.)768.Similarly in China, and even in Upper Egypt, the China, so to speak, of antiquity! CompareHerodot., II, 112 ff;Homer, Od., IV, 354 ff. The religion of the Egyptians prescribed to them a mode of life which was scarcely practicable in foreign parts. They were systematically inspired with a horror for everything foreign. They had a strong antipathy for salt, fish and pilots. In Egyptian mythology, Osiris represents the Nile, Typhon the desert and the sea! (Plutarch, De Iside, 32.)769.The other party, of course, makes a profit also. He is in a better condition than if he wished to produce the desired commodity in his own country.770.The first clear germ of this doctrine, which is one of the most important theoretical principles of international-trade politics, is to be found inDavid Hume, On Interest;Cantillon, Nature du Commerce, 226, 369 ff.Ricardo, Principles, ch. 7.“Gold and silver having been chosen for the general medium of circulation, they are, by the competition of commerce, distributed in such proportions amongst the different countries of the world, as to accommodate themselves to the natural traffic which would take place if no such metals existed, and the trade between countries were purely a trade of barter.”Rebenius, Oeff. Credit, I, 29 ff. Still further developed, especially byJohn Stuart Mill, Elements, 1821, III, 4, 13 f.;Torrens, The Budget, 1844.John Stuart Mill, Essays on some unsettled Principles of Political Economy, 1844, No. 1, and Principles, III, ch. 19, § 3, 5th ed.:“The opening of a new branch of export trade from England; an increase in the foreign demand for English products, either by the natural course of events or by the abrogation of duties; a check to the demand in England for foreign commodities, by the laying on of import duties in England, or of export duties elsewhere; these and all other events of similar tendency, should make the imports of England, bullion and other things taken together, no longer an equivalent for the exports; and the countries which take her exports would be obliged to offer their commodities, and bullion among the rest, on cheaper terms, in order to re-establish the equation of demand; and thus England would obtain money cheaper, and would acquire a generally higher range of prices.”Obscurely surmised byBeccaria, E.P., 3, 18, and even byGaliani, Della Moneta, II, 2.Senior'sadmirable work, Three Lectures on the Cost of Obtaining Money, 1830, follows up the thought that every country obtains indigenous and foreign products at a cost which grows smaller in the same proportion as the productiveness of its people's labor is large. This would, certainly, explain why it is that perhaps one hundred English days' work in cotton manufactures will exchange against as much silver as is produced by two hundred days' work in Mexican mines and foundries. This would not, by any means, produce a lowering of the price of the precious metals relatively to other English commodities, but the influence would be felt equally by all the products of English national industry.771.To be found in germ inCantillon, Nature du Commerce, 1755, 249 ff. 307.Büsch, Geldumlauf, 14.Kaufmann, Untersuchungen, I, 75 ff. Many of the doctrines of the so-called Mercantile System, of which I shall treat in my projected work on the Political Economy of Commerce, have given expression to this truth in an inexact and exaggerated way; but they were not entirely erroneous, as is supposed by the adherents of Hume and Smith. However,J. S. Mill, Principles II, ch. 19, § 2, does not fully admit the degree of the cheapness of money in England usually assumed. According to him it is wants of luxury (luxury-wants) become such through habit, that produce“the dearness of living in England.”772.Pettyconsiders the search for a measure which could be applied both to land and labor as one of the principal problems of Political Economy. (Political Anatomy of Ireland, 62 ff.)Sir J. Steuart, Principles, III, ch. I, took the matter very easy by considering the so-called“coin of account,”for instance,“bank-money,”as an invariable value-magnitude. CompareJacob, Grundsätze der National Œkonomie, II, 441 ff.Cazaux, Economie politique et privée, 1825, 16 ff., has a not uninteresting study on this subject; but he goes, throughout his argument, on the assumption that the rate of interest is the price of money! If the rate of interest in two countries = I and i, the prices of the same commodity = P and p, the true thing-values, V and v; then we have v: V:: i p: I P!773.Law, Trade and Money, 181. Before him, and quite correctly,Montanari, Della Moneta, I, p. 84 ff., compares the means employed of measuring one commodity by another, to the means used to estimate time in terms of space, as when it is measured by the revolutions of the hands of a clock, and again, space in terms of time.774.The solvability or capacity to pay of buyers cannot be taken into consideration here, because it is synonymous with the amount of counter-values which are to be measured.775.Adam Smith, Wealth of Nations, I, ch. 5. SimilarlyLuther, vom Kaufhandel: Werke, ed.Walch, X, 1098 f.B. Franklinconsidered the labor employed in the production of wheat as the best measure of prices. (Letter to Ld. Kames: Works, ed.Sparks, VII.) As Adam Smith, so alsoSismondi, Richesse commerciale, I, 371 f.;Kraus, Staatswirthschaft, I, 84,; v.Schlözer, Anfangsgründe, I, 41. AlsoMalthus, in the second and succeeding editions of his Principles, ch. I, 6, and Definitions, ch. 8, 9. The Measure of Value, 1823.Zachariä, Vierzig Bücher, VII, 53 f., maintains that, at least within the limits of every separate nation, the average labor-power of one man is invariable. Assuming this principle, therefore, to be true, the means of subsistence necessary to support a laborer for one work-day constitutes, indirectly, a measure of prices.Tooke, History of Prices, I, 56, says that the amount of a day's wages is always a better measure of the price of the precious metals than the price of wheat. Even in 1750,Galiani, Della Moneta, II, 2, had denied the impossibility of an entirely invariable measure of price in this world of change, but he considered man himself the least variable of measures, and in a country where slavery prevailed, slaves. He thought that themacutaof the negroes were a part of the average price of slaves. Practically, Adam Smith's proposed measure was used in the French constitution of 1791, in as much as it provided that participation in primary assemblies should depend on the participant's paying an annual tax equal to the wages of three days' work, and eligibility as anèlecteur, on the possession of an income equal in value to the wages paid for two hundred days' day-labor.Owenendeavored to base the value of the paper money in circulation in his Utopian commonwealth, not on any metal of a certain weight or stamp, but on hours of labor as the unit. (Reybaud, Réformateurs Contemporains, I, 255.)776.The wretched condition, until within a short time since, of the Irish working class, is well known; how they dwelt in mud cabins without windows, board-floors or chimneys etc., in the same apartment with their pigs; how they lived almost exclusively on potatoes, and went about in rags. These same Irish,coelum, non animum mutantes, received in North America for the coarsest kind of labor, 50 to 75 cents wages, besides wheat bread and meat three times a day, coffee and sugar twice a day, butter once, and seven or eight glasses of whisky or brandy. (M. Chevalier, Lettres sur l'Amérique du Nord, I, 159.)777.Thus in Mauritius, the immigration of the coolies has produced a decrease of negro wages, but an increase of negro industry. In the Barbadoes, the negroes are more industrious and their wages lower than in Jamaica. The wages of good workmen, as for instance during the commercial crisis in Manchester, often sink, while the wages of bad workmen rise; as, for example, in a village through which a railroad is made to pass. CompareLauderdaleInquiry, ch. 1;Sartorius, Abhandlungen, 1806, I, 16 ff.;Lotz, Revision, I, 99 ff.;M. Chevalier, Cours, III, 88 f.778.Besides the passages cited in §107, compare alsoHarris, On Money and Coins, II, 1757 f.;Jacobalso precededRicardo. See the German translation ofSay, II, 435, 507.779.The introduction of the words“the socially necessary time of labor”into the formulæ does not make the measure any more practical for political economists or for socialists.780.Cantillon, who reduces all the cost of production to land and labor, considers the“at par”between these two to be this: that the labor of the meanest slave corresponds to the quantity of land which the owner is obliged to employ for his support, and the support of the slave and of the children who are to take his place. (Nature du Commerce, 42.) The Physiocrates thought that the internal (innere) value of two commodities stood in the same relation to each other as the area of land directly or indirectly necessary to their production.Schlettwein, Grundfeste der Staaten, 1792, 230.781.The so-calledSachwerth(thing-value, real-value) ofHermann, St. Untersuchungen, 101 ff. ThusPoulett Scroperecommended a“tabular standard,”to be officially established and renewed from time to time, to serve as an anchor to those persons who wished permanently to fix their money in such a manner as to make it exchangeable for an equal value inthings. (Principles of Political Economy, 1833, 406.) Something of this kind was tried for 50 commodities, between 1833 and 1837, byPorter, Progress of the Nation, 1st ed., II, 236 ff., then for 40 commodities byJevonsin the Statistical Journal, 1865. Of course, all commodities of a given price are not equally important in this respect. Thus, for instance, a fluctuation in the price of diamonds would have no effect on the thing-value or real-value of a day's wages, but it certainly would on the thing-value of a princely income. There are some excellent remarks on this very important subject inLowe'swork, On the Actual Condition of England, chs. 8 and 9. The controversy carried on betweenJevons, A serious Fall in the Value of Gold, and its social Effects, 1863; Statist. Journal, 1865; andLaspeyres,Hildebrand'sJahrb., 1864, 81 ff.; 1871, I, 296 ff; in which the former recommends the geometric mean of the relative prices of separate commodities at different points of time, in order to calculate the average relative price: and the latter, as usual, the arithmetical mean, is very thoroughly reviewed and criticised byDrobisch, who shows that neither of these methods is sufficient, but that the quantity of every separate commodity must also be taken into account, for which he furnishes practical formulæ. (Math. phys. Berichte derK.Sächs. Gesellsch., 1871, I, 143 ff, 416 ff.) It is certain that a fixed income in money could maintain its real value or thing-value (Sachwerth) just as little if the cwt. of bread rose by as many dollars as the cwt. of pepper had fallen; as if the increasing price of bread depended on a decreasing price of pepper.782.Senior, Outlines, 187. In addition to this, we may draw from the thing-value of a day's wages a right conclusion as to the economic condition of the majority of the people; and assuming the customary division of the national wealth, also as to the degree, to which the people have subjected the forces of nature to their service.783.Ricardo, ch. 22, refuted, indeed, only the view that an increase in the wages of labor produced by the higher prices of corn, would necessarily make all goods or products of labor, correspondingly dearer.784.Compare §103. In Paris, in 1817, thesetierof wheat cost March 5, 55½ francs; April 2, 57 fr.; April 23, 60 fr.; May 14, 63 fr.; May 21, 66 fr.; May 28, 75 fr.; June 4, 82 fr.; June 11, 92 fr. (Tooke, History of Prices, II, 17.)785.Locke, 98. WhenCondillacasserts that wheat is the best measure of prices, he adds, when free trade in wheat obtains. (Commerce et Gouvernement, 1, 23.)Fichte, on the other hand, while advocating the despotic guidance of all trade by the state, would employ wheat as the fundamental measure of prices. (Geschl. Handelstaat, 47 ff.) That grain does not afford a good measure of prices in very highly cultivated nations nor in barbaric ones, seeHermann, II, Aufl., 451.786.The average price must be based on the prices of a great many years, since crops vary not only from year to year in price, but from decade to decade. SeeRoscher, Nationalökonomik des Ackerbaues, § 152, andRoscher, Kornhandel und Theuerungspolitik, 47 ff. Great wars are wont to disturb agriculture in such a manner that the price of corn is very much increased by them. Hence, it is not unfrequently possible to use the prices of grain as a species of barometer to determine the real pressure of a war upon the economic life of a people. Judging by this standard, England suffered much less from the War of the Roses in the fifteenth century, than from the civil wars in the seventeenth; and less than France from the religious wars of the sixteenth. The war year 1631-2, in which Gustavus Adolphus and the emperors had to spare the country, must have been far less oppressive for Saxony than the later Swedish campaigns.Roscher, in the Tübinger Zeitschrift, 1857, 471.787.Most countries go through these successive periods in their corn trade: in the first, exportation preponderates; in the second, there is an equilibrium; in the third, importation preponderates. (M. Chevalier, III, 74 ff.) CompareTacit., Ann., XII, 43. Omitting the two dearest and the two cheapest years, the Prussian provinces were circumstanced as follows:In The Whole Kingdom, the price of Rye, 1816 to 1837, was 40. silver groschens. The population per square mile, 2,776In Prussia, 32.2 silver groschens, and 1,827In Posen, 34.3 silver groschens, and 2,180In Brandeburg, Pomerania, 38.4 silver groschens, and 2,093In Saxony, 40.3 silver groschens, and 2,366In Silesia, 38.0 silver groschens, and 3,612In Westphalia, 47.7 silver groschens, and 3,600In Rhine Province, 49.4 silver groschens, and 5,078Rau, Lehrbuch, I, § 183. As to when it may be assumed that the price of corn has remained unchanged, seeHermann, loc. cit., 125 ff.788.Pettyrecommended the average daily food necessarily required by one man as the measure of price, estimated on the basis of the cheapest means of subsistence. (Polit. Anatomy of Ireland, 62 ff.)Thaerused as such a measure the smallest day's wages; as he supposed, expressed in rye, that is, 1/9 of the Prussianscheffel. Similarly,Malthus, in his first edition, andBuquoy, Theorie der Nationalwirthschaft, 240. But this is simply to substitute for wheat an arbitrarily determined quantity and quality of the same as a measure of prices. For practical experiments of this kind, made by the depreciation of paper money during the French Revolution, seeM. Chevalier, Cours, III, 98; and Constitution de 1795, V, 68, VI, 173.Count Soden, Nat. Œk., II, 338 f., demands that all taxes, salaries of state officials etc., should be regulated in accordance with the price of corn. This same view has been suggested recently in many German States.789.Recognized generally byLocke, Considerations 24. Further,Galliani, Della Moneta, II, 2;Adam Smith, I, ch. 5.Schäffle, N. Œk., II, Aufl., 127, maintains that a constant measure of price, such as would enable a person to stipulate for a salary for instance that would be always of the same value, is impossible. Similarly,Hildebrand'sJahrb., 1871, 315 ff.790.CompareJ. Tucker, Four Tracts on political and commercial Subjects, 28 ff., who maintains that it is a rule, almost without exception, that“operose or complicated manufactures”are cheapest in rich countries;“raw materials,”in poor ones. Thus, for instance, corn (?), garden products in the former; cattle, wool, milk, skins, flesh-meat, in the latter. Ships and movable property are cheaper in the former, whereas wood may be said to be almost the free product of nature here. See especiallyAdam Smith, Wealth of Nations, ch. 11, Digr.791.Senior, Outlines 119 f., makes the following calculation: Of the 15d. which a loaf of bread costs in England, 10d. goes to buy the wheat, the other 5d. to the miller, baker etc. If now, we suppose, that in consequence of an increased demand, and therefore of increased production under more unfavorable circumstances, the price of wheat should rise to 20d., the cost of production would possibly, because of an improved division of labor, come down to 3-¾d., and hence the price of the loaf of bread would be increased to 23-¾d. It is quite the reverse in the case of lace, because here a piece of raw material worth only 2 shillings may, by reason of the labor expended on it, become worth as much as £105. If the consumption of lace should increase so that the value of the raw material rose to 4 shillings, the simultaneous decrease of the cost of manufacture to the extent of one-quarter of the aggregate price, would leave the price of the manufactured article £78, 19s.792.When, for instance, the inhabitants of the Baltic coasts, by way of preference, kept up their relations with the Hanseatic cities, the Dutch and English, that is with the most important industrial and commercial nations in their own sphere, they in all this pursued only their own interest. As to how this intercourse between“old”and“new”countries is susceptible of the very highest development, seeTorrens, The Budget: On Commercial and Colonial Policy, 1844, and earlier,Wakefield, England and America, II, 1823.793.The clearing up of primeval forests, the cultivation of natural meadows, etc.794.In Hungary, during the sixteenth century, the choicest venison was consumed by plebeians and nobles alike.Herberstein, Rer. Moscov. Comm., 97. In Russia, even the lowest classes not unfrequently partake of roast hare and duck etc.Kohl, Reise in Russland, II, 386. Still, in St. Petersburg, wild-fowl game rose between the time of Peter the Great and Alexander I. 600 per cent. in price. (Storch, Handbuch, I, 368.) In Pittsburg, in 1807, mutton, beef and veal cost from 4 to 6 cents a pound, and game only from 3 to 4-½ cents a pound. (Melish, Travels through the United States, II, 57.) The more the game laws are enforced, the longer does the low price of game continue, especially when it is not easy for the poor to procure them. The moderns have seldom thought of raising game artificially; among the Romans, artificial raising was confined to the hare and fieldfare. (Varro, R.R., III, 12 ff.;Columella, R.R., VIII, 10.) Hence, the enormous prices paid for game, of whichPliny, H. N. X., 43, relates an example from the time of the emperors. On the other hand, Polybius assures us that, in his time, game was to be had as good as gratis in Lusitania. XXXIV, 8, 7.795.In Buenos Ayres, in the nineteenth century, beggars on horseback were to be seen. (Robertson, Letters on South America, II, 294.) In Krasnojarsk, in 1770, 1-½ rubles was the price of an ox, 1 ruble of a cow, from 2 to 3 of a horse, from O.3 to O.5 of a sheep; O.15 of a deer. (Pallas, Sibirische Reise, III, 5, II 12.) According to the Tables of Prices inSir F. M. Eden, State of the Poor, Append. I, andRogers, History of Agriculture and Prices (1866), I, 245, 361, the following prices obtained in England;(On an average.)in 1125-26, one ox, 1 shilling; one quarter of wheat, 20 shillings;in 1260-1400, one ox, 13 shillings 1-¼d; one quarter of wheat, 5 shillings 10-¾d;in 1406, one ox, 9-½ shillings; one quarter of wheat, 4-½ shillings;in 1463, one ox, 10-20 shillings; one quarter of wheat, 1-⅔-4-⅔ shillings.CompareHume, History of England, a. 1327. Under Henry VIII. veal, beef, mutton and pork were food for the poor in England, and cost on an average 1-½d per pound; while wheat cost from 7 to 8 shillings a quarter. (24 Henry VII, c. 3.Price, Observations, II, 148 f.) The same appears from the“reasonable prices”which Charles I, in 1663, had established by sworn juries viz.: that the different kinds of meat were much cheaper comparatively than corn in our days.(Rymer, Foedera, XIX, 511.Anderson, Origin of Commerce, a. 1633.) In many places in the highlands of Scotland, in the middle of the seventeenth century, one pound of oat-bread cost as much or more than one pound of the best meat. The union of Scotland with more highly civilized England soon changed the relation, so that inAdam Smith'stime, good meat, in nearly all parts of Great Britain was worth from 2 to 4 times as much as the same weight of wheat bread. (Wealth of Nations, I, ch. 11, 1.) The Thomas Hospital in London paid, on an average, for good beef per stone weight:1701-1710: 1s. 7.9d.1764-1773: 1s. 3.7d.1794-1803: 1s. 5.d.1804-1821: 1s. 10.9d.1822-1842: 1s. 1.5d.(Porter, Progress of the Nation, III, 112.) Among the most certain proofs of the high degree of economic civilization attained in upper Italy about the close of the medieval times is the fact, that the price of cattle, compared with that of wheat in the thirteenth and fourteenth centuries, varies very little from what it is to-day. (Cibrario, Economia politica del medio Evo, III, 335-383.) CompareRau, Lehrbuch I, § 185. In Athens, the cost of amedimnosof wheat was as great as that of a sheep in Solon's time. In the age of Demosthenes, it cost only half as much. (Böckh, Staatshaushalt der Athener, I, 107, 132.) It is obvious, however, that the price of meat compared with that of corn, was lowered by the great extension of the artificial cultivation of meadows; for, when the former has reached its maximum, it becomes a great spur to the promotion of the latter. Thus, in England, the price of meat, at the beginning of the sixteenth century, was on an average, higher than inAdam Smith'stime. (loc. cit.) To the same cause is to be ascribed the state of things in Prussia mentioned byv. Podewils, Wirth schaftserfahrungen, II, 15.As a common basis for such calculations, the following may be accepted. It is plain that meadows, pasturages and forage-fields must yield as much in meat, as corn-fields of the same dimensions of equal goodness, and situated as favorably, in corn. According toBlock, a Prussian acre (Morgen) of the best quality, used as a meadow, produces a hay-value equal to 1,000 pounds, a clover-value equal to 2,420; as a vegetable field, a beet or potato-value equal to 6,050-6,930 pounds,v. Lengerke'sestimate is that 110 pounds of cattle-fodder expressed in terms of hay, produces on an average 40 pounds of milk, and from 3-½ to 4 pounds of meat. This would, at most, give 36, 88 and 220-252 pounds of meat. The yield of wheat,v. Lengerkeestimates, on the best soil, and on an average, at 14 Prussianscheffels(at 80 pounds, i.e. 1,120 pounds) yearly per acre (Morgen). The three periods in the history of the prices of cattle were clearly recognized byThaer, Landw. Gewerblehre, 1815, 100.796.It is a very characteristic fact, in relation to the river fisheries, that the fable that servants formerly stipulated not to eat salmon except twice a week is to be found in so many places. Thus on the Elbe and the Rhine. CompareThaarup, Dänische Statistik, I, 112. In Scotland, about the end of the seventeenth century, the story in places ran, that it was five times a week. (Walter Scott, Old Mortality, ch. 8.) In England, fish seems to have been a tid-bit among the poorer classes in the fourteenth century. (Rogers, I, 606.) It was dearer especially during Lent. (Statist. Journ., 1861, 544 ff.) The artificial production of sea-fish seems to have been tried only by the ancient Romans. On the whole,Adam Smith'slaw that a ten-fold demand can, as a rule, be met only by a greater than ten-fold labor, applies here. (I, 370, ed. Basil.) But this relation is obscured to a certain extent, from the fact that the source of the production of sea-fish, the ocean, which may be claimed at any time by occupation, is, practically, boundless. Here, therefore, the improvements made in nautical science, and the progress of geographical knowledge, may yet for a long time compensate for the exhaustion of the nearer seas, and even more than counterbalance it.797.Among a great many nations in a low stage of civilization, agriculture consists in the burning down of the forest. In 1594, the Lauenförder forest produced 1,110 thalers' worth of food for hogs, and wood to the amount of 44 thalers. (v. Berg, Staatsforstwirthsch., 213.) The Harzgerode woods, at the ducal line of Anhalt-Bernburg, were estimated at 6,000 thalers. A hundred years later, they brought in yearly 70,000 thalers, although, in the meantime, very little progress was made in the science of cultivating them, (v. Justi, Staatswirthschaft, II, 211.) We may form a notion of the relativity of the idea of the dearness of wood from the fact that in Bavaria, for instance, in 1840, there was a great deal of complaint, that in the district of Isark the price rose from 6 to 9 florins; in the districts of Regen and the lower Maine, from 11 to 14 florins to from 15 to 18; in the Rhine district, from 20 to 26 florins per cord (Klafter). (Rau, Lehrbuch, III, § 150, a.) Besides, the price of wood in the forest rises, with an advance in civilization, much more rapidly than it does in the market; in which last, labor and capital play a greater part. (Rau, I, § 385.)798.Plan for the artificial production of pearl oysters. (Novara-Reise, I, 303.) Ostriches seem now to be ceasing to be objects of mere occupation, and to be becoming objects of breeding. (Ausland, 1869, § 13.)799.Thus Wolff's experiments made at Möckern have shown that in the case of sheep fed with hay, the wool becomes much heavier and the flesh leaner than those of sheep fed with a more concentrated food. While it is estimated in England, at the present time, that the wool of South-Down sheep is worth scarcely one-tenth what their flesh is (Jacob, On Corn Trade, 166), mutton, from the year 1260 to 1400, was, on an average, worth 17 pence; and this even at a time when prices were gradually rising; but the wool of one animal (1 lb., 7-¾ ounces), 5-¼ pence. (Rogers, I, 362, 395.) Even under Anglo-Saxon kings the fleece was worth 40 per cent. of the value of the whole sheep, (David Hume.) And soW. Macann, Two Thousand Miles Ride through the Argentine Provinces, 1853, I, 151, says that in the interior of Buenos Ayres, he purchased 8,000 sheep at 18 pence a dozen, and after a march of 200 English miles, sold the skins for sixty pence a dozen. In Goya, formerly, a live horse cost 3 pence, its skin on the coast 12 pence; and the slaughtering of the beast cost 3 pence, the removal and cleaning of the skin 3 pence; and 3 pence were paid for transportation. (Robertson.)In Ireland, in 1763, it not unfrequently happened that the skin and tallow of an ox cost as much in a commercial city as the whole ox had cost in the nearest market town. (Temple, Works III, 13.) In England, from 1260 to 1400, the average price of a whole cow was 9s. 9d.; of the hide 1s. 8d., and cows were cheapest in the first decade, i.e., 6s. 2d., and the hides dearer than they were generally afterwards, i.e., by from 1-9-¼d. (Rogers, I, 361, 451.) In Saxony, according toEngel(1853), the average price of horned cattle was about 46 thalers; of their hide, 4 thalers and 21 silver groschens. Russia exported, 1842-1847, 72,636,166 silver rubles worth of tallow, 1,832,137 silver rubles worth of horse hair, 10,811,735 worth of bristles (Borsten), 7,387,140 of uncured skins, 36,159,452 of sheep's wool, but flesh-meat only to the amount of 370,362 rubles, and entire animals to the value of 6,853,241 rubles. (P. Storch, Der Bauernstand Russlands, 289 ff.) Tallow is there ten times dearer than the same volume of wheat. (Steinhaus, Russlands industrielle und commercielle Verhältnisse, 294 ff.); while in Saxony, according toEngel(1821), a pound of wheat cost on an average 7.8pfennigs, and a pound of tallow 30p.However, Russia's recent progress in civilization has had for effect: that the exportation of tallow (1833 = 4-½ millionpuds; 1869 = 2-¼ mill.) has greatly fallen off; while that of butter and live stock has increased. (v. Lengefeld, R. im 19. Jahrh., 220 ff.)In England, during the fourteenth century, a pound of meat cost, on an average, ¼d.; of lard, from 1-½ to 2. (Rogers, I, 411.) On the other hand, from 1848 to 1856, the average January price of beef from America was 110 shillings; of tallow from St. Petersburg, 48s. 11d. per cwt. (Newmarch.) And so, in the time ofPallas, the Cossacks chased the deer of their steppes only for the sake of its skin and horns. (Pallas, Reise, III, 524.) While the Greeks got horn from Macedonia and Thrace (Herodot., VII, 156), it is a striking proof of high civilization that at Athens (?), about the time of the hundredth Olympiad, an ox-hide was worth only 3 drachmas, and the whole ox 77 drachmas. (Böckh, Staatshaushalt, I, 105 ff.)As the ox is primarily serviceable as an object of food and an instrument of labor, and the sheep on the other hand, only an instrument to produce wool, it is easy to understand why, with the further advance of civilization, the price of oxen rises comparatively much more than the price of sheep. In Athens, during the time of Solon, an ox was equal in value to five sheep. (Plutarch, Solon, 23.) So also in countries with a low civilization in the time of Polybius. (Polyb., XXXIV, 8;Gell., XI, 1.) Why the same was the case in Rome at the beginning of the Republic? (Plut., Popl., 11). In England the proportion between the price of an ox and that of a sheep was,in 927 as 6:1 (Henry.)in 1125 as 3:1in 1182 as 6.3:1in 1197 as 9:1in 1229 as 8:1 (Eden.)in 1260-1492 (av.) as 9.2:1 (Rog.)in 1497 as 10:1in 1500 as 11.6:1in 1511 as 8:1in 1528 as 10:1in 1529 as 12.8:1in 1531 as 9.4:1in 1551 as 10.6:1in 1597 as 8.2:1 (Eden.)At present the proportion may be from 10 to 20:1. In Saxony, it is as 48 thalers to 5.27. (Engel.)800.About 1793, Russia exported 10,000 rubles worth of fish, 452,000 of sturgeon bladders, 188,000 of caviar. (Storch, Russland, II, 184.) But this had undergone a great change even in 1850. At present, there are 64 per cent. of sturgeon bladders, 27 of caviar, and 7 of whole fish. (Steinhaus, Russland's industrielle und commercielle Verhältnisse, 102, 368.) Yet the Astrakan fishermen still throw the greater number of the sturgeon they catch back into the water. (Pallas, Reise im süd. Russland, I, 189;Steinhaus, 99.) Salt fish are adapted for transportation to a distance not only because they can be preserved, but also because they may be caught and prepared on the great highway of the water. Athens got from the Black Sea besides wood, tar, wool, hides, cordage, honey, wax and slaves, also salt fish. (Wolf, z. Demosth. Leptin., 252;Bockh, Staatshaush. I, 51.) The latter from Sardinia, Egypt and Spain. (Pollux, VI, 48.)801.The principal countries that produce potash are Russia and North America. It is estimated that a cwt. of potash requires, on an average, 480 cwt. of wood. (Pfeil, Grundsätze der Forstwirthsch. in Bezug. auf National-Oekon. etc., I, 128.) From 1800 to 1840, wood for fuel in Würtemberg trebled its price; for building material the price increased 1.6 times. (Deutsche Vierteljahrsschrift, 1847, No. 4, 104.)802.Whereas barbarous nations take little trouble to turn the milk from their cows to account (Roscher, Ideen z. Politik und Statistik der Ackerbausysteme, Archiv. der politische Œkonomie, neue Folge, III, 202),Reuning, in 1844, calculated that the milk from all the cows in Saxony amounts to a value of 10,000,000 thalers, their meat to over 2,000,000, and the labor performed by them in various ways to 3,000,000. In Silesia, in the last decade of the eighteenth century, a quart of milk was estimated to be worth 2pfennigs(Festschrift der deutschen Landwirthschaftsversammlung, 1869, 343), whereas as now it is sold almost everywhere for 12pfennigs. (Schmoller.) In the rather high state of civilization which Saxony had reached at the end of the sixteenth century, when game was already dear, and the prices of other meat were almost as high as in 1800, asheffelof rye was worth 44 measures (Mass.) of milk, and recently 82-⅔ measures. (Schmoller, Tübinger Ztschr., 1871. 336 ff.)803.The principal cheese-producing countries and cities are Holland, Limburg, Switzerland, Gloucester, Chester, Ayrshire etc. CompareRoscher, loc. cit., 195 ff.804.In England, in the year 1000, a cow was worth only as much as two sheep. (Anderson, Origin of Commerce, a., 979.) The best butter was worth only 1d. per pound in 1550, while pork was worth 1-1/8, veal and mutton, 1-½, and beef, 2-¼d. The price of butter was exceedingly variable in the sixteenth century. (Eden.)805.During the middle ages, pork constituted the most usual animal food even of the best classes. (Büsching, Ritterzeit und Ritterwesen, I, 164.) Immense importance attached to pork by theLex Salica. (Tit., II, XIV; Emendatt. Caroli Magni, II, 1 ff.) The archbishop of Cologne used every day 24 large and 8 medium-sized hogs, and four more on the three great festivals. The abbot of Corvey used daily five fat and one lean hog, besides two young ones. (Kindlingen, Münsterische Beitr., Urkunden, 147, 126.) In 1345, at the court of Dauphiny, there were used annually for 30 persons, 30 salt and 52 fresh hogs; whereas, in modern Paris, with 800,000 inhabitants, only 32,000 hogs are consumed yearly. (Roquefort, De la Vie privée des Fr., I, 310 f.) Compare herewith the place occupied by the swine-herds in the Odyssey in Greece's age of chivalry. In England, in the time of William I., woods were taxed according to the number of hogs they might feed. At present, there is an enormous production of hogs in Servia, which, in many places, constitutes the only source of ready money to the agricultural population.And about the end of the eighteenth century, it is said that Servia received from Austria alone 1,300,000 florins yearly for hogs. (Ranke, Serb. Revolution, 95.) In 1864, Servia's total exports amounted to 62,500,000 piasters, of which 28,162,260 were for hogs, 7,043,000 for wool, 7,662,000 for the skins of sheep and deer, 5,732,000 for cattle, 1,222,400 for tallow. (Kanitz, Serbien, 598 ff.) Great production of hogs also in the Moldau and in Wallachia, in the United States and Mexico, where, instead of butter, only lard and suet are used; also in Lombardy, the Prussian Rhine province, Belgium, the English milk-producing districts, Gloucester, Wilt, Dumfries, Galloway and the districts where agricultural proletarians abound—Ireland and Yorkshire. It is a consequence of the same law that, among the South Sea Islanders, the hog was the principal domestic animal, as it still is among the Chinese. Similarly in the whole of Asia, beyond the Ganges (Ritter, Erdkunde, IV, 938, 1101); in semi-barbarous upper Italy in the time ofPolybios(II, 15); in Gall itself, in the time of Augustus. (Strabo, IV, 192, 197.) The America of the ancient Greeks, Sicily, exported hogs, mainly, in the time of Hermippos. (Athen., I, 27.) And even among the Romans, the consumption of pork was much greater than the consumption of beef. (Marquard-Becker, Handbuch, V, 2, 39.)806.In the cities of Prussia subject to a tax for the privilege of maintaining slaughter houses, a pound of beef cost on an average, in 1846, from 2 silver groschens, 5pfennigs, to 3 s. gr. 4 pf.; pork, from 3 s. gr. 2 pf. to 4 s. gr. 4 pf. (Dieterici.) In Moscow, also, the latter is dearer at present. Before the time of Peter the Great, it was cheaper. (Storch, Handbuch I, 364.) It was a sign of high civilization, too, that in Florence, in the fifteenth century, veal cost, on an average, 2-½ soldi; mutton, 2-⅓ soldi; but pork, 4 soldi. (Pagnini, Saggio sopra il giusto Pregio delle Cose, 325 f., Cust.) It is especially the lower middle class who ask for fat meats. The very fat English sheep are taken not to London, but into the manufacturing districts. (Lauderdale, Inquiry, 322 f.) As to whether the relatively high price of pork, and the fact that in the later times of Rome, the wild boar was the most fashionable dish, compareBecker, Gallus, II, 186.807.The production of fowl is similar in this, that they are frequently fed from remains of consumption; only their production is not adapted to uncivilized countries, because it is difficult to protect them there. In Texas, it is said, it costs more to raise ten chickens than to bring up ten children. (Kennedy, Czarnkowski's translation, 1846, 115.) The independent breeding of fowl is advisable only where there are a great many rich consumers; for the reason that they are naturally a delicacy. Enormous production of pigeons in Cambridge, Huntington etc. (McCulloch, Statistical Account, I, 189.) In Paris the consumption of pork and fowl has gained somewhat since the Revolution. (M'Chevalier, Cours. I, 113.)808.According toSchuckburg, Philosophical Transactions of 1798, andKraus, Vermischte Schriften, I, tab. I, the prices of the following species of animals rose in England between 1550 and 1795: horses, 904 per cent.; oxen, 896 per cent.; sheep, 876 per cent.; cows, 2050 per cent.; hogs, 1964 per cent.; geese, 300 per cent.; butter rose from 5d. per pound to 11-½d.; beer from 1d. per gallon to 2-¾d.; agricultural day wages from ½s. to 1s. 5-¼d.; wheat 326 per cent. Compare, however, Edinburg Review, III, 246 ff. In Germany also, cows and hogs have increased much more in price than horses and sheep. (Tübinger Ztschr., 1871, 342.)Dutot, Réflexions, 946 ff., éd. Daire, says that the value of the precious metals in France decreased in value between the times of Louis XII. and Louis XV. in the ratio of 3-79/91:1. On the other hand, the prices of different commodities rise in very different degrees:Fat sheep, from 7 sous to 10 livres.Lean sheep, from 5 sous to 5 livres 10 sous.Hogs, from 10 sous to 25-35 livres.Capons, from 1 sou to 12 sous.Hens, from 1-½ sous to 6 sous.Pigeons, from 1-½ sous to 3 sous.Deer, from 1-½ sous to 15 sous.809.Thus, in Thuringia, the average price in silver of corn from the sixteenth century until the period 1848-61 increased in the ratio of from 1 to 3-4; the price of the different kinds of animals, on the other hand, from 1 to 5-10. (Knies, inHildebrand'sJahrbb., 1863, 78.) The price of the different kinds of corn as compared with one another may, however, be modified by many different circumstances. Thus the Capitulare Saxoniæ of 797, c., II, estimated the prices of rye, barley and oats to be to one another as 30:30:15; while the Magdeburg Chamber of 1804 estimated them to be as 17:14:8. In the kingdom of Saxony, in 1841-9, the average prices of wheat, rye, barley and oats stood to one another in the ratio of 144:100:75:47 (Engel); while, in the middle ages, wheat, rye and oats were as 9:6:3 (Gersdorf, Cod. Depl. Sax., II, p. XXXIV); under Prince August, corn, barley and oats were as 24:22:12. Assuming the price of rye to be equal to 100, the cost was:At Brussels, in the 16th century, wheat 126.7, barley 80, oats 50At Brussels, in the 17th century, wheat 138.8, barley 82.9, oats 51.9At Brussels, in the 18th century, wheat 147, barley 86.7, oats 55.2At Brussels, 1815-1844, wheat 156At Brussels, 1841-1850, wheat 153, barley 82.7, oats 51At Berlin, 1789-1818, wheat 135, barley 74.8, oats 54At Berlin, 1819-1832, wheat 143.5, barley 74.9, oats 52(Rau, Lehrbuch, I, § 183.) To understand this, it is necessary to bear in mind the relatively great increase of wheat bread, beer made of barley, and horses, as objects of luxury. The unusually low price of oats in North America, as compared with the price of wheat, is dependent on the facility of exporting the latter. In Florence, in the fifteenth century, the price of wheat was 22-⅔, of rye, 12, of barley, 8soldi. (Pagnini, Sopra il giusto Pregio delle Cose, 325.)810.The English so called custom-house prices (Zollhauspreise) correspond to the market prices of 1696. If these are assumed = 100, the priceOf steel and iron was, in 1826, 83, in 1831, 56Of coal was, in 1826, 47, in 1831, 45Between 1835 and 1850, Scotch iron had already become cheaper by one-half (Meidinger, 387), and coal in London by one-third (Porter).811.Rogers, History of Agriculture, I, 67.812.In England, in 1172, an ox cost 2 shillings; in 1175, green cloth cost per ell, 2-10/12 shillings; red cloth, 5-½ shillings. (Eden.) In the western states of North America, the farmer gives two pounds of coarse wool for one pound of woolen yarn; he sends 4 bushels of wheat to the miller for the flour of three bushels (Ausland, 1843, No. 68), while in Ravenna, in the thirteenth century, the miller's fee was 1/10 (von Raumer, Hohenstaufen II, 437); according to the fixed prices inFantazzi, (Monumen. Ravennet.); in Germany, during the last centuries of the middle ages, 1/8 (J. Grimm, Weisthümer, III, 8); at the end of the sixteenth century from 1/8 to 1/5 (Coler, Oeconomia, II, 3); in modern Germany, generally 1/16 of the raw material, and in the steppes of southern Russia, when the wind is still, in summer, even the half. (Mitth. der freien ökonom. Gesellsch. zu Petersburg, 1853, 85.) In Guiana, in 1806, a very ordinary saddle and bridle could not be had under 10-½ guineas. (Pinckard, Notes on the West Indies, III, 1806.)Count Görtzwas obliged to pay 2 dollars, in Demarara, for the cleansing of a rifle, and another person for the oiling of a carriage, 5 dollars. (Reise um die Welt, 1864, 327.) A lady's dress in Mobile costs four times as much as in London or Paris. (Ch. Lyell, Second Visit to the United States, II, 70.) In Athens, articles of clothing, even for the poorer classes, were never as cheap as they are in civilized countries to-day. (ComparePlutarch, De Tranquill. Anim., 10.)813.In Upper Italy, between 1261 and 1400, a lady's chemise and the making of it cost 14.77 lire; Rheims linen, 7.04; ordinary mourning cloth, O.45; black cloth from Moriana, 2.83; cloth from Mecheln, 43.83; from Ypres, 47.04; scarlet cloth, 80.44 per ell. (Cibrario, 1. 1.) On the other hand, to-day, in the Leipzig market, the difference in price of the dearest and of the cheapest cloth will scarcely surpass the ratio 18:1. EvenScaruffi, Sulle Moneta, 1679, 163, Cust, remarks that hemp-linen and similar coarse articles had increased much more in price than brocades; but he ascribes this circumstance to the disordered state of the coinage. It is much better accounted for byAdam Smith, Wealth of Nations, I, 386, ed. Basil.814.Before the plague in the fourteenth century, the cwt. of lead was worth 10-½d.; of iron, 4s. 1d. (Rogers, I. 599.) On the other hand, between 1848 and 1856, the average January price of bar-iron was £7, 11s.; of lead, over £20. (Newmarch.)815.Thus, in England, the price:Of glass was, in 1826, 387; in 1831, 369 per cent.Of leather was, in 1826, 285; in 1831, 123 per cent.Of silk goods was, in 1826, 158; in 1831, 249 per cent.of the price of the same articles in 1796. (Rau.) Of 29 chemical products of the Parisian manufacture, the wages of labor is on an average only 7.4 per cent. of the selling price; and, in some cases, only from 1 to 2 per cent. (Chabrol, Richerches Statistiques sur la Ville de Paris, 1821;Hermann, Staatsw. Untersuch., 137.) In Buschtiehrad, between 1670 and 1870, barley rose from 1 to 4.8; hops to 6.52; fire wood to 6.14; the excise to 6.54; but beer only to 2.81; although wages increased ten fold. (Inama Sternegg, Gesch. der Preise im österreich. Ausstellungsbericht von 1873, 43.)816.A silk cloak lined with fur cost in the time of Charlemagne, 400 scheffels of rye, one not so lined 200. (Hullmann, Finanzgeschichte, 212 ff.) In Florence in the fifteenth century, one pound of sugar was equal in value to 15 pounds of mutton. (Pagnini, 326.) In Turin, in the fourteenth century, 1 pound of pepper was equal in value to 28 pounds of salt. (Cibrario, III, 359, 362.) As late as the middle of the fifteenth century, the court of Duke William of Saxony paid for one pound of sugar 1 thaler and 8 groschens, while ducal fees paid to servants and workmen seldom exceeded 2 gr. Hence, even at a princely meal, often scarcely ½ a pound was consumed. (Büsching, Ritterzeit, I, 137 f.)817.Charlemagne's capitularies suppose a merchant's profits to be from 100 to 200 per cent. (a. 809, c. 34.) And even in our own day, merchants in the markets of Cabul are frequently not satisfied with a profit of from 300 to 400 per cent. (K. Ritter, Erdkunde, VII, 244), and the caravans which leave Maroc for the Soudan are wont, in exchange for commodities amounting in price to 1,000,000 piasters, to return with a supply of other commodities worth 10,000,000. (Stein-Wappäus, Handbuch, Africa, 33.) According toBüsch, Geldumlauf, II, 10, the price of East Indian products in Hamburg was some 70 per cent. higher than at home, whilePliny, H. N. IV, 26, speaks of a price one hundred times (?) as high; and its spices, at the time of Portuguese dominion, were sold at a profit of at least 600 per cent., in Europe. (Crawfurd, History, VII, 360;Ritter, Erdkunde, V, 872.)818.When Humboldt found a missionary near Cumana who paid 7 piasters for a cow, and was obliged to pay 17 piasters for blood-letting, rather unskilfully performed, he found an illustration of one of the peculiarities of colonial life—to have all the wants of higher stages of civilization but not the means of satisfying them. (Relation historique, I, 374.)819.Enormous payments made to distinguished virtuosi, actors, sophists and hetares at the time in question, also to Appelles, Aristides etc., for works of art. (Plin., XXXIV, 19, 2, XXXV, 36, 19.) The actor Aesopus (see § 233, note 6) had a fortune worth 20,000,000 sesterces, while Pompey, for instance, had 70,000,000. Roscius received from the state for every day he played, 286 thalers, and earned 43,000 a year. (Mommsen, Römische Geschichte, III, 483, 547.) CompareCicero, pro Roscio Comœdo, 10, andPlin., H. N. IX, 59, X, 72. The zither-player, Amoebaeos, received one talent for each appearance. (Athen.XIV, 623.) According toPliny, H. N. XXIX, 5, the Romanprincipesgave the most distinguished doctors yearly 250,000 sesterces, and even more as an honorarium. At the end of the eighteenth century, the greatest Parisian actors received from 4,000 to 5,000 francs per annum. Now 100,000 is considered a moderate income for one. (Journ. des Economistes, May, 1854, 279.) It is said that Frederick Hase earned $30,000 in America in ten weeks. (Leipz. Tagebb., 15 Jan., 1871.)Steuart, Principles, II, ch. 30.Adam Smithfrequently represents it as a rule, that superfluous goods like gold and silver, are dearest among the richest nations, necessary goods among the poorer, andvice versa. But the supply has much more to do with the permanent price of a commodity than the demand for it has. And the principle above mentioned applies only in so far as the supply is here an unlimited and there a limited one. Hence, the comparison of silver with painters' and sculptors' works is not an apposite one—in the case of these there is a natural monopoly, while the former, on account of its durability and capacity for transportation, may, on the contrary, be increased almost at pleasure.820.BesidesBöckh., Staatshaushalt der Athener, 1817, Book I, compareArbuthnot, Tables of ancient Coins, Weights and Measures, 2d ed., 1754,Reitmeyer, Ueber den Bergbau der Alten, 1785, and Michaelis, De Pretiis Rerum apud veteros Hebræos, in the Comment. Societ. Gottingensis, vol. III. The principal sources of information among the ancients areDiodor., V;Strabo, III, V;Plin., H. N., XXXIII.821.The money revenue of the Persian king, to the amount of 14,560 talents yearly, was transformed into bars and thus deposited in the treasury.Herodot., III, 95 f. Even the little vassal prince Pythios of Celænæ had a treasure of 2,000 talents of silver and 4,000,000 pieces of gold. (Ibid, VII, 26 f.) On the money stores of private persons, seePlin., H. N., XXXIII, 47.822.An ox was worth, in Solon's time, 5 drachmas; in 410 B.C., 51 dr.; 374 B.C., 77¼ dr.; a medimnos of wheat in Solon's time, 1 dr., about 390, 3 dr., under Alexander the Great, on an average, 5 dr. (Böckh., I, 102, f.) The usual amount of ransom paid for a prisoner of war, in Kleomenes' time, was 2 minæ (Herodot., V, 77, VI, 79); under Dionys., I, 300 m. (Aristot., Oeconom, II, 21); under Philip of Macedon, from 300 to 400 m. (Demosth., De fals. Legat., 394); under Demetrios Poliorketes, 1,000 for a free man, 5 for a slave. (Diod., XX, 84.)823.This booty for Susa alone amounted to from 40,000 to 50,000 talents; for Persepolis, to 120,000; for Pasargadæ, to 600.Curtius, V, 2, 6;Strabo, XV, 731;Justin, XI, 14;Arrian, III, 16;Diod., XVII, 66, 71;Plutarch, Alex., 36.824.Oros., VI, 19;Dio, C., LI, 21;Suet., Aug., 41. Decline of the value of money under Constantine the Great, when the precious objects of the heathen temples were coined. (Monitio ad Theod., Aug. de inbidenda Largitate,Thes., Antt. Renn., XI, 1415;Taylor, ad Warm. Sandvic, 38.)825.Compare I Kings, 10, 14, 27 ff.; I Chron., 22, 2 ff.; II Chron., 9, 15 f., 12, 10 ff. On Ophir:K. Ritter, Erdkunde, XIV, 407 f.; on the wonders of the discovery of Spain:Herodot., IV, 152.Aristot., De Mirab., 146; Diodor, V, 35 ff. On the other hand, of Greece,Athen.VI, 19 ff.826.ComparePlin., H. N., XIV, 1. Yet the value of money in the time of the Cæsars seems to have stood much higher than it is now, as is proved, for instance, by the endowments by Trajan (16 sesterces per month for boys, and 12 sesterces per month for girls), as thealimentafurnished them according to Digest XXXIV, 1, embraced their entire support. Compare the excellent essay on this subject byRodbertus, inHildebrand'sJahrbb., 1870, I.827.The conquest of the Avares seems to have temporarily produced a considerable cheapness of the precious metals. (Guérard, Polyptiques, I, 141.) Increase of the value of money in Scandinavia, during the later part of the middle ages. (Wilda, Gesch. des deutschen Strafrechts, I, 323 ff.)828.In England, from 1279 to 1509, there were coined on an average only 6,868½ pounds sterling; from 1603 to 1830, on the other hand, 819,415 pounds sterling. The average in the time of George IV., per annum, was 4,262,652 (Jacob, ch. IV.) An evidence of the uncertainty of the history of prices in the middle ages is, thatJacob, ch. 12, infers, from the price of corn, that the price of silver remained rather stationary from 1120 to 1550, whileAdam Smith, I, ch. 11, 3, infers from the same fact, a remarkable rise in the price of silver from 1350 to 1570. Concerning the latter, seeLeber, Fortune privée au moyen Age, 16 f.Tooke-Newmarch, History of Prices, VI, 391; whereasRogers, Statist. Journ., 1861, 544 ff., finds that in England, between 1300 and 1532, there was no change whatever in the price of silver. According toSoetbeer, Forschungen zur deutschen Geschichte, VI, 94, wheat and rye were, as compared with silver, worth during the Carolingian period, about one-fourth of its value, between 1750 and 1850.Hegel, Shassburger Chroniken, II, 1012, ascribes to gold over 2½ times as great a purchasing power in the 13th and 14th centuries as in the 19th century; and to silver, a purchasing power about three times as great.829.The silver ores of Peru and Mexico yield, on an average, only from 2 to 3 per 1,000 of metal; those of Potosi, at present, scarcely 1 per 1,000; those of Mexico, according toHumboldt, on an average, from 3 to 4 ounces per cwt.; so that many of the European ores are decidedly richer. While the veins of the Saxon mine, Himmelsfürst, have a breadth of only from 0.2 to 0.3 meters; the Veta-Madre of Guanaxuato, is in few parts less than 8, and it is sometimes even 50 meters broad; and the Veta-Grade of Zacatecas is from 5 to 10 meters in breadth. In Pasco there are veins of silver ore which have 114 and even 123 meters.Tschudi, Reise in Peru, K., 12;Chevalier, Cours, III, 184 ff., 241 ff. According toHumboldt, Essai sur la Nouvelle Espagne, III, p. 413, eleven times as many miners are needed at Himmelsfürst as at Valenciana to obtain the same quantity of silver.830.Thus, for instance, the celebrated ransom-money of Athahualpa (even according toGarcilaso de la Vega) amounted to only 5,000,000 thalers, while the French King John, after the battle of Poitiers, in 1356, had to pay 41,000,000 francs for his ransom. (Leber, Fortune privée au moyen Age, 121 ff.)831.CompareM. Chevalier, III, 190 ff. Discovery of the quicksilver mines of Guancavelica, 1567.832.The yield of Potosi amounted from 1545 to 1638, to 395,619,000 pesos. (Ulloa, Viage, II, I, 13.) Up to the present time, the aggregate yield there has been estimated at from 6,000 to 7,000 million francs.833.On the worse grounded assumptions of former writers, seeHumboldt, N. Espagne, IV, 237.834.There was really introduced into Spain, about 1525, not much over 2,000,000 francs annually; and after 1550, six times as much. (L. Ranke, Fürsten und Völker, I, 347 ff.) CompareHumboldt, Ueber die Schwankungen der Goldproduction, in the Vierteljahrsschrift, 1838, IV, 18.835.On the Brazilian exports of gold in the 18th century, seeSchäfer, Gesch. von portugal, V, 192 ff.836.According toHumboldt, N.E., IV, 218, the amount up to the beginning of this century was 17,000 kilogrammes of gold and 800,000 kilogrammes of silver.837.Thus, for instance, Mexico, during this period yielded, on an average, 65,000,000 francs, instead of the former amount of from 130,000,000 to 140,000,000. In Carro de Potosi, there were, in 1826, of the former 132 pool-works only 12 in operation. CompareAdams, The Actual State of the Mexican Mines, 1822.Jacobassumes that about 1830, the quantity of money in Europe and America was 1/6th less than in 1809. (Ch. 28.)838.Of this, 1,800 kilogrammes of gold from the United States.839.Fischer, Geschichte des deutschen Handels, 2d ed., II, 616 ff., 673 ff. But the Schwaz mines, in the Tyrol, are said to have produced, until 1523, 55,000 marks annually; the Freiberg silver mine, from 1542 to 1616, 16,000 marks annually. Comparevon Langen, Kurfürst Moritz, II, 56.840.The Russian gold ores, quite insignificant before the year 1814, have made very great progress since 1840. Their aggregate yield, between 1814 and 1861, not taking into account the amount embezzled, amounted to 37,000puds, thepudbeing equal to 16.3 kilogrammes. The best year, 1847, gave a yield of 1,757puds; 1852-1861, an average of 1,556puds; 1861 alone, 1,442puds, of which 1,041 came from the private Siberian gold-sand washings. (Walcker, in Faucher's Vierleljahrsschrift, 1869, II, 115.)841.Spanish silver production yielded, in 1845, over 184,000 marks; in 1850, over 291,000. (Willkomm, Halbinsel der Pyranäen, 1855, 537.)842.Annales des Mines, X, 831 ff.843.Of this amount, there came to Europe, not including Russia, 150,000 kilogrammes of silver, 2,650 kilogrammes of gold; to Russia, 24,000 kilogrammes of silver and 30,000 kilogrammes of gold (embracing the quantities probably withdrawn without the knowledge of the custom's authorities); to the rest of Asia, 100,000 kil. of gold; to Africa, 4,000. (M. Chevalier.)844.According toHumboldt'sassumption before the time of Columbus, Europe had a circulation of 170,000,000 piasters; about 1600, of 600,000,000; about 1700, of 1,400,000,000; in 1809, of about 1,824,000,000. Up to 1803, there was produced in America, 9,915,000 marks (Spanish) of gold, and 512,700,000 of silver. (N.E., 245.)Gallatinestimates that, before Columbus, there were 1,600,000,000 francs; in 1830, in Europe and America, from 22,000,000,000 to 27,000,000,000 francs. (Considerations on the Currency and Banking System of the United States, 1831.) According toM. Chevalier, 1850, all the silver which America produced had a volume of only 11,657 cubic meters; and all the gold of only 151 cubic meters. The latter, therefore, would not even fill the half of a French gentleman'ssalon.845.All the more in favor with governments because they affect principally foreign consumers. Thus, the Spanish government at first imposed a tax of 50 per cent. of the gross yield of the raw material, on the purchaser of silver; since 1503, under Orando, of 33-⅓ per cent.; and later yet, of 20 per cent. This last tax was therefore in full force under Cortes. This tax was reduced in Mexico, in 1725, and in Peru in 1736, to 10 per cent., and later, in the case of gold, to 3 per cent. Heavy taxation of Russian gold ore (35 per cent. of the raw material), by virtue of the ukase of April 14, 1849. CompareM. Chevalier, III, 274.846.Cantillon, Nature du Commerce, 215, 236, shows very clearly how the increase of the price of commodities was produced, in the first instance, by the increased consumption of the possessors of gold, and how it, therefore, first affected those commodities which they especially desired.847.This is the opinion ofAdam Smith. Similarly ofDavid Hume, On Money. According toLetronne, Considérations sur l'Evaluation des Monnaies Grecques et romaines, 119, andBöckh, Staatshaushalt, I, 88, the average value of wheat in relation to silver was, in Athens, 400 B.C., as 1:3146; in Rome, 50 B.C., as 1:2681; in France, shortly before 1520 after Christ, as 1:4320; in the nineteenth century it is as 1:1050.Th. Smith, De Republ. Anglorum, I, assumes that the price of silver, from the age of chivalry to 1625, decreased in the ratio of 120:40. The Spaniard,Moncado(1619), says as 6:1. (Jacob, ch. 19.)Jacob, himself, in comparison with his own time, as 7:1 (ch. 15.) Much more moderate isNewmarchinTooke'sHistory of Prices, VI, 345 ff., who assumes an increase in the prices of commodities of about 200 per cent. The estimated value of tithe-wine (Zehntwein) about doubled in lower Austria, during the sixteenth century. (Oberleitner, Finanzlage N. Oesterreichs im 16 Jahrhundert, 36.) According to the important researches ofMantellier, Mémoires de la Société Archéologique de l'Orleanais, vol. 1, 103 ff.; extract ofLespeyresinHildebrand'sJahrb., 1865, I, 1, the purchasing power of silver as compared with the average value of twenty-seven commodities, assuming it to have been 1 from 1750 to 1850, was, from 1350 to 1450, 2.9; from 1450 to 1550, 2.8; from 1550 to 1650, 1.5; from 1650 to 1750, 2.1. According toRogers, the prices of corn in relation to silver were from 1596 to 1636, at most 2.3 times as high as from 1260 to 1400; from 1637 to 1700, 2.6 times; from 1701 to 1764, 2.1 times; from 1726 to 1820, 3.2 times. (Rogers, I, 180.)848.In Germany, the rise in prices was first observed in the price of foreign groceries, which partly rose 400 per cent. Popular opinion looked for the cause in the evil disposition of the large commercial houses. In order to facilitate the competition of the smaller houses with the larger, the Reichstag, in 1522, prohibited all companies with a capital of more than 50,000 florins; and, in 1524, the royal treasury wished to bring suit against the violators of this law. But the cities contrived to avert the blow. (L. Ranke, Geschichte der Reformation, II, 42 ff., 134 ff.) In Spain, the government, especially between 1550 and 1560, endeavored to oppose the growing dearness of goods of all kinds, by prohibiting the exportation of the most important commodities, and by putting obstacles in the way of retail trade. The lower classes in England ascribed the rise to the suppression of the monasteries (Percy, Reliques of ancient Poetry, II, 296), while Henry VIII. endeavored to improve the condition of things by laws against luxury, the governmental establishment of fixed prices, the expulsion of foreign merchants etc. (21 Henry VIII.) The first writer who seems to have clearly seen the true cause of the changes in price wasBodinus, Response aux Paradoxes de Mr. de Malestroit touchant l'Enchérissement de toutes Choses et des Monnaies (1568). This work was translated into Latin byH. Conring, 1671; and done over in the work: Discours sur les Causes de l'extrême Cherté, qui est aujourd'hui en France (1574). Next, we have the English authorW. S., A Compendious or briefe Examination of certayne ordinary Complaints of divers of our Countrymen of these our Days, London, 1581. InBefold'sVitæ et Mortis Consideratio politica, 1623, 13 f., we have a right explanation of thecaritas sine inopiawhich is to be considered as the common property of his time.849.SimilarlyQuesnay, 77, Daire.Sir J. Stewart, Principes, ch. 3.Kraus, Vermischte Schriften, II, 131 ff.Hermann, Staatsw. Unters., 127.Helferich, Von den periodischen Schwankungen im Werth der edlen Metalle, 1843, 70 f.850.According toCibrario, a hectolitre of wheat was worth, in Turin, from 1289 to 1379, on an average, 905 gr. of fine silver; that is, about three times as much as in Paris before the discovery of America, and as much as in Paris from 1546 to 1556. In Turin, from 1825 to 1835, it was worth about 1702 gr. In the fifteenth century even, the foreign embassadors complain of the enormous cost of living there. So, for instance,Raumer'shistor. Taschenbuch, 1833, 162. Compare also,Carli, Del Valore della Proporzione dei Metalli monetati con i Generi in Italia prima delle Scoperte dell' Indie, 1760, in which he, indeed, exaggerates the matter, and seeks to prove his views by the coarsest sophistry.851.The chief result ofHelferich'sexcellent researches. (Helferich, loc. cit.) The general opinion, indeed, is that thisstatu quoof the value of the precious metals was interrupted about the middle of the eighteenth century by another decline, and that the latter yielded to a subsequent rise in 1815 and afterwards. ThusDavid Hume, History of England, ch. 44, App. 31, ch. 49, App. A.Young, Political Arithmetics, ch. 6. More recently,Rau, Lehrbuch, I, § 176.M. Chevalier, Cours, III, 320 ff. One of the principal advocates of the opinion that every increase made in the medium of circulation produces a corresponding depreciation isNebenius, Deutsche Vierteljahrsschrift (1841). In England a quarter of wheat was worth, on an average, 38s. 8/9d., from 1595 to 1685. On a similar stability of corn prices in Belgium, seeSchwerz, Belgische Landwirthschaft, III, 37. According to Suckburg (l.c.), the value in exchange of money from 1640 to 1700 declined 32-2/9 per cent.; from 1700 to 1760, 43 per cent.; from 1760 to 1806, 84 per cent.852.From 1637 to 1700 the price of corn in England averaged 51 shillings; from 1701 to 1764 only 40½ shillings.853.Thus, the dearness of wheat in Germany, during the first thirty years after the Thirty Years' War was caused, in large part, by the depopulation produced by the War.854.In Germany, also, the cause of the enhanced dearness of so many goods during the Thirty Years' War is to be sought for in the goods themselves.855.Since 1815, most Birmingham and Sheffield wares have fallen from 50 to 70 or 80 per cent. in price—at least from 20 to 30. (McCulloch, Statist. Account, I, 705.) The Quarterly Review, May, 1830, speaks even of an average decline of prices of English commodities in general, of 50 per cent.856.Excellently carried out inTooke, History of Prices, III, 1838. That the world's market is not so very readily affected by an increase of the medium of circulation, is established by this fact, among others, that the immense exportation of French metallic money in consequence of the issue of paper money between 1716 and 1720, and again in 1790 and the following years, is coincident with very low prices of wheat in the neighboring countries. (Helferich, loc. cit., 139, 190 ff.) And yet, in the former case, the amount was 400,000,000 francs, and in the latter, at least 1,000,000.857.Jacobestimates this part at only 2-½ per cent.,McCulloch, at 20,Loweat 25,NeckerandHelferichat 50,Humboldtat 66-⅔ of the whole quantity worked. It certainly is, in our day, on account of the ever growing aggregate supply, greater than hitherto; but it is very different in different countries.Nebenius, Deutsche Vierteljahrsschrift, 1851, 56 seq., estimates the aggregate consumption of new gold and silver for industrial purposes at 14-½ piasters yearly, and in addition to this seven millions of old gold and silver (Bruchgold und Bruchsilber). The annual wear and tear of previously existing articles of gold and silver, it is estimated, amounts to 4,420,000 piasters (1/420); the annual increase of their aggregate amounts in Europe to 6,000,000 piasters (1-½ per cent., corresponding to the increase of population), and 4,200,000 (one-fifth of the entire consumption), is employed, as he claims, in gilding, plating etc. The last item is probably much increased by galvanic silver-plating, the invention of photography etc.858.Jacobembraces in the amount of metal employed in industrial purposes, in the sixteenth and seventeenth centuries, 1/5 of the amount which, after deducting the loss in Asiastic trade, was added to the gold and silver stores of Europe; i.e., in the seventeenth century, about 2,500,000 piasters yearly; in the eighteenth century, ⅔ (!); that is, annually, 15,000,000 piasters; in 1830, in England, £2,457,221; in France, 120,000; Switzerland, 350,000; in the rest of Europe, 1,605,490; in North America, about 300,000; altogether, £5,900,000.Humboldt'sestimate is 21,000,000 piasters;McCulloch's, £6,050,000. According to the records of the ParisMonnaie, the amount of silver ware in France increased seven fold between 1709 and 1759. (Humboldt.) In England, between 1807 and 1814, 8,290,000 ounces of silver were stamped for manufacturing purposes, from 1830 to 1837, only 7,387,000; in 1851, 924,000.McCullochestimates the annual consumption of silver, in Birmingham alone, for plating purposes, at 150,000 ounces; in Sheffield, at 500,000; and the gold consumption in the pottery districts at £650 per week. Birmingham consumed (1831) for gilding purposes, £1,000 gold yearly. (Whately.) It now employs weekly 3,000 ounces of gold and 6,000 ounces of silver in the manufacture of gold and silver ware, besides the quantity intended for gilding and silver-washing purposes. (Quart. Rev., April, 1866, 381.) The jewelers of New York manufacture yearly 3,000,000 of dollars worth of gold and silver ware, mostly new material. (Economist, April 16, 1853.) There were in Vienna, in 1781, only 167 workers in gold and silver; in 1840, 229; in 1847, 539. (Baumgartner, in the Wiener Akademie, May 3, 1857.)Jacobestimates the aggregate mass of gold and silver ware, in plate, instruments etc., in Europe and America, to be 1-¼ as great as that of the ready money; and in England alone to be twice as great (ch. 28); whileTengoborskithinks that at the beginning of the nineteenth century, the coin constituted ⅔ of the entire amount of the precious metals. Sometimes a movement in the opposite direction takes place, as, for instance, in those revolutions in which the silver of the church was confiscated; in the unfortunate wars of Louis XIV., etc.Nebenius, loc. cit., 17, mentions a South German silversmith who melted down in the years succeeding 1802, monastery silver to the amount of 11,000,000 guldens.859.On the wear and tear of coin, see §120, andHermann, in the Archiv. der politischen Oek., I, 1841. Compare also,Faust, Concilia pro Aerario, 1641, 263 ff. This wear and tear is so great thatM. Chevaliersupposes that it alone would suffice to reduce an amount of money under Constantine the Great of 5,000 millions to 300 millions, in the time of Philip IV. (ob. 1314.) Cours, II, 322. How great a number of coins, especially of the smaller denominations, are entirely lost is evident from the fact, that at the time of the demonetization of the 15-sous and 30-sous pieces of 1791-92, amounting to 25,000,000, only 16,000,000 were presented for redemption. Of the 10-centime pieces stamped with an N, amounting to 3,286,932 francs, there were only 2,000,000 left when they were withdrawn from circulation, and this although individuals had added to the coinage. (M. Chevalier, III, 321.) The total loss caused on this score,McCullochestimates at 1 per cent. per annum, andHelferich, at ¾ per cent. The greater the aggregate stock of gold and silver, the greater the absolute amount of wear and tear. If, therefore, there were annually an equal influx of mineral products to the markets, the pressure of this increase of supply from that cause alone would take the shape of a converging series of prices. (Tooke, History of Prices, II, 151 ff.)860.The British East India Company exported gold and silver on an average per annum from:1711-1720, £434,0001721-1730, 532,0001731-1740, 487,0001741-1750, 631,0001751-1760, 571,0001761-1770, 152,0001771-1780, 43,0001781-1790, 393,0001791-1800, 352,0001801-1807, 852,000Milburn, Oriental Commerce, 1813, 419. According toM. Chevalier, Introduction aux Rapports de l'Exposition de 1867, the trade of Europe and North America, with India, China, Japan and the Australian islands, amounted in 1800, to only 410 million francs, in 1866, to 4,024 million. Yet, for a time, the largely increased exportation of English manufactures to East India and of East Indian opium to China, had changed the relation so that the exportation of the precious metals from South Asia, by a great deal, more than counterbalanced the imports. On the other hand, between 1853 and 1856 240,000,000 thalers were shipped to India and China from England and the Mediterranean harbors; in 1863 and 1864, even as much as 300 millions, to be, for the most part, buried there. Moreover, the immense quantity of cash money—often as much as from 12 to 15 million in pounds sterling—in the state treasury, and silver ornaments (§§ 44, 123) customary in India, demand a considerable yearly supply to make up for wear.Newmarchspeaks of 400 million pounds sterling which can be maintained in its condition hitherto by a yearly increase of 1 per cent. (History of Prices, VI, 723.) From 1865 to 1869, English steamships carried gold and silver to the East in the following quantities, yearly: 93.9, 66.3, 24.6, 70.2 and 60.4 million thalers, in addition to which almost as much came directly from California. Statist. Journ., 1871, 122 seq.861.Tooke-Newmarch, History of Prices, VI, 147 ff., estimates the aggregate stock of gold at the end of 1848 at £5,600,000; in 1856, at £172,000,000 more. According toLavasseur, the amount of silver in the East increased, between 1848 and 1857, from 22 to 24 milliards of francs; and the amount of gold from 9-½ to 15-½ milliards. (Annuarie d'Economie politique, 1858, 632.) The total amount of gold and silver in the civilized world,Wolowskiestimated at from 55 to 60 milliards of francs, in 1870. (L'Or et l'Argent, Enquête, 19.) CompareMason, The Gold Regions of California from the Official Reports, 1848.Tengoborski, Sur les Gîtes aurifères de la Californie et de l'Australie, 1853. Goldfield's Statistics issued from the Mining Department in Victoria, 1862.W. R. Blake, The Production of the precious Metals, or statist. Notice of the principal Gold and Silver producing Regions of the World (New York, 1869).862.Soetbeer'sDenkschrift betr. die deutsche Münzeinigung Mai, 1869, and earlier yet, inFaucher'sVierteljahrsschrift, 1865, II. According toM. Chevalier, all the mines of the world, a short time previous to 1865, produced 284,000 kilogrammes of gold, and 190,000 kilogrammes of silver in a year: a total of 373,000 thalers (Journal des Economistes, June, 1866), while, in 1848, the total amount of gold coinage in the world was estimated at 560,000,000; Great Britain, France, North America and Sidney had, since that time and up to 1871, added to this £597,780,000. The additions have been made in decreasing quantities: thus, 1857-59, 37.2 millions annually; 1869-71, 16.99 millions annually. (Statist. Journ., 1872, 376 ff.) The estimates as to how much a gold-digger might make in a day have been variously estimated. Thus,Larkinestimates it from $25 to $50;Mason, at $10;Folson, at $25 to $40;Butler King, at $16, reckoning one ounce at $16. All these estimates seem to give an altogether too high average. In Australia, according toKhull, Colonial Review, June, 1853, a digger can produce only one ounce daily, or less than 4 thalers. According toW. Stamer, Recollections of a Life of Adventure, II, 1866, a gold-washer in Victoria earned in 1858, on an average, £250 per year; in 1865, only £70; while day labor was worth 15 shillings. Hence, great hopes have to be built on the lottery-nature of gold-washing. On the Rhine, a gold-washer is satisfied with ⅔ of a gramme of gold, that is worth from 13 to 18 silver groschens. (Daubrée, Comptes rendus de l' Académie des Sciences, XXII, 639.) It should be borne in mind, however, that the Rhine-lander devotes to gold-washing only the leisure time which his avocation as a fisherman leaves him, while the gold-washer in the new world, as a rule, devotes his whole time to it; and that his labors are interrupted by the long rainy season, attacks of fever etc. To this must be added the great difference of the average prices of the means of subsistence and the difference of all social conditions.863.Compare, for instance, on the early productiveness of the Brazilian gold districts which soon ceased:Spix und Martius, Reise nach Brasilien, I, 262 f., 350.Gardner, Travels in the Interior of Brazil, 1846. On Hispaniola, seeBenzoni, N. Mundo, I, 61, andPeschel, Gesch. der Entdeckungen, 304, 556. Hitherto, gold had been obtained by the usual mining process, only in very few places. As a rule, it has been found in alluvial land not far from the surface. CompareAnsted, The Gold-Seekers' Manual, 1849. These circumstances have made the production of gold important from the first; and they still make it comparatively easy, while it causes little demand for capital but for great skill. As soon, therefore, as the greater part of the country washed for gold has been worked, which does not require a long time, the whole is abandoned, while in the production of silver the great amount of capital fixed in pits, shafts, kilns etc. ties the parties engaged in the enterprise to the spot, and necessitates the continuation of the enterprise. In recent times, however, Australia and California have developed the mining and machine production of gold to a surprising extent. According toLaur, La Production des Métaux précieux en Californie, 1862, 33, and the Journal des Economistes, Nov. 1862, Californian gold-quartz produced, in 1851, on an average, 635 francs per ton; in 1860, only from 80 to 85 francs; but the gold-washing methods have become cheaper in the ratio of 2,500:1. However, the production of the precious metals seems even now to be decreasing. According to the Statist. Journal, 1866, 99, it amounted on an average to:in 1849-51, gold £23.9 million, silver £15.5 million.in 1852-56, gold 38.7 million, silver 16.1 million.in 1857-59, gold 36.5 million, silver 17.1 million.in 1860-63, gold 33.5 million, silver 18.2 million.in 1864-68, gold 30.0 million, silver 19.5 million.The number of gold-diggers in Victoria steadily decreased from 125,764 in 1857, to 63,053 in 1867.864.One of the chief difficulties in the way of the production of gold is the loss by embezzlement, which is estimated at an average of 20 per cent. Small companies of men working on their own account would be less exposed to temptation, and the Anglo-Saxon races and the North Americans are very well adapted thereto. (M. Chevalier, III, 261.)865.Gold is in a certain sense one of the most widespread of metals, although it is found anywhere only in small quantities; so that on the Rhine, for instance, it takes from 17 to 22 millions of gold grains to make a kilogramme. An extraordinary large number of places owe their civilization to gold-seekers. CompareTacitus, Agr., 12. I select the following“finds”fromRitter'sErdkunde. The Shangallas (I, 249); still more the terrace of Fazoglu itself (I, 253, compareBruce, Travels, V, 316, VI, 255, 342), in Monomotapa (I, 140); in Manica, west from Sofala (I, 145), especially since the suppression of the slave trade (I, 305, 471); in Mandigo land (I, 360, 372); on the road from Gambia to Timbuctoo (I, 457); on Lake Mangara (I, 493); between Timbuctoo and Finnin (I, 445); in Nubia (I, 667, seq.); unused silver and quicksilver mines on the lower Bagradas (I, 493); gold wealth at Malacca,aurea chersonesus(V, 6 f., 27); Tonkin, Lao and Ava (III, 926, 1, 216, IV, I, 213); Assam (IV, 294); smaller Thibet (III, 657); Kashmere (III, 1,155); on upper Setledsch (III, 654 ff., 668); in the mountainous sources of the Indus (III, 508, 529, 593, 608); on the Cabool (VII, 23); in Peshaver (VII, 223); Badakschan (VII, 795); rich silver mines abandoned for want of wood near Herat (VIII, 243); in Armenia (X, 273). It is said that in southern China there are great treasures of the precious metals, the removal of which has been opposed thus far. (IV, 756.) Arabia's richness in gold mines, spoken of byDiodor., II, 50, III, 45, andAgatharch, De Mare rubro, 60, is of doubtful existence, as no traces of them are to be found in the country to-day. On the other hand, on both shores of the Pacific Ocean, the portions of the earth richest in volcanoes seem to possess almost everywhere quantities of gold equal to those of California and Victoria. (Edinburgh Review, Jan., 1863, 82 ff.) What an amount of treasure can be obtained at times from old and long since forgotten“finds”is proved by the Altai (that is gold mountain), which even the old Tschudi had rummaged (K. Ritter, II); and where Herodotus' (III, 16) love of truth, so frequently called in question, has recently been so brilliantly vindicated. Comparev. Ungern-Sternberg, Gesch. des Goldes, 1835.A. Erman, Ueber die geographische Verbreitung des Goldes, 1835. According toMurchison, Siberia, ch. 17, gold is to be found only“in crystalline and paleozoic rocks, or in the drift from these rocks, which is a tertiary accumulation of the pliocene age;”and that it is found most abundantly“in quartz-ore, vein-stones and traverse altered Silurian slates, chiefly lower Silurian, frequently near their junction with eruptive rocks.”866.CompareHumboldt, N. Espagne, IV, 147 ff.;St. Clair Duport, Essai sur la Production des Metaux précieux en Mexique, 1843;M. Chevalier, Cours., III, 483 ff.867.The cost of a kilogramme of silver, expressed in terms of silver itself, up to the moment that it is shipped, is estimated byDuportas follows: salt andmagistral, 61 grammes; quicksilver, 112 grammes; stamping it, 171 grammes; transformation of the ore, 72 grammes; rent and superintendence, 38; duties etc., 145; smelting, transportation and shipping, 35. There remains as profit for mining it, 336 grammes. As to how the production of American silver increases and runs parallel with the cheapness of quicksilver, seeHumboldt, N. Espagne, IV, 91 ff.868.Wolowskicalculates that the absolutely much smaller yearly increment to the amount of the precious metals in the sixteenth century, frequently 1/12, now constitutes only 1/50 of the greater existing amount. (L'Or et l'Argent Enquête, 50.)869.In the United States the stock of cash money in 1820 was estimated at 5.1 thalers per capita; in 1849, at 8.6 thalers; in 1854, on the other hand, at 13 thalers.870.The weight of the mass of gold introduced into Europe annually stood to that of silver in the ratio of 1:60-65 in the seventeenth century; in the first half of the eighteenth century, in that of 1:30; in the second half, in that of 1:40; and yet the variations in price were not in the least parallel. According toSœtbeer(Beiträge und Materialien zur Beurtheilung von Geld und Bankfragen, 1855, 102 seq.), the average silver-course (silbercurs) of gold had, 1852-54, sunk only 2.05 per cent., as compared with that of 1800-40. And yet the value of the annual production of gold stood to the annual production of silver, in the beginning of the nineteenth century, as 29 to 71; in 1846, as 47 to 53; in 1848-56, as 3 to 1.871.While the public, even since 1850, think they have noticed a depreciation in the value of money, there are a great many learned political economists who are by no means prepared to grant it. The principal advocates of this opinion areTooke, andNewmarch, in vol. VI. of the History of Prices (1857). AlsoLavergne, in the Journal des Economistes. And really the enhanced dearness of many kinds of goods up to 1857, might have been accounted for by causes affecting the goods themselves: diminished supply by reason of bad harvests, commercial gluts etc.; increased demand by capitalization on a gigantic scale, speculation, but especially by the elevation of the lower classes etc.The London wholesale prices were on the 1st day of January, 1869, nearly all lower by 10 per cent. than on the 1st day of July, 1857. Only indigo, cotton and meat had risen. (Hildebrand'sJahrb., 1870, I, 328.) In many instances the enhanced dearness is entirely local, by reason of the greater facilities for transportation in places where prices were already higher. But as new truths are very easily exaggerated by their discoverers, much of Tooke's view concerning these events depends upon a polemic carried too far against the theory of the balance of trade which was customary in the so-called currency school. Compare, in opposition to Tooke,Lavasseur, in the Journal des Economistes, March, 1838, andM. Chevalier, La Baisse probable de l'Or, 1858.Lavasseur, from the difference between the official and real custom-house prices in France, calculates that raw materials in 1856 were on the average 63 per cent., and in 1858, 20 per cent. higher than in 1826; and that manufactured articles were in 1856, just as high, and in 1858, 6 per cent. lower than in 1856. An average made of all commodities showed, in 1856, an enhancement of 30 per cent, and in 1858 of 9 per cent. (Hildebrand'sJahrb., 1864, II, 118.)In the Hamburg market in 1847-65, 87 articles declined in price, 183 rose in price, and 24 remained about stationary. (Amtl. Statistik von 1887, 18 ff.)Jevonsassumes a general rise in the price of commodities between 1849 and 1869 of about 18 per cent. (Economist, May 8, 1869.) He makes this estimate from the average March prices of 50 of the principal articles. Assuming the average March price of 1849=100, we have, according to him, for the following years, respectively: 101, 103, 101, 116, 130, 125, 129, 132, 118, 120, 124, 123, 124, 123, 122, 121, 128, 118, 120, 119. Previous years showed: 1789=133; 1799=202; 1809=245; 1819=175; 1829=124; 1839=144. (Compare supra, §129, note 1.) The budget of a Swiss teacher's family consisting of five persons has become dearer since 1840 ff., their consumption remaining the same and of only the simplest articles, by 72.5 per cent. (Böhmert, Arbeiterervhältnisse etc., I, 302 ff., 355.) That, however, the depreciation is under-estimated most precisely in England and over-estimated in Germany,Kniesvery well accounts for by the price-leveling effects of the more modern means of communication. (Tübinger Zeitschr., 1858, 280 ff.)872.CompareLeibnitz, on the consequences which would follow the realization of the dreams of the alchemists. It would be a great misfortune, since then a pocket would no longer suffice for the transportation of money, and people would have to use wheel-barrows as they do now in Sweden. (Opera ed. Dutens, V, 199, 401.)873.Beccariaconsiders it equitable that the debtor should always pay the original value of the metal. (E.P., IV, 2, 17.)Galiani, on the other hand, would not permit individuals, even when the state arbitrarily causes a diminution in the real value of money, to maintain the real value of the coinage in their contracts. (Della Moneta, V. 3.)874.It is precisely this class which first comes to an understanding of the essential nature of the change effected.875.Thus the English lessees, who in the sixteenth century had leases for a long term of years, saw themselves rise in the social scale in consequence of the revolutions in price—a fact of importance in the political struggles of the seventeenth century. CompareSir F. M. Eden, State of the Poor, I, 119 ff.876.Too much stress is laid upon this byTooke-Newmarch, who, on that account, considers almost every increase of the precious metals as a blessing. As a matter of fact, the population of Australia, of the United Kingdom, and of the United States, increased, between 1848 and 1871, 44.5 per cent.; the production of coal and of railroads in England, between 1856 and 1869, by about 60.6 per cent.; the English production of woolen goods, linen and cotton and yarn, between 1848 and 1870, by from 110 to 335 per cent. (Statist. Journal, 1872, 376 ff.)877.Luther'scomplaint concerning the poor condition of the clergy. SeeSchmoller, in the Tübinger Ztschr., 1860. This very clearly shows how much surer for the crown domains are than a civil list, and donations of land to a church than payments in money. Law of Elizabeth, 18 Eliz., that, in the case of university property, ⅔ of the lease rent should be paid in metal and ⅓ in corn. InAdam Smith'stime, this latter third was worth as much again as the other two. (I, ch. 5.)878.In the sixteenth century, this class was of small importance in most countries; in our times, their ruin would cause general disturbance. The wiser class of capitalists would, indeed, find means to exchange their credits for more certain values, or make it a condition that they should receive in the end a large sum.879.Thus, for instance, the son of a deceased land owner who retains the lands as his own acquits himself towards his brothers who have entered the military or civil service of their country by paying them a certain sum periodically. If a revolution were really impending, the owners of land would soon emulate one another to improve their estates by borrowing capital, if for no other reason, to turn the depreciation of the medium of circulation to their own advantage. In the sixteenth century, the indebtedness of land owners was relatively unimportant.880.It appears fromRoger'sTables, Statist. Journal, 1861, 551 ff., that, between 1583 and 1620, a time during which the population of England increased neither in wealth nor in numbers, there was a considerable increase in the price of nearly all English commodities. Thus, for instance, wheat was, from 1591 to 1600, 468 per cent., and from 1611 to 1620, even 495 per cent. higher than from 1530 to 1533. The Saxon laborer earned, in 1599, in corn, only half as much as in 1455. (Tübinger Ztschr., 1871, 354.)881.When labor is indispensable to employers, it may happen that a small decline in the supply may largely raise the price. Wages, in almost all branches of labor, rose between 1851 and 1856, by about from 15 to 20 per cent.882.This, also, was of little significance in the sixteenth century, but how important now!883.Income taxes,ad valoremduties and tithes rise and fall in their nominal amount as the price of the medium of circulation falls and rises.884.Thus, for instance, the victory of the English Parliament over the unlimited power of the crown, in the first half of the seventeenth century, was very much promoted by the fact that the crown, in spite of all its economy, was always in financial straits in consequence of the depreciation of money. (Power of the purse, power of the sword!) However, any force kept steadily in action is a two-edged sword. While under favorable circumstances, it may be thereby developed, under unfavorable circumstances it may be thereby exhausted. How great a number of representative assemblies, during the revolutions in prices in the sixteenth and seventeenth centuries, allowed their energies to grow dormant!885.Most of the above points are very well discussed in the workW. S., cited above, §137.886.As no one then doubted: CompareW. Raleigh, The Discovery of Guiana, Pref. I refer to Philip of Macedon.887.CompareRoscher, Kolonien, Kolonialpolitik und Auswanderung, 1856, 145 ff.888.Something similar might have been observed in England in 1819 etc., at the restoration of a depreciated paper currency. Among nations in a comparatively low stage of civilization, a variation in the medium of circulation is of less importance than among more highly civilized nations, because trade in money, and still more, credit, are relatively speaking undeveloped.889.Fawcettgreatly exaggerates when he says that with an increase of population and wealth, an increase of money is as much a want as hunger. (Manual, 370.)890.Galiani, Dellab Moneta, III, 1. At the time of the Lex Salica, 10:1. After the Edictum Pistense of Charles II., ch. 24 (Pertz, Mon. Germ., III, 488), 12:1. At the time of the Sachsenspiegel (III, 45), again, 10:1. Under Saint Louis, King of France, 12.5:1. (Leblanc, Traité historique des Monnaies de la France, ch. 1, 2.) In Poland, 1356, 12:1. (Muratori, Dissertt. Medii Aevi, II, 28.) In England, 1262, 9.6; 1272 = 12.5; 1345 = 13.7:1. (Rogers, 1, 593 ff.) Under Henry VI., and in 1494 = 12:1. (Anderson, Origin of Commerce, a. 1422, 1494.) In Denmark, under the former Kings of the Union = 8:1. (Dahlmann, Dänische Geschichte, III, 52.) And so throughout almost the whole of Scandinavia's medieval period, as for instance in the Graugans. (Wilda, Gesch. des deutschen Strafrechts, I, 329.) In Italy, 1579 = 12:1. (Scaruffi, Sopra le Moneta, 1582.) In Holland, 1589 = 11.6:1.Bodinus, De Republ., 1584, II, 3, maintains 12:1 as the general ratio; but the Apostolic Chamber adopted the ratio of 12.8:1. In Germany, according to the instances cited byA. Riese, 1522 = 10:1. The monetary laws of Germany give it in 1524 = 11-⅓:1, in 1551 = 11:1, 1559 = 11-3/7:1;Budelius, De Monetis, 1591 = 11-¼:1. At the beginning of the seventeenth century the relation in Spain was = 13.3; in Germany = 12.16; in Flanders = 13.22; in England = 13.5:1. (Forbonnais, Finances de la France, I, 52.) About 1641, in Flanders, it was 12.5; in France, 13.5; in Spain, 14.1. Immediately after Colbert's death it was, in Genoa, 15.03; in Milan = 14.75:1. (Montanari, Della Moneta, 80.) While in the seventeenth century gold rose, it sank in the eighteenth, on account of the Brazilian gold washings and the many bank notes in circulation, which were for the most part of a large denomination. (Steuart, Principles, III, ch. 13.) Still it was in Amsterdam in 1751 = 14.5:1.891.In Hamburg, the relation of the price of gold to that of silver bars, varied, between 1816 and 1852, from between 15.11-16.2 to 1 (Soetbeer); in London, from 1816 to 1837, between 15.80 and 14.97 to 1.892.In Asia, it is generally lower than in Europe—for centuries mostly = 10:1. But in Birmah it is = 17:1, mostly on account of the extent to which indulgence in luxury is carried there. (Crawfurd, Embassy, 433.Ritter, Erdkunde, V, 244, 266.) Concerning China, seeM. Chevalier, Cours, III, 359. In Africa, gold is low as compared with silver, in proportion to the distance from the civilized world. Thus, an ounce of gold in Shenaar cost 12 piastres; in Suakim, 20; in Djidda, 22. (Ritter, Erdkunde, I, 538.) In Timbuctoo, Mungo Park found the relation of gold to silver to be as 1-½:1. Compare Marco Polo, II, 39 seq.893.In antiquity, a similar course is to be observed. According to Manu's Indian laws, VIII, 134 seq., = 2-½:1; in the East, for a long time, = 10:1; under Darius Hystaspis, = 13:1. (Herodot., 111, 95.) In Greece, in the time of Lysias, = 10:1 (Lysias, pro bonis Arist., Conon); according toPlato,= 12:1 (Hipparch., 231); according toDemosthenes, adv. Phorm., 214, = 14:1 (Böckh, Staatst., I, 43); Menander's estimate, = 10:1, probably because Alexander's victory had made gold cheaper. (Pollux, IX, 76.) Among the Romans, about 189 B.C., = 10:1 (Livy, XXXVIII, 11); somewhat later, = 11.9:1 (Mommsen, in the histor. phil. Berichten der K. Sächs. Gesellschaft, 1851, 184 ff.); in the fourth century after Christ, = 14:1. (Theod., Cod. VIII, 4, 27.) We sometimes find sudden variations. Thus, according toPolyb., XXXIV, 10, gold, in Italy, sank about ⅓ in consequence of the opening of the mines at Aquilea. It sank to the proportion of 9:1 when Cæsar spent the contents of the Roman treasure, which consisted of gold. (Surton., Cæs., 54.) The ratio of 17:1, during Hannibal's wars, was a species of National bankruptcy. SeePlin., H. N., XXXIII, B.894.After the February revolution, the gold-agio, as compared with silver, rose from 10-17 to 70 per 1,000. (M. ChevalierCours, III, 346.) On the other hand, since the discovery of America, gold, as compared with commodities, has declined much less than silver. CompareHermann, Ueber den gegenwärtigen Zustand des Münzwesens, inRau'sArchiv., I, 151 ff. According toLord Liverpool, Treatise on the Coins of the Realm, the value of gold coin in the London market, as compared with bank notes, varied in 40 years, almost 5½ per cent.895.In recent times, it has become possible to extract from ancient silver coins a small quantity of gold, and with some advantage. European industry produced in this way about 1,600 kilogrammes of gold per annum. One half of this amount is obtained in France and the rest in Hamburg, Amsterdam, Brussels and St. Petersburg. (Michel Chevalier, Cours, III, 302.)896.Senior, On the Value of Money, 77 ff. It is certain that a simple variation in prices would not induce people to have gold table services, or architectural ornaments of silver.897.Rau, Lehrbuch, 6th ed., I, § 277 c. In Rau's opinion (loc. cit.) we may, in the course of the next decades, expect a decline of the price of gold of about 76 per cent., and of only 10 percent. of the price of silver (because of the low prices of quicksilver.) But here he seems to overlook entirely what influence a change of standard in important commercial districts would have.898.Compare the works already mentioned.Fleetwood, Chronicon preciosum, or an Account of English Gold and Silver Money, the Price of Corn and other Commodities etc., for Six Hundred Years last past, 1707;Dupré de Saint Maur, Essai sur les Monnaies ou Réflexions sur les Rapports entre les Denrées et l'Argent, 1746;Unger, Ordnung der Fruchtpreise, 1752;Paucton, Métrologie ou Traité des Mesures etc., des anciens Peuples et les modernes, 1780; the appendix toMacpherson'sAnnals of Commerce, 1805; the tables inGarnier'stranslation of Adam Smith, vol. II, 1822;A. Young, Inquiry into the progressive Value of Money in England, as marked by the Price of Agricultural Products, 1812;W. F. Lloyd, Prices of Corn in Oxford, in the Beginning of the fourteenth Century, and also from 1583 to the present Time, 1830;Helferich, in the Tüb. Zeitschrift, 1858, 471 ff. There are some very interesting notes on the history of prices during the Merovingian and Carolingian periods inGuérard, Polyptiques, I, 141 ff.899.Thus, for instance, the bonds (and their coupons) of states, cities, great corporations, certificates of stock, mortgages, bills of exchange, checks.900.A Prussian regulation of 1765 (Goldschmidt, Handbuch des Handelsrechts, I, 550), calls money-paper (Effecten), instruments of trade in which a value or avalutais designated.901.Garnier, French translation of Adam Smith, II, 143 ff., distinguishes between coin-paper and promise-paper: the latter is never found in circulation at the same time with the capital which it represents.Saysays that, for instance, evidences of state indebtedness, state bonds, call for money if they would circulate, but they seldom act as money in circulation. (Traité, III, ch. 2.)Sismondivery well determines the difference in his Richesse Commerciale, I, 160.Rau, Lehrbuch, I, § 293, requires of all good paper money: a., that its mere transfer, even without any proof of its rightful acquisition, should suffice to vest the property in it in the receiver; b., that the power emitting it should enjoy universal confidence or be able to compel universal recognition; c., that its redemption should not be fixed for any definite point of time.902.That it is not possible to keep paper money from declining in value, by the payment of interest, the people of North America learned from more than one experiment during the eighteenth century. (Benjamin Franklin, Remarks and Facts relative to the Paper Money of America, 1765.) The same phenomenon was observed in the case of the Spanishvales, which were created during the North American war in consequence of the absence of the silver fleet. (Bour-going, Tableau de l' Espagne, II, 38 ff.Humboldt, N. Espagne, II, 808.) When the Portugueseapolices(since 1797) still bore six per cent. they depreciated in value; and when the payment of the interest was suddenly stopped, the rate of exchange did not become any lower. (Balbi, Esai statist. sur le Portugal, I, 323.) In Austria, in September, 1820, the bank notes which bore no interest were at a premium as compared with the imperial treasury notes, which did bear interest of 1 per cent., although the credit of both kinds of paper had ultimately the same foundation, namely, Austrian state-credit.903.The attempt to make paper money pay interest suggests (as the Saint Simonists recommend it should, with much ado;Enfantin, Ser les Banques, d' Escompte in the Producteur, 1826), that awkward sword, invented by Count Wilhelm von Bückeburg, to the blade of which a pistol is affixed! Shortly before each term for the payment of interest, the circulation of such paper money would be arrested. If the rate of discount should sink below the rate of interest such notes bore, they would be sought after eagerly and disappear in quantities, and, not be ever seen again until the rate of discount had risen to a high figure, when they would be suddenly presented for redemption. Such interest-bearing paper money, therefore, would be a serious element to aggravate the fluctuations of the money-market between good and bad times. When interest-bearing paper money pays interest at the rate usual in the country, it is hoarded by misers, (v. Struensee. Abhandlungen, III, 387.) CompareForbonnais, Principes économiques, p. 234, ed. Guill., whereasv. Prittwitz, Kunst reich zu werden (1840, 359), takes delight in elaborating the idea of an interest-bearing paper money.904.Of jurists, seeThöl, Handelsrecht, I, § 51, and the authorities for and against inGoldschmidt, Handelsrecht, II, Kap. 4, 1, 2. The compulsory circulation of paper money is an essential element only in reference to the person that issues it. Of political economists, especiallyA. WagnerinBluntschli'sStaatswörterbuch, Art. Papiergeld, Band, VII, who, however, is very soon compelled to oppose to paper money“proper,”another kind not“proper.”Adam Smithunhesitatingly accounts bank notes also paper-money. (W. of N., II, ch. 2, p. 28, Bas.)Huskissonunderstands by“paper-money”only the irredeemable paper-money of the state, while bank notes should be considered as“paper currency.”(The Question concerning the Depreciation of our Currency, 1810.)905.Seyd, Münz, Währungs- und Bankfragen in Deutschland, 50 ff., distinguishes four classes of paper-money: 1st class, paper-money covered by cash; 2d class, bank notes covered after the manner of banks; 3d class, state paper-money; 4th class, such paper money as the notes of the Southern Confederacy after its defeat.906.EvenPlato, De Legg., V, 742, was acquainted with money after the Spartan type, intended only for internal trade: νόμισμα ἐπιχώριον, αὐτοῖς μὲν ἔντιμον τοῖς δὲ ἄλλοις ἀνθρώποις ἀδόκιμον. Besides the state kept for foreign trade a supply of the universal Hellenic money, of which in case of need, private individuals could acquire what portion they needed by exchange. When Dionysius I. issued tin instead of silver money, all the Syracusans, although they noticed the forgery, acted in their intercourse with one another as if they considered the coins genuine. (Aristot., Œcon., II, 21,Pollux, IX, 79.) Timotheos behaved more honorably when, pressed by the dearth of money, he gave his troops copper coin tokens, which passed for the time being for their full value in the camp; but which were later to be redeemed at their full value in silver. (Aristot., Œc. II, 22.) ComparePolyæn, Strateg., IV, 10, 2. The iron money which the Klazomenians exchanged with the rich for silver, which bore interest, but which the rich were forced to take, had a longer duration; the silver was used to pay foreign state creditors, the iron money circulated for the time being in the city, and was gradually redeemed. (Aristot., loc. cit, II, 17.)We are still more forcibly reminded of paper money by the Carthaginian leather money, where any object whatever of the size of a coin was shut up in a leather envelope with the state seal, and then circulated as if it were the coin it purported to be.Mieris, Beschryving der Munstn, 1726, explains the saga of Dido's ox-skin by means of this leather money. Certain it is, however, that the surprise with which the sophistical dialogue, Eryxias, mentions the matter, is a proof how foreign it was to the Greeks. Concerning the Roman plated denarii which were stamped with the silver coins, but which were also accepted by the state treasury, seeMommsen, R. G., I, 405.907.In the middle ages, leather money was issued as a promise of future payment: by the doge of Venice in the wars of 1122 and 1126 (Montanari, Della Moneta, 34); by King John, of England, during the struggle of the barons (Camden); Emp. Frederick II. at the siege of Faventia (Malespini, Hist. Fior., 130,Villani, Hist. Fior., VI, 21); by Louis IX. during his captivity (v. RaumerHohenstaufen, V, 461), John of France, 1360 (Anderson, Origin of Commerce). On the Frankfurt lead marks which were afterwards redeemed by theRechnerei:Kirchner, I, 541. Lavallette's copper tokens during the siege of Malta had the inscription:non æs sed fides. The paper money which was issued during the siege of Leyden, the inhabitants afterwards would rather preserve than have redeemed,ad perpetuam liberationis divinæ memoriam. (Bornitii, De Nummis, 1605, I, 15. Distress coins,melacs, during the siege of Landau and of the HungarianRagoczy,Marpurger, Beschreibung der Banquen, 213.Krones, Zur Geschichte Ungarns im Zeitalter R's, 1870.)908.The Chinese have had various kinds of paper-money in their country since the 7th century after Christ. Sometimes they called them“flying coins, convenient coins,”and sometimescoupons,bons,conventions(Klaproth, Mémoires relatives à l'Asie, I, 375 ff.), against which the caravans, as soon as they had passed the limits were obliged to exchange their silver (Pegolotti, Pratica della Mercatura in Della decima etc., III, 3). These had compulsory circulation in China. The great Mongolian khans here became acquainted with paper-money. (M. Polo, II, 21.) Thus, especially in Persia, where refusal to accept such money and the imitation of it was punished with death (1340). CompareFerishta, ed.Briggs, I, 414 ff.d'Ohsson, Hist. des Mongols, IV, 101 ff.; II, 487. Even here there occurred cases of state bankruptcy and finally withdrawals of the depreciated paper. (Klaproth, loc. cit.) In Japan, according toOliphant, Narrative of L. Elgin's Mission to China and Sapan (1859), all foreign coins were required to be exchanged against paper-money at the offices of the state bankers.909.Adam Smith mentions North American paper money of the amount of 1 shilling, and Yorkshire bank notes of the amount of 1-½ shillings. Sweden had, until 1828, notes of 28pfennigs.910.Hence in Sweden, with its copper standard of long duration, the system of banks of issue was developed very early. The transport-notes (Transportzettel) (to be found in that country as far back as 1661) of the Stockholm bank are considered the oldest bank notes. Compare, however,Palgrave, in the Statist. Journal, 1873. When, in 1768, Catherine II. introduced paper money into Russia, the people gladly paid ¼ per cent. exchange to the state treasury for it. (Brückner, inHildebrand'sJahrbücher, 1863, 49.) According toCancrin, Oconomie der menschl. Gesellschaft, 116, private individuals in from four to five months exchanged 40 millions of silver roubles for paper. And thus, in 1780, Berlin bank notes stood a few per cent. above par, and the notes of the S. Carlos-Bank, in 1788, from 1 to 1-½ per cent. (Rau, Archiv., II, 161.)911.When at times in which paper money is looked upon with diffidence, peasants and others bury their metallic money, this advantage of course is lost. On the other hand, the exportation of precious metal money, caused by the emission of paper money, must not be considered a necessary evil, but rather as the condition precedent which in most cases makes the above advantages of the paper money possible for the first time. CompareAd. Wagner, Die russische Papierwährung (1868), 22, 24, 33.Ricardo, Proposals for an economical and sure Currency, 1816, estimated that England, after the abolition of the bank restriction, needed twenty million pounds sterling. The interest on this amount of capital inclusive of wear and tear etc., should be estimated at at least ten percent.; that is for the whole kingdom at at least from two and one-half to three millions a year. On thisRicardofounded his proposal to base the bank notes on gold bars. In its time, the essay: Guineas an unnecessary and expensive Incumbrance on Commerce, or the Impolity of repealing the Bank-Restriction Bill considered (London, 1802), met with great approval.912.Adam Smithcalls attention to the analogous case in which a manufacturer replaces a costly machine by a cheap one, sells the former and employs the difference between the old one and the new in enlarging his business. (W. of N., II, ch. 2.) When, indeed, all nations have introduced the use of paper money, the greater portion of the advantages which the one nation was able to obtain by its means cease, and the only ultimate result is a depreciation of the value of money and of the precious metals. Formerly the advantage reaped by the single nation that emitted paper money was greater than its share in the depreciation. (Wolowski, Enquête de 1865, 108.)913.When E. Seyd calls bank notes more costly than metallic money, because the former in England require an outlay for administration of 1-½ per cent. per annum, while the wear and tear of metallic money amounts to 1 per cent. only in 20 years (Statist. Journal, 1872, 511), he overlooks the loss in interest and the costs of coinage in the latter case.914.Related to this is the fact that in France, during the assignat-crisis, the large bills of 10,000 francs were harder to get rid of than the small ones. (A. Schmidt'sPariser Zustände, III, 22.)915.The numbering of paper money. A state which should neglect this would not only reserve to itself the possibility of an unlimited increase, but would surrender all control of its officials charged with the emission of the paper money.Law, Trade and Money, 162, advises that a large money reward should be paid to any one who should show the existence of a higher number than allowed by law, or of a duplicate number. And indeed, as comptroller-in-chief, he caused theprévôt des marchandsto be removed, because charged with the duty of burning the paper withdrawn from circulation, he (theprévôt) noticed that the same number reappeared several times.916.If a traveler wished to pay his inn-keeper in the note of a bank entirely unknown in the place, the latter would certainly refuse it. If, on the other hand, the traveler were to offer him a silver coin, the stamp and inscription of which were not familiar, still it would be taken at the value of the metal it contained, after deduction made of the costs of testing it, re-coining it, and compensation for the trouble caused. Ignored byBerkeley, who, indeed, considered metallic money nothing but“counters”or tickets (Querist, No. 23, 26, 441, 475), and who ascribes important advantages to paper money,—which by“stamp”and“signature”is made as costly as gold (440)—over metallic money (226).917.Any person who has witnessed a tax-execution, or sale of property for the non-payment of taxes (Stuerexecution) will admit that a tax receipt is at least as real goods as an umbrella or a glass window that protects one from the storm.Michælisconsiders the amount of running payments to the state for duties, taxes etc., as the only right basis for full-value paper money. (Berliner Vierteljahrsschrift, 1863, III.) Better yet whenHöfkenadvises that only as much paper money should be issued as amounted to the average balance (Bestand) in the national treasury. The tax-basis is defended with great warmth byL. Stein. Louis XIV., in 1704 issued paper money bearing 7 per cent. interest, the acceptance of which by all the royal officers of the treasury was prohibited! (Dutot, Réflexions, 863, Daire.)Law, Trade and Money (1705) ascribes to parcels of land the greatest constancy of value, because they cannot be replaced, because they can be neither increased nor decreased, and because they help to produce all other goods (p. 170). While silver cannot but depreciate, they have a prospect but to rise (188). HenceLawrecommended notes based on parcels of land as the best money. (163, 191, 195.) Similarly,Benjamin Franklin, Modest Inquiry into the Nature and Necessity of a Paper Currency: and the Paper Money of Pennsylvania, New York and New Jersey was actually based on parcels of land, and was to be extinguished by the enfeoffed owners, and the interest paid by them. (Ebeling, Gesch. und Erdbeschreib, von N. Amerika, III, 621, IV, 649.)918.F. Renonard de Ste Croix, Voyage aux Indes orientales (1810), I, 32, describes a species of paper money based on parcels of land which had lost 40 per cent. of its nominal value, although the holders of them were invested with the fief at only one-half their value. The Frenchmandats territoriauxof 1796, declined in five months to 5 per cent. of their nominal value, although they contained the provision that the holders might, without public sale (Auction), have a certain amount of the national estates allotted to them in exchange for themandats. The assignats were still more defective after their redemption (at theCaisse de l'extraordinaire), which was at first intended, and their drawing of interest were not fulfilled. Leaving the tax-basis out of consideration, the notes might, at the sale of the national estates, be brought in as means of payment: a thing which would not have been inoperative, provided the amount of the paper money had been strictly limited to the price of the pieces of land estimated in money. On the 1st of April, 1790, 400,000,000 francs in assignats were issued, and in September, 800,000,000 more, both together about equal to the secularized property of the church. (Ad. Schmidt, Pariser Zustände, II, 97.) But as afterwards all proportion between these two magnitudes ceased, or rather as up to January 1, 1793, 3,626,000,000 assignats were issued; up to September, 1794, over 8,800,000,000; up to September, 1795, 19,700,000,000; and finally up to September, 1796, 45,578,000,000 francs, of which perhaps 6,500,000 were either burned or demonetized, the price of the national estates on lands must naturally have risen as vastly as the assignats declined.919.The paper money issued by Colbert's successor, Chamillard, soon lost on account of its too great amount, 25 per cent. of its value, spite of the fact that it bore interest, and that ¼ of all payments to private persons had to be made in it. (Forbonnais, Recherches et Considérations, II, 182.) When the people of the United States, in 1775, issued paper money, it did not decline in value up to the end of 1776, so long as the amount did not exceed $20,000,000, as it was considered a matter of honor to take it at par. Afterwards, when the amount issued continued to increase, not even the law that a refusal to accept it, or insisting on taking it below par, should be punished with the loss of the commodity, and that the guilty party should be declared a national enemy, could keep it from declining in value; so that in May, 1871, a dollar in specie was worth $200.5 in paper. CompareFranklin, Works, ed. Sparks, II, 421, VIII, 328, 505.France, during the Reign of Terror, on the 2d day of April 1793, threatened the claiming of a discount in the taking of assignats with six years' confinement in chains, and on the 1st day of August, on Couthon's motion, with twenty years' confinement. In addition to this, maximum prices for the principal necessities of life were fixed and the exceeding of them was punished by severe penalties; and in France, and still more in the neighboring conquered countries, there were many persons who preferred to take assignats instead of payment rather than permit themselves to be robbed by requisitions. And yet on the 4th of June, 1796, one franc in specie exchanged for 800 francs assignats. CompareBüsch, Geldumlauf, III (§ 58 ff.,d'Ivernois, Etat. des Finances Française, 1796).920.The Prussian treasury notes of 1806, by virtue of a decree published in 1807, were to be taken by all at a rate of exchange to be officially published from time to time. Between December 1, 1807, and February 28, 1809, the highest“normal course of exchange”was 71, and the lowest 27 per cent. In January, 1815, a refusal to take them at par, except in certain cases, was threatened with from 500 to 1,000 thalers of a money-fine or from 6 to 12 months' imprisonment. But indeed, in December, 1812, of 8,000,000 thalers, there were only 731,625 still circulating. Compare § 7 of the decree of the 19th of January, 1813. In April, 1815, it was ordered that the half of all taxes should be paid in such notes, or that if not, 8-½ per cent, should be added as a penalty. This penalty, reduced in 1827 to 1 silver groschen, was not formally abolished even in 1870, although it had long fallen into disuetude. There was a run of the owners of the notes in 1830, for redemption, and again in 1841 and 1848; in 1848 to the extent of at most 40,000 thalers in one day, and altogether not over 100,000 thalers. (Bergius, in the Tübinger Zeitschr., 1870, 226 ff.) About 1846, it was estimated that scarcely 1/250 a year of Prussian paper money was presented for redemption, while ⅓ of the state receipts came in in the shape of paper money. (Rau, Archiv., V, 125, 207.) The Saxon treasury notes never lost over 2 per cent., although the state treasury redeemed them up to 1804 only at anagioof 9pfennigsper thaler, and afterwards of 1pfennig.921.Those entitled to make money claims are either compelled to accept the paper money at its nominal value or only at its current value for the time being. In the latter instance, the unjust compulsion is much smaller, but at the same time the whole expedient is much less productive to the state; and hence the former is the more usual. It was provided in Austria on the 22d of May and the 2d of June, 1848, that the former should be the rule, and that the latter should govern in cases in which gold or foreign silver had been stipulated for. (Höfken, Oesterreichs Finanzprobleme, p. 53.) On the 7th of February, 1856, it was permitted to contract by express promise for loans in the metallic currency of the country, both for the interest and the repayment of the principal. Hence a species of parallel-currency. If it be made entirely impossible for private individuals to protect themselves against the compulsory circulation of paper money, the more prudent are forced to send their capital into foreign countries, which operates very disadvantageously to poor countries especially. (Wagner, Tübing. Zeitschr., 1863, 441.)922.Thus, for instance, the Frederick coins, and for a time the French assignats were helped by the popular enthusiasm, while Gustavus III., of Sweden, could give little value to his paper. (v. Struensee, Abh., III, 577.) In France, in 1796, 2,400,000,000mandatswere issued instead of all the outstanding assignats; that is, as many as there were assignats at the close of the year 1792. And yet the latter were then only 25 per cent. below par; the former, before one month had elapsed, 80, and in nine months, almost 98 per cent. below par. (St Chamans, Nouvelle Essai sur la Richesse des Nations, p. 150.A. Schmidt, Parisier Zustände, III, 121 ff.) In Austria, in 1811, the volume of paper money was contracted, but in a manner so violent and destructive of credit that its rate of exchange did not rise in consequence. (Tub. Zeitschr., 1763, 1874.) After 1848, also, the rate of exchange of Austrian paper money was much more perceptibly influenced by the variations in the political state of affairs than by the changes in its volume. (Tub. Zeitschr., 1856, 129.) In the summer and winter of 1866, about 650,000,000 paper rubles circulated, with scarcely any increase or decrease; and yet the ratio of exchange was, during a part of the summer, 66, and in winter, 84 per cent. of the silver value of the ruble. (Wagner, Russ. Papierwährung, 74.) Instances in which the increase in the price of commodities began to be more general only after the volume of paper money had decreased; in Austria, in 1851 and 1866; in Russia, in 1857 (loc. cit).923.Then precious metal money becomes a commodity of which great stores may be collected in the country itself, at the banks, but chiefly for foreign trade. It is said that Austrian business men in 1860 and the following years invested“hoards”to the amount of several hundred million florins in exchange on metallic-currency countries. (Tüb. Zeitschr., 422.) Good paper money will never drive out the whole supply of cash money out of a country, because a good portion must always be kept for purposes of redemption; depreciated paper money operates much farther in this direction. Even the exportation of small change may become a profitable speculation as soon as the amount of depreciation of paper money exceeds the seigniorage. Then usually small change of a worse kind is stamped, as, for instance, in Austria, copper instead of silver; and in 1860, 12 millions florins of paper small change. Here the exportation of the better money is not a consequence, but the motive to the manufacturing of the worse.924.During the assignat-period it could happen that a land owner, after the term for which he had farmed out his land, might be compelled to surrender it to the farmers, for the reason that the taxes, requisitions, etc., paid by the farmers, amounted to more than the farm rent. In the case of the former, the calculation was based on the recent depreciated value of the assignats; in the case of the latter, on the higher value the assignats had at the moment that the contract was concluded. (Büsch, Geldumlauf, III, 62.) A writer in the Revue des deux Mondes, April 15, 1865, thinks that one reason why the American civil war was so popular in the northwest was because the paper money issued during the rebellion made it easy for that part of the country to pay off the mortgage-debts which had burthened it since 1848. Even of the two law catastrophes,Duclos, in his memoirs, remarks that they produced a great admixture of those who had been formerly separated by differences of class and wiped out the previous ideas of decorum, fitness, etc.925.During the time that the clipping of the coin was practiced, it is scarcely possible to show that money was debased below 11 per cent. of what its value should have been. See, on the other hand, §3. In Austria, in 1810, a person had to give 1,200 florins in paper money for 100 florins in silver. (Tüb. Zeitschr., 1861, 593.) In North America, in 1781, it took $280 in paper to purchase $1 in silver. (Ebeling, Gesch. und Erdbeschreib., von N.A., 1856, III, 580; IV, 440; V, 437.) During the American civil war, the paper money of the Southern States declined to ½ (December, 1863) and even to 1/35 (October, 1864) of its nominal value. CompareHock, Finanzen der V. Staaten, 514 ff. Observed even byStorch, Handbuch,Rau'stranslation, III, 141 ff. (See, on the other hand,C. King, Thoughts, p. 113.) In Paris in July, 1795, the greater number of commodities estimated in assignats were worth as much as if the rate of exchange of the latter was 6-14 per cent. of their nominal value, while it actually amounted to only 3-½ per cent.926.Where anagioof exchange of metallic money as compared with paper is prohibited, the decline of the latter will manifest itself not only in foreign rates of exchange, but also in the price of bars of the precious metals.927.The changes of the agio or premium depend mainly on the supply and demand of the precious metals, that is, on the extent and intensity of the business transactions which have to be made in these metals themselves. (Wagner,Russ. Papierw., 87.) Hence, for short periods of time, it may be said in a paper currency country, that business transactions based on cash money have a great element of variation in them. (WagnerinBluntschli'sStaats-wörterbuch, III, 971.) The purchase and lease-hold prices of fixed capital, of houses, for instance, rise much less because most people look upon the distress as transitory, and of short duration. (A. Walker, Sc. of W., 133.) In Austria in 1859, the rise of the agio of exchange of silver from par to 40 per cent., and its subsequent fall within 7 months to 20 per cent., left the price of coin almost entirely unaffected. (A. Wagner, Gött. Anz., 1860, 114.) That country people in general suffer more from a bad paper currency than the towns people and inhabitants of cities, seeBonamy Price, Currency and Banking, 175, seq. In the northern states of the American union, in 1864, 12 home kinds of commodities had risen 148 per cent., 7 foreign kinds of commodities, 164 per cent., and 7 which could be obtained only from the southern states, 353 per cent. (v. Hock, 186 seq.) As too great issues of paper money are so frequently made on account of war, it is comparatively easy to understand why it is that articles for which war creates a demand should rise in price very soon and very high; while the very opposite happens in times of taxation-distress, in the case of a great many articles of luxury, which can readily be dispensed with.Büschremarks (Werke, VII, 91), that retail dealers frequently raise their prices in order not to be obliged to pay out so many small coins as change for the paper dollar.928.CompareHufeland, N. Grundlegung, II, 241. Self-seeking undertakers (Unternehmer= men of enterprise) have, on this account, both in Austria and Russia (Wagner, Russ. P.W., 105), but more so in North America (v. Hock, 556 ff.), opposed measures intended to restore values (Valuta), on the ground that they were anti-national. EvenSperauskyexperienced this in 1809, when he published very correct ideas on paper money, while in the“fairy”times of Catherine II., no one even thought that state paper money is a state debt. (Bernhardi, Russ. Geschichte, II, 2, 636.) One of the principal representatives of this course isH. C. Carey, Our Resources (1866), and in the New York Herald, 1865. On the other hand,Faucherrightly calls the more active exportation of countries, with a bad paper currency, an exportation of barbarous nations, the commerce of misery, to which any price paid in metal or in any higher-standing product of civilization is acceptable. (Vierteljahrsschrift, 1868, IV, 167.) The nation in the aggregate loses in international trade for the simple reason that its foreign creditors will accept its paper money at most at its current rate of exchange against specie, while foreign debtors force it upon the nation at its nominal value.929.The different provinces also of a large empire may have very different degrees of depreciation of the same paper money. Thus, in the interior of Russia its rate of exchange against specie had for a long time not declined beyond 50 per cent. of its nominal value; while the foreign rate of exchange supposed a decline to 33-⅓ per cent. (Cancrin, Weltreichthum, 68.)930.An enhancement of duties, taxes (Abgaben) etc., will seldom be able to progress in the same measure as the paper money sinks; in any case, a law would be necessary to effect this, which, however, comes always later than the decline. (Sismondi, Du Papier Monnaie, 27.)931.Wagner, Russische Papierwährung, 142, estimates that the Crimean war depreciated the average current rate of exchange of Russian paper money by 11.1 per cent., the Italian war of 1859 by 14.5 per cent., the German war of 1866 by 19.4 per cent., spite of the fact that Russia did not participate directly in the last two wars.932.The more than forty-five milliards French assignats, estimated at their rates current, really produced to the state only about six milliards. (Gentz, Histor. Journ., 1800, II, 317, afterLecoulteux.)933.Very well explained byH. Thornton, Paper Credit of Great Britain, ch. 10. As to how, in Austria, the paper-money crisis contributed to bring the rigid national resources into a molten state, and to shake off the national inertia by the feeling of insecurity, seeBuquoy, Theorie d. Wirthschaft, 1816, 347 ff.Schäffle, System, 3 aufl., 254 seq., thinks that if Austria should first adjust its values, and then, in case of another war, have recourse to a second depreciation, the disastrous disturbances of its national economy consequent herein would be produced twice instead of once, and not without reason.934.The Prussian treasury-bills stood, in June, 1809, at 36 per cent. of their nominal value; June, 1810, 84-½ per cent.; January, 1812, 13-½; December, 1812, 44-½; June, 1813, 26-½; July, 1813, 24-½; December 31, 1813, 49-½; January, 1815, 88; January 5, 1816, 99 per cent. Austrian paper money expressed in terms of metallic money, amounted, on an average, between 1849 and 1855, to 292,000,000 florins: but at certain moments, it fluctuated from 231,000,000 to 337,000,000. (Tübing. Zeitschr., 1856, 124.) The agio of silver fluctuated during theBancozettel(bank-billets, a species of Austrian paper money) period from one day to another on Change 40 and even 100 per cent.: thus, on the news of Napoleon's entry into Paris, between the 25th of March and the 4th of April, from 330 to 440; on the receipt of the news of the result of the battle of Waterloo, in three days, from 458 to 412; after Napoleon's abdication, from 412 to 320. (Gentz, Werke, V, 62.)Huskissonrightly calls a depreciated paper currency a much worse thing than clipped coin: the clipping of the coin is, so to speak, one great blow after which people can again calculate with certainty; but bad paper money is one continual fluctuation.935.“The only difference here is that it is not left to individuals to say whether they will join in the game or not.”(Helferich.)936.During the later assignat-period every house was full of commodities, every pocket of samples; every“exquisite”and every lady was a merchant, because no one had any further confidence in the money. People had retrograded to the barbarous condition of trade by barter. (Goncourt, Histoire de la Société française pendant le Directoire, 1854.) The French constitution of 1795 fixed the salaries of members of the Directory at the value of 50,000myriogrammesof wheat (art. 173, 68). In Delaware, while the depreciation of paper money lasted, farm rent was usually required to be paid in produce. (Ebeling, V, 37.)937.“Of all contrivances for cheating mankind, none has been more effectual than that which deludes them with paper money.”(D. Webster.) The American Secretary of the Treasury,McCulloch, says, in the report of December 7, 1868, of the legal tender notes:“there can be no doubt that these acts have tended to blunt and deaden the public conscience, and they are chargeable in no small degree with the demoralization which so generally prevails.”Niebuhrattributes the decline of old Spanish honesty which was formerly so much relied on in all great money centers, principally to thevales. (Nichtphilol. Nachlass, 489.)938.This calls to our mind the impersonal mass-crimes to which our own times so frightfully incline, when many a man who would recoil in horror from an ordinary act of pocket-picking or from manslaughter with intent to commit larceny, robs thousands in cold blood by means of a swindling enterprise, or, for the sake of a fraudulent insurance, destroys the lives of a whole ship's crew.939.Saxon loans of two million thalers treasury notes (Kassenbillets), August, 1813, which were then to bear interest in silver and to be paid in silver. The purchase of the precious metals, or loans made by the state in foreign countries, with the intention of redeeming paper money, effect the same end at a much greater cost. (Peschel, D. Vierteljahrsschrift, 1858, III, 254.) If the currency consists of bank notes endowed by the state with compulsory circulation and an irredeemable character, such a metallic loan made in order to reimburse the bank for a loan to the state in depreciated notes is a gift made to the bank without reason; and the metallic money brought into the country flows back into foreign parts when the bank restriction is removed, because it, together with the appreciated notes, creates a too abundant circulation.940.Although in England the suspension of the redemption of notes had lasted from 1797 to 1819, depreciation of notes during the greater part of this time either did not occur at all (Summer of 1797 to 1799, 1802 ff.) or was very small; and even during the last five war years, it did not amount to much over 30 per cent. About 1817, the notes of themselves again rose to par, and had lost but little during the following years, in consequence of the great loans of the continental powers in the English market. Under such circumstances, the repeated promise of the state to make the notes redeemable at their full nominal value was certainly a cogent reason for the Peel's Act of 1819. In favor hereof are especiallyTooke, Hist. of Prices, II, p. 60 ff., andJ. S. Mill, Principles, III, ch. 13. Opposed to it, the so-called Birmingham-Atwood school and alsoLord Ashburton, in his statement before the Agricultural Committee, 1836. But according toRob. Muschet, Tables, exhibiting the Gain and Loss to the Bondholders arising from the Fluctuations in the Value of the Currency (1826), the state creditors, on the whole, lost more by the depreciation of the notes than they gained by their subsequent rise.Ad. Wagneralso is decidedly in favor of the course A.941.This has occurred not unfrequently in the case of the paper money of subdued revolt: thus, for instance, the Hungarian of 1849; in the case of the Southern Confederacy. But the assignats, too, came to this end, although, according toBüsch(Werke IX, 526), the intentions of the country at first were good; and in Austria, in 1810, many prophecies looking in this direction were made. (Per contraRehberg, Sämmtl. Schriften. IV, 334.) Not very differently did it fare with the Swedish coin-tokens (Münzzeichen) of Charles XII, which were altered 7 times between 1715 and 1718; and where besides, the tokens called in in a much too short space of time were transformed into small change coins 1/32 their value hitherto. (BrücknerinHildebrand'sJahrb. 1864, I, 161, ff.)942.Thus it was, for instance, in Austria, in 1811 and 1820, at 1/5 and 2/5 of the nominal value, in 1799 in the United States, in 1813 in Denmark with the currency notes (Courantzettel), in 1816 in Norway with the royal bank dollar notes, in Sweden in 1814 with the bank notes (Bancozetteln) at 37-½ per cent., in 1839 in Russia with thebankassignationen, at 2/7 of their nominal value. Of theoretical writers this course is recommended among others byJacob, Staatsfinanzwissenschaft, § 980 ff.;Nebenius, Œff. Credit, 2 Aufl., ff.; Deutsche Vierteljahrsschrift, 1841, I, 65;Rau, Lehrbuch, III, § 528;Helferich, Tüb. Ztschr., 1856, 435 ff. According tov. Rotteck, Lehrbuch, IV 402, it may be assumed that paper money is spread among the people of a country in proportion to their resources: which is also the hypothesis on which all direct taxation is based. Hence the gradual depreciation of paper money operates like the imposition of a tax and thereduction of value(Deralvirung) is, so to speak, only the release of the same. BesidesGentz(Werke by Schlezier, IV, 58) shows from the example of Austria in 1811, that in the case of the taking up of a depreciated paper currency it makes a better impression to give 100 florins in specie for 1,000 florins in paper, than 200 florins in a new kind of paper. The holders of the old paper money have now lost confidence in all paper currency. Of similar import is the immediate abolition of the compulsory circulation of paper money at its nominal value (Prince SmithinFaucher'sVierteljahrsschrift, VII, 126 ff.), and the introduction of compulsory circulation in accordance with the day's quotations of the actual value of the paper as compared with specie. (Strache, Die Valuta in Œsterreich, 1861;per contra,Ad. Wagner, Tüb. Zeitschr., 1861, 606 ff.)943.Such measures as were adopted in Austria, in 1811, where a“redemption and extinction deputation,”independent of the government was established and sworn to prevent a further increase of paper money, are not sufficient of themselves alone.944.The Code Civil (art. 1895) makes the nominal value entirely conclusive; so, also, the Prussian Landrecht (I, § 790): which is to proclaim the omnipotence and infallibility of the state power in the most ingenuous or else in the most brutal manner. The power given byPuchtato metallic value (Pandecten, VII, aufl., § 38) is applicable neither to paper money nor to small coin; and it ignores entirely that stamped coins and currency money are something different from mere metallic commodities and even from metallic bars. The Austrian civil law (bürgerliche Gesetzbuch) decides in favor of the current value (986 seq.): a view which most modern jurists sinceSavigny(Obligationenrecht, I, 404; earlier yet,Hufeland, Ueber die rechtliche Natur des Geldschulden, 180) entertain. But they even fail to recognize that the depreciation, for instance, of paper money as compared with specie and general decrease of purchasing power are identical only in the case of such paper money or reduced coins which have no compulsory circulation. (A. Wagner, Tüb. Ztschr., 1863, 478 ff.)945.Let us suppose that at the moment the state could perform its duty to its servants only to the extent of one half. If it should frankly admit this, pay one-half in good money and remain in debt for the other half, it might subsequently, in better times, make good to them or to their heirs what it had now refused; and thus private credit, from the disturbance of which the state can only suffer, suffer no diminution. Both are quite different when the state disguises its insolvency under the mask of apparent full payment in paper money which has lost 50 per cent. of its nominal value. In opposition to the myth that the assignats saved France, seeLevasseur, in the Acad. des Sc. m. et. p.946.It not unfrequently happens that a nation's paper money has been directly or indirectly affected by an unfriendly state. Thus for instance, England, in 1794, tolerated an assignat manufactory at Lambeth, while Frenchmen imitated English bank notes. (Archenholz, Aenalen XI, 429.) Napoleon in 1812 issued forged Russian bank notes. (Cancrin, Œconomie der menschl. Gesellschaft, 136.Niebuhr, Gesch. der Revolution, II, 314.) When Maria Theresa first wished to introduce paper money, Bolza, her minister of finance, in his urgent appeal to her to desist from adopting such a measure, foretold the subsequent bankruptcy etc. (Mailath, Oesterr. Gesch., V., 83.)Adam Smithcompares gold and silver circulation to a highway which, indeed, produces nothing directly. Paper money is an advance similar to that which would be produced by the construction of a machine adapted to the carriage of persons and goods through the air, and which permit the highways hitherto used to be turned into meadows, arable land etc.Ad. Smithvery strongly emphasizes the insecurity of these“Dædalian wings”as compared with the“solid ground of gold and silver,”especially in the transitory misfortune produced by war. (W. of N., II, p. 78, Bas.)David Humesays of all paper media of exchange, that they share all the harmfulness of an increase of specie money, enhancement of the price of commodities, aggravation of the obstacles to exportation; but that they do not share in the useful properties of specie money. (Discourses, On Money and on the Balance of Trade.) The youngerMirabeaukept Necker from pursuing his plan to issue paper money with the words:du papier monnaie c'est la peste circulante!Inconsistent as Napoleon was in his bank policy (compareHorn, Bankfreiheit, 304), he always rejected paper money. As in 1805 he wrote to the minister of justice:je ne veut pas de papier monnaie: so, in opposition to the minister of the interior, he in 1810 compared it to the plague:le plus grandfléau des nations. (Acad. des Sciences m. et p., 1864, II, 212.)Sismondi, too, compares paper money to the paper cannons of the Chinese, which render a cheap service until the hour of danger comes. (N. Principles, II, 107.) Of the banks he says:les avantages aussi-legers les dangers aussi graves. (Eludes, II. 421).Cancrin, Œkonomie der menschl. Gesellschaft, 1845, 152 ff., says he thinks that possibly it might have been well never to have established banks, but that yet the craving for the new is preponderately good, it brings inventions and improvements with it. EvenTookeconsiders the insecurity of paper money a disadvantage which more than counterbalances its cheapness. (Considerations on the State of the Currency, 1829, 85.) On the doubts ofJeffersonandGallatin, seeWolowski, Enquête, 170, seq.Webstercalled paper money“the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow.”Tout papier monnaie par lui même est un mensonage.(M. Chevalier, Cours, III, 428.)M. Niebuhrcalls banks a poison which should be used with moderation. (Bankrevolution und Bankreform, 1846, 37.) Compare the writers named in §2.947.Avec la liberté un peuple n'a jamais de mauvaises monnaies(F. Lenormant): entirely so, providedlibertébe translated“true and insured freedom.”948.Law's giddy projects under the regents of Orleans and the assignats of the first republic; Austria, Russia and the United States; the Danish absolute monarchy, and Sweden, both under Charles XII., and its oligarchical times. The history of Rhode Island paper money is peculiarly scandalous. All debts had to be paid within two years, or to be held invalid, and juries were dispensed with in such cases. (Ebeling, Gesch. und Erdbeschreib. von N. America, II, 173 ff.)949.Ad. Müllercompares“cosmopolitan”metallic money to a universal language: paper money ties one to the country, as people do not like to travel in foreign parts when they understand only their native language. As paper money compels subjects to take an interest in the state, a state like Austria would act very foolishly if it should begin its reorganization by enhancing its depreciated values (Valuta). (Elemente der Staatskunst, 180, III, 171; II, 339 ff.) Even in 1830, he found fault with the Austrian loan for the payment of the paper money. (Briefwechsel mit Gentz, 321 seq.) He lauded paper money because he claimed it led a country back to the barter And service-economy of the middle ages. (Verm. Schriften, I, 59 ff.) Similarly,Gentz, in his later writings. CompareRoscher, Gesch., der N. Œk., in Deutschland, II, 762.950.Who, for instance, would lay by a paper dollar in the savings bank for his godchild? In this respect, too, oriental countries have preserved much of the medieval. Concerning the aversion of the Egyptians of our day for all paper money, seeStephan, Ægypten, 250 seq. This is all the more surprising since during several months after the harvest, there are from 4,000,000 to 8,000,000 piasters in specie sent every day from Alexandria by post to private individuals in the provinces. In addition to this there is the immense difference in the French, English and Austrian coins circulating in the country, and which have very different rates in the different provinces. It is still worse in Arabia. (v. Maltzan, Reise, I, 27.)951.Comparev. Schlozer, Anfangsgründe, I, 140 ff.M. Niebuhr(Rau's Archiv. N.F. II, 125) finds paper money best adapted to countries without any exchange-trade, but which at the same time require a species of money easily computed and easy of transportation (Russia); countries whose national economy has an extraordinarily rapid growth (the United States); and in unusually solid countries (Scotland).952.List, Nat. System der politischen Œk., I, 394. A private individual of small means who should go on his travels without money would be subject to all sorts of annoyances; a king or a Rothschild, just as soon as he was recognized as such, would find credit everywhere. Thus, English businessmen have outstanding claims in all parts of the world, which might without any great difficulty be called in in the precious metals. The more the division of labor is developed, the better may the condition of a nation's whole economy be seen reflected in the course of its banking system and its exportation and importation.

Footnotes1.The author's preface to the twelfth edition is confined to pointing out the improvements etc., made in the eleventh. There is no new preface to the thirteenth edition of the original, which appeared in 1877.—Translator.2.“We shall never thoroughly understand the reason of customary law unless we also have a knowledge of that which is not customary. The one is connected and bound to the other. We have no slaves; why vex ourselves with questions about slaves?—Words worthy of a novice.”3.“I am a man; I think nothing foreign to me that pertains to man.”4.“That excellent and glorious philosophy.”5.Introduction to the Civilistisches Magazin.6.Dunoyer, De la Liberté du Travail.7.Cicero, De Leg., I.8.Discours Préliminaire du Code Civil.9.Cicero, De Leg., II, 4.“Legem neque hominum ingeniis excogitatam, nec scitum aliquod esse populorum, sed æternum quiddam quod universum mundum regeret, imperandi, prohibendique sapientia.”Ibid.10.Revue de Législ. et de Jurispr. (1841, XIII, p. 39.)Montesquieusays:“The relations of justice and equity are anterior to all positive laws.”11.Mr. Wolowski translated the second edition of Roscher's Principles into French, and prefixed the present essay thereto as a preface. Since Wolowski's translation appeared, the original work has gone through eleven editions, been largely increased in size, and enriched with new notes, the result of nearly twenty additional years of research and thought. The thirteenth German edition, from which the present translation is made, is larger than the first by one hundred and seventy pages.—Translator's note.12.And he adds:“Animals which yield only to an impulse or blind instinct, come together only fortuitously or periodically and in a manner destitute of all morality. But in the case of men, reason is mixed up more or less with every act of their lives. Sentiment is found side by side with desire, and right succeeds instinct. I discover a real contract in the union of the two sexes.”It would be impossible to present a more complete or eloquent refutation of the definition of the Roman jurisconsults which debases marriage to the level of the promiscuous coming together of animals, and which limits the natural law to the law common to man and beast.“Jus naturale est quod natura omnia animalia docuit; nam jus istud non humani generis proprium, sed omnium animalium quæ in terra, quæ in mare nascuntur, avium quoque commune est. Hinc descendit maris atque feminæ conjunctio, quam nos matrimonium appellamus, hinc liberorum procreatio, hinc educatio; videmus etenim cætera quoque animalia, feras etiam, istius juris peritia censeri.”D. L. I. De Just. et Jure.13.Comment. in tit. Dig., De Just. et Jure, VII, 11th Naples edition. The ingenious argument of the great jurisconsult falls to the ground under the beautiful words of Cicero:“Ut justitia, ita jus sine ratione non consistit; soli ratione utentes jure ac lege vivunt.”De Natura Deorum, II, 62.“Virtus ratione constat, brutæ ratione non utuntur, cujus sunt expertia, ergo jure non vivunt, et ut rationis, sic jures sunt expertia.”Besides, Cujas himself recognizes how faulty and incomplete was the definition he was defending:“At ne jus quidem naturale, de quo agimus, est commune omnium animalium quatenus rationale, est, sed quatenus sensible est, sensui congruit. Tullius participare hominem cum brutis eo quod sentit, sed ratione ab eo differre. Et alio loco: jus naturale esse commune omnium Quiritium, veluti ut se velint tueri: sed hoc distare hominem a bellua, quod bellua sensu moveatur, homo etiam ratione.”14.Rossi.15.Politics, I, ch. I, II.16.Ueber die Nothwendigkeit eines Allgemeinen burgerlichen Rechts fur Deutschland.17.Vom Beruf unserer Zeit für Gesetzgebung etc.18.In one of his latest productions (Ueber die sogennante historische und nicht historische Rechtsschule, Archives du Droit Civil, Heidelberg, XXI 1838) the veteran of the philosophical school, resuming a debate begun a quarter of a century before, energetically defends himself against the erroneous interpretations which it was sought to give to his thoughts.“Does it follow,”he inquires,“that because a man is desirous of reform, he must surrender the study of the past? And if there be new laws to construe, how could his evil genius deter him from the necessary knowledge of ancient laws? Is there a single jurisconsult, who, in the hope of a better future, despises the meaning and spirit of that which still exists? I do not know even one.... And when I am accused of passing by the institutions of the past with coldness and hatred in my heart, because I was one of the first to express the hope of a better future, a charge is laid at my door which is perfectly incomprehensible ... I am reproached with despising the history of law. It is a slander on me. Although I have only laughed at these reports, one man's mistake grieved me; for that man's name was Niebuhr.... When he [Niebuhr] returned from Italy to devote himself entirely to science, in his retreat at Bonn, he passed through Heidelberg, where he remained five or six days. During a great part of that time we came frequently together. He was at first a little cold; but Cicero made us friends. After a happy word let drop concerning that writer, he asked me what I thought of him. I answered laconically:‘If they were burning all the Latin authors, and I were permitted to grant a pardon to one of them, I should say, without hesitation: Spare the works of Cicero.’He joyfully exclaimed:‘I have at last found a man who judges rightly of Cicero. I share your admiration for him, and that is the reason I have given my boy the name of Marcus.’The ice was now broken, and he frankly told me that he could not understand how I could be an inveterate enemy of Roman law and of the history of law. I gave him to understand that I had simply been slandered, and I added, that, in order to live entirely with the classics, I had always refused to give legal advice, or act as a counsellor, although I might have made a fortune in that way. I told him that I owed my gayety and vigor, in great part, to my love for the classics of all ages, even those outside the domain of jurisprudence; but that I held, above all things, to the good qualities of the German nation, and that I did not hesitate to say with Facciolatus:‘Expedit omnes gentes Romanis legibus operam dare, suis vivere.’“When he heard those words of mine, he exclaimed with his usual energy and vivacity:‘Habes me consentientem, labes me consentientem.’From that moment all coldness between us was at an end, and we approached, without any embarrassment, a host of questions in one conversation in which I endeavored, as I had before, to learn from him.“Thus I receive with sincere gratitude, all the works, both useful and profound, which have appeared in our day on the history of law. It would be folly in me to deny the impetus which the study of positive law has received. New sources have been discovered. Their newness and importance have excited the zeal of many scholars who have studied them profoundly; a fact which made a review of the older sources, still by far the most important, necessary. These two circumstances soon rendered it imperative to proceed to the making of scrupulous dogmatic researches. Thus there now is a new life among jurisconsults, and a great activity, which, it is my hope, may continue long.”19.Revue de Législ. et de Jurisprudence, 1834-35.20.Rossi.21.M. de Bonald.22.M. Cousinhas brought this out in an admirable manner in his lectures on Adam Smith. Cours de Philosophie Moderne.23.Channing.24.Knies.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode, Braunschweig, 1853.25.Cours Complet d' Economie politique, II, 540, éd. Guillaumin.26.Cousin.27.We here append an extract fromHeinrich Contzen'sGeschichte, Literatur, und Bedeutung der Nationalökonomie, Cassel und Leipzig, 1876, p. 7:“Roscher ... is rightfully considered the real founder and the principal representative of the historical school. This school is continually gaining in extent, and has found, both in Germany and in France, the most distinguished disciples—men who honor Roscher as their teacher and master, the leader whose beacon light they follow. Roscher combines the richest positive learning with rare clearness and plastic beauty in the presentation of his thought. These are conceded to him on every hand; and it does not detract from him, or alter the fact that he possesses them, that, here and there, an ill-humored or maliciously snappish critic calls them in question.”It should be borne in mind here that Wolowski wrote in 1857; Contzen, like Wolowski, a politico-economical writer of mark, in 1876.—Translator's note.28.Leben, Werk und Zeitalter des Thukydides.29.Rau'sArchiv., Heidelberg. This remarkable essay has since appeared in Roscher's Ansichten der Volkswirthschalt vom geschichtlichen Standpunkte, 1861.—Translator's note.30.Grundriss zu Vorlesungen über die Staatswirthschaft nach geschichtlichen Methode.31.Berliner Zeitschrift für allgem Geschichte.32.Ueber Kornhandel und Theuerungspolitik, 3d ed., 1852.33.Untersuchungen über das Kolonialwesen.34.Umrisse zur Naturlehre der drei Staatsformen (Berliner Zeitschrift, 1847-1848).35.Ueber das Verhältniss der Nationalökonomie zum klassischen Alterthume (K. Sachs Akademie der Wissenschaft, 1849). Also to be found in Roscher's Ansichten etc.—Translator.36.Zur Geschichte der englischen Volkswirthschaftslehre im 16 und 17 Jahrh.37.Ein nationalökonom. Princep der Forstwirthschaft.38.Roscher'scomplete work he calls“A System of Political Economy.”It embraces the four parts above referred to; but each of these parts constitutes an independent work. The first part, or the Principles of Political Economy, covers the ground generally covered by English treatises on Political Economy.Besides the works above mentioned,Professor Roscherhas written Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte, 2d ed., Leipzig, 1861; Die deutche Nationalökonomik an der Grenzscheide des sechszehnten und siebenzehnten Jahrhunderts, Leipzig, 1862; Gründungsgeschichte des Zollvereins, Berlin, 1870; Betrachtungen über die geographische Lage der grossen Städte, Leipzig, 1871; Bertrachtungen über die Währungsfrage der deutschen Münzreform, Berlin, 1872; Geschichte der Nationalökonomik in Deutschland, Munich, 1874; Nationalökonomik des Ackerbaues, 8th ed., Stuttgart, 1875.—Translator's note.39.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode.40.Die National Œkonomie der Gegenwart und Zukunft.41.Recherches sur les Finances de France.42.Frédéric Passy, de la Contrainte et de la Liberté.43.Poor peasantry, poor kingdom; poor kingdom, poor sovereign.44.Cours d' Econ. polit., 2e., Leçon I, p. 33.45.This would be: Propter vitiam, vitæ perdere causas.46.Cousin, loc. cit., p. 276.47.Ibid., 274.48.Frédéric Passy: De la Contrainte et de la Liberté.49.Schäffle, Deutsche Vierteljahrsschrift (1861), emphasizes this.Adam Smith, Wealth of Nations (1776), very characteristically, begins with the yearly labor of the nation;J. B. Say(Traité d'Economie Politique, 1802), withrichesses;Ricardo(Principles of Political Economy and Taxation, 1817), with the idea of value.50.The sum total of the wants (Bedarf) of the Bavarian people, for a whole year, is estimated byHermann, Staatswirthschaftliche Untersuchungen (2d ed., 1870, p. 81), at 177,000,000 florins for food (77 millions for wheat and potatoes, 69 millions for meat, 15 millions for milk etc., 16 millions for eggs, vegetables, salt and spices); 50 millions for clothing, 45 millions for shelter, 37.5 millions for fuel, 60 millions for beverages.51.The original adds:deren Gesammtheit sein Bedarf heisst; the aggregate of which is called his [man's] Requisite (Bedarf). There being no exact equivalent in English for the wordBedarfin this connection, this note is appended.—Translator.52.According toBoisguillebert(ob. 1714) Traité des Grains, I., c. 4, the wantsnécessaire,commode,délicat,superflu,magnifique, arise in successive order with increasing welfare or prosperity, and are surrendered in a reverse order, with increasing need.Tuckerdistinguishes necessaries, comforts, and conveniences of the respective conditions, elegancies and refinements, and lastly,“grand and magnificent.”(Two Sermons, 1774, 29 ff.);F. B. W. Hermann, loc. cit, 1st, ed., 1832, 68; necessary goods (Güter der Nothdurft), goods that contribute to pleasure and recuperation, to culture and splendor.53.CompareTucker, On the Naturalization Bill (1751 seq.), IV, note.54.No people without fire (Prometheus!); and it seems that broiling was the earliest mode of preparing food; then followed baking in heated cavities, and lastly came boiling in vessels. (Klemm, Allgemeine Kulturgeschichte, I, 180, 343.)55.There is an interesting attempt byFaucher, in the Vierteljahrsschrift für Volkswirthschaft und Kulturgeschichte, 1868, III, 148 ff., to determine the relative place of our various wants according to their capacity for extension or contraction.56.The qualification“true,”excludes from the circle of goods, not only all those things which might satisfy only irrational or immoral wants (compareMischler, Grundsätze der Nationalökonomie, 1856, I, 187), but also vindicates the fundamental idea of the whole system of Political Economy, as a subject of moral as well as of psychological investigation.57.EvenAristotle(Eth. nicom. V, 8), considers that all things intended to enter into commerce, should be susceptible of comparison with one another, and that the measure of this comparison iswant, which is the foundation of all association among men.58.An Arab helped pillage a caravan, and carried away, as his share of the booty, a chest of pearls. He thought it a box of rice, and gave them to his wife to cook, but finding they did not boil tender, he threw them away. (Niebuhr, Beschreibung von Arabien, 383). See a similar anecdote inAmmian. Marcell.,XXII. CompareStrabo,VIII, 381.59.As soon as the Persians renounce the superstition that the daily contemplation of a turquoise is a talisman against the "evil eye" (K. Ritter, Erdkunde, VIII, 327), that precious stone will lose much of its value. On the other hand, the amulets of antiquity, although they have long lost the quality of goods as objects of superstition, have now a real value for the archæologist.60.Since observation shows, that, as time runs on, matter tends more and more to becomegoods, the blind forms of motion in nature to become useful labor and useful sustenance, impersonal and objectless existence to be transformed into personal property and personal culture,Schäffleinclines to the belief that the whole mechanism of unconsciously governing nature is destined ultimately to aid in the realization of moral good, which alone is really valuable. Das gesellschaftliche System der menschlichen Wirthschaft, III, Auff., 1873, I, 3.61.Hermann, loc. cit, 1st ed., I, calls internal goods whatever each of us finds in himself, the free gift of nature; also that which we develop in ourselves by our own free action; and external, whatever we create or obtain, through the external world, as a means of satisfying our wants. The internal goods of one man may be external goods to another, as, for instance, when the former conveys them directly to the latter to be enjoyed, by words, demeanor, etc., or indirectly, in combination with other external goods.62.The exclusion of all else, has, indeed, been called one-sidedness and materialism. But, asSeniorsays, no one blames the writer on tactics, because he confines his attention to military subjects; nor is the objection raised, that by so doing, he is encouraging eternal war. On the other hand,J. B. Storch(1815) devoted a special division of his work to the consideration of“internal goods”(health, knowledge, morality, security, leisure,.etc.). SeeRau'stranslation of his Manual, II, 337 ff. CompareGioja, Nuovo Prospetto delle Scienze economiche, 1815 ff. VIII.63.The inclination to exchange is, according toAdam Smith, one of the most important marks which distinguish man from the brute. (Wealth of Nations, I, ch. 2). But seeBüsch, Geldumlanf (1780), I, § 29, on exchange among the lower animals.64.Observed byAristot.Polit. I, ch. 6.65.The efforts of political economists to select from among the infinite number of goods, those which should constitute the subject of their investigations, have taken two directions in recent times.Bastiathere confines himself too exclusively to commerce. The political economist should concern himself only with wants and satisfactions, where the labor, which is the connecting link between them, is undertaken by some other person for a consideration. Thus the ordinary act of respiration lies outside the circle, that of the diver, which is paid for, does not. (Harmonies économiques, 1850, 68 ff.) But even Robinson Crusoe had his own system of economy. Are the products which the farmer consumes in his own home, the work he does himself, any the less matters of economic moment than the products he sells, or the labors of his servants?Schäffleis right when he says that ordinary respiration is no economic function, because it is an unconscious necessity of nature. But his definition is too broad, inasmuch as he places the essence of the economic character of goods or of an act, in the conscious adaptation of means to human ends. (Tübinger Progr. z. 27 Sept. 1862, 9, 24 seq.) To take a walk is no economic operation, although it may be the best means to a very important end,—health. The same goods or the same act may have, frequently, according to the end proposed, an economic or non-economic character. The beauty of the human body, for instance, however systematically made use of for purposes of vanity, is not economicgoods. But it is an economic speculation, base though it be, when a man relies on his handsome figure to secure a wealthy wife, or, for purposes of gain, allows her to pose as a model to artists or to take part intableaux vivants. According toC. Menger, Grundsätze der Volkswirthschaftslehre (1871) I, 51 ff., there are no economic goods, but those the disposable supply of which is, at most, equal to the quantity that is required. But is not the largest navigable stream, even in the most thinly populated country, an economic good?66.Hegel, Rechtsphilosophie, § 67. Even the use of a corpse as manure, or for any mercantile purpose, is repugnant to our feelings,“because of the dignity of personality.”(Schäffle, National Œkonomie, 1860, 28.) In this respect, prostitution is a remnant of slavery.Schäffleis right, when he says that to repay personal services with material commodities which do not afford as much food etc., as the former have cost in expenditure of vital energy, is a slow and frequently a very cruel kind of cannibalism. (Kapitalismus und Socialismus, 1870, 18).67.Bornitz, De rerum Sufficientia in Republica procuranda, 1625, gives in this encyclopædia of political science, together with a dissertation on agriculture, commerce and manufactures, a complete survey of theministeria. Several modern writers refuse to look upon personal services, or the ability to render such services, as elements of wealth: compareKaufmann, Untersuchungen im Gebiete der politischen Œkonomie, 1830, II, Heft I. They demonstrate, however, no more than this, that that class of goods has something very peculiar. ThusMalthus, Principles of Political Economy (1820), chap. I, sect. I, objects that they cannot be inventoried or taxed; but can material goods be so completely? Can all the parts of the wealth of a nation be so inventoried and taxed?Rau, Lehrbuch der pol. Œkonomie (1826) I, § 46, remarks that the personal aptitude to perform services dies with the person, and that personal services cannot be stored up (?), etc. I appeal simply to the definition I have given above of economic goods, and which applies equally to services of every kind which can be performed for other people. Besides, those who oppose this view are unable to give a satisfactory explanation of all the phenomena of commerce. Of course, the qualification“recognized as useful”is of the utmost importance as a mark to determine what is goods. But a prima donna, or a world-renowned physician, cast naked by shipwreck on the shores of North America, is certainly, better off than a blind beggar, his fellow sufferer. CompareStorch, Handbuch II, 335 ff. and his Considérations sur la Nature du Revenu National.68.Ad. Müllercompares persons, so far as they render any kind of service, to things, and, so far as they are required to be preserved in their individuality, to persons. The children in the“status”of a country gentleman, for instance, are treated more as persons, and domestics, more like things; the land partakes of a species of personality, but not the implements of labor. (Nothwendigkeit einer theolog. Grundlage der Staatswissenschaft, 1819, 48.)69.The privilege of selling refreshments in the garden of the Palais Royal was formerly let for 38,000 francs a year.70.See the cases cited byHermann, Staatswirtsch. Untersuchungen, 6 ff. and byBernoulli, Schweiz. Archiv. für Statistik und N. Œkon. II, 55. Think of the firm of J. M. Farina! In Athens, good stands were leased at a very high rent, even where there was no investment of the lessee's capital. (Demosthenes, pro. Phorm., 948; adv. Steph. I, iiii.) There is, again, the sale of inventions, while they are still“mere ideas.”According toSchäffle, Theorie der ausschliessendnen Verhältnisse, 1857, II ff., the value in exchange of these relations depends on the extra income which is assured in fact, or in law, against diminution, by the exclusion of competition. He, therefore, recommends, instead of the word“relations,”“custom,”or“publicum.”But these words, by no means, exhaust the meaning expressed by“relation.”Thus, the good administration of public affairs, although it has no value in exchange, is one of the most valuable economic goods which a people can possess.71.The relation mentioned above of a general to an army may even have great value in exchange. Instance, the Italian condottieri in the fifteenth century!72.Relations which take from one man, as much as they afford to their possessor, are of value as components of a man's private fortune, but not of the wealth of the nation. To this class belong debts due from persons or from things, compulsory custom or good-will of every description; as for instance, the seventy-two places of theagents de changein Paris, each of which was worth more than a million of francs; or the right of navigating the Elbe as far as Magdeburg, which, about the beginning of this century, was worth in every instance about 10,000 thalers. (Krug, Abriss. der St. Œkonomie, 62.)73.Schäffle, N. Œkonomie, 10. In the German language, this same word is used to designate utility, and sometimes useful objects (so called values). A clear distinction, however, should be made between utility and value in use. Utility is a quality of things themselves, in relation, it is true, to human wants. Value in use is a quality imputed to them, the result of man's thought, or of his view of them. Thus, for instance, in a beleagured city, the stores of food do not increase in utility, but their value in use does. CompareSchäffle, System, III, I, 170.74.Genovesi, Economia civile (1869), II, I, 7.L. Say, De la Richesse individuelle et de la Richesse publique (1827), 29, estimates the value of goods according to the degree of discomfort attendant on the privation of them.75.Friedländerhas, however, made a general attempt in this direction. Theorie des Werthes (Dorpat, 1852). But saysTh. Fix(Journal des Economistes, 1844, IX, 12):“It is as impossible to establish a scale of values, as it is to find an exact mathematical and permanent measure of our wants, passions, desires, tastes and fancies.”76.CompareKnies, Geld und Credit, 1873, I, 126 ff. The very respectable attempt made byA. Samter, Sociallehre (1875), with the idea society-value (Gesellschaftswerth) covers too nearly the idea of value in exchange. Further research will here have to be made, with the idea of“impotent need,”inasmuch as, from a high ethical, national-dietetical point of view, the question is asked whether, to what extent, and how,“impotent need”may be made a potent one.77.Friedländer, loc. cit, 50. If too many copies of the very best book be published, there is a certainty that a number of them will remain little better than waste paper.78.Schäffle, System, II, aufl., 55. See also his Kapitalismus und Socialismus, 1870, 31, 35, 43.79.ThusKleinwächter(Hildebrand's Jahrbücher für N. Oek. und Statistik, 1867, II, 318), defines value in exchange=value in use + costliness. According to Schäffle, it is“a covert comparison between the cost-value and the value in use of the two kinds of goods to be exchanged.”(Kapitalismus und Socialismus, 35.)80.An intermediate dealer can, so far as he is himself concerned, attribute value in exchange to goods only to the extent that they have use for the last person who has acquired them. Hence,Storchcallsvalue in useimmediate, andvalue in exchange, mediate value. As the English are always wont to express the immediate in words of Germanic origin, and the mediate in words borrowed from the Latin,Lockecalls value in use“worth,”and value in exchange, simply“value.”(K. Marx, Das Kapital. Kritik der politischen Œkonomie, 1867, I, 2.)81.It is, of course, otherwise when, for instance, a beautiful sea view, or a desirable position as regards air and sunshine, is connected with a piece of land.82.In Ravenna a cistern had greater value in exchange than a vineyard:Martial, III, 56. In Paris, too, drinking water, which is transported only with considerable trouble, costs 1-1/3 thalers per cubic meter. We may also mention snow and ice in summer, which last sells in the capitals of southern Europe at 0.34, silber groschens per pound. According toCarey,“utility”is the measure of man's power over nature,“value,”the measure of nature's power over man. He very inaccurately adds, that both are always in an opposite direction. (Principles of Social Science, 1861, VI, ch. 9.)83.HenceAd. Müllercalls value in use, individual value, and value in exchange, social value. The Germans call the value of goods whose value in use is recognized by only one person,Affectionswerth, (affection-value) a value which influences its value in exchange only when the individual who holds it in high esteem is not himself the possessor of the goods. An instance of this latter is a piece of paper covered with notes, intelligible only to the maker of them.84.The very important difference between value in use and value in exchange was recognized oven by Aristotle.Aristot.Pol. I, 9.Hutchinson, System of Moral Philosophy (1755), II, 53 ff. The Physiocrates speak very frequently ofvaleur usuelleandvénale, on which, according toDupont, Physiocratie, CXVIII, the difference betweenbiensandrichessesis based.La valeur d'un septicr de blé, considéré comme richesse ne consiste que dans son prix.(Quesnay, éd. Daire, 300.)Turgotdistinguishes between“valeur estimative”and“échangeableorappréciative;”the former designating the relation between the amount of energy, physical and mental, which one is willing to spend in order to obtain the goods, to the sum total of his energies, physical and mental; the latter the relation between the aggregate like energy of two persons which they are willing to spend in order to procure each of the goods to be exchanged, and the sum total of their energies in general. (Valeurs et Monnaies, p. 87, seq., éd. Daire.)Ad. Smith, in his Wealth of Nations, I, ch. 4, shows that he knew the difference between value in use and value in exchange; but he afterwards drops the consideration of the former, altogether. In this respect he has had only too faithful and one-sided followers among his countrymen, so thatRicardo, Principles, ch. 28, asks what value in exchange can have in common with the capacity of commodities to serve as food or clothing. (See, however, ch. XIX seq.) Many“free traders”would have no objection to interpose, if a people should abandon the cultivation of wheat, etc., to devote themselves exclusively to the manufacture of point lace, provided the latter had a greater value in exchange. The two degrees of the idea of value have been examined with much thoroughness byHufelandin his Neue Grundlegung der Staatswirthschaftskunst (1807), I, 118 ff.;Lotz, Revision der Grundbegriffe (1811 ff.), I, 31, ff.;Storch, Handbuch, I;Rau, Lehrbuch, I, 56, ff.;Thomas, Theorie des Verkehrs, I, p. 11;Knies, Tübing. Zeitschr. 1855;Bastiat'sdeclaration (Harmonies, p. 171 ff.): that“valeur”(by which Bastiat means only value in exchange), =le raport de deux services échangés, contains a two-fold error: the ambiguity of the wordservices, which applies equally to a yielding or affording of utility, as to useful labor, and the error that the labor necessary to produce a commodity, and of which the purchaser is relieved, alone determines its value in exchange. Compareinfra§§47,107,110,115ff., andKnies, loc. cit., p. 644 ff.85.Proudhon, Système des Contradictions économiques, 1846, ch. 2.86.In France, according toCordier(Mémoire sur l'Agriculture de la Flandre Française), the wheat harvest yielded, in1817, forty-eight million hectolitres, with a value in exchange of two thousand and forty-six million francs; in1818, fifty-three million hectolitres, with a value in exchange of one thousand and four hundred and forty-two million francs; in1819, sixty-four million hectolitres, with a value in exchange of one thousand and one hundred and seventy million francs.A rise in the value in exchange of wheat, such as was witnessed in 1817, is synonymous with a decline in the value in exchange of money, and of all those goods whose money price has not risen. It is no objection to the views here advocated, that when the necessaries of life are very scarce, the want of clothing, furniture, articles of luxury etc., is not felt so keenly as at other times, and that the value in use of these commodities really falls; andvice versa.87.CompareB. Hildebrand, N. Œkonomie der Gegenwart und Zukunft, 1848, I, p. 316 ff.Knies, loc. cit.88.The greater importance attached, in our days, to value in exchange, than to value in use, is seen especially in the attitude which the buyer, who is possessed of the more current commodity (money), assumes toward the seller,—an attitude not unlike that of a patron towards his client. In the interior of Africa, the possessor of money, as such, would scarcely look down on the possessor of the means of subsistence. The South American Indians are ready to render an amount of service for a little brandy, which it would be in vain to ask them to perform for ten times its value in gold. (Ausland, Jan. 15, 1870.) The miser estimates the possibility of being able to procure for himself, for one dollar, a hundred different articles worth a dollar each, to be worth one hundred dollars.89.When the wants of a person or of a people change, it is possible for the value in use of one kind of goods, which had the greater prominence before, to take the place occupied previously by its value in exchange; andvice versa. Thus, the youth sells the plaything he used in childhood; the man, the educational apparatus of his earlier years; the old man, the implements that enabled him to acquire wealth, and which he can no longer use except with great effort. (Menger, Grundsätze, I, 220 ff.)90.Rau(Lehrbuch, I, § 61 ff.) distinguishes between the concrete or quantitative value which a certain kind of goods may have for a certain person, under certain circumstances, and the abstract or species-value which a whole class of commodities may have for men in general.ButF. J. Neumann, (Tübinger Zeitschrift, 1872, p. 288 ff.) objects, that even the abstract value of a commodity always suggests the relation of a definite number of concrete men to a definite quantity of goods; else, by the expression, value of goods, is to be understood not what it is generally meant to signify, but only the capacity to satisfy a single want.91.Storch, Ueber die Natur des Nationaleinkommens (1824, 1825), 5, defines (Vermögen) thus: a source of income, permanent in its nature, and capable of being transmitted, the possessor of which does not need to work, on its account. Hence he does not approve of the expression“the people's resources”(Volksvermögen).92.See especiallyLord Lauderdale, Inquiry into the Nature and Origin of Public Wealth, 1804, ch. 2.Storch, loc. cit.93.Moreau de Jonnès, Le Commerce au 19. Siècle (1825) I, 114 ff., says that the United States imported from abroad 9.6, France 6, and Great Britain 5.8 per cent. of their annual consumption; and exported respectively 10.4, 6.2, 9.8 per cent. of their annual production. The recent free trade tendencies, and the improvement in the international means of transportation, have certainly increased the relative importance of foreign commerce. In the kingdom of Saxony (1853),Engelestimates that 10/47 of the whole production of the country was destined for foreign countries, and that 10/47 of the consumption was imported.94.When the land of a country becomes dearer, simply on account of the increase of population, or goods, the quantity of which is susceptible of increase, because the cost of production has been increased, this cannot be considered an increase in the wealth of the people, (v. Mangoldt.)95.Neither is value in exchange a quality inherent in goods, but only a relation between them and other goods. Hence it is absurd to speak of a rise or fall of all values in exchange. If the goods A lose in capacity to be exchanged against goods B, goods B of course increase in exchange power as compared with A, andvice versa. It is necessary to guard against being misled here by the intervention of money, that is, by the custom universal among men of employing a definite kind of goods as a medium of exchange for all others. Yet there are many writers who have been thus misled. ThusGaliani, Delia Moneta (1750), II, p. 2, who regards the lasting increase of the prices of all commodities as an infallible sign of national prosperity. To the same effect is the motto of the Physiocrates:Abondance et cherté c'est opulence. In its coarsest form, inSaint Chamans, Nouv. Essai sur la Richesse des Nations (1824), 456, who would have that which is now the free gift of nature, to come to us or be produced only as the reward of toil.Verri, on the other hand, Meditazioni sull. econ. pol. (1771), ch. V, thinks that the number of buyers in a country should be as small as possible, and that of sellers as great as possible, in order that thus prices might be low; (as if every buyer was not,eo ipso, also a seller.)96.Kaufmann, Untersuchungen, I, p. 165 seq. Also,Verri, Meditazioni, XVII, 2.97.The differences characteristic of poverty, indigence, managing to live, fortune and wealth, cleverly treated byvon Justi, Staatswirthschaft, I, p. 449, seq.Rau, Lehrbuch I, § 76, seq., establishes the following gradation: privation and wretchedness, poverty, indigence,“getting on,”comfort, wealth, superfluity.L. Saycalls those who can satisfy the wants of luxury rich; well-to-do, those who can command the comforts of life; and wretched, those who cannot obtain a sufficiency of the objects of prime necessity. In France, the limits of these situations are marked by an income of respectively 60,000, 6,000 and 900 francs per family, so that a family with an income of only 300 francs per year is in a condition of wretchedness. (Traité de la Richesse, 1827, I ff., 71 ff.)98.Palmieri, Ricchezza nazionale, Introd. The greater number of the definitions of wealth are rather onesided than false.Socrates, for instance, looks only at the relation existing between means and their owner's wants. (Xenoph.Memor., IV, 2, 37, seq. Œconom. II, 2 ff.).Plato, on the other hand, as the socialists are wont to do, looks to the excess over that possessed by others. (Legg. V, 742, seq.).Xenophon'sobservations, Hiero, 4, on the nature of wealth, are many-sided and beautiful.Aristotledistinguishes between natural and artificial wealth: πλῆθος ὀργάνων οἰκονομακῶν καὶ πολιτικῶν—πλῆθος νομίσματος. (Polit, I, 3, 9, 16.) CompareCicero, Parad. VI. The dominant idea of the so-called Mercantile System is thus expressed in a Saxon pamphlet of 1530 (Müntzbelangende Antwort, etc.):“Money is the real watchword; where there is much money, there is wealth, it is clear.”CompareLuther, Werke, Irmisch edition, XXII, p. 200 seq. See some excellent remarks in opposition hereto, in the Saxon pamphlet, Gemeyne Stimmen von der Müntz, 1530.Schröder, Fürstliche Schatz-und Rentkammer, 1686, ch XXIX.“A country grows rich in proportion as it draws gold or money, either from the earth or from other countries; poor, in proportion as money leaves it. The wealth of a country must be estimated by the quantity of gold and silver in it.”See a very passionate argument against this view inBoisguillebert, Dissertation sur la Nature des Richesses, written sometime between 1697 and 1714.Berkeley, Querist (1735), Nos. 562, 542. Among Englishmen, the correct view was prevalent much earlier, especially among the founders of the American colonial empire. SeeHachluyt, Voyages (1600) III, 22 ff. 45 ff. 152 ff. 165 ff. 182 ff. 266 ff; but especially the work“Virginia's Verger”in“Purchas Pilgrims”(1625), IV, p. 809 ff. However, several Spaniards were led by hard experience to adopt a view opposed to the Midas-view (compareAristotle, Polit. I, ch. 3, 16), by which the first American explorers were carried away:Garcilasso de la Vega(1609), Comment. reales II, ch. 6;Saavedra Faxardo, Idea Principis christiani (1640) Symb. 69:potissimæ divitiæ ac opes terræ fructus sunt, nec ditiores in regnis fodinæ, quam agricultura; plus emolumenti, acclivia montis Vesuvii latera adverunt, quam Potosus mons. Contemporary with those Englishmen, was the Italian,Giov. Botero, who called attention to the fact, that France and Italy were the countries of Europe richest in gold, although they possessed no mines of the precious metal themselves: Della Ragion di Stato (1591) p. 88 ff. AlsoSully, who called agriculture and cattle-breeding the breasts of the state, the real mines and pearls of Peru. (Economies royales I, ch. 81. See however, II, p. 381).Montchrêtien, Traité d'Économie politique (1615) 81, 172 seq. According toSir D. North'sDiscourses upon Trade, 1691, wealth is synonymous with freedom from want, and the ability to procure many comforts, whileTemple(ob. 1700, Works I, 140 seq.) looks entirely at the subjective side of wealth.Pollexfen,“England and East India inconsistent in their Manufactures”(1697), considers gold and silver as the only real wealth. To this definition Davenant (ob. 1714), opposes another. Wealth, according to him, is whatever places prince or people in a condition of superabundance, peace and security. See his Works, I, p. 381 seq. He even reckons intellectual powers, alliances etc., among the national wealth. CompareW. Roscher, Zur Geschichte der englischen Volkswirthschaftslehre 1851, in the acts of the royal Saxon Academy of Sciences, vol. III.Vauban(Dime royale 1707), Daire's edition, says:“The real wealth of a people consists in an abundance of those things, the use of which is so necessary to sustain the life of man, that they cannot at all be dispensed with.”By the wealth of a peopleGaliani, Della Moneta II, c. 2, understands the aggregate of all lands, houses, movable property, money, etc. which belong to them, but, that the chief element of wealth, and the condition precedent of all others, is men themselves. Hence, the process of the impoverishment of a people in their decline, takes the following course: money first emigrates, next, population diminishes, afterwards, the houses fall in ruin, finally, the land itself becomes a waste. According toBroggia, wealth isun avanzo osia valore di tutto cio che avanza al proprio consumo e bisogno, Delle Monete, 1743, IV, 307, 314; Cust.Palmieri(ob. 1794), also says:il superfluo constituisce la richezza. (Publica Felicità.) According toTurgot, Sur la Formation et Distribution des Richesses 1771, § 90, the wealth of a nation consists in the net proceeds of landed property capitalized at the ordinary price of land, and then of the aggregate of all the movable property of the country.Büsch, Geluumlauf III, § 27, considers a certain duration of the produce or revenue as an essential element in the idea of wealth.Lauderdale, Inquiry, ch. II, distinguishes national wealth and private wealth; the former embracing all that man covets as agreeable or desirable; while it is one of the marks of the latter, that there should be no general superfluity of it on hand. Several modern English economists call wealth only that, the production of which cost human labor. Thus,Malthus, Definitions (1827) p. 234.Torrens, Production of Wealth, 1821, ch. I. WhenRossi, Cours d'Economie politique, 1835, L. 2, says:tout chose propre à satisfaire aux besoins de l'homme est richesse, he demonstrates how the frequent inaccuracy of the French language stands in the way of a close analysis. The greater number of more recent definitions are true of resources rather than of wealth.Bastiatdistinguishes betweenrichesse effectiveandrelative, the former being based onutilité, the latter onvaleur. (Harmonies, ch. 6.)99.The national wealth of Athens, at the time of the hundredth Olympiad, is estimated byBöckh(Staatshaushalt der Athen, I, p. 636, 2d ed.) to have been from thirty to forty thousand talents, besides the non-taxable property of the state. That of Great Britain is estimated at about 8,000 million pounds sterling. (Athenæum 5 March, 1853.)Wolowskiestimated that of France at, at least, 116 milliards of francs, with an annual increase of 1-½ milliards, (L'or et l'Argent, 1870. Enquête, 59.)David A. Wellsestimated that of the United States, in 1860, slaves not included, at 14,183 million dollars, or $451.20 per capita, whereas in England, the per capita wealth was about $1,000. (Hildebrand'sJahib., 1870, I, 431.) The national wealth of the kingdom of Saxony is equal to 600 million thalers immovable, and 600 million movable, property. (Engel, Statist. Zeitschr. August, 1856). That of Würtemberg=2,710 million florins, of which 700 millions represent movable goods, and 100 million, claims on foreign countries. (Statistisches Handbuch, 1863.) Of course all these estimates are very inexact.100.Ch. Dupin, Forces productives, p. 82. Seeinfra, § 230.101.CompareMeidinger, Das britische Reich in Europa, pp. 79, 238, 261.102.Davenantconsiders an increase in the number of houses, ships and stocks of goods, as the surest sign of an increase in the national wealth; and on the other hand, a high rate of interest, a low price of land, small wages, a decrease of population, and an increase of uncultivated land, as the signs of national impoverishment. (Works, I, pp. 354, seq. II, p. 283.)Sir M. Decker, Essay on the Causes of Decline of Foreign Trade (1744), 3, gives as the signs of impoverishment, the following: a wretched condition of the poor and of manufactures, a low price of wool, long credit to retail dealers, frequent cases of bankruptcy, exportation of the metals, unfavorable exchange, few new coins, many cases of unpaid rent of leased land, and high poor rates.103.Storch, Handbuch, I, 45. Compareinfra, § 187.104.On the difference between human and animal economy, seeSchön, Neue Untersuchungen der N. Œkonomie, (1835), 4.105.CompareSchäffle, System, III, Aufl. I, 2, 28.106.Knies, in his Polit. Œkonomie vom geschichtl. Standpunkte, 1853, p. 160 ff., shows, very happily, how the love of one's self,—which must, indeed, be distinguished from self-seeking—is not in conflict with the love of one's neighbor; but that, in healthy natures, it is found allied with a feeling of equity, and of the common good. See, also,F. Fuoco, Saggi economici, Pisa, 1825, Nr. 7.Schutz, Das sittliche Element in der Volswirthschaft: Tübinger Zeitschrift für Staatswissensch. 1844, p. 132, ff.107.“That they should seek the Lord if haply they might feel after him.”(Acts, 17, 27. Compare Matthew, 6:33, also I. Timothy, 5:8.)Adam Müllerin his Nothwendigkeit einer theolog. Grundlage, 49 seq., is a strong advocate of all this, but a rather narrow one. The farmer, he says, should first work for the love of God, then for the fruit, that is, for the gross product, and lastly for the net product. His work is a trust.Müllerconsiders the business relations of men, as they exist at present, as“the comfortless mutual slavery of all.”(Nothwendigkeit einer theolog. Grundlage, 49 ff.) The economist,Ch. Perin, who writes from the Catholic politico-economical standpoint, substitutes for conscience,renoncement, as the force antagonistic tointérêt, an expression inappropriate, because merely negative, although in perfect harmony with the ascetic religiousness of the middle ages. (De la Richesse dans les Sociétiés chrêtiennes, 1861, II vol., passim) CompareRoscherinGelzer'sProtestant. Monatsblättern, Jan. 1863.Puchta, Institutionen, I, f. 8, opposes to individualism—or the impulse to distinguish ourselves from others, and which, when uncontrolled, leads to egotism, pride and hate—love and right, which are controlling powers over the former.108.Even the ancients conceived Eros as a world-building principle. According toSchön'sexpression, loc. cit., which it is not difficult to misconstrue, the feeling of the common interest manifests itself, both as law and force. And, in reality, it is necessary that, in order not to permit the drowsy conscience to fall too far behind self-interest, which is always awake, it should create lasting institutions and regulations above and beyond the caprice of the individual or of the moment; for instance, in the family, marriage, education etc.109.The more private interest ceases to be momentary, and becomes life-long and even hereditary, the better does it harmonize with the feeling of the common interest.110.Perinsays (1, 93), that the conflict of interest is reconciled in the seeking for the attainment of the supreme good, that is God,“who gives himself to all in equal measure, and yet always remains the same, and out of whose fulness all may draw, and yet no one's share grows less.”But the same is true of all ideal goods, and of every form of the feeling for the common interest, the highest of which is, indeed, religiousness.111.According toKant, Anthropologie, p. 239, the desire of comfort and well-being, and the inclination to virtue, when the former is properly restrained by the latter, produce the highest degree of moral, united to the highest degree of physical, good. It is well known, that during the middle ages, in all countries except Italy and, even up to the seventeenth century, the moral sciences were under a one-sided theological influence, whose ascetic condemnation of self-interest may have been well enough during a period of violence. By virtue of a very natural reaction, and as a protest of individualism against the constraint of absolute monarchy, the materialists of the eighteenth century endeavored to discover, even in the most exalted phenomena of human society, only the expression of an enlightened self-interest. SeeMandeville'sFable of the Bees, or private Vices public Virtues (1723), but especially,Helvétius, De l'Esprit (1758).Voltairesays, that, in all the celebrated maxims ofDe Rochefoucauld(1665) there is but one truth contained,que l'amour propre est le mobile de toutes nos actions. (But see, per contra,Pufendorf, Jus Naturæ et Gentium, 1672, II, 3, 15.) This tendency was opposed, especially by the English, who could not be blind to the influence exerted in public life by the feeling for the common good.David Hume, Treatise on Human Nature (1739), III, 54, is of opinion that the interests of others are, on the whole, in the case of nearly every man stronger than even his own self interest.Hutcheson, System of Moral Philosophy (1755), speaks of the innate principle of benevolence. Man is not a perfect whole; a part belongs to his own person, part to his family, part to the nation, part even to all humanity.Burke, Inquiry into the Origin of our Ideas of the Sublime and Beautiful (1756), distinguishes two fundamental principles of action, that of self-preservation and that of society. On the former is based the sense of the sublime; on the latter, of the beautiful. According toFerguson, History of Civil Society, (1767), I, 3, 4, the“sense of union”is frequently strongest where the advantage drawn from the connection is smallest; for instance, it is weakest in highly cultured commercial countries.Adam Smith, Theory of Moral Sentiments (1768), has been as one-sided in reducing everything to“sympathy,”as he has been in his Wealth of Nations in reducing everything to“self-interest;”but not without the consciousness, that to explain the reality, it is necessary to take both into consideration (Buckle). It would, indeed, be just as preposterous to base economy on self-interest alone, as to base marriage merely on the sexual appetite. Recently,Hermann, Staatswirthschaftliche Untersuchungen, 1st ed., part 1st, discovers in self-interest, and in the feeling for the common good, the two springs of all economy. He would even base the so-called theoretic Political Economy, on the study of self-interest, its practice in that of the common good.M. Chevalier, Cours d'Economie politique, 1844, II, 412 ff., understands something very like this by the contrast between liberty and centralization. TheantagonismeandassociationofBazard, Exposition de la Doctrine de Saint Simon (1829), p. 144 ff. Closer investigation will show, however, that self-interest, which must not be confounded with egotism, and the common interest, are neither coördinate nor exhaustive opposites. Compare the beautiful contrast drawn byGoethe(Pocket edition of 1833, vol. 46, 97), between“Pietät”and“Egoisterei.”112.Paul, I. Corinth. 12, gives the most beautiful model description of a social organism. Compare, however, the fable of Menenius Agrippa inLivy, II, 32.113.Excellent beginnings of a general theory of economies in common inSchäffle, N. Œkonomie, II, Aufl., 62 ff., 331 ff.114.The French and English, with their strong political bias, use the expressions respectivelyeconomie politiqueand Political Economy. In Germany, where the terms the people (Volk) and the state (Staat) are much less nearly coextensive, the wordsVolkswirthschaftandNationalökonomieare preferred. But evenHufeland, who first gave currency to the termVolkswirthschaft(Grundlegung, I, 14), called attention to the peculiarity“that the term economy suggests that there is one who economizes and guides, an economist in chief, and that such a one is, even according to the most correct opinion, wanting in the public economy of a people.”115.According toTh. Cooper, Lectures on the Elements of Political Economy, (1726), 1, 15 ff. 117, the wealth of society is nothing but the aggregate wealth of all the individuals that compose it. Each individual looks out best for his own interests, and, hence, that nation must be the richest, in which each individual is most completely left to himself. (If this were so, savage nations would be the richest!)Coopergoes so far as to disapprove of the protection afforded to commerce on the high seas by a national navy; no naval war is worth what it costs, and merchants should protect themselves. He says, too, that the word“nation”is an invention of the grammarians, made to save the trouble of circumlocution, a nonentity!Adam Smithis, as might be expected, far removed from such absurdities. (Compare Wealth of Nations, IV, ch. 2, and the end of the fourth book.) But, even he is of opinion that men, in the study of their own advantage are led“naturally, or rather necessarily”(IV, ch. 2), to the employment which is most useful to society. But hereAdam Smithoverlooks the fact, that every individual nation strives after earthly immortality, and is, in consequence, frequently compelled to make immediate sacrifices for the sake of a distant future, a thing which can never be to the private interest of the mortal individuals who compose it. And thus,D. North, Discourses upon Trade (1691), 13 seq., says, that in commercial matters, different nations stand in precisely the same relation to the whole world, that individual cities do to the kingdom, and individual families to the city. Similarly,Boisguillebert, Factum de la France, ch. 10, 327, Daire's edition.Benjamin Franklin(ob. 1790), Political Papers, § 4. AndJ. B. Say, Traité d'Economie politique (1802) I, 15: every nation is, in relation to neighboring nations, in the situation of a province in relation to neighboring provinces. Unfortunately, such doctrine is only too palpably refuted by every war!J. Bentham'ssaying:Les intérêts individuels sont les seuls intérêts réels(Traité de Législation, I, 229).Infra§98.Among those who, in antiquity, most energetically maintained that the idea of national economy is not a merely nominal one, isPlato(De Republ., IV, 420, I, 462); more recently,Fichte(Der geschlossene Handelstaat, 1800), although, in general, the socialists attach as little importance to nationality as their most decided opponents. Adam Müller is a writer who deserves recognition for his advocacy of national economy, and of the state as a whole, paramount to individuals, and even generations. He gives war the credit of causing the scientific knowledge of the state to cast deeper roots, and of enlightening individuals in the most forcible way, that they are parts of one great whole. (Elemente der Staatskunst, 1809, I, 7, 113). He calls public economy, as a whole, the product of all products. What, he inquires, is the use of all wealth, if it does not guarantee itself? And this, it can do, only through the organization of the whole people, that is, through the nation (I, 202).Adam Smith'stheory of labor would be correct if it considered the entire national life of a people itself as one huge piece of labor. (II, 265). And so, Müller directs his polemics against Adam Smith's premise of a merely mercantile world-market. (II, 290). Similarly, the protective tariff theoreticians,Ganieh, Théorie de l'Economie politique (1822), II, 198 ff. andFr. List, Nationales System der politischen Oek. (1842), I, 240 ff.Colton, Political Economy of the United States, 1853.Sismondi, Nouveaux Principes (1819), I, 197, ridicules the opinion which resolves the public interest into merely private interests: It is A's interest to rob B; B, the weaker, is equally interested to let himself be robbed, that he may fare no worse. But the state—?!116.National wars are really no mere operations of the will of the state! Since 1800, Ireland, and, since 1858, even British India, constitute one state with England, and yet how different are the economic tendencies of these different countries of which the individual husbandman or business man must take cognizance!117.One might also deny the reality of a stream, considered as a whole, since its bed, no one calls a stream, and its watery contents change every moment. And yet, it is well known to scientific geography that every stream has its own individual character.118.This would be to be guilty of explainingignotumperignotius. And yet, there are a great many modern writers who imagine that they have said something all-sufficient, when they have told us that the state is an organism. As early a writer asHufeland(N. Grundlegung, I, 113), enters his protest against such abuses. The person who would operate with this notion, should, at least, have read the acute observations, so well calculated to dissipate preconceived opinions, made byLotze, in his Allgemeine Physiologie des körperlichen Lebens, 1-165. The organic conception of national life, the life of a whole people, where the individual organs are free and rational beings, is evidently a much more difficult one to form than that of the animal or human body.119.I first called attention, in my work on the life-work and age ofThucydides, to the fact that that great historian always accounts for causes in the following manner: A. is produced by B., and B. by A. (Roscher, Leben Work und Zeitalter des Thukydides, 199 ff.; compare especiallyThucyd., I, 2, 7, seq.) Such a circle is not a vicious one. All first class historians have thus explained historical phenomena. The one-sided deduction of A. from B., and B. from C., etc., which the so-called pragmatic writers likePolybius, for instance, is the result of overlooking all reciprocal action.Scialoja, Principii (1840), p. 60, makes a somewhat similar observation for Political Economy.120.Whether we call the unknown and inexplicable ground back of all analysis, and which our analysis cannot reach, vital force, generic form, spirit of the nation, or God's thought, is for the present a matter of scientific indifference. All the more necessary are the self-knowledge and honesty, in general, which admit the existence of this background, and which do not, by denying it, deny the connection of the whole, which is, for the most part, much more important than the analyzed parts. But I must at the same time, enter my energetic protest against the imputations of heresy made by those who do not comprehend the sacred duty of science, by never ceasing investigation, to push farther back the bounds of this inexplicable background.121.WhenHildebrand, for instance, objects to the application of the expression“natural law”to the economic actions of man, for the reason that it conflicts with human freedom and man's capacity for progress (Jahrbücher der N. Œek. und Statistik., 1863, Heft., I), I cannot agree with him. I use the expression“natural law”wherever I observe uniformity, explicable in its broader connections, and not dependent on human design. That there are such uniformities there can be no question. I need only mention the philological law of the so-called“permutation of consonants,”which individuals follow when speaking—certainly not through compulsion,—and, by means of which, the progress of the speaking aggregate is made manifest. Or, I might call attention to the well known fact, that, in populous countries marriages and crimes, which are for the most part free, are divided among the different age-classes in a proportion much more uniform, from year to year, than are deaths, which are not free. I adhere all the more firmly to the expression“natural law,”because no one takes offense at or objects to the expression,“nature of the human soul.”But to this very nature of the human soul belong the freedom and responsibility of the individual, as well as the capacity of the species for progress. CompareA. Wagner, on Law in the Apparently capricious Actions of Man (Die Gesetzmässigkeit in den scheinbar willkürlichen menschlichen Handlungen, 1864, p. 63 seq.), in which, however, he only goes so far as to show that law and freedom coexist side by side as indubitable facts, while the seeming contradiction between the two remains.Drobisch'sMoralische Statistik und die menschliche Willensfreiheit, 1867, is an important contribution to the literature of this question.122.Whately, in his fourth lecture (Lectures, 1831), shows in a very clear way, how London is supplied and provisioned by men with no object in view but their own personal interest, each of whom is possessed of but a very limited knowledge of the aggregate wants of its inhabitants, and yet they work into one another's hands, in the interests of the whole, purely instinctively, and infinitely better, perhaps, than the operations of the most skillful governmental commission, organized for the same purpose.123.Alphonsus of Castile, the king astrologer of the thirteenth century, is reported to have said, that the universe would have been much better constituted, if the Creator had asked his advice beforehand. Astronomers like Newton and Gauss have, certainly, judged otherwise.124.MacCullochremarks, that there is an essential difference between the physical and the moral and political sciences in this, that the principles of the former apply in all cases, those of the latter, only in the greater number of cases—a thought very ably developed byKnies, loc. cit.,passim. If, withNewmarch, (London Statistical Journal, 1861, p. 460 seq.), we could grant, that there is no“law,”except where it is possible to predict each individual occurrence under it, there would be no such thing even as the“laws”of the probability of life. The word“element,”also, means something very different in Political Economy from what it does in chemistry: a combination which might be broken up, but which that science leaves it to other sciences to do. The“element”of Political Economy is Man. ComparePickford, Einleitung in die politische Œk., 1860, 17.125.It is in this sense thatAristotle(Polit., I, p. 1, 9 Schn.) says: φανερὸν, ὅτι τῶν φύσει ἡ πόλις ἐστὶ, καὶ ὅτι ἄνθρωπος φύσει πολιτικὸν ζῶον. According toL. Stein, Lehrbuch der Volkswirthschaft, 1858, 33, the political economy of a people begins at the point where the overplus of individuals begins.126.CompareK. L. von Haller, Restauration der Staatswissenchaft, I, p. 446 ff.127.AsSallustcharacterizes the political apogee of the Romans:Optimis moribus et maxima concordia egit populus Romanus inter secundum atque postremum bellum Carthaginiense.SeeAugustin(Civ. Dei II, 18).Puchta(Institutionen, I, f. 83), with a great deal of good sense, distinguishes in every people their individual character from that which they share in common with all mankind. The latter exists among savage nations, only as a germ buried under the overpowering weight of that which is special to them. The period of the perfect equilibrium of both elements is coincident with that of a people's real culture. In the further course of development, the latter, more general element becomes gradually over-powerful, destroys the individual, and thus dissolves nationality.128.Thus formulated, the principles of the two great parties, evidently, no more contradict one another than their ordinary watchwords,“freedom”and“order,”are in contrast with one another. Hence all the great statesmen of the best periods of history have adopted the middle course recommended by Aristotle.129.SeeLotze, Allgemeine Pathologie, 1842.Ruete, Lehrbuch der allgemeinen Therapie, 1852. These analogies, obviously, should not be pushed too far. One of the most essential differences between the two consists in this, that in the diseases of the body politic, physicians and nurses are themselves part of the diseased organism.130.SeeAhren'svery beautiful exposition, Organische Staatslehre, 1850, I, 77. National economy (Nationalökonomie=public economy); national economics (Nationalökonomik=the science of public economy). The latter term was first proposed, in Germany, in 1849, byUhde; the former was naturalized therein 1805:v. Soden, Nationalökonomie, 1805;Jacob, Grundsätze der N. Œk., 1806. In Italy,G. Ortesused it as early as 1774, in his Dell Economia nazionale, and in England it was employed, even in 1867, byFerguson, History of Civil Society, III, p. 4. Holland. Volkshuyshoudkunde. As a rule, outside of Germany, the term political economy,économie politique, one which is somewhat calculated to mislead the student, is used. (ThusMontchrêtien sieur de Vatteville, Traité de l'Economiepolitique, 165; laterJ. J. Rousseau, Discours sur l'Economie politique, later yet the Traités d'E. p.,Maillardère,PageandJ. B. Say, 1801-1803). Political Economy (Sir J. Stewart, Inquiry into the principles of P. E., 1767); also Public Economy (Petty, several Essays, 1682, 35);Economia politicaorpubblica(the latter byVerriandBeccaria). The titleEconomia civile(Genovesi, Lezioni, d'Ec. civ. 1769), has found few adherents. It has, however, been used recently byCernuschi: Illusions des Sociétés coöperatrices (1866). The term,Economie socialehas been used all the more in France (Dunoyer, Nouveau Traité d'Ec. soc., 1830), since recommended byJ. B. Say, and employed byBuat(Des vrais Principes de l'Origine et de la Filiation du Mot Economie politique, in the Journal des Economistes, 1852.)131.Stein, Lehrbuck der V. W., prefaces his“Science of Public Economy”(pp. 329-358), by a“Science of Economy”(pp. 96-328), which, however, treats individual economies only as the elements of the national economy. A science of household or isolated individual economy could, of course, treat only of the economic relations of anchorites. Those who object that Political Economy is not a real whole will be satisfied with the definition of it given byF. I. Neumann:“The Science of the bearing of household or separate economies to one another, and to the state as a whole.”(Tüb. Zeitschr., 1872, 267.)132.In so far as these various institutions are concerned, with objects beyond the human, or supernatural, only the manner in which they are accepted, or in which they are made use of, is an expression of national life.133.Thus,J. Tuckerthinks that religion, the state and commerce, are only the parts of one same general plan: no institution, therefore, can be called appropriate, within the limits of the province of any one of these, if it be clearly in opposition to the other two, because the harmony of God's work can not be broken up. (Four Tracts and two Sermons on political and commercial Subjects, 1774, Serm. I.)134.Riedel(National Œkonomie, 1838, I, p. 178 seq.), gives a good illustration of the difference between the manner in which law and Political Economy look at the same question. The law (to avoid strife, or to settle controversies) looks upon the debtor as the owner of the capital, and lets him run all the risk; Political Economy, on the other hand, looking deeper into the nature of the contract, reaches an entirely opposite result. The mere jurist has a dangerous tendency to undervalue the reign of the laws of nature; the mere political economist, just as readily, undervalues the element of free will. (Arnold, Cultur und Recht I, 97.) In this respect, the two sciences complement each other very well.Roesler(Hildebrand'sJahrb., 1868, II, and 1869, I.) shows, and he does not exaggerate the fact, that political economists have made altogether too little use of the results of the science of law.135.Jurists will always experience the want of divesting their isolated ideas of their purely accidental character, by grouping them together in such a manner as to make them constitute a complete and independent whole. One must be possessed of profound knowledge to perceive their necessary connection from an historico-juridical point of view. Political Economy, with its characteristic accuracy and practical utility, can best take its place, at the present time. It is in the greater number of legal questions, the systematically elaborated science of“the nature of the thing.”See the able beginnings of a policy of legislation and higher history of law, based on Political Economy, byH. Dankwardt: N. Œk. und Jurisprudenz, 3 Hefte, 1857, and my preface toDankwardt'sNationalökonomisch-civilistischen Studien, 1862.136.The intellectual power of a people depends upon the vigorous and harmonious development of all seven spheres of life.137.Montecuccoli, Besondere und geheime Kriegsnachrichten (Leipzig, 1736). A very similar judgment by Cæsar inDio Cass., XLII, 49.138.Bülan, Handbuch der Staatswirthschaftslehre, 1835.139.Thusv. Justi, Staatswirthschaft 1755.Kraus, Staatswirthschaft, published by Auerswald, 1808;Schmalz, Handbuch der Staatswirthschaft, 1808. More recently,Hermann, Staatswirthschaftliche Untersuchungen, 1832. In France, the expressionéconomie de l'état, is very seldom used.Gavard, Principes del'E. d'Etat, 1796.140.Pölitz, Staatswissenschaften im Lichte unserer Zeit, II, 3. CompareLotz, Handbuch der Staatswirthschaft (2d ed., 1837), I, 10 ff.141.Our view of Political Economy holds a middle place between opposed extremes. The view expressed byWhately, Lectures on Political Economy (1831), No. 1, and covered by the proposed term“catalactics,”is by far too narrow. Similarly,Macleod, Elements of Political Economy, 1858, I, 11. A like objection may be raised to the earlier title ofPritzwitz'sbook: Die Kunst reich zu werden,—the art of growing rich. On the other hand,Dunoyer, Liberté du Travail (1845), L. IX, ch. I, goes too far altogether:“not only in what manner a nation grows rich, but according to what laws it best succeeds, in the execution of all its functions.”And soStorch, Handbuch, translated into German byRau, I, 9. Many modern writers define Political Economy simply as the theory of society; for instance,Scialoja, Principj. dell'Economia sociale, 1840.Cibrario, E. polit. del medio Evo, III, 1842.142.For the many and various definitions of the police power, seevon Berg, Handbuch des Polezeirechts, I, 1-12;Butte, Versuch der Begründung eines System der Polezei (1807), 6 ff.;Rosshirt, Ueber den Begriff der Staatspolizoi (1817), 34 ff. One of the principal difficulties is, that the practical domain of the police power is, in consequence of the successive grades of civilization through which a people passes, subject to greater modifications than any other state power. We call attention especially to the expressions“without mediation, to prevent,”and“external order,”in our definition. The church, the school, the administration of justice etc., act mediately towards the prevention of such disturbances; and there are many other institutions which offer immediate protection to order of a higher and more intellectual nature.143.See the great number of earlier definitions collected inR. von Mohl, Gesch. und Literatur der Staatswissenschaften III, pp. 637 ff. There are two principal groups of them, the one of which considers it as the science of things of political note, the other as the science of actual or past conditions.144.SeeDufau, Traité de Statistique, 1840;Moreau de Jonnès, Elements de Statistique, 1847;Knies, Die Statistik als selbstständige Wissenschaft, 1850.B. Hildebrand, in his Jahrbüchern, 1866, I etc., but especiallyQuetelet'sworks. For the contrary view, seeFallati, Einleitung in die Wissenschaft der Statistik der St., 1843;Jonak, Theorie der Statistik, 1856, andHeeren, in the Gött. Gelehrten Anzeigen, 1806, No. 84, 1807, 1302.145.So thinksv. Rümelin(Tübinger Zeitschr., 1863, 653 ff.); and he recommends in place of statistics an independent branch of learning bordering on history and geography, to be called demography. His statistics is a science auxiliary to all the experimental sciences of man, just as criticism and hermeneutics are a methodological science auxiliary to many sciences, otherwise different. It would be difficult to justify the use of the name statistics for such a science, as such a science corresponds to neither of the two meanings of the wordstatus(state—condition).146.The ancients understood by the term καμάραcamera, covered places such especially as were vaulted, also vaults of the most varied kind. CompareHerod, I, 199;Diod., II, 9;Strabo, XI, 495;Arrian, Exp.Alex., VII, 5, 55;Dio Cass. XXXVI, 32;Sallust, B. C., 55;Cicero, ad Q. fratrem III, 1;Plin., H. N. XXX, 27;Seneca, Epist., 86;Tacit.Hist. III, 47;Sueton, Nero, 34. During the middle ages, the meaning treasure-chamber (Schatzkammer) became predominant:camera est locus, in quem thesaurus recoilligitur, vel conclave, in quo pecunia reservatur(Ocham, Cap. Quid sit Scaccarium). It gradually became synonymous with finance,—from the time of Charlemagne, or at least since Louis II. (Charter of 874). SeeDucange, Glossarium, v. Camera, andMuratoriAntiquitt. Ital., I, 932 ff.147.“A husbandman must plow and manure his land if he would reap a harvest from it. He must fatten his cattle if he would slaughter them; and furnish his cows with good fodder if he would have them give good milk. In like manner, a prince should begin by assuring his subjects healthy and abundant food, if he would take anything from them.”von Schröder, Fürstl. Schatz-und Rentkammer (1686), preface, § 11.Von Horneckbefore him, Oesterreich über alles wann es nur will, p. 220, ed. of 1707, had expressed the idea that the watchful solicitude for the public economy of the country was noparergon, noappendix, to the council (Kammer), but its real basis, and that it embraced many subjects which had nothing in common with the cameralia (“Cameralien”).148.Morhof, Polyhistor (1688), III.Thomasius, 1728, Cautelæ circa præcognita Jurisprudentiæ (1710), ch. 17. (Cautelæ circa studium œconomicum.) Also, in his lectures onSeckendorff's“Teutschen Fürstenstaat.”CompareRoscher, Gesch. der N. Œk. in Deutschland, 328 ff.149.WhileDithmar(1731) distinguishes economy-police and cameralistic sciences and restricts the latter to finance and taxation;Darjes(1756) comprises under the name of cameralistic science, economy (municipal and rural), and police, as well as cameralistic subjects in the strict sense of the term, that is, the public, domain and regal rights. WhileNau(1791), in his“Ersten Linien der C.,”treats only of the branches of private economy,Schmalz, (1797) treats also of national or public economy, andRössig(1792) divides cameralistic science into the doctrine of the public demesne and regal rights (cameralistic science in the narrower sense), and the doctrine of taxation and police.150.Thus, for instance, all that concerns domestic economy, book-keeping and private financial administration.151.John Stuart Mill, Principles of Political Economy (1848), I, p. 25, draws a distinction between the physical conditions which influence the economic situation of a people, and the moral and psychological conditions; which last have their origin in social institutions or in the fundamental principles of human nature. Only the latter belong to the domain of Political Economy. According toJ. B. Say, Traité, Introd., this science embraces at once agriculture, manufactures and commerce, but only in their relation to the increase or diminution of wealth, and does not concern itself with the means employed to reach the desired end. As a rule, saysArndt(Naturgemässe Volkswirthschaft, 1851, p. 16), it takes into consideration not so much things themselves as their exchange value.Lotz(Handbuch, I, p. 6 seq.), in like manner, defines Political Economy—the science of the one activity which constitutes the basis of all industries etc.F. G. Schulze(Ueber volkswirthschaftliche Begründung der Gewerbswissenschaften, 1826), characterizes Political Economy as the science of the fundamental conditions of the well-being of a people, in so far as they lie in human nature.WhenAdam Smith(book IV, c. II) says that the government in respect to matters of economy is inferior to the first best person engaged in industrial pursuits, he is right only from a technic point of view. And whenStewart, on the other hand, vindicates for the state the office of a pater-familias (book II, ch. 13), he evidently means only in national economical matters.152.See alsoRau(Ueber die Cameralwissenschaft, Entwickelung ihres Wesens und ihrer Theile, 1825);Baumstark(Cameralistische Enclycopädie, 1835).153.Xenoph.Œconom. I, 8 ff. Cyrop. VIII; 2, 23. He saw with equal clearness the moral light and shade of wealth. (Œcon. XI. 9. Conviv. 4. Memor. I, 6. Cyrop. VIII, 3, 35 ff. Hiero 4.)154.Thomas Aquinasvalues earthly goods according to the end they are made to serve; when used for a good purpose, they have a mediately true value. Hence it was an error of the stoics to despise them under all circumstances. (Summa Theol. II, 2. Qu., 50, 3. 58, 2. 59, 3. 125, 4.)155.Whateleyconsiders the savage much beneath the materialist, instead of superior to him. The latter possesses, although he frequently abuses it, the faculty of self-control and forethought, which is entirely wanting in the former. (Lectures, No. 6.)Dunoyer, De la Liberté du Traväil, liv. IV, ch. I, 8, an apology for the moral wholesomeness of civilization, since promotive of military prowess, favorable to the development of the sciences, and even poetical.Baudrillart, Manual d'Œkonomie politique, 1857, 24. SeeFallati, Ueber die sogennannte materiellen Tendenz der Gegenwart, 1842.156.See the inscription on the tomb of Sardanapalus: ταῦτ᾽ ἔχω, ὄσσ᾽ ἔφαγον καὶ ἐφύβρισα καί μετ᾽ ἔδωτος τέδπν ἔπαθον. (Strabo, XIV, 672.)Isaiah, 122, 13, 56, 12, and the book of wisdom (2) characterizes the view of the fallen Jewish people. In Greece, the Cynic and Epicurean schools were only different phases of the same degeneration.“Thirst, for money, and nothing else, will be the ruin of Sparta!”(Cicero, De Offic, II, 22, 77.) See the magnificent description by Demosthenes, in which he shows the over-estimation of material things to be the principal cause of the decline of Athens, and in which he lays great stress on the fact, that Athens, on its decay, had a larger population, more wealth, ships, and evidences of external power, than in its golden age. (Phil., III, 120 seq.) Also Phil., IV, 144, cautions us against the Manchester criterion of national prosperity. SeePlato, De Rep., VIII. In Rome, the principleommia venalia essewas a chief element in the total decline and fall of the republic. (Sallust, Cat., 10 ff., Jug., 8 ff.) In an age when people think they can do everything with money, the ruin of all things is the last end of mercantile, financial and political speculation. (Condillac, Le Commerce et le Gouverment, 1776, II, 18.)157.Under Pericles, the Athenian treasury of the state contained at most 9,700 talents. (Thucyd.II, 13.) On the other hand, Alexander the Great had a treasure of 180,000 talents accumulated in the citadel of Ecbatana. (Strabo, XV, 731); Ptolomy II. left after him 740,000 talents. (Appian.præf. 10,Droysen, Geschichte des Hellenismus II, 44 ff.) In Nero's time there was many a freedman's daughter who owned a looking glass worth a greater sum than the senate had appropriated as a dowry to the daughter of the great Scipio. (Seneca, Quæst. Natur. I, 17. Compare Cons, ad Helviam, 12.)McCullochsays that an intelligent despotism can enrich a nation as well as freedom. (In his Discourse on the Rise, etc. of Polit. Econ., 1825, 77 seq.)158.Bacon(Sermones, 56) says that youthful states distinguish themselves specially by their warlike instincts; mature states in literature; old and decaying ones in industry and commerce.Davenantvery happily remarks, that the development of commerce among a people has an ambiguous value. It, indeed, increases wealth, but, at the same time, it may introduce luxury, covetousness and fraud, destroy virtue, do away with simplicity of manners and customs, and then it inevitably ends in internal or external slavery. (Works II, 275.) The simplicity of the patriarchal state, however, cannot last always, if for no other reason, because of the emulation of foreign nations. (1, 348, ff.) The impoverishment of even the wealthiest nation is certainly inevitable when its morality declines. It is especially true, that the public economy of a people can be prosperous only where political liberty obtains, and this, independent of the fact that wealth without freedom has no value. (II, 336 ff., 380, ff., 285.) According toFerguson, private wealth, honestly acquired, used rightly and with moderation, managed with a sense of independence, may be to those who possess it, an element of self-confidence and of liberty, provided they loosen their purse strings not through vanity or for their personal gratification, but for commendable party purposes. But in periods of decay, even a greater amount of wealth is very far from producing these results. (History of Civil Society, VI, 5.)Whately, on the contrary, maintains that only personal wealth—never national wealth—has a disastrous influence on morals. Lectures, No. 2.159.“The method of a science is of much greater importance than any individual discovery, however wonderful.”(Cuvier.)160.Thus, for instance,G. Biel(ob. 1495), the“last of the schoolmen,”gives us his doctrine of Political Economy, in a work on Dogmatic Theology, in the chapter on Penance, his starting point being the inquiry, how the economic damage caused by the sinner may be repaired.Roscher, Geschichte der Nationalökonomik in Deutchland, 1074, I, 23. The Melittotheologia, Arachnotheologia of later times! A recent attempt in this direction has been made byAd. Müller, Nothwendigkeit einer theologischen Grundage der gesammten Staatswissenschaften und der Staatswirthschaft insbesondere (1819), i.e.,“necessity of a theological basis for all political science, and especially for Political Economy.”He divides political science into two parts: the science of law, and the science of wisdom, embracing under the latter denomination, politics, Political Economy, etc. Law emanates from God, as supreme judge; the science of wisdom from God, as our Supreme Father.161.Abstraction is indulged in on a large scale, when a number of elements which are always found combined in life, are here separated and examined apart. It is precisely thus that anatomy proceeds, dissecting each member of the human frame, separating the bones, ligaments and muscles from one another, thus becoming the necessary preparatory school to physiology.162.Thus, for instance,Canard, Principes d'Economie politique (1801). AlsoKröncke, in several of his works, andCount Buquoy, in his Theorie der Nationalwirthschaft (1816), p. 333 ff.;Lang, Grundlinien einer politischen Arithmetik, Charkow, 1811, and more especiallyv. Thünen, Der isolirte Staat, vol. I (1842), vol. II, 1850. See my criticism of his method inBirnbaum'sGeorgika, 1869, 77 ff.Voa Thünen'sfirst volume is an essay towards a geometrical exposition of the science. See alsoRau, Lehrbuch I, § 154, appendix;von Mangoldt, Grundriss der Volkswirthschaftslehre (1862);Cazaux, Elements d'Economie privée et Principes mathématiques de la Théorie des Richesses (1838);F. Fuoco, Saggi economici (1827) II, 61 ff.Walras, Eléments d'Econ. politique pure (1874).Jevonshas recently endeavored to give Political Economy a mathematical basis by reducing the objects of which it treats to the calculable feelings of pleasure (+) and pain (-). The duration of a feeling is treated as an abscissa, its intensity as the ordinate of a curve, and its quantity as the area. Future feelings are reduced to present ones, by allowing for their distance, and the uncertainty of their occurrence. All this, however, is rather curious than scientifically useful.163.Herbart, Ueber die Möglichkeit und Nothwendigkeit, Mathematik auf Psychologie anzuwenden; Kleinere Schriften, II, 417.164.How detrimental it is to ignore the psychological nature of Political Economy is evident from the errors ofKarl Marx, who personifies things in a manner almost mythological. Thus, according to him, modesty should be ascribed to a coat which exchanges for a piece of linen, and purpose to the linen, etc. (Das Kapital, 1867, I, 19, 22, seq.) The greatest fault of this intelligent but not very acute man, his inability to reduce complicated phenomena to their constituent elements, is greatly increased by his way of thus looking at things.165.CompareJ. B. Say, Traité I, introd. Thus, it would be certainly possible to describe every individual's physiognomy by means of a very complicated mathematical formula, and yet there is no one who would not prefer the usual mode of taking pictures. The simple motions of the heavenly bodies, on the contrary, are always treated mathematically. (Lotze, Allgemeine Physiologie, 322 ff.)166.WhenFawcettsays that all“principles of Political Economy are describing tendencies instead of actual results”(Manual of Political Economy, 1863, p. 90), our method, the historical, would give also the theory of the latter.167.This was lost sight of by most writers during the second half of the eighteenth century, because they looked upon that equality as the really oldest condition, and its restoration the ideal to be striven for. How much of this still clings to the present free-trade school; see inRoscher, Gesch. der N. Œk. in Deutschland, 10, 17 ff.168.Thus, for instance,Ricardoexamines, almost exclusively, the actual condition of things, while the socialists confine themselves, still more exclusively, to the investigation of how things should be. It has been very usual in Germany sinceRauwrote, to draw a distinction between theoretical and practical Political Economy. There are many who think that a good manual of practical Political Economy, dropping the introduction, demonstrations etc., would be also a good code of law, of universal application.Mercier de la Rivièrehas said that he wished to propose an organization which should be necessarily productive of all the happiness which can be enjoyed on earth. (Ordre essentiel et naturel (1767), Disc. prélim.) Compare, also,Sismondi, N. Principes, I, ch. 2.169.The word method is used in an essentially different sense, when the inquiry is, whether the inductive or deductive method is followed in Political Economy.J. S. Millcalls Political Economy, and, indeed, all“sociology,”a concrete deductive science, whosea prioriconclusions, based on the laws of human nature, must be tested by experience, either by comparing them with the concrete phenomena themselves, or with their emperical laws. It, in this, resembles astronomy and physics. (System of Logic VI, ch. 9. Essays on some unsettled questions of Political E., No. 5.) According to this, an economic fact can be said to have received a scientific explanation only when its deductive and inductive explanations have met and agreed.“Only those principles which, after they have been obtained by the one, are confirmed by the other method, can be said to have a scientific basis.”(von Mangoldt, Grundriss, 8.) While I agree to this view, it seems necessary to me to mention points wherein caution is necessary: A. Even the deductive explanation of economic facts is based on observation, namely, on the self-observation of the person accounting for them, who, consciously or unconsciously, must always inquire: If I had experienced or accomplished the same fact, what should I have thought, willed and felt? The man who cannot translate himself into the souls of others, will give a wrong explanation of most economic facts. In the question, for instance, of the determination of the price of an article, the person who can look into the mind of one of the contracting parties only, will give a one-sided explanation of the facts. B. Moreover, every explanation, that is, satisfactory connection of the fact seeking explanation with other facts which are already clear, can be only provisional. The wider our horizon grows, the deeper should our solution of all questions become. A hundred years hence, should science increase in the mean time, the solutions which are satisfactory to us will be looked down upon by our posterity, as the speculations of our fathers antecedent to Adam Smith's time are looked down upon by us.170.Tanquam e vinculis sermocinantur, saysBacon(De Dignit. et Augm. Scient., III, 3), of those who have written in a not non-practical way on the laws.Hugo, also (Naturrecht, 1819, p. 9), calls attention to the resemblance of the so-called laws of nature, to the positive law in force at the time. As to political idealism, seeRoscher: De historicæ doctrinæ apud sophistas majores vestigiis (Gött. 1838, 26 ff.). The only exceptions to this rule are the eclectics, who form their own system from the blossoms of all foreign ones, a system, indeed, without root, and which therefore must soon wither.171.In this place, naturally, such an assertion can be made only as a programme to be carried out, the proof whereof is to be sought in the rest of the work. By“the people,”we do not mean the governed, to the exclusion of the governing classes, but both classes together. We attach to the expression the most extensive meaning possible. We do not limit it to the present generation, but intend it to cover all the generations from the beginning of a people's history to its end.172.The custom, which has become general, of calling all democratic movements, and them only, revolutions (thusStahl: Was ist Revolution? 1852, and many other writers of an entirely opposite tendency, especially in France), is not warranted. It is true that democratic (and imperial) revolutions are more frequent than others in our times, just as aristocratic revolutions were in the middle ages, and monarchical at the beginning of modern history. The essence of revolution, however, is in the operation of change contrary to positive law, acknowledged as such by the consciousness of the people.173.Compare, especially, the first pages ofSir J. Stewart, Principles of Polit. Economy.174.SeeColton, Public Economy of the United States, p. 28, who, indeed, unwarrantedly, refers to the whole of Political Economy, what properly belongs to its precepts.175.Je n'impose rien, je ne propose même rien: j'expose.(Ch. Dunoyer).Cherbuliez, Précis de la Science économique, 1862, p. 7 ff., has exaggerated this idea in a strangely non-practical manner. That the historical method does not differ essentially from the statistical as recently recommended, seeRoscher, Gesch. der Nat. Œk., 1035 seq.176.Storch, Handbuch, II, 222.177.Ad. Müller, an essentially mediæval mind, is guilty of this same braggadocio in an opposite direction, when he calls the“present with its political disorders simply an intermediate state,—the transmission of the natural or unconscious wisdom of the fathers, through the inquisitiveness of their children to the rational acknowledgment of that wisdom by their grandsons.”(Theorie des Geldes, 1816, pref.)178.Thus, for instance, it can not be said that a model university is better than a model public school; and yet the former is higher, because the age to which it is adapted is doubtless intellectually higher.179.Knies(Polit. Œk., 256 seq.) remarks, that it would be a great mistake, and it is the mistake of the majority, to consider what has been achieved or striven for in the present, as the absolutenon plus ultra, and thus to look upon all future generations as called upon to play the parts of apes and ruminators; a remark worthy to be taken to heart.180.I have, myself, no doubt, that up to the present time, mankind, as a whole, has, from the beginning of historical knowledge, always advanced. In individual cases, their movement has been interrupted by so many pauses, and even by so many occasional retrogressions, that great care must be taken not to infer superior excellence from mere subsequency.181.Bucklewrites of people whose knowledge is about limited to that which they see going on under their eyes, and who are called practical, only because of their ignorance; and he adds that, although they assume to despise theory, they are in fact slaves of theory, of others' theories.182.Compare this whole chapter withRoscher, Leben Werk und Zeitalter des Thukydides, 1842, pp. 25, 239-275;Roscher, Grundries zu Vorlesungen über die Staatswirthschaft nach geschichtlicher Methode, 1843, preface;RoscherGeschichte der Nat. Œk. in Deutchland (1874), 882 f., 1017 seq., and D. Vierteljahrsschrift, ff. See alsoJ. Kautz'slearned and accurate Theorie und Geschichte der N. Œkonomik, vol. I, 1858, II, 1860. I find no real contradiction between the views here expressed and those ofKautz, when he (I, pp. 313 ff.) introduces history and ethico-practical reason with their ideals as sources of Political Economy, to the end that the science may be something more than simply a picture, namely, a model of economic life. Apart from the fact that it is only the ethico-practical reason that can understand history at all, the ideals of a period constitute one of the most important elements of its history. The aspirations of an age find in them their best expression. The historical political, economist as such, is certainly not disinclined to form plans of reform, nor can it be said that he is not adapted to the performance of such a task. Only, he will scarcely recommend his reforms as absolutely better than what they are intended to supplant. He will confine himself to showing that there is a want which may, probably, be best satisfied by what he proposes. SeeSartorius, Einladungsblätter zu Vorlesungen über die Politik, 1793.183.“There is a book which youth may use to grow old, and the old to remain young—History.”(K. S. Zaccharia).184.Especially when natural science begins to be“a practical science.”(L. Stein).185.The difference between the broader and narrower sense of production, corresponds essentially with that of gross and net income (§ 145). Compare also §§ 206, 211 ff.186.Von Mangoldtdistinguishes the coming into existence of free values of the production undertaken for an economic purpose. (Grundriss, 9.)187.Gioja, Nuovo Prospetto delle Scienze economiche (1815), I, 49 ff. Besides positive production, there is a latent production, which prevents the decay of goods. It is not possible to make as exact an estimate of the latter as of the former; and much more depends in the latter case than in the former on continuity and proper extension. Hence, latent production is especially a state concern. (Knies, Telegraph als Verkehrsmittel, 1857, 232.)188.SeeSchäffle, in the Tübinger Univ. Programm, September 27, 1862, on the disastrous effect on the community of idleness. The leading of a happy life the Greeks called very appropriately, εὐπράττειν (Garve).189.We use the expression“external nature”through the whole of this work in contradistinction not only to the soul, but also to man's body, designating his entire physico-intellectual activity by the term“labor-force”(Arbeits kraft).190.By the expression“natural forces,”we designate the economically useful changes of matter, changes of place as well as of composition, which are made without man's cooperation; for instance, the gigantic machinery which supplies the greater part of mankind with water to drink, for domestic and other purposes—the evaporation of the sea, the formation of clouds, rain, springs, rivers etc. SeeBastiat, Harmonies, 277. Thus the sun's rays are indirectly the cause, not only of vegetation, but also of all wind and steam forces.191.Spite of this“freedom,”it may well happen that these gifts of nature can be utilized, in many cases, only on condition of some expenditure. The photographer can compel the sunlight to work for him only by means of a camera obscura, and the smithy the atmosphere, only by means of a bellows. But neither will ever successfully make an item, in their accounts with their customers, of the services of the sun or air.192.The most important ocean currents may be explained by two causes: the flowing of the water from the polar seas to the equator (polar current), and the revolution of the earth about its axis (equinoctial current); besides which, there are the reflex currents produced by the horizontal form of the coast-lands. Thanks to these natural ocean highways, England is nearer to almost all the important mercantile coasts of the world by 300 geographical miles than the Eastern States of the American Union. The only exception is the Atlantic coast of America north of the Equator. North Americans to pass the line, or to double one of the two great capes, are obliged first to traverse the ocean as far as the Azores. On the other hand, the western coast of South America is very widely separated from Mexico, for instance, by its ocean currents. The colonization of America by Europe, instead of by China, is a consequence of the direction of ocean currents, as is also the fact that America has now the fairest prospect of influencing the civilization of China and Japan. What an influence the warm gulf stream has on the mild climate of north-western Europe!193.While the Mississippi has no ebb or flow whatever, the influence of the ocean is felt in the Hudson, which is 60 geographical miles long, a distance of 29 miles from its mouth.194.Thus,A. Young, Travels in France I, 293 ff., has defined, with approximate accuracy, the limits within which the vine, maize and the olive grow. And sovon Cancrin, Dorpater Jahrbuch IV, 1, distinguishes the ice zone, the reindeer-moss (a lichen on which the reindeer live in winter) zone, the forest zone, the zone within the limits of which cattle are raised; that in which the culture of rye begins, that in which it becomes permanent; the wheat, fruit-tree, vine, maize, olive, sugar cane and silk-worm zones. The United States are divided into cattle-raising, wheat-raising, cotton-raising, rice-raising and sugar-raising zones. Even in Europe, beyond the 60th parallel of north latitude, wheat can scarcely be cultivated; the polar limits of rye raising extend, at most, six or seven degrees farther. Towards the north, barley extends sometimes as far as the 70th degree. Here agriculture almost ceases, and the inhabitants are compelled to confine themselves to animal substances for food. On the other hand, these three cereals are not adapted to a tropical climate, while the bread-fruit tree, for instance, does not thrive at more than 22 degrees from the Equator, nor the banana at more than 35. CompareGrisebach, Die Vegetation der Erde nach ihrer klimatischen Anordnung. II, 1871.195.Thus rye and wheat thrive in many parts of Siberia (Iakutzk) at an annual temperature of - 7.50, while in Iceland no cereals ripen at an annual temperature of + 4°. But in the former place the summer heat is + 16.2°; the winter cold, - 39.2°; in Iceland, + 12° and - 1.6°. In England, the myrtle, laurel, camelia and fuchsia stand the winter well; while the vine no where ripens. On the other hand, Astrakan and Hungary are vine growing countries, although the former is as cold in winter as North Cape, and although the cold is more intense in Hungary than in the Faroe Islands, where neither the oak nor the beech grow any longer. No good wine is produced on the western coast of France, north of 47° 20' north latitude; in Champagne, north of 49°, or in the Rheingau, north of 51°. In Norway, the average heat is greater on the coast than in the heart of the country where, however, grain ripens, while it does not on the coast; for the mildness of the winter, no matter how great, can make no compensation for the want of heat. On the other hand, the cattle on the coast can remain much longer out of doors, and the sea seldom freezes in such a way as to interfere with the fisheries.Blom, Norwegen I, 39.Boussingnault(Economie rurale considérée dans ses Rapports avec la Chimie, II) has made some interesting attempts to calculate by a mathematical process the amount of heat necessary to vegetable, during the period of vegetation. Thus, for instance, wheat requires about 12° (Réaumur) of heat during 140 days; that is, nearly 140 x 12° = 1680° Réaumur. In Venezuela, the sugar cane requires a longer time to grow in a higher and therefore cooler position than in a lower and warmer, and the length of time required is in proportion to the height.196.Hence it is that the isothermal lines are not parallel with the equator or with one another. The greater number of these have two northern and two southern summits; the former on the western coasts of Europe and America, and the latter in eastern North America, and in the interior of Asia.197.The quantity of rain which falls every year is, at St. Petersburg and Pesth, from 16 to 17 inches; at Berlin 19, Mannheim 21, Tübingen 26: in the interior of France 16-24; on the French coast 25, on the eastern coast of England 24, on the western coast 35, in Milan 36, Genoa 44, on the coast of most tropical lands 70-120. On the political-economical influences of most climates, seeGobbi, Ueber die Abhängikeit der Populationskräfte von den einfachen Grundfstoffen, 1842.198.The snow limit at Mageröe in Norway is 2,200, in Iceland 2,900, in the northern Ural 4,500, in the Alps 8,200, in the Caucasus 10,400, and Quito 14,850 feet high. Hence it is that mountainous countries which produce nothing in the north, make magnificent vineyards in warmer countries.199.In central Germany, even a second crop can be produced after the corn harvest. In Arabia, the same seed produces three harvests, because the grain which falls at the time of harvesting to the ground, germinates immediately and suffices for new seed. (Niebuhr, Beschreibung, 154.)200.Thus in the northern states of the American union, wheat yields a return of only from four to five times the amount sown; in France, 5-6 times (Lavoisier): in Chili, 12 times; in northern Mexico, 17 times; in Peru, 18 and 20 times; in southern Mexico, 25 and even 35 times; in Germany, maize seed yields at best one hundred fold, while in the torrid zone there is a return of from three hundred to four hundred fold, generally.201.Andalusian corn produces in the mill only one-half as much bran-waste as Baltic wheat produces.Bourgoing, Tableau de l'Espagne, II, 155. Baltic wheat contains 6-7 per cent, of azote, and Algerian, 20-25 Per cent. (Kabsch, Pflanzenleben der Erde, 1865.)202.In Europe the blossoming season is retarded four days for each degree of northern latitude. (Schübler.) As we advance towards the north, the difference becomes less noticeable, but more so as we go towards the south. In mountainous countries a similar difference is observable, produced by a like climatic influence. It is from about 10 to 12 days, for a height of from 500 to 600 feet. (Wolff, Naturgesetzliche Grundlagen des Ackerbaues I, p. 332 ff.) In the cantons, in which the Swiss confederation had its origin, the pasturage of the Alps lasts generally thirteen weeks, but in the higher Alps it lasts only from six to seven weeks. (Businger, C. Unterwalden., p. 52.)203.In central Italy, winter wheat may be sown in October, November or December; summer wheat, in February or March. (Sismondi, Tableau de l'Agriculture Toscane, p. 35.) In Judæa, it was possible to harvest figs ten months in the year. (Joseph, Bell. Jud., Ill, p. 10.) On the other hand, there is Jemtland, where the peasant in many places surrounds the northern portion of his cornfield with fagots, and lights them in August when the north wind blows, to protect his land from the frost; and where the expression“green years”is used to designate those in which the harvest has to be reaped before it is ripe. (Forsell, Statistik von Schweden, 24.) In the valuation made of the lands of the kingdom of Saxony, for assessment purposes, the cost of supporting a yoke of oxen in the lowest country is estimated at only three-fourths of what it is in the highest localities, because in the former, 200 work days can be calculated upon in the year, in the latter only 159. In central Russia, the greater part of the labor of agriculture, sowing and harvesting, has to be finished within the space of four months. In central Germany, they are spread over seven months. Other things being equal, seven horses and ploughmen are needed in Russia where only four are called for in central Germany, (von Haxthausen, Studien I, 174.) On the impediments put in the way of agriculture by the climate of eastern Prussia, seeMeitzen, Boden und landwirthsch. Verhältnisse des preussichen Staats, 1868, I, Abschn., 6.204.“In both hemispheres, the zone in which the temperature decreases most rapidly lies between the 40th and 50th degrees of north latitude. This circumstance must have a happy influence on the culture and industry of the nation inhabiting the neighborhood of that zone. Here is the point where the regions of the vine touch upon those of the olive. Nowhere in the world, do the products of the vegetable kingdom, and the most varied wonders of agriculture, follow with such rapidity on one another. The great variety of products enlivens the commerce and increases the industrial activity of agricultural nations.”(Humboldt.) It is true, however, that tropical countries possess, also, in their mountainous parts, thetierra fria,templadaandcaliente, superimposed the one on the other.205.The aggregate coal supply of Great Britain (1869) was 2,180 millions cwt.; of Belgium (1862), 207 millions; of France (1868) 256 millions; of Prussia (1870), 600 millions, of Austria (1870), including brown lignite coal, 158 millions; of Russia (1868), only a little over 9 millions. The great English coal field, in the counties of Durham and Northumberland, embraces 732 English square miles; that of South Wales, 1,200, with a depth of 95 feet, so that the geographical square mile contains here 679 millions of tons, each of twenty cwt. To obtain the same quantity of combustible material as was furnished to Prussia, in 1865, by its coal, it would be necessary to use up 6,331 square miles of forest, (von Dèchen, inEngel'sZeitschrift, 1867, 258.) The supply of coal is, of course, exhaustible while, for instance, turf-fields replace themselves by slow degrees. CompareGriesbach, über die Bildung des Torfs, in the Göttinger Studien, 1845, vol. I. The importance of the coal-fields of the United States, which are twenty-two times as large as those of Great Britain, in the distant future, cannot be over-estimated.206.I need only call attention to the earth-fire (Erdbrand) for the purpose of forcing the growth of garden plants in the neighborhood of Zwickau, which is said to have existed since 1505.207.Thus, in Watt's steam engines of the larger kind, an hourly consumption of ten pounds of coal is needed to produce a force equivalent to that of one horse, while in the smallest machines of only one horse power, twenty-two pounds are needed. SeePrechtl, Technolo. Encyklopädie, III, 669.208.It is easy to see that it is the most important substances needed in industry which are mentioned in this section. Many political economists have considered the principal difference between agriculture and the industries and economies of towns to lie in the contrast here referred to. Thus,A. Sena, Sulle Cause che possono far abbondare li Regni d'oro e d'argento, dove non sono miniere, 1613, I, 3. See the description of the difference between land and machines inMalthus, Principles, III, 5;Senior, Outlines, 86. But it is nothing more than a difference of gradation. Even in the most active of businesses there is a limit which the accumulation of means of production cannot pass without a relative diminution of the income. This boundary is imposed by the limited nature of those organic beings which must contribute to production either actively or passively. Thus, for instance, a manufacturing establishment or commercial business can be enlarged with advantage only so long as it is still possible for one superintendent to conduct it. And so, when cattle are furnished with very abundant and substantial food, a pound of meat costs the producer a much higher price than when they are more moderately supplied: sometimes in the ratio of 1.95:0.98.Boussingault, Economie rurale, II. Where there is absolute over-feeding, the producer must suffer loss. But, even inorganic nature imposes its own limits here; as, for instance, when ships, machines etc., on account of the insufficient strength of the materials of which they are made, cannot be constructed beyond a certain size. But all these limits are much narrower than those imposed by the quality of immovability.209.Senior, Outlines, 26, 81 ff. SeeStewart, Principles, II, ch. 11;Ortes, E. N., I, 18, II, 18 ff. This most important principle in Political Economy is thus illustrated byJohn Stuart Mill, Principles, book I, ch. 12.“The limitation to production from the properties of the soil is not like the obstacle opposed by a wall, which stands immovable in one particular spot, and offers no hindrance to motion short of stopping it entirely. We may rather compare it to a highly elastic and extendible band, which is hardly ever so violently stretched, that it could not possibly be stretched any more, yet the pressure of which is felt long before the final limit is reached, and felt more severely the nearer that limit is approached.”This is, if possible, more obvious in building than in agriculture, both as to the construction of new stories and the excavation of deeper cellars.210.Ad. Mayer, Das Düngerkapital und der Raubbau (Heidelberg, 1869), sees the only conditions of production which man cannot increase at will exclusively in the sun's rays, the employment of which also depends on the quantity of land. Thus would he explainSenior'slaw.211.See the tables of increase inCotta, Anweisung zum Waldbau, p. 228.Count Buquoy, Theorie der N. Wirthschaft, p. 54, ridicules the absurd procedure of a great many farmers, as if by forcing the ploughshare deeper into the soil, they could compel it to produce a double return, and asks: if one should dig a square foot of land to the center of the earth and manure it, who would take it off his hands? As to the effect of manure,Kuhlmann'sinvestigations have shown that 300 kilogrammes of guano produced in three years an increase perhectarein the yield, of 2,469 kilogrammes of hay; while 600 kilogrammes produced an increase of only 2,870 kilogrammes.Schübler, found that where salt had been used for manuring purposes, 40 kilogrammes produced a maximum of fertility from which point forward every increase in the amount of salt was attended by diminished returns, and finally led to complete barrenness. SeeWolff, Naturgesetzliche Grundlagen, I, 408, 412, 502. Constantly increased irrigation would convert the land into a swamp instead of indefinitely adding to its fertility. Nor can abundant sowing be of any use when it reaches such a point that the plants stand so closely together as to interfere with their proper development.212.These differences correspond with the differences in the kinds of deterioration to which land is liable from rivers, floods, lava, etc., soil-exhaustion, and the growing wild of the land.213.From a technic point of view, it would, perhaps, be practicable, in most instances, to obtain the phosphoric acid immediately from the land and transfer it to other land; but the relation of the cost to the result makes it impossible from an economical point of view.214.It most certainly is always an uncommon advantage that certain kinds of soil, rich in kali and decayed vegetable matter, yield a long series of harvests without the addition of manure, provided, always, that a short interval is allowed to the process of decay to replace the exhausted plant-food. Thus in many volcanic regions. Compare on similar districts in the Deccan:Rilter, Erdkunde, V, 714.215.According toSchübler, the absorption of water by 100 parts of earth is, in the case of quartz-sand, 25 per cent. of its weight; for clay, 70 per cent.; for calcareous earth, 85 per cent.; humus, 190 per cent.; and for 100 parts of their value, respectively, 37.9, 66.2, and 69.2 per cent. The consistency of the four kinds of earth, in a dry state, is in the proportion of 0.100, 5, 8.7; their adhesion in a moist state, to iron agricultural implements, is in that of 0.17, 1.12, 0.65, 0.40. Of 100 parts of water mixed with these kinds of earth, the evaporation in four hours, at a temperature of 18° 75' (centigrade) is 88.4, 31.3, 28 and 20.5 per cent, respectively. The diminution of volume when the moist earth dries, under the same degree of temperature, is, 0, 18.3, 5 and 20. Their relative absorption of atmospheric moisture for 48 hours is as 0, 24, 17.5 and 55; their absorption of oxygen in 30 days is respectively 1.6, 15.3, 10.8 and 2.03 per cent.; and, lastly, their heat-holding power is in the ratio of 95.6, 66.7, 61.8, 49.216.In Austria, below the Enns, only 3.8 per cent. of the soil is barren; in the Tyrol, 29 per cent.; in Dalmatia, 48.1 per cent. (Springer). In the French Pyrenees, 43 per cent. is considered incapable of cultivation; in the Alps, in Landes and Morbihan, 42 per cent.; in the departments of Nord and Somme, 1.3 per cent. (Schnitzler).Fransciniconsiders 36 per cent. of Switzerland unfit for tillage. The idea“barren”is a very vague one, and hence a comparison of different countries on this point should not be made without great caution.217.Wolff, loc. cit., 353 ff. As to the manner in which soil and climate mutually improve or injure one another, seeSchwerz, Prackt. Ackerbau I, 12.218.In this respect, also, the fundamental difference between agriculture and industry is very important, inasmuch as the products of the former, equal in value to those of the latter, require a very large supporting or bearing surface; those of industry, a very small one. IfNobbe's“water-cultivation”should ever come to assume any great practical importance, agriculture would approach to industry in this respect.219.Wolkoffhas called special attention to mereemplacement: Lectures d'Economie polítique rationelle (1861), pp. 90 seq., 157 seq.Bastiat'srather broad and enthusiastic assertion, that no mere product of nature possesses value (in contradistinction to utility), an exaggeration of his very honorable contest with the socialists (1848!), is refuted by daily experience, as when, for instance, discoveries are made accidentally of metallic veins, coal-fields etc., which immediately acquire great exchange value.220.Aristotledistinguishes between ἀπολαυστικὰ and κάρπιμα. (Rhet., I, 5.)221.Humboldt, Essai politique, súr la N. Espagne, IV, 9, in which he estimates the relation of the culture of the banana to that of wheat, in respect of mere quantity, to be as 4,000 to 30,—“probably the best gift of nature to awakening man, and the object of the most ancient cultivation.”222.It was said that in Easter Island, three days' labor sufficed for a man's maintenance through the whole year. A similar gift of nature to tropical lands is the date tree. It is turned to so many different uses that the Arabs of the coast of the Persian Gulf say that it is possible to construct a ship, rig it, supply and freight it, from date trees. Houses are built of palm wood, covered with palm leaves, furnished with palm mats, lighted with palm chips, and heated with palm coals. The whole architecture of these countries is fashioned by the date tree. Date wine is the favorite intoxicating beverage. There is a proverb current there that a good housewife can vary the preparation of the date for her guests every day in the month. Even the pulp is eaten. Each tree yields an average of 50-250 lbs. of dates; and a tree may last over 200 years. An acre may contain more than 200 trees. The labor of cultivation is very slight, although it demands more care than the banana. CompareRitter, Erdkunde, XII, 763. An acre planted with the sago-palm yields as much nourishment as 163 acres of wheat land. (Reise der Frigatte Novara, II, 113.)223.SeeD. Hume, Discourses No. I (On Commerce). While in hot countries“the sun does more work for man, it diminishes human strength itself.”(M. Wirth.) That, however, such people, to their surplus of the natural means of enjoyment and the consequent laziness and absence of care, add the bright side of a joyous disposition, is well shown byGoethe, Werke (16 mo., 1840), XXIII, 246.224.Noticed even byThucyd., I, 2. See alsoEuripides'comparison of Sparta and Messina, inStrabo, VIII, 366.225.We find, in a great many countries, that their northern portions are endowed more sparingly by nature with means of enjoyment (Genussmitteln) than southern portions, but more abundantly with means of acquisition. (Erwerbsmitteln.) Hence, the former are latest to develop; but once developed, they assume a much higher place in civilization than the latter. This is true of Italy, Spain, Portugal, France, the Netherlands, and the United States, and of North America in general, as compared with South America. Something similar may be seen in the contrast between Austria and Prussia. The latter is colder and less fertile, but far superior to the former in extent of coast, in rivers, and fossilized combustible matter.226.The rule is not without its exceptions. Thus, for instance, Borneo and New Guinea are physically very like each other, but zoölogically two different worlds; the former belonging to India and the latter to Australia.227.Even language, which is the most general and most accurate expression of the intellectual genius of a people, presents a strikingly analogous contrast in mountainous and coast countries. Thus, compare the Ionic, Latin, Low German, Danish and Portuguese, with the Doric, Oscan, High German, Swedish and Spanish.228.SeeStrabo, II, 126. seq.229.The most striking instance, illustrative of the manner in which the nature of a country influences the character of a people is afforded by the difference in the development of the Aryans in India and Persia, especially when their sojourn in the territory of the Indus before that near the Ganges is looked upon as an intermediate stage.230.French writers, especially, have exaggerated the influence of nature over man. Thus,Bodin. de Repub. (1584), V, I;Montesquieu, Esprit des Lois, XVII, 6. XVIII, 1, 18.Cabanis, Rapport du Physique et du Moral de l'Homme (1805), IX, Mémoire, Influence des Climats.Comte, also, Traité de Législation (1827), is of opinion that“the degree of civilization which a people may attain does not depend on the degree of development of which they are capable by nature, but on that which their geographical situation permits them to attain.”See, also,Herodot., III, 106;Hippocr., De Ære etc., 71;Euripid., Medea, 820 ff.;Plutarch, De Exilio, 13. The proper mean has been found byE.M. Arndt, in his Anleitung zu historischen Characterschilderungen (1810), and byRitter, and his school. See, also,K.S. Zachariæ, Idee einer volkswirthschaftlichen Geographic als Grundlage der praktischen N. Œkonomie fur jedes einzelne Volk: Vierzig Bücher v. Staate, II, 79. See, also,Turgot, Géographie politique, 1750, Œuvres (ed. Daire, II, 611 ff.);Lueder, Nationalindustrie und Staatswirthschaft, III, 1800 ff.231.Malte Brun, Précis. de la Geographie universelle, VI. pr.232.Strabo, IV, 178. On the climate of ancient Germany, seeTacit, Germ, 2.233.Fraser, Travels in Koordistan and Mesopotamia, II, 5. See, also, the description of ancient Susiana inStraboXV, 731, with that of the new one byM'Kinneir, Geogr. Memoir of Persia, 92.234.Thus,Galenus, De Usu Partium Corporis humani, L. I. The animal nearest to man mentally, the elephant, is also possessed of a member more like the human hand than any other animal. Its trunk was calledmanusby the Romans. Hence the Indians call the elephant, the animal gifted with a hand.Buffon'sview is exaggerated by Helvetius in the interests of materialism.Aristotle, (De partt. anim. IV, 10), opposes the saying of Anaxagoras: διὰ τὸ χεῖρας ἔχειν φρονιμώτατον εἶναι τῶν ζώων ἄνθρωπον. CompareBell, On the human Hand, 1836.235.As to the imperfection of the ordinary division into agricultural, industrial and commercial labor, seeJohn Stuart Mill, I, ch. 2, 9. The division of all labor into mental and physical, is not more satisfactory; for even the basest labor is not wholly physical. SeeBuckle, History of Civilization, vol. II.236.DioscoridesandGalenwere acquainted with, at most, 600 plants;Linnæus, with 8,000. About 1812, about 30,000 had been described; in 1837, about 60,000; in 1849, about 100,000.Buckle, History of Civilization etc., II, p. 359.237.Industrie extractives, according toDunoyer. When nature's spontaneous gifts are exhausted, thisoccupationreadily becomesproduction.238.Industrie voituriére, according toDunoyer;industria traslocatricein opposition totrasformatrice, according toScialoja.Ortesdistinguishes only four classes:agricoltori,artefici,dispensatoriandadministratori, orraccoglitori,manifattori, anddifensori di bene(E. N. I, 2; III, 14).A. Walker, Science of Wealth (1867), p. 34, knows only three classes: transmutation, transformation, transportation.239.This is not to be understood in the sense, that there ever was a period in which these sciences were unknown. We need only mention the position occupied by the priest and knight in the middle ages. But, looked upon as economic labor, intended only for purposes of free commerce, they have become very important only within a relatively recent period of time. Thus, for instance, there was in Lower Austria, in 1866, one lawyer or notary to every 6,569 inhabitants; in Bohemia, to every 14,860; in Galicia, to every 22,361; in the whole of Cis-Leithanian Austria, 12,259. In 1865, there was in Prussia, one to every 11,149; in Bavaria, to every 7,350; in Hanover, to every 4,946; in 1862, in Baden, one to every 4,992; in 1867, in Saxony, one to every 3,048.Hildebrand'sTagebuch, 1868, I, 234. There was in Prussia, in 1871, one doctor to every 3,230 inhabitants; in Berlin, to every 1,100; in Heldesheim, to 1,803; in Cologne, to 2,120, in Marienwerder, to 7,240; in Gumbinnen, to 10,047.Engel, Preuss. Statis. Zeitschrift, 1872, 376. The verb“to plow”is, according to comparative philologists, of more recent origin than“to weave.”(Lassen, Indische Alterth. I, 814 ff.) And yet agriculture, in the sense above indicated, undoubtedly precedes industry.240.Observed byGeiler v. Kaisersberg. CompareSchmollerin the Tübinger Zeitschr., 1860, 483. Hour wages occupy a middle place between day wages and piece wages.241.Thus the introduction of piece wages into lower Silesia has increased the daily earnings of workmen by one-third, one-half, and even more.Engel'sStastist. Zeitschr. (1868), p. 327. The investigations of the German agricultural congress on the condition of agricultural laborers in the German empire (report ofv. d. Goltz, 1875) show that in all Germany on an average, the daily earnings of a contract workman (Accordlöhner) is to the daily summer wages of a day laborer as 15:10 (1420). On the other hand,Brassey, in the construction of a railway, found that the same workmen engaged in grading, digging, etc., cost 18 pence per yard when paid by the day, and 7 pence when paid by the piece. (Work and Wages, 266.) Swiss experience is, that production became 20 per cent. cheaper under the piece wages system. (Böhmert, Beitr., 109.)242.According tov. d. Goltz'sEnquête, the earnings of workmen by the piece, compared with the wages paid workmen by the day in summer, is especially high in middle Franconia (16.5:10); in the Leipzig circle of the German empire (16.6), in the Braunschweig plain (16.8), within the jurisdiction of Hildesheim (18.1), of the Bavarian Palatinate (18.6), in Rhenish Hesse (23.2), especially low in Stettin (13.2:10), in Stralsund (12.4), in Schleswig Holstein (12), in Osnabrück, (11.7.)243.According tov. Flotow, Anleitung zur Fertigung der Ertragsanschlage, I, 80, four days of serf labor are equivalent to only three of a free day laborer. According tov. Jacob, Ueber die Arbeit Leibeigener und freier Bauern (1815), 21, two day laborers are equal to three serfs, and one farm horse is equal to two employed by serfs. It is as impossible to obtain accurate general estimates here, as in the case of slave labor. As a rule, hope is not only a more humane but a sharper spur to action. But if force is employed at all, there is no doubt that the greater it is, the more effectual it is. Wherever the right of corporal punishment has been taken from the masters, the technic value of serfdom has uniformly decreased. In the English West Indies, formerly, philanthropic masters who treated their negroes with unwonted gentleness, obtained from them, as a rule, very poor economic results. While each of the slaves expressed the greatest indignation at the idleness of the others when they had“so good a master,”they were all equally and excessively lazy. The weekly production of a plantation sank rapidly under this system from thirty-three hogsheads to twenty-three, and finally to thirteen.Math. Levis, Journal of a West India Proprietor, 1834; Edinburg Review, XLV, 410. For the same reason, the negroes in the Spanish colonies, who were treated much more gently than those owned by other European nationalities produced much worse work. See, however,Columella, De Re rust., I, 8.244.According toHowlett, The Insufficiency of the Causes to which the Increase of our Poor Rate have been ascribed (1788), piece wages had become usual“a few years ago.”Very recently the trades unions have again restricted the system of piece wages (§ 176).245.This system is inapplicable in the case of domestic servants (Gesinde) who are a part of the household, and who afford to their masters, besides their services, the advantage of having a person at their disposal always about them, and whose wages are therefore in great part their board and lodging. Still less can it apply to the case of the family physician, whose services consist not simply in writing prescriptions, but who is also the professional family friend. The same may be said of the state official, clergyman etc., from whom it is demanded that he should sacrifice his entire life to the service of the public. Against adopting piece wages in the case of state officials, it may be further urged that no case at law, no act of public life is precisely similar to any other. It cannot be applied to that of soldiers, because they are called upon for action only after a long term of peace, during all of which they must keep themselves in readiness for war. (Schäffle, N. Œk., II, 388.) It has also been the practice of courts, until recently, on account of their dignity, to pay their mechanics not by the piece, wherever that was practicable, but by a fixed salary. An able professor in a university is of use to it not only by his lectures, but by his reputation and example etc.; hence, here, a combination of piece wages and of a regular salary is preferred. As to services, the permanency of which constitutes their essential character, remuneration is also wont to be permanent or hereditary, as in the case of very many public officers, while civilization is as yet unadvanced. Later, in proportion as the progress of civilization makes itself felt, this hereditariness is wont to be confined to the sovereign. For an opposite view, seeBoxhorn, Institutt. politt. (1663), 41.246.Thus, the Chinese, who, by a ridiculous exaggeration bordering on caricature of many of our recent tendencies, may afford us a warning reflection of ourselves in our present state of civilization, rarely labor efficiently when not watched. Only by means of piece wages or the share-system can they be induced to do good work.R. M. Micking; Recollections of Manilla and the Phillippine Islands, 1851.247.Day laborers, for instance, must be watched over during the harvest, to prevent their idling away their time, and piece-workers to prevent their continuing to work in spite of wet weather, binding sheaves, for instance, which causes the sheaves to rot. In England, it is considered almost an impossibility to induce laborers to cut wheat close enough to the soil. (Sinclair, Code of Agriculture, 102.) The haste of piece-workers, in the harvest of the rape, occasions great loss, by the fall of the seed. In Russia the removing of the hide from animals is paid for by the piece, and the laborers injure a very large number of skins in their haste.Steinhaus, Russlands industrielle und commercielle Verhältnisse, 425. Piece-wages are to be entirely discountenanced in the reeling of silk. SeeBernouilli, Technologie, II, 215. A yearly salary is to be recommended in the tending of cattle, because here a certain connection (Anschluss) with individuals is desirable. In building trades, contractors in England prefer a regular salary; but they employ model workmen, the so-called“bell horses,”to whom they pay a large salary, and who keep the others on the strain by their example, and who on that account are very much hated by their colleagues.248.Adam Smith, W. of Nations, I, ch. 8.Howlett, also, l. c., thinks that piece-wages increase the earnings of workmen, but at the expense of their capacity for constant labor.Count Görtz, in his Reise, 328, relates with what fatal effect piece-work in Demarara tells on white laborers and their horses. After the February Revolution, Parisian workmen demanded the abolition of piece-wages, and obtained it in several manufactories. Revue des deux Mondes, March 15, 1848.249.In several Swiss factories, understrappers receive a salary, whilemonteurswork by groupe-contract. (Böhmert, Arbeiterverältnisse und Fabrikeinrichtungen der Schw., II, 70.) Sub-contracting, where the contract is generally made with only one person, for the most part of more than average capacity, and this latter contracts with other workmen on his own account entirely, is considered by philanthropic employers of labor as one of the worst kinds of remuneration. The more democratic system of gang-contract is much better, although even here, it is very easy for the weaker members of a good gang to overwork themselves. (Edinburg Review, October, 1873, 365.)250.Especially important in chemical factories. The expense of greasing on the Rhenish railways fell, through premiums offered as rewards for saving, from 27,000 thalers to 5,000, in spite of an increase in the amount of traffic. (v. Mangoldt, Volkswirthschaftslehre, 349.) This was, besides, the most effectual way of controlling the theft of material.251.In the cachelot fishery, the captain receives one-sixteenth, the master, one twenty-fifth, the second master, one thirty-fifth, the boatswain, one-sixtieth, each sailor, one eighty-fifth of the profit. (Humboldt, N. Espagne, IV, 10.) This system is very common in North America. SeeCareyinJ. S. Mill'sPrinciples, V, ch. 9, 7. In heathen Iceland, mariners were always paid a certain quota of the profits.Leo, inRaumer'shistorischem Taschenbuch, 1835, 524. The same was often the case in China.McCulloch, Comm. Diction. v. Canton. In England, its employment was rendered very difficult by the laws of partnership, which made each individual, except in great chartered societies, responsible for all kinds of debts contracted by the rest of the firm.J. S. Mill, B. IV, ch. 7, 5.252.The house painter Leclaire, in Paris, obtained very high results in this respect.Leclaire, Répartition des Bénéfices du Travail, 1842. He retained for his own services as contractor the sum of 6,000 francs, and paid each workman the salary he had hitherto received. What remained was, at the end of the year, equally divided among all.Leclaireassures us that he was always satisfied with the system. The paying of a proportion of the general profits to laborers is advisable only in case their ability of surveying the whole is not much inferior to that of their employers. Where a special proportion is paid, in special branches of business, it is sufficient if their supervision extends over that particular branch. But a sharing in the profits of business always supposes a corresponding supervision of the business itself, and also the keeping of accounts.253.A very good remedy against indigence among the lower classes. (Umpfenbach, National Œkonomie, 1867, 214.) But whether it will ever be possible to make the remuneration of the navvy or that of a type-setter depend on the final success of his work,qnœre.254.Tournefort, speaking of the fatalism of the Turks, says that they always and everywhere leave the world as they found it. According to their own proverb, no grass grows again where the Osman has set foot.255.The experiments made with the dynamometer in 1800 ff. show that the averageforce manuelleof an inhabitant of Van Dieman's Land is to that of an inhabitant of New Holland, of Timor, of a French marine, and of an English colonist in Australia, in the ratio of 50, 51, 58, 69, 71 kilogrammes.Péron, Voyage de Découverte aux Terres australes, 2d ed., II, 417. It was found more recently in the American army, that the average lifting-power of white soldiers was 314 to 343 -lbs.; of white marines, 307; students, 308; negroes, 323; mulattos, 348; and Indians, 419.Gould, Investigations in the Military and Anthropolog. Statistics of American Soldiers, 1869, 458, seq. According to English manufacturers, an English laborer accomplishes almost as much again as a French one(?), and the latter in turn more than an Irishman. An English contractor, who had worked in French manufactories, expressed his opinion concerning the French to this effect:“It cannot be called work they do; it is only looking at it and wishing it done.”Senior, Outlines, 149. Thus, for instance, a good English spinner with a machine of 800 spindles could produce 66 lbs. of yarn, No. 40, while a Frenchman could produce only 48 lbs. (M. Mohl, Reise durch Frankreich, 535; compareDingler, Polyt. Journal, I, 63 seq.) That the Americans also are inferior to the English in strength and dexterity is attested by the AmericanHewitt. SeeBrentano, Arbeitergilden, II, 231. A Berlin wood-sawyer accomplished as much in ten days as a West Prussian from Labiau in twenty-seven days.J. G. Hoffmann.English farmers on the Hellespont prefer to pay Greek laborers £10 per year“besides their keep,”rather than £3 to Turkish laborers. (Lord Carlisle, Diary in Turkish and Greek Waters, 1854, p. 77 seq.) In Paulo-pinang, the Malayan agricultural laborer receives $2-½ per month, the Malabar, $4, the Chinese, $6; for which compensation they work respectively 26, 28 and 30 days.Ritter, Erdkunde, v, 54.256.Little light can be thrown on this subject by a comparison of different countries. Thus, in France, there are 614 persons in every 1,000 examined fit for military service; in Bavaria, 705; in Denmark, 523; in Austria, 498; in Prussia, 284; in Saxony, 259; in England, where the conscription is from among the lowest classes, 665; and in Württemberg, 490. (Wappäus, Allg. Bevölkerungsstatistik, II, 71, 140.)Massy, Remarks on the Examination of Recruits, 1854. (Memminger, Würt. Jahrb., 1843, 103.) The comparison of different parts of the same state is much more instructive. Thus, in Saxony, cities afford only 197, and the flat country only 265 per 1,000 (Sächs. statist. Ztschr., 1856, No. 4 ff.); and in France there are among those of illegitimate birth a very large number unfit for military service. (Journ. des Econ., 1850, XXV, 69.) According to the Austrian Annual of military statistics, there were in 1870, on an average, throughout the entire monarchy, 211 per 1,000 of those liable to enter the ranks of the military, fit for service; in the Innsbruck command, 325; in Lemberg, 179.257.M. Chevalier, Cours, I, 115.Adam Smith, B. I, ch. 8, noticed the great industry of well paid workmen. Among the uneducated, labor must almost necessarily be repulsive in proportion as it is illy remunerated.258.ThusA. Youngremarked that wages in Ireland are wretchedly low, while labor is far from being cheap. In his“Evidence in Respect to the Occupation of Land in Ireland,”II, 135, he says that a Scotch day laborer at 1s. per day is cheaper than an Irish day laborer at ½s. According toMcCulloch,“Statis. Account of the British Empire,”I, 666, industrial labor in Germany and France is dearer than in England, because in the former countries there are,ceteris paribus, twice as many laborers employed in most manufactures. SeeSenior, Lectures on Wages, 1830, 11, and the reports of the committees of parliament,passimon French manufactures (1825). The same has been experienced in the agricultural history of Schleswig-Holstein. SeeHanssen, Archiv. der Politisch. Œk. IV, 421.La main d'œuvre est chère en Russie dès qu'il s'agit d'une certaine capacité et d'un certain degré d'instruction professionelle, tandis que celle de l'ouvrier ordinaire n'est nulle part aussi bas.(Tégoborsky.)259.Thus evenColumella, R. R. I, 9.J. S. Mill, Principles, I, ch. 7, 5.260.Thus, for instance, the Lex Visigoth., VIII, 4, 16, graduates the fine to be paid by the murderer according to the age of his victim. It increases up to the 20th year in the case of males, and diminishes after the 50th. In the case of females, the maximum is attained between the ages of 15 and 40. Similarly evenMoses, Book III, 27.261.As to what concerns the two sexes, theforce rénaleof adult males is twice that of females in the human species. The difference between them in youth is not so great. The forcemanuelleof the two sexes at the age of 30 is as 9:5. (Quételet, Sur l'Homme II, p. 73 ff.) The numerical ratio of one sex to the other varies but little among those nations which have attained a certain degree of civilization. Seeinfra, § 245.262.It is of great importance to calculate here the number of days in the year in which the laborer is compelled to be idle on account of sickness.Fenger, (Quid faciant ætas annique tempus ad frequentiam et diuturnitatem morborum, Hafniæ 1840), finds the following result:Between 15 and 19 years, 7.2 days. Between 35 and 39 years, 7.8 days.Between 20 and 24 years, 10.3 days. Between 40 and 44 years, 8.3 days.Between 25 and 29 years, 9.5 days. Between 45 and 49 years, 11.6 days.Between 30 and 34 years, 7.6 days. Between 50 and 59 years, 14.1 days.According toVillermé, in the Annales d'Hygiène, II,At 60 years, 16 days. At 67 years, 42 days.At 65 years, 31 days. At 70 years, 75 days.The latter table is the result of a comparison made of the tables of seventy Scotch mutual aid societies. CompareDigler, Polyt. Journal, XXIV, 168.263.Tacit., Germ., 14.Leo, inRaumer'sTaschenbuch, 1835, 418.Maxime sua esse credebant, quæ: ex hostibus cepissent.(GajusIV, 16.) Roman auctionsub hasta! Similar views obtained among the Thracians. SeeHerodot., V, 6. In Sparta, even in the time of Agesilaus, economic labor was considered unworthy of a free man, (Plutarch, Ages, 26); while the Athenians, from the time of Solon, punished idleness, and from that of Pericles“knew no other festival but attending to their business.”Thucyd., I. 70. For some happy observations on this subject, seeRiehl, Die deutsche Arbeit, 1861.264.CompareErasmusColloq. (ed.Stallb.), 21 ff., 213 ff., 392 ff.265.Templelearned from the Dutch of his own age that the time of industrious men is the greatest home commodity of a country. (Works I, 129.)“A trader's time is his bread.”(Sir M. Decker, Essay on the Decline etc., 1744, 24.)Walpole, in his Testament politique II, 385, speaks of the inferiority of the Roman Church in this respect. I would allude to the medieaval prohibition“to sell time”as one of the chief grounds of the prohibition of usury. (SeeRoscher, Gesch. der N. Œk. in Deutschland, 7.)Economia di tempo equivale a prolungamento di esistenza.(Soialeja.)266.Douville, Voyage au Congo I, 239. Seev. Haxthausen, Studien, II, 439;W. Jacob, Production and Consumption of the precious Metals, II, 209. The division of the day into hours dates from the time of the sun dials of Alexandria. It was not known in Rome until after the year of the city 491. (Mommsen, Römische Geschichte, I. 301.)267.Pinckard, Notes on the West Indies, 1806, II, 107. In Spain it looks as if no one in the streets was in a hurry. What a contrast between thesans soucigait of persons at bathing places and the resorts of pilgrims and the precipitate haste in commercial centres!268.Meyendorff, Voyage à Boukhara, 246.269.The history of this idea affords a remarkable example of the confusion produced by the employment of scientific terminology in daily life. Until within a short time every possible meaning of the wordcapitalwas to be found in the dictionary of the French Academy, its scientific politico-economical meaning alone excepted. During the middle ages, the Latincapitalewas used to signify both loaned money and cattle. (Ducange, s.v.) When culture was at its highest in Greece,Demosthenesentertained very good ideas of the nature of capital which he sometimes calls ἀφορμὴ, sometimes ἔρανος, the meaning of which he extends also to the incorporeal capital of a good reputation. (Adv. Mid., 574; pro Phorm, 947.) The same may be said of the Roman in conception ofpeculium. SeeHildebrand'sJahrbb., 1866, I. 338. On the beginnings of the present idea of capital among the later schoolmen, seeFunck, Tübinger Ztschr., 1869, 149. The diary ofLucas Rems, 1491-1541 (ed.Greiff, 1861), calls commercial capital, in most instances, the chief good (Hauptgut) p. 37; alsoCavedal. The words money and capital, interest and the price of money are now confounded in daily life, as they were formerly by most writers. In the 17th century,ChildandLockemay be mentioned as instances.Hobbeshad some faint notion of the productive power of capital. SeeRoscher, Zur Geschichte der englischen Volkswirthschaftslehre, 49, 60, 102. Thus, also, in the 18th century,Law, Sur l'Usage des Monnaies, 697; Trade and money (1705) 117;Mélon, Essai politique sur le Commerce, 1734, ch. 22;Galiani, Della Moneta, IV, 1, 3;Blackstone, Commentaries, 1764, II, 456;Genovesi, Economia civile, II, 2, 18, 13;Stewart, Principles, IV, 1, ch. IV;Verri, Meditazioni, XIV;Büsch, Geldumlauf, V. 14;A. Young, Political Arithmetics (1774), 1, ch. 7.Hume, on the other hand, Discourses (1752), No. 4 (on interest), shows, that the rate of interest is dependent, not asLockesupposed, on the abundance or scarcity of money, but on the state of profit and on the relation between the demand and supply of capital. Similarly,J. Massie, An Essay on the governing Causes of the Rate of Interest (1750).Quesnay, Dialogue sur le Commerce, 173 (ed. Daire), shows that he had a very clear conception of the operation, and of the principal component parts of capital.Turgot, Sur la Formation et la Distribution des Richesses, § 14, 54-79, came very near the truth, and yet missed it. He recognized the necessity of advances which, as a rule, are the result of saving, in every case of production. He also distinguishes in the product of the soil, besides theproduit netand thesubsistance du laboureur, theprofitof the latter. He likewise points out a great number of differences between the“price of money”considered in its relation to trade, and in its relation to loans. He explains the interest on capital, asSchröder, in his Schatz-und Rentkammer, 231, andBenjamin Franklin, in his Inquiry into the Nature of a Paper Currency (1729) had done before, by the fact that the owner of capital can purchase a piece of land with his capital, and thus draw an income without working. Money, he said, was indeed not productive, but neither was any other thing that could be loaned or leased, with the exception of land and cattle.Adam Smithdeserves the greatest credit for his analysis of the idea of capital, although he opposes“capital”to what the Germans call capital-in-use, the“stock for immediate consumption.”WhenCanard, Principes d'Economie politique (1801) andJ. B. Say, Cours pratique, 1828, I, 285, included man's power of labor in capital, they took a retrograde step.“Labour is Capital, primary and fundamental.”Colton, 275. Every grown-up individual, saysMcCulloch, Principles, 1825, II, ch. 2, may be looked upon as a machine which has cost several years of continued care and a considerable sum for its construction. It is only another side of this same perversity, whenMcCullochseeks to force the results produced by animals and machines into the definition of labor.Schlozer, Anfangsgründe (1805), I, 21, goes so far as to call the soul, raw material, which receives productive power from the labor of the teacher! For a calculation of the money value of man in the different ages of life, see Statis. Journ. XVI, 43 ff. See, on the other hand,Malthus, Definitions, ch. 7; andRossi, in the Journal des Economistes, VI, 113. Nor does the view ofGanilh, Systèmes d'Economie politique (1809), I, 243; ofAd. Müller, Concordia, 93 ff., 211; ofHermann,“Staatswirth”Untersuchungen, No. 3; ofDunoyer, Liberté du Travail, L. VI; ofBastiat,Careyand others, who include pieces of land in themselves under the head of capital, seem to be better founded.Hermanndefines capital the durable basis of every utility possessed of value in exchange.Schäfflereckons land as nature offers it to us, amongfreegoods. From the moment that labor and capital are spent upon it, it becomes immovable capital, but he concedes that it still preserves many essential points which distinguish it from other capital. (N. Œk. Theorie der ausschliessenden Absatzverhältnisse, 1867, 65 ff., 89 ff.) These differences appear to me to be still more important than that which land and capital have in common; especially as the historic development of their relations proceeds for the most part in opposite directions. Thus, for instance, as civilization advances, land is wont to become dearer and capital cheaper. How difficult would it be to introduce clearness into the ideas ofintensiveandextensiveagriculture, if land were accounted capital! And it is not only always theoretically, but also very often, in practice, possible to separate the value of a given piece of land from the most durable capital-improvements (Kapitalmeliorationen) made on it. It is only necessary to call to mind the area of buildings.270.Marxmakes a very arbitrary assertion when he says that only the capital operating in trade, and even only that operating in trade where money is used as the instrument of exchange, can properly be called capital; and that, therefore, the modern biography of capital dates only from the 16th century, (Das Kapital I, 106 ff.)271.See, on the other hand,Wolkoff, Lectures d'Economie politique rationelle, 167.272.Hermann(II ed., 238 ff.) distinguishes especiallypreparatory contrivancesauxiliary to labor, such as stationary structures etc., vessels, tools, machines and instruments for measuring etc.273.Thus, for instance, the plow and the gun are machines, the spade and the blow-pipe are tools. A hammer may be considered as a hard, insensible fist; the bellows as a pair of very strong and durable lungs. Tongs take the place of fingers, just as a spoon does of the empty hand, and the knife the place of the teeth. A great number of machines, on the other hand, may be compared to a complete workman. Thus, the action of the mill which grinds grain has very little resemblance to the blowing of the wind or the running of the water, whereas the rising and falling of the pestle in the small mortar for throwing grenades corresponds to the motion of the arm. (Rau, Lehrbuch I, § 125.) The infinite number of functions of which our members are capable is related to their inability to attain alone the greater number of their ends. Hence animals which require no tools can undertake to achieve very few things.“Man is a tool-making animal.”(B. Franklin.)274.This is seen most clearly in the history of the grinding of corn. In the time of Moses, and even of Homer, there were only hand-mills, and originally only mortars. Later, mills set in motion by horse-power were employed. Shortly after Cicero's time, mills driven by water-power came into use.Brunck, Analecta, II, 119, Ep. 39. Mills built on pontoons do not date farther back than the time of Belisarius. Wind-mills have been known since the ninth century; Dutch wind-mills, only since the middle of the 16th century. SeeBeckman, Beiträge zur Geschichte der Erfindungen II, I ff.275.ComparePlato, Polit., 280.276.Thus,Ganilh, Théorie de l'Economie politique I, 133, calls the knowledge, talents and probity of merchants, as well as their reputation, valuable parts of their capital in trade. See, also,Möser, Patriot. Ph. II, 26. See some happy observations on the intellectual capital of nations, as consisting of“known and unknown preparatory labor through their history,”inLotze, Mikrokosomos II, 353 seq.277.CompareDietzel, System der Staatsanleihen (1856), 71 ff. And, earlier yet,Ad. Müllerhad looked upon taxes not in the light of an insurance premium, but as“the interest of the invisible and yet absolutely necessary intellectual capital of the nation.”(Elemente, III, 75.) Of course, the State is much more than a species of capital; just as a Gothic cathedral is something more than a piece of masonry, but does not on that account cease to be a piece of masonry.278.J. B. Say, Traité d'Economie Politique I, ch. 10. Only think of what is known in physiology as the change or transformation of matter (Stoffwechsel!).279.Productive capital has been rendered into German by the wordErwerbstamm, by the author of“Staatswirthschaft nach Naturgesetzen,”1819.Malthus, Definitions, ch. 10, andRau, Lehrbuch, I, § 51, call productive capital alone, capital. According toM. Chevalier, goods lose their quality of capital as soon as they come into the hands of a consumer.Schäffle, N. Œk., II, aufl., 59, calls capital in useGenussvermögen(resources intended for enjoyment) and productive capital,Kapitalvermögen(capital-resources). On the other hand,J. B. Say, Traité, I, 13;McCulloch, Principles, II, 2, 3,Hermann, Staatswirthschaft. Untersuchungen, p. 60 ff., andv. Mangoldt, Volkswirthschaftslehre, 122, divide capital into capital in use and productive capital, according as it provides the possessor with that which he may turn to account directly or indirectly by becoming the owner of goods through its means.Aristotledistinguishes between ὄργανα and κτήματα, the former relating to ποίησις; for instance, a shuttle; the latter to πράξις, as, for instance, bedding and articles of dress. (Polit., I, 2, 5.)280.Thus, for instance, class A embraces parks and forests; B, theaters, churches, manufactories, arsenals, granaries, public walks and roads. Walks can, besides, be used for the cultivation of fruit, and roads for pleasure trips.281.Translated“capital de consommation”by Wolowski, p. 96 of his Roscher's Principles.—Translator's note.282.Dead, or better, dormant capital is such productive capital as, for the time being, remains unused, and which, therefore, does not yield even personal enjoyment. The sum total of this kind of capital is very much diminished by the agency of savings banks. Loaned capital which has been employed unproductively evidently constitutes no longer a part of the wealth of a people. Seeinfra, § 189.283.Wolkoffis so far right, when in his Lectures, p. 142, he calls the return of capital in use notrevenu, butdéstruction graduelle.Schäffleis right, too, and entirely so, when he says that only such an increase of the property, intended for enjoyment simply, is anti-economic, as does not make the personal capacities of labor (Arbeitsvermögen) as much more productive than they would otherwise be. N. Œk., II, aufl., 224.284.Humboldt, N. Espange, II, ch. 17;v. Schlözer, Anfangsgründe, II, 109. Ausland, 140, No. 313. On the extraordinary wealth of even Russian peasant women in pearls, seev. Haxthausen, Studien, 87, 309.285.Townsend, Journey in Spain, I, 115, 310. In the patriarchal age of the Jews, there was a relatively very large quantity of ornamental objects in gold and silver:Michælis, De Pretiis Rerum apud Hebræos, in the Comm. Soc. Götting., III, 151 ff., 160. Conservative Sparta, in the middle age of its history, was certainly not rich, and yet it had more gold and silver than any other Grecian state:Plato, Alcib., I, 123. According toSt. John, The Hellenes, III, 142, the ancients had relatively much more of the precious metals in the form of objects for ornament than the moderns. The Romans, with their usual good sense, did not make use of silver as an article of luxury until they had attained great wealth. SeeCato, R. R., ch. 23, andSeneca, De Vita beata, ch. 21. Then the Carthaginian ambassadors railed at their hosts because they found the same pieces of table silver in all the houses to which they were invited. The younger Scipio, even, did not possess more relatively than 32 pounds of silver ware.Mommsen, Römische Geschichte, II, 383. The relatively great importance of the stores for domestic use, nevertheless, runs through the whole of Roman history. The titlede penu legato, in the Pandects (Digest, XXIII, 9), points to this, during the reign of the emperors, and in earlier times, the derivation ofpenatesfrompenu. SeeRodbertus, inHildebrand'sJahrbuch, 1870, I, 365. Immense importance of the ring in the old north countries:Weinhold, Altnord. Leben, 184 ff. The age of chivalry was very rich in silver plate, cups, basins, etc.Büsching, Ritterzeit und Ritterwesen, II, 137.Anderson, Origin of Commerce, a. 1386.Lord Burleigh, in the age of queen Elizabeth, left after him between fourteen and fifteen thousand pounds sterling in silver ware; that is almost as much as the rest of his whole estate; and, it would seem, that for a man of his rank, even this was not considered a great deal.Collins'Life of B., 44. According toGiustiniani, cardinal Wolsey owned articles of silver to the value of 1,500,000 ducats, and the greater number of the lords of the time were equally well provided with them.286.The Bedouins are fond of decorating their wives and children with all the jewels that they possess, both on holidays and other days, so that they sometimes have four or six bracelets on each arm and fifteen ear-rings in each ear.Burckhardt, Bemerkungen, 188.Wellsted(Roederer's translation), I, 224. In Asia Minor, girls wear their whole dowry in the shape of personal ornaments.Belgiojoso, Revue des deux Mondes, Feb. 1, 1855. In East India even the most wretched towns have their silver workers. The emirs of Scinde, with an annual income of £300,000, had a treasure worth £20,000,000, nearly £7,000,000 of which were in jewels.Ritter, Erdkunde VII, p. 185. On the upper Ganges more jewels and other ornaments are worn than on the lower, where the wealthy prefer to spend their capital on landed estates.Ritter, VI, 1143.287.The first beginnings of this division are to be found inQuesnay(Analyse du Tableau économique, 1758), in which he develops the difference betweenavances primitivesandavances annuelles. See alsoAdam Smith, W. of N., II, ch. 1, who, however, reduces the difference between them mainly to the relations of possession, and hence includes grain and seed in fixed capital.Hermann, Staatsw. Untersuch., 269 ff.;Ricardo, Principles, ch. 1, sec. 2;Schmitt-henner, Staatswissenschaften, I, 387, divides capital into I,infungible, that is, 1, fixed in the strict sense of the word; 2, transportation-capital; II,fungible, 1, transformable capital; a, material (raw material, auxiliary material etc.), b, formed products; 2, circulating capital; a, wares; b, money.A. Walker, S. of W., 57, calls circulating capital that which may be easily transferred from one branch of production to another; fixed, that which can be used with advantage only for the purpose for which it was originally intended.288.Old wood-work is burned; old iron utensils sold; also houses when pulled down.Emminghaus, Allg. Gewerbelehre, 1868, 175.289.If the Mongols, for instance, should despoil China of all its moveable property with the exception of its buried money, its immovable property would become productive only from the time that that money would be used to secure other moveable articles. In any case, the production would be proportioned only to the borrowed seed, cattle, etc. (Sismondi, Richesses commerciale, 1803, I, p. 61.)290.That the Athenians left everything in the lurch to oppose Xerxes, much more readily than under Pericles, even, the flat country of Attica.Büchsenschütz(Besitz und Erwerb im griech. Alterthum, 589) explains by the fact that in the interval between the two periods, fixed capital increased largely. In rude ages under the appellation of a community or nation was understood a number of men; and the state, while its members remained, was accounted entire. With polished and mercantile states, the case is sometimes reverted. The nation is a territory cultivated and improved by its owners; destroy the possession even while the master remains, the state is undone.Ferguson, Hist. of civil Society, V, 4;v. Mangoldt, Volkswirthschaftslehre, 159. Fixed capital is not so sure of being completely used up as circulating. On this point seeSchäffle, N. Œk., 53.291.If the aggregate productive activity of man be designated by the word labor (just as everything produced on a piece of land is inaccurately called its product), then all capital may be considered as the unconsumed result of labor. The recent socialistic theory that considers capital as the wages which have been earned but not paid, is a gross misconception of this truth. This is the origin only of the capital of oppressors and deceivers, and of theirs only in part. Seeinfra, § 189.292.“While we are clothed in our winter garments, the spring stuffs are already in the shops of retail dealers; the light material of next summer's wear is already manufacturing, and the wool for our next winter's clothing spun.”Think of the study in advance which the physician must have gone through, whom we summon to us at a moment's notice!Menger, Grundsätze, I, § 33. seq.293.Thus in dangerous callings, as for instance, among soldiers and sailors, there is very little saving. The same may be said of times of plague. SeeJ. Rae, New Principles on the Subject of Political Economy, 1834.294.That we keep our property under lock and key, while it was customary in Plato's time to seal it up, is in itself a great advance. SeeBecker, Charicles, I, 202 seq. Earlier yet, artificial knots were used.Homer, Odyss. VII, 443.295.CompareHearne, Reise, nach Prinzwalesfort, 43, 58, 119.Barrow von Sprengel, 282.Humboldt, Relation historique, II, 245. Ausland, 1844, No. 359; 1845, No. 84.Stein-Wappüus, Handbuch der Geographie, I, 310. For proof that the clergy by preaching self denial contributed largely to the creation of capital in the earlier part of medieval history, seeGuórard, Polyptiques d'Irminon Préf., 13.296.On the inevitableness of slavery, where capital is needed, and no one cares to save, seede Metz Noblet, Phénomènes économiques, I, 306.297.The origination of capital by“social connexions”(gesellschaftliche Zusammenhänge)Lassalle(Bastiat-Schultze, 92, 98) exaggerates into the absurdity that no capital was ever saved. This is in part related to his confounding land with capital (103 seq.). On the other hand,P. L.(v. Lilienfeld), Gedanken über die Staatswissenschaft der Zukunft (1873), distinguishes between the external and internal creation of capital in human society; the latter based on the condition of every organic being, by virtue of which the present is generated by the past, and generates the future. The intercellular substance of plants, the honey-comb of bees, and the blood in the animal body, correspond to the capital of a nation.298.Hermann, St. Untersuchungen, 289 ff.;List, System der politischen Œkonomie, I, 325 ff. Thus, for instance, capitalization among a race of hunters may be continued longest by the creation of herds; that of a race of shepherds by the building of houses, and by land-improvements; that of an agricultural people by the establishment of trades, artificial roads, etc. As to how, in general the accumulation of goods to any great extent, supposes exchange, and as to how, first of all, with exchange through the existence of a superabundance wealth may originate, seeHermann, loc. cit., II, Aufl., 25 ff.299.The annual increase of the capital of France during the later years of Louis Philippe's reign, was estimated at from 200 to 300 million of francs; during the best years of Napoleon III's reign, at 600 million. Journal des Econ., Nov., 1861, 170. The capital of the British empire, judging from the statistics of the income tax, increased from 1843 to 1853, in Great Britain alone, at least £42,000,000 yearly; from 1854 to 1860, in the whole empire, at least £114,000,000; and in 1863 alone by £130,000,000. London Statis. Journal, 1864, 118 ff. A war carried on on English soil would doubtless be more destructive of capital than one waged in Russia; but Russia would recover from one like that of 1854-55 with much greater difficulty because of the small tendency of its people to amass capital. In countries in which the middle classes preponderate, the influence of the amassing of capital on foreign politics is one that favors peace. In despotic or democratic countries, it may as readily favor war.300.The“absolute formation”of capital above described is, of course, the only one in the general economy of mankind. In the economy of individuals, we frequently meet with another which is only“relative,”as when the increase of one's resources is attended by as great or even greater decrease of another's. This is the case, for instance, where privileges or monopolies are granted. The same phenomenon is found also in the intercourse of economies of different nations.Supra, §64.301.ThusCicero, De Off., II, 3, 4. Nature may indeed produce mere value in use without the coöperation of labor, in the narrow sense of the word; as, for instance, a forest which protects a district from avalanches etc. But“everything which has been transformed into goods tends constantly to return to its natural state, and to withdraw itself from the life of goods.”Stein, Lehrbuch.302.CompareList, System der Polit. Œkon. But see also the very fine discussion ofJ. S. Mill, Principles, IV, ch. VI, 2, on the dreariness of nature, when taken exclusive possession of by man;“with every rood of land brought into cultivation which is capable of growing food for human beings; every flowery waste or natural pasture plowed up; all quadrupeds or birds which are not domesticated for man's use, exterminated as his rivals for food; every hedgerow or superfluous tree rooted out, and scarcely a place left where a wild shrub or flower could grow, without being eradicated as a weed, in the name of improved agriculture.”303.In Paris, in 1820, the necessary tools of a rag-gatherer cost 6-¼ francs.Garnier, Elements d'Econ.-polit., 43.304.It is not to be overlooked that all labor expended for a distant end also falls under the head of capital. SeeDroz, Economie politique, 1829, I, 6.305.For a good exposition as to how England has need of more agricultural products, the East Indies of more capital, and the West Indies of more labor, seeFawcett, Manual of P. E., 110.306.It is a very significant fact, that, at present, in certain European countries, in Germany for instance, the laborer is called ataker, and the capitalist agiverof work. The expressions employed byCanard,SayandHermann, teach a similar lesson.307.Schäffle, Kapitalismus und Socialismus, 124 seq.308.It is evident, that, absolutely considered, the predominating factor of an earlier period may continue to increase during the following: and, as a rule, it does continue to increase.309.I need cite only the instance of the slaves, who called out the hours, thus performing the functions of a clock:Martial, VIII. 67;Juvenal, X. 216;Petron.26; of the turning of water wheels, in Egypt and Babylon, by human hands.Strabo, XVI. 738, XVII., 807. Among the ancients, it required one shepherd, and shepherd boys besides, to take care of twenty sheep. (Geopon.XVIII, 1.) In highly cultivated regions, the number ran up to fifty. (Demosth., adv. Euerg. et Mnes., 1155.) It seldom passed eighty (Varro, De re rust., II. 10, 10. 2, 20), or one hundred (Cato, R.R. c. 10); while, recently, five men are sufficient to take care of eighteen hundred sheep. SeeRoscher'sdiscourse on the relation of Political Economy to classical antiquity, in the reports of the Royal Saxon Science Association, May, 1849. AlsoD. Hume, Discourses, No. 10.310.The productive power of each of the factors of production has been over-estimated by some schools. AfterGratian(c. i, C. XIII. qu. i), had clearly recognized the necessary coöperation of the three elements, there was in the one-sidedness with which the Reformers emphasized God's blessing as the only source of wealth, a great over-estimation of the factor nature. The Mercantile System over-estimated the factor capital, in one of its most obvious component parts, money. In later times again:“La terre est la source ou la matière d'où l'on tire la ichesse; le travail de l'homme est la forme qui la produit. Tous les hommes d'un état subsistent et s'enrichissent aux dépens des propriétaires des terres.”(Cantillon, Sur la Nature du Commerce, 1755, I. 33, 55.)La terre est l'unique source des richesses.(Quesnay, Maximes générales de Gouvernement, 1758, ch. 3.) In another place, indeed, the same writer says:les revenus sont le produit des terres et des hommes (Grains, p. 276, Daire), andMirabeaufrequently laid stress on the necessary coöperation of labor and capital. (Landwirthschaftsphilosophie, translation byWichmann,I, 5.)Turgot, Sur la Formation et Distribution des Richesses, § 7. For an excellent refutation of this“Physiocratic”one-sidedness, which, if all men are endowed by nature with equal rights, leads to socialism, seeCanard, Principes, 6. According toGioja, N. Prospetto, I. 35, the part played by labor, in the production ofParmesancheese, is a thousand times as great as that played by the soil; and in the production of a Dutch tulip, a hundred thousand times as great. The English are wont, similarly, to over-estimate the relative power of labor. (Ponocratie, afterAncillon, Essais philosophiques, 1817, II. 327.)“Commerce and trade first spring from the labour of men.”(North, Discourses upon Trade, 112.) Thus,Locke(1690), Of Civil Government, II, 5, 40 ff., is of opinion, that, at least 9/10 of the value of the products of the soil, useful to man, are to be ascribed to labor, and, in the case of most, even 99/100. And so,Berkeley(1735), Querist, No. 38 seq. This view is advocated in its boldest form,—a thing unusual in the case of the independent disciples of a great master—byMcCulloch, Principles, II, ch. i, that it is to labor, and to labor alone, that man owes everything that possesses any value in exchange. Similarly,J. Mill, Elements (1824), III, 2. The consequences which socialism might draw from these premises are self-evident.Karl Marx'swhole system, for instance, rests, without any attempt at demonstration, on the assumption that the Ricardo school is right. Much more moderate views are met with earlier. Thus,Hobbes, De Cive, XIII, 14, andLeviath., 24 (1642 and 1651), callslabor et parsimonianecessary sources of wealth;proventus terræ et aquæuseful ones; andPetty, On Taxes (1679), 47, says:“Labour is the father and active principle of wealth, as lands are the mother. Land and labour together are the sources of all wealth; without a competency of lands there would be no subsistence, and but a very poor one without labour.”Harris, Upon Money and Coins, 1757, P.I.Adam Smith, also, in spite of the well known passage at the beginning of his work, very frequently lays stress on“the annual produce of land and labour.”(See the passages collected inLeser, Begriff des Reichthums bei A.S., 97.) According toLeibniz, regionis potentia consistit in terra, rebus, hominibus. (ed. Dutens, IV. 2, 531.)Ricardo'sschool is wont to bring capital under the head of labor, as saved-up labor. This is about as correct as to say, that all that a grown man does, his parents had done. (Umpfenbach, Nat. Œk., 64.) There is only one way in which labor, and even then the expression is not exactly correct, can be looked upon as the only factor in production; and that is to presuppose the forces of nature as matters of course (als sich von selbst verstehend), and to call the aggregate use made of them by the human mind, labor. Or we might say with oldEpicharmos, that the gods sell all goods for labor. (Xenoph., Memor. II. 1.) Moreover, even in purely intellectual productions, in poetical productions for instance, nature, labor and experience, the culture inherited from former ages (a kind of intellectual capital) uniformly coöperate. But how almost completely valueless in literature are all entirely pure (empty!) productions of the fancy!311.Before the predominance of the Mercantile System,Montchrétienvery cleverly called all trades:parcelles et fragments de cette sagesse divine que Dieu nous communique par le moyen de la raisen. By means of the three estates;labourers, artisans, merchands, tout état est nourri; par eux tout profit se fait. L'utilité règle les rangs des arts. (Traité, 12, 45, 66.) The teaching ofP. Gregorius Tolosanos(ob. 1597) on the different classes of society and the different callings of men, is still more in keeping with the present doctrine of production; only, in the moralizing tone of the time, he speaks rather of their dignity than of their influence in creating wealth: De Rep. I, 195. See, also, the earlier views ofFranc. Patricius(ob. 1494), De Rep. I, 4, 7, 8.312.CompareA. Serra, Breve Trattato delle Cause che possono far abbondare i Regni d'Oro d'Argento, 1613.Th. Mun, England's Treasure by foreign Trade, 1664.Ch. King, British Merchant or Commerce Preserved, 1721. But, particularly,A.C. Leib, Von Verbesserung Land und Leuten etc. (1708), who, from the point of view of the Mercantile System, draws a very clear distinction between the productive and unproductive classes. See, also,infra, §116. First thoroughly refuted byW. Petty, Political Anatomy of Ireland, 67, 82. Quantulumcunque concerning Money (1682).D. North, Discourses upon trade (1691). SeeRoscher'sGeschichte der englischen Volkswirthschaftslehre, 77, 88, 138. And later, especially,Ad. Smith, W. of N. IV., ch. 1 ff.Adam Smith'sdoctrine of productive and unproductive labor is to be found already, in this period, inPetty, Several Essays, 127 ff. Political Anatomy, 185 ff; also, in the anonymous work, A Discourse of Trade, Coyn and Paper Credit, London (1697), 44, 159.313.Quesnay, Dialogue sur les Travaux des Artisans, 210 ff.; 289 éd. Daire;Turgot, Sur la Formation etc., § 8;Dupont, Correspondence avec J.B. Say, 400, éd. Daire.B. Franklin, Letter to Dr. Evans (1768), and Positions Concerning National Wealth (1769), Works ed. Sparks, VII and II. Similarly evenAristotle, Oec., I, 2, says, that commerce, wage-labor and war win from men, with or without their will; but that only agriculture obtains booty from nature. And soCicerosays of merchants:nihil proficiunt, nisi admodum mentiantur. De Off., I, 42. The same view seems to have prevailed during the middle ages. SeeThom. Aquin., De Rebus publicis, II, 3, 5 seq.Lutherentertained a like notion (Vom Kaufhandel und Wucher, 1524). He prefers agriculture to the trades. See the Irmischer edition of his works, XXII, 284; XXXVI, 172; LXI, 352.Calvinconsidered commerce both useful and honorable; so thatex ipsius mercatoris diligentia atque industria, its profit may be greater than that of agriculture. (Opp. ed. Amstelod, 1664, IX, 223.)Asgill, Several Assertions proved in order to create another Species of Money than Gold (1691):“what we call commodities is nothing but land severed from the soil; man deals in nothing but earth.”ConcerningCantillon, compare § 47, note 4. How violent an innovation the Physiocratic theory was in its time may be inferred from whatZinckewrites in the Leipzig Sammlungen, X, 551 ff. (1753), p. 20, XIII, 861.314.Quesnay, l. c., 189, does not ignore that many workmen earn more than the cost of their necessary subsistence; but he claimed that this was a result of a natural or legal monopoly of the same. The dearer labor was, the more productive it seemed. Per contra, seeDohmon the Physiocratic system, in the Deutsch. Museum, 1778, II, 313 ff.315.Gournay(compareTurgot, Eloge de G., in Guillaumin's edition, I, 266, 271 ff.), as well asRaynal, Histoire des Indes, vol. X, Livre 19, spite of the similarity of their and Quesnay's views, acknowledged on this account, the productiveness of industry. For some remarkable examples illustrative of how it may increase the value in exchange of raw material, see the anonymous work, Paying Old Debts without New Taxes, London, 1723. See alsoAlgarotti(ob. 1794), 318, inCustodi, Economisti classici italiani, Parte moderna, I. Thus a cwt. of coarse cast iron is converted, in a Berlin manufactory, into 88,440 shirt buttons worth 6-⅔ silver groschens each. Hence the value is raised from 1-2 thalers to 19,653 thalers. The increase of the value in use by industrial labor is self-evident.316.Quesnay, Dialogue sur le Commerce.317.Recognized very early byAd. Contzen, Politicorum, Lib. VIII, C. 10 (1629).318.This did not escape the notice of Frederick II.Von Raumer, Hohenstaufen, III, 535.319.Condillacacknowledges the productive power both of industry and of commerce; and that the service rendered by the state is at least economically indispensable. (Le Commerce et le Gouvernment, 1776, I, 6, 7, 10.)Beccaria, Economia pubblica (1769 ff.), IV, 4, 24.Boisguillebert(ob. 1714), Sur la Nature des Richesses, illustrated the utility of commerce by the picture of a number of men bound to pillars, one hundred steps apart, one with a superabundance of food but naked, a second with a superabundance of fuel, a third with a superabundance of clothing etc.; all of whom perish, because unable to exchange their respective surpluses with one another. According toLotz, Revision, I, 217,“buying dear,”apart from real fraud, means only a decrease of possible gain.320.Verri, Meditazioni, XXIV, instead of calling the merchant productive, calls him a mediator between producers and consumers. It would be just as reasonable to call the shoemaker a mediator between the production and consumption of leather; or the cloth merchant, who cuts the material from the piece, an assistant preparatory to the tailor. The labor of commerce is especially like that of the fisherman or the turf digger, because they produce only in so far as they transfer goods from inaccessible to accessible places. See, however,Rau, Lehrbuch, I, § 103. See the demonstration of the productive power of commerce in general, as well as of what is, by way of preference, called industry, inAd. Smith, W. of N., IV, ch. 9. A much more fundamental refutation of the Physiocratic Principle is to be found inJacob, N. Œk., 204 ff.321.In 1843, about 55,000 tons of ice were shipped from Boston. Less than 25 cents per ton was paid for the ice in the first instance. When packed on board ship, it was worth $2.55 per ton. The ultimate sale brought $3,575,000. Ausland, 1844, No. 278. The ancients were acquainted with a similar production of ice, the value in exchange of which might be almost entirely reduced to the labor of commerce. SeeXenoph., Memor., II, I, 30; Athen. III 97: Proverbs of Solomon, 25, 13.322.W. of N., ch. 3. See, however,Garnier'sFrench translation of Ad. Smith, Préf. p. IX and V, note 20. Similarly,Malthus, Principles, ch. 1, Lect. 21. Definitions, ch. 7, 10.323.Baconhad already said of the nobility, clergy and literateurs:sorti reipublicæ nihil addunt(Serm., 15, 29); in opposition to which,Hobbesjustly remarks, that even human labor may, like other things, be exchanged against goods of all sorts. (Leviathan, 24.) In the work, Discourse of Trade, Coyn and Credit, p. 44 ff., and p. 156, the absolute necessity of“head-work”as well as bodily labor, is conceded; but it is insisted that physicians, clergymen and jurists can never enrich a country, and that a relatively large number of them would even conduce to national poverty. (SeeRoscher, Geschichte der englischen Volkswirthschaftslehre, 138.)David Humeconsiders merchants as productive, but says that a doctor or lawyer can grow rich only at the expense of some one else. (Discourses, No. 4, On Interest.)Fergusonvery cleverly compares such a valuation of national wealth to that of a miser. Hist. of Civil Society, VI, I.324.SimilarlyLauderdale, Inquiry, 355;Lotz, Handbuch der Staätswirthschaft, I, § 39, andRau, Lehrbuch I, § 195, concede only indirect productiveness to commerce. It may be shown, in a great many instances, that such productiveness exists side by side with direct productiveness, on account of the thousand ways in which all economic threads are interwoven with one another. ThusPaleyremarks in his work on the Principles of Morals and Politics, that a tobacco manufacturer even may contribute indirectly to the cultivation of grain; an actor, to industry etc.325.ThusSismondi, Nouveaux Principes, II, ch. 1, and, earlier,MengottiColbertismo, 317. (Cust.) See, on the other hand,Hermann, Staatsw. Untersuchungen, 34 ff. EvenJ.B. Saydoes no manner of justice, in this respect, to personal services. He speaksof produits qui ne s'attachent à rien qui s'évanouissent à mésure qu'ils naissent, qu'il est impossible d'accumuler, qui n'ajoutent rein à la richesse nationale. Compare Catéchisme (3d ed.) 52 ff., 174 ff. On the other handDunoyer, Libertê du Travail, L.V., remarks that here labor and its result are made to change places; the former like all labor is very perishable, the latter as lasting as in the case of other kinds of labor. In the one case the utility is fixed in things, in the other in persons.Ad. Müller, Elemente der Staatskunst passim, calls special attention to how the kinds of labor, called unproductive byAdam Smith, preserve the state, and in that way, all individual exchangeable goods. Similarly,Storch, Handbuch, I, 347;Steinlein, Handbuch, I, 460.Lauderdale(443), however, is correct when he says, that the continued duration of the product of labor depends, usually, more on the caprice of consumers than on the nature of the labor.326.Garniercalls attention to the fact, that there is a great quantity of material products, such as laces, perfumes etc., that can scarcely be ever used in further production, and, generally speaking, one's resources for the most part are not kept in lasting goods, but are preserved by the change of technic forms in production.Hermann, I, Aufl., 115.327.WhenSchön, Nat. Œkonomie, 33, ridicules the idea of the productiveness of personal services, by citing the instance of prostitution carried on as a trade, he forgets that many material goods also may conduce to the moral damage of the purchaser of them. It is said that there are in France 3,500 retailers and colporteurs of immoral writings and pictures, who sell yearly nine million numbers or pieces, at a cost of six million francs! (Moniteur, 9 Avril, 1853.)328.CompareSchäffle, Theorie der ausschliessenden Absatzverhältnise, 1867, 135. seq.329.Many of the socialists take a retrograde step in this respect, in as much as they consider only manual labor productive.Fourier'sschool particularly, declaim passionately against the unproductiveness of commerce and of most personal services. CompareV. Considérant, Destinée sociale, 1851, I, 44.330.Besides the above, seeGioja, N. Prospetto, I, 246 ff.;Scialoja, 42;J. B. Say, Traité, I, ch. 2;Hufeland, N. Grundlegung, I, 42, 54;Gr. Soden, Nat. Œkonomie, I, 142 ff.Hermann, St. Untersuchungen, 20 ff., distinguishes three politico-economical points of view; that of the producer, that of the consumer, and that of the whole nation's economy. The producer calls his labor productive, in case he receives back his outlay of capital with the rate of profit usual in the trade of the country. To this point of view, therefore, every service which is paid for, according to wish, seems productive. On the other hand, the consumer ascribes productiveness to all those kinds of labor the achievements of which he may use, and which he can obtain at a convenient price. Whenever, therefore, he pays for a service voluntarily, he acknowledges its productiveness. Lastly, from a national-economical point of view, all labor is considered productive which increases the quantity of goods exposed for sale in the market; and this, personal services do. The technic productiveness, which depends on the execution of the technic ideas floating before the mind of the workman, must be distinguished from this economic productiveness. It is possible that, technically labor may be very productive, and yet cause economic loss; for instance, the fine arts and the so-called master pieces of the trades! SeeSeneca, De Benef., II, 33.H.(33) furnishes a very good refutation of the doctrine that a great deal depends on whether the labor has been paid from capital or from income.Eiselen, Volkswirthschaft (1843), 27 ff., remarks, that the laborer, for instance, who grows corn, must besides look after his health and the preservation of his house; this is a part of his necessary aggregate labor. Why, then, should it be called unproductive when such secondary labor is performed by particular persons? Otherwise the farmer would have no time whatever for his principal business! Edinburgh Review, 1804, IV, 343 ff.;Wakefield, An Essay upon Political Economy, 1804, who is concerned mainly with the theory of the productiveness of labor.L. Lauderdalesays, that when the nation's wealth is estimated according to its value in use, all useful labor is productive; and that when estimated according to its value in exchange, all labor that is paid is productive. (Inquiry, ch. 3.)Stein(Lehrbuch, 68; Tüb. Zeitschr., 1868, 230) conditions the notion of productiveness by the presence of a superfluity of values. But, it may be asked, does a family, which does no more than support itself, labor unproductively? (Compare, however, §30.)J. S. Milltook a surprisingly retrograde step in the doctrine on this point, in his Principles, I, ch. 3. Compare his Essays on some unsettled Questions of Political Economy, No. 3. A still more surprising exaggeration inde AugustinisInstituzzioni di Economia sociale (Napoli 1837), who goes so far as to call a person guilty of arson a productive person because he has produced for himself“the pleasure of destruction”! More recently,von Mangoldtdistinguishes between economic labor and the labor of culture: the latter is incorporated into the man himself, the former one employed on the external world, in order to transform it in a way corresponding to human wants. Viewed from the stand-point of Political Economy, the latter only is productive. (Volkswirthschaftslehre, 1865, 26 ff.)331.We might, indeed, compare original production, that which preceded all other, to eating; the trades, to digestion; commerce, to the movements of the several members of the body; personal services to inspiration, and yet all are equally necessary to the life of the body! Thus,Gamilhcompares agriculture to the root of a tree of which the service rendered by the state is the top. The growth of the latter contributes, as well as that of the former, to the nutrition of the whole, and is far removed from exhausting the tree. Théorie de l' E.P., II, 46 ff.“Natural production”would, indeed, accomplish very little without the legal protection guaranteed by the state, or without the tools furnished by industry etc. But it is, besides, in most instances, a distortion of the truth to speak of productive and unproductive men or classes of men. These expressions are proper only when applied to individual kinds of labor. SeeMurhard, Ideen über Nat. Œk., 88 ff. Persons seriously ill are temporarily unproductive, and children who die early, are unproductive for their whole life.332.Not, however, in the case in which the loser estimates the pleasure of the play higher than the loss.333.J. B. Say, Traité, I. ch. 1.334.v. Cancrin, Œkonomie der menschlichen Gesellschaften, 1845, 10, speaks, in this case, of privative production. Among the Socialists,Bazard'sexpressionl'exploitation de l'homme par l'homme, has found loud echo; instead of which onlyl'exploitation du globe par l'hommeshould be allowed to obtain. (Exposition de la Doctrine de St. Simon, 24.) Butvon Schröderhad already warned the world of“imagined food”which led only to idleness. (F. Schatz- und Rentkammer, 191, 363.)335.Therefore, there should not be too many nor too highly salaried offices. SeeStorch, Nationaleinkommen, 33 ff.336.Seev. Mangoldt, Volkswirthschaftslehre, 29 ff.337.Remained, and notbecome, poor, as is generally supposed; for the enormous wealth of Spain, under Ferdinand and Isabella, as well as during the early period of Charles V. is only afable convenue. Charles V. said: France has a superabundance of everything, and Spain is in want of everything. See also the embassy report ofNavagero(1526), Viaggio fatto in Spagna e in Francia (Venet., 1563), andRanke, Fürsten und Volker, I, 393 ff.338.The prize was won byArreta de Monteseguro. The author of the history of Portuguese Asia, translated byStevens, is of opinion (III, ch. 6), that commerce is not a proper subject for serious history to treat.339.There is a very fine description of this spirit inClenard, Epist. I. ad Latomum (1535 ff.) CompareJuvellanos, inLaborde, Itinéraire déscriptif, IV, 176.Townsend, Journey through Spain, II, 207, 117.Buckle, History of Civilization, II, ch. I. The census of 1788 gave the number of priests and monks, soldiers, mariners, nobles, lawyers, tax-gatherers, authors, students and domestics, at 1,221,000, in a total of 3,800,000 men; from which number there was a multitude of beggars, vagrants etc. to be deducted.Laborde, Itinéraire, II, 32 ff. The seventeen universities and the numberless small Latin schools, with their gratuitous instruction, and their many scholarships, misled a disproportionately large number to engage in study. At the beginning of this century, there were at least 200,000 priests, nuns (Geistliche), etc., in a population of from three to three and a half millions only. (Ebeling, Erdbeschreibung von Portugal, 66.)Seniorshows that the poverty of the Osman is caused by too many state employees, tax-farmers and retail merchants. (Journal kept in Turkey and Greece, 1857-58.) Thus, also,J. Tucker, Four Tracts, 1774, 18, contrasts men engaged in industry with rich idlers, whose increase, possibly by immigration, would make the people a nation of“gentlemen and ladies, footmen, grooms, laundresses etc.”Schmitthener, N. Œk., 656, calls a condition such as that of Spain,“national-economical phthisis.”340.Tucker, Progress of the U.S., 137. The following data also will serve for a comparison: In Belgium, in 1856, it was estimated that, leaving personssans professionout of consideration, 45.6 per cent. were agriculturists, 37.2 industrials, 6.7 in commerce, 2.8 in the liberal professions, 1.5force publique, 2.1propriétaires, rentiers, pensionnés, 3.7domesticité. In Prussia, in 1871, of the entire male population, 28.6 per cent. were engaged in agriculture, forest-culture, hunting and fishing: 32.3 per cent. in mining, industry, building, and in founderies: 8.56 in trade and commerce; 20.3 in personal services and handiwork not belonging to any of the groups above mentioned; 2.3 in the army and navy; 3.7 in other callings; 2.7 were renters, pensioners, and persons who lived by selling or renting houses, reserving lodgings for themselves therein, and persons who gave no account of their calling. (Preuss. statisc. Zeitschr., 1875, 32. ff.) It is, however, surprising thatEngel'sAmtl. Jahrbuch, III, 1867, gives only 48 per cent. as belonging to the first category, and 25 to the second. In the kingdom of Saxony in 1861, 25.1 per cent. of the population were agriculturists and foresters; 56.1 were engaged in industry; 7.7 in trade and commerce; 6.8 in art, science, the service of the state and of private persons; while 4.1 per cent were without any particular calling, or returned none. Bavaria, in 1852, had 67.9 per cent. of its population engaged in agriculture; 22.7 in the trades and in manufactures; 5.5 per cent., persons living on the interest of their money, and by performing the higher class of personal services; 1.9 in the army; and 2 per cent. of listed poor. InHermann, Beiträge zur Statistik des Königreichs Bayern. In France, according to the official reports, there were:Agriculteurs61.46 per cent. in 1851, 51.49 per cent. in 1866;Industriels et commerçants25.95 per cent. in 1851, 32.78 per cent. in 1866;Professions libérales9.73 per cent. in 1851, 9.48 per cent. in 1866.To which it must be added, that, in 1851, there were 2.86sans profession ou dont les professions n'ont pu être constatées; and that, in 1866, on the other hand, there were 2.87 per cent. inprofessions se rattachant à l'agriculture, industrie et commerce. (Legoyt.)In England and Wales, leaving the domestic class out of consideration (women without an independent means of employment, school children, servant girls etc.), and also the“indefinite class,”there were, in 1861, 25.3 per cent. of the population engaged in agricultural pursuits; 60.7 in industrial; 7.8 in commercial; and 6.06 in professional pursuits. In Italy, omitting housewives, children and infirm persons, there were, in 1862, 57.4 per cent. of the population engaged in agriculture; 22.9 in industrial pursuits; 4 in commerce; and 3.9 per cent. in the army and in the liberal professions. (Annali univ. di Statistica, Febbr., 1866.) On Holland, in the middle of the 17th century, seeJ. de Wit, Mémoires, 34 seq.341.Csaplovics, Gemälde von Ungarn II, 1.Torrens, The Budget: On commercial and colonial Policy, 106 ff.342.Precisely as there are more people ruined by spirituous liquors than by bread. Time thieving is also more frequent among servants. There is scarcely anything in agriculture analogous to the lazzaroni who wait all day to help a gondola to land, to unload a coach, etc. There is more in the chase, in the fisheries, or in the cattle raising.343.CompareBastiat, Harmonies économiques, ch. 17. HenceSismondiaccounts it one of the chief merits of the constitutional state, that in it, thepopulation gardiennedoes not regulate its own remuneration. (N.P., I, 144.)Saint Simon, indeed, says that the French members of theChambre, in his time, drew a revenue from the state, three times as large as from their own resources, and were, therefore, deeply interested in increasing the budget. (Vues sur la Propriété et la Législation, 1818.) I would call attention also to the national over-estimation and over-crowding of learned callings from which Germany suffered, even as far back as the time of Louis XIV. (v. Schröder, Fürstl. Schatz-und Rentkammer, 302 ff.); to the disproportionate number of keepers of public houses, which is related to the system of popular assemblies, and is a regular attendant upon Democracy (Bronner, Der C. Aargau, I, 451.) Taxation-legislation may here become a good means of popular education.344.This was recognized very early byGregor. Tolsan, l.c.Ad. Müller, Elemente, II, 255.Storch, Handbuch, II, 229 ff. (Schleiermacher, Christ. Sitte, 668.)A. Smith,W. of N., II, ch. 5, ascribed greater productiveness to agricultural than to industrial labor; in the former case, not only human labor was put in operation, but the forces of nature were compelled to coöperate with them. Similarly,Malthus, Additions (1817) to the Essay on the Principle of Population, B. III, ch. 8-12. Principles of P. E., 217 ff. Both thus explain the rent of land, and so far as products, which have only value in exchange are concerned, they are right. Hence it is all the more surprising thatCarey, the zealous advocate of a protective tariff and opponent of rent, comes back in this to Adam Smith. Principles of Social Science, 1858, II, 35, and passim. Compare alsoJ. B. Say, Traité, II, ch. 8;Sismondi, N. P., II, ch. 5. For the best refutation of this view, seeRicardo, Principles, ch. 2, 3. Does not all labor put the force of nature in operation?Ad opera nihil aliud potest homo, quam ut corpora naturalia admoveat, reliqua natura intus transigit.(Bacon.) Similarly,Verri, Meditazioni, III, 1. An expression escapes evenRicardohimself (ch. 7), to the effect, that capitalists are the producing class.345.Relying on very superficial statistics of England and France,Ganilhadvocates a theory of the productive forces of the several branches of economy the very reverse ofAdam Smith's. He places foreign trade first; then follow wholesale trade, industry and agriculture. (Théorie, I, 240 seq.)346.Ausland, 1846, No. 54. Expressions still used in Europe, such asSpindelmagen(spindle-relation),Kunkellehen(apron-string-hold) etc., for instance, suggest this most ancient and purely family division of labor. The lower classes of the population, even in the most civilized countries, are wont to preserve some of the peculiar customs of very primitive times. Hence it is that among proletarians, the division of labor between males and females is still very small. The employments usual at different stages of life among men, and the costumes worn by them are much more uniform than among the higher classes. SeeRiehl, Die Familie, 1855, passim.347.AsDankwardtshows, thejus civileof the earliest Roman time is based on the condition of isolated labor, the laterjus gentium, on the division of labor. N. Œk. und Jurisprudenz, 1857, Heft. I.348.Saxo Gramm., Hist. Dan. V, 101.Turner, Hist. of the A. Saxons B. VII, ch. 11. Nibel., 351 ff. There is a French proverb:du temps que la reine Berthe filait. Queen Bertha was a mythic daughter of Charlemagne. It may be that the character meant is the old German spinning goddess Berchta. Concerning the daughter of Otto the Great, seeDithmar, Merseb. II.Homer, Od. V, 31 ff.; X, 106; XXIII, 189 ff.Herodot., VIII, 137.Livy, I. 57.349.Eden, State of the Poor I, 558 ff. In the interior of Peru, the priest is also usually a shop-keeper (Pöppig, Reise, II, 365); in Canada, as in many of the villages of the Alps which are not often visited, a hotel keeper. In countries with an unadvanced civilization, the little division of labor that exists is also very awkwardly regulated. Thus in Russia, weak children are very frequently put to work on farms, while powerful men are found in the city offering all kinds of eatables and the pictures of saints for sale. (Storch, Gemälde des russischen Reichs II, 364.v. Haxthausen, Studien I, 335.)350.Babbage, Economy of Machinery, 1833, 201.L. Faucher, Angleterre II, Ch.“la Ville des Serruriers.”The industrial statistics of Paris, furnished byH. Sayin 1847 and 1848, show that in that city alone there are 325 different branches of industry, 17 of which are concerned with the production of food; 21 with building; 32 with the manufacture of furniture; 21 with that of clothing; 36 with that of thread and tissues; 7 with skins and leathers; 14 with vehicles, saddlery, and military equipment; 33 with chemicals and pottery; 33 with working in metal, glass etc.; 35 in that of the precious metals and jewels; 27 with printing, engraving and paper; 15 with that of wooden-ware and wicker-ware; 34 witharticles de Paris. Journal des Economistes, Janv., 1853, 107. According to the industrial almanac of Birmingham, there are in that city manufacturers of buttons in gold, silver, metal, mother-of-pearl etc.; manufacturers of hammers, ink-stands, coffin-nails, dog-collars, tooth-picks, stirrups, fish-hooks, spurs, pack-needles etc.351.And so with the subdivisions. Flannel is manufactured almost exclusively in Halifax, woolen blankets between Leeds and Huddersfield etc.352.The same division of labor was developed among the Dutch in the 17th century, and excited then the wonder of the English. SeeSir W. Temple,Observations upon the U. Provinces, 1672, ch. 3. Works, I, 128, 143. In 1615,Montchrêtienheld up the Flemish as a model to the French, in this respect.353.On the bees, seeVirgil, Georg.IV, 158.354.The principle of the division of labor was known to the ancients:Xenophon, Cyri Discipl., VIII, 2, 5.Plato, de Rep., II, 369, III, 394, IV, 443;Isocrat., Busir., 8.Aristot., Polit., II, 8, 8. Among the more modern writers, compareThomas Aquin., De Reg. pr., I, 1, II, 3.Luther(Works by Walch, I, 388), in his Commentary on Genesis, 3, 19.Petty, Several Essays, 1682, p. 113. Considerations upon the East India Trade, London, 1701.Roscher, Geschichte der englischen Volkswirthschaftslehre, 118.Mandeville, The Fable of the Bees, enlarged edition of 1723, p. 411.Berkeley, Querist, 1735, No. 415, 430, 520 ff., 586:“What is everybody's business is nobody's.”Harris, on Money and Coins (1757), I, 16.J. J. Rousseau, Emile (1762), L. III.Turgot, Sur la Formation et la Distribution des Richesses, § 3, p. 50, 62, 66.Diderot, Encyclopédie de l'Art, s. v. Art.J. Tucker, Four Tracts (1774), p. 25 ff.Boccaria, Economia pubblica, I, 1, 9. But the author to whom we owe most on this score is undoubtedlyAdam Smith. To him we are indebted almost entirely for our knowledge of the natural laws developed in §59seq.355.According toAdam Smith, a nailer can make 2,300 nails (Rausays 3,000 shoemaker's tacks in the Odenwalde) per day; a smith who is only occasionally employed in the manufacture, from 800 to 1,000; and smiths who never made nails before, from 200 to 300. A clever filer makes 200 strokes in a minute; a skilled comb-maker can make in a day from 60 to 70 combs of such fineness that there are from 40 to 48 teeth to the inch in them; eight Liege brick-makers, working together, produce 4,800 bricks per day; children employed in a needle manufactory, in making the eyes of needles, grow so skillful at it that they can make a small hole in the finest hair and draw another hair through it.Rau, Lehrbuch I, § 115. The old proverb,“practice makes perfect,”is followed even by thieves in their great division of labor. SeeThiele, Die jüdischen Gauner I, 87.Fregier, Des Classes Dangéreuses.356.Children, with their thinner fingers, can point twice as many needles in the same time as a grown person.357.The manufacture of English needles demands, on the part of workmen, degrees of skill so different that their pay varies from 6 pence to 20 shillings per day. If the most skillful workman were to manufacture whole needles alone, he would partly be obliged to be satisfied with one-fortieth of what he might otherwise receive.Babbage, loc. cit.358.In the case of machines and in the chemical branches of industry, the labor increases in a much smaller ratio than the material used in production.359.In opposition to monopolies, and to practical constraint which has its source in ignorance etc.360.HenceTorrenscalls foreign trade the“territorial division of labour.”(Essay on the Production of Wealth (1821), 155 ff.)361.SeeBastiat, Harmonies, ch. 1, for a very beautiful exposition of the doctrine that each man receives much more from society than he accomplishes on his part, for it.362.The working together of a great number of persons is often carried on to the detriment of agriculture, for each then waits for all the others to work, throws all the blame on them etc. (Columella, I, 9.) As many a housekeeper must have observed, two seamstresses or ironers accomplish, in a day, less than one, in two days. Of course, this rule does not apply in the case of work which cannot be performed by one man, under any circumstances, or the magnitude of which would easily discourage him, and in which mutual aid is easily obtained; as in the raising of heavy loads, the construction of roads, dikes etc.363.Ad. Smith, B., II, Introd.Hufeland, Neue Grundlegung, I, 215. In many instances, a division of labor, of course, favors the saving of capital. If every workman needed all the tools necessary to the work in which he participates, three-fourths of them would have to lie idle at present.J. Rae, New Principles on the Subject of Political Economy, 164.364.This necessity is observable, although in a peculiar form, even where what has been called the“despotic organization of labor”prevails, instead of freedom.365.In the highlands of Scotland, in Adam Smith's time, there were no smiths who manufactured nails only; for the reason that no smith had a market for more than 1,000 nails a year, that is not for so many as might be manufactured in a single day.366.It is of course very different when there is question of a foreign market, even if it be only indirectly. Thus, for instance, there are in the Hartz mountains, persons who are simply post-makers, trough-makers, chess-wood-makers, block-hewers, shingle-makers etc.367.Too much should not be inferred from the existence among the Egyptians of physicians, specialists for the several members of the body.Herodot., II, 84. Something analogous is to be found even among barbarous nations; but it is accounted for entirely by the superstition of the people. SeeKlemm, Kulturgeschichte, I, 266.368.In the whole of Hesse, there were under Philip the Magnanimous, only two apothecaries, one at Cassel and one at Marburg.Rommel, Gesch. v. Hessen, IV, p. 419, note. And there were no bakers among the Romans before the time of the war with Perseus. All the bread needed by the family was baked by the wife or by female domestics.Plin., H. N. XVIII, 28. The common oven in new towns marks the period of transition. Even yet, in the central part of France, there are localities where each family bakes its own bread for a whole month in advance; and, in the Alpine departments for even a year in advance.M. Chevalier, Cours II, 366.369.It is obvious from the foregoing that, in decaying nations, in which the market contracts and capital decreases, the division of labor also must grow less.370.According toArago, a horse uses the same amount of force to draw 20 cwt. along an ordinary road that he does to draw 200 over a railroad track, or 1,200 on a canal. He could carry scarcely 2 or 3 on his back! Moniteur, 1838, No. 116. It is, however, certain that the introduction of our railroads has somewhat detracted from the advantages of coasts.371.CompareHumboldt, Essai politique sur l'Ile de Cuba, II, 205.372.Strabo, II, 121 ff. In Europe, there is one mile of coast to every 31 square miles in the interior; in North America, to 56; in South America, 91; in Asia, 100; in Africa, 142. (Humboldt.)373.If the original connection of the Caspian sea and the sea of Aral with the Frozen Ocean were still in existence, it is probable that an Asiatic Scandinavia would have been formed in consequence.374.What is true of the sea in this respect may be claimed, also, though in a less degree, for the streams that carry the civilizing fruits of the coasts far into the interior. Nearly all large cities not situated on the harbors of coasts derive their importance from rivers; especially when they have been built on spots adapted by nature to the transhipment of merchandise. That Venice finally eclipsed Genoa is to be ascribed, in greatest part, to its control of an important stream, the Po. The economic importance of Holland, of Hamburg and Bremen will, in the long run, bear the same relation to one another as the geographical importance of the valleys of the Rhine, Elbe and Weser. As nothing is more disastrous to a nation than the loss of its coast (we need only cite the efforts of the Lybian kings and, later, of Philip of Macedon to conquer the Greek colonies on their coasts; and in more recent times, of Russia before Peter the Great, or of the Zollverein without the shores of the German sea), so, also, the economic and political influence of a stream increases as one approaches its mouth. Hence the justification of the great interest taken by Germany and Austria in the question of the Danubian principalities. The United States recognized this fact when they purchased Louisiana for 80,000,000 francs.Bignon, Hist. de France III, 111 seq. Readers of history are familiar with the important part played by the three Asiatic Mesopotamias: that between the Euphrates and the Tigris; that between the Ganges and the Brahmapootra; that between the Hoang-Ho and the Yang-tse-Kiang, to which finally the Punjab might be added. This relation is recognized by popular consciousness, in the case of the Ganges, by the belief in the sacredness of the stream. No river has had so much influence on civilization as the Nile: its periodical risings have made the labor of agriculture extraordinarily easy; their extent and regularity favored the progress of astronomy; the flooding over of the land led to geodesy; the hydraulic labors necessitated by the rising of the waters produced a school of architecture to which the river furnished an excellent means of transportation for the enormous masses to be moved.K. Ritter, Erdkunde, I, p. 880 seq; VI, p. 1,168 seq. In this matter, also, America and Europe have the advantage over Asia and Africa. While the Danube is, in places, scarcely three German miles from the Rhine—which, however, flows in an almost opposite direction—in Asia, the eastern streams are separated from the western, and the northern from the southern, by a strip of land difficult to be traveled, and about 300 German miles in extent. Besides, the principal streams of northern Asia have their exit into the Frozen Ocean, a fact which diminishes their importance greatly. The source of the Missouri is only about one mile distant from the Columbia river, although the two flow towards opposite seas.375.The law governing the march of civilization from the mountain to the plain and to coast lands was observed even byStrabo, XIII, 592, and partly byPlato, De Leg., 677 ff.376.Thus, for instance, that all the customers of a shoemaker together form a shoe-association etc.Dunoyer, Liberté du Travail, L. IV, ch. 10.377.Storch, Handbuch, III, 188 ff. The Dutch traveler,Usselinx, speaks in a similar way of the imitativeness and many-sidedness of the Swedes (Argonautica Gustavica, 20). Chilian servants (peones) are a good combination of the cook, the muleteer, builder, courier etc. Once they have passed over a road, they never forget it. A knife stands them in stead of most tools, and pieces of leather in stead of nails.Pöppig, Reise, I, 171 ff.378.von Haxthausen, Studien, I, 63, 113. In 1827, a Russian hatter got 12 rubles for a hat, a German one 35 (Schön, N. Œkonomie, 78).379.See the report of a large manufacturer inKohl, England und Wales, p. 332 seq.380.Raynal, Histoire des Indes (1780), L. XV. And soRousseau, Discours sur l'Inegalité (1754), who also declaims against all kinds of capital; were there no ladders, men would climb better; and throw a stone better if they had no slings. There is certainly a misunderstood truth in this saying. It is assuredly very salutary, in the actual state of society, in which every one's business is transacted for him by some one else, that a time should occasionally come when no one can take our place, and a man can only call upon himself. And herein lies the immense value which just war, when not much prolonged, but which is brought to a happy termination, sometimes has upon the life of a people.381.The American savages are, on an average, weaker than the whites. In a fist-fight the Kentuckians and Virginians showed themselves far superior to the Indians. SeeLawrence, Lectures, 403,supra, §40.382.For a very unprejudiced estimate of the dark and bright sides of the divisionof labor, even before Adam Smith's time, seeFerguson, History of of Civil Society (1767), IV, I, V, 3 ff. AlsoGarve, Versuche, III, 41.Adam Smithwas not blind to the dark side of the divisionoflabor, which, in part, he would remove by popular instruction at the expense of the state, and by a species of compulsory education. W. of N., V, ch. 1, 3, art. 2. One of the chief peculiarities ofJ. Möser'sPolitical Economy is his great opposition to all highly developed division of labor. Patr. Ph., I, 2, 21, III, 32, 34.383.von Ledebur, Reise in Altai, I, 384. The working together of wife and child, introduced recently by manufacturers, cannot be considered as a higher grade of the division of labor, but only as a very unfavorable change in the kind of it; inasmuch as it were better to employ the women in their domestic avocations and to leave children to their studies and their sports. Among the higher classes, it should be made the part of female education, to counterbalance, in the family, the effects of the ever increasing division of labor among the male portion, by the development of that which is universally human—art, sociability, house-keeping etc.384.Schleiermacher, Christliche Sitte, 465 ff., 676 ff., 154 ff. From a similar feeling, although much exaggerated, the Greeks of the classic age proper considered all callings followed for gain dishonorable, not excepting even those of the physician and of the teacher.Plato, de Rep., I, 347 ff.Aristot., Rhet., I, 9, 27: μηδεμίαν ἐργάζεσθαι βὰναυσον τέχνην, ἐλευθέρον γάρ τὸ μὴ πρὸς ἄλλον ζην.385.As, for instance, the superintendent of a manufactory must have a better general training, but can get along with less of a special, than his workmen.386.Thucydidessays of the contemporaries of Pericles:“The same men devote themselves, among us, in part to domestic and political business; in part, others who busy themselves with agriculture and industry have no mean knowledge of the affairs of state. We call those who take no part in the former not people loving their ease, but useless men.”(II, 40.) During the succeeding period, Athens was destroyed mainly by the ever increasing division of labor between citizens and soldiers. For,“to separate the arts which form the citizen and the statesman, the arts of policy and war, is an attempt to dismember the human character, and to destroy those very arts we mean to improve.”(Ferguson.) We know fromValerius Maximus, that the Roman soldiers from the time of Marius had, doubtless, a better technic training than their ancestors who who defeated Hannibal; but was it in a military or political sense that they were thus better trained? The beautiful definition of Cato intimates something of the same nature; the good orator wasvir bonus dicendi peritus. (Quintilian, XII, I.) And soGarve, Versuche, IV, 51 ff., expects from the political elevation of citizenship, of those possessed of the right of citizens, not only usefulness in a particular direction but the development of the whole man, a thing hitherto expected only of the nobility.387.As one's peculiar calling does not take up all his life, we must draw a clear distinction between the one-sidedness of labor and the one-sidedness of life, (von Mangoldt, Volkswirthschaftslehre, 227.) Only the last is to be avoided at all hazards; and we find it in the middle ages, with its limited divisions of labor, perhaps more frequently than where civilization has attained a higher stage. During the middle ages, it was not unusual to make feelings which every one should cultivate at times, if only temporarily, the lasting calling of some. Thus one prayed his whole life long, or was engaged in contemplation, and relieved others of the necessity of performing these duties. The consequence was, that the latter sank as deeply in worldliness and want of the interior spirit as the former were plunged in idleness and hypocrisy. But, on the other hand, when, in our day, the printer relieves the writer of a portion of the labor which might be his, the personal development of neither suffers.388.L'uomo è un' tal potenza, che unita all' altra non fa un eguale alla somma, ma al quadrato della somma.(Genovesi.) As to how the action of every individual man is a species of division and union of different kinds of labor, seeStein, Lehrbuch, 24.389.CompareAd. Müller, Elemente der Staatskunst, III, 1809.Fr. List, System der polit. Œkonomie, 222 ff., 409 ff.Wakefield, in his edition of Adam Smith, distinguishes two degrees of coöperation, simple and complex. In the case of simple labor, the same sort of work is performed at the same time and place by several individuals, as, for instance, by a lot of hod-carriers in building. In the other case, there are different kinds of work performed at different times and places, but all intended for the one greater end. Agriculture affords room for the first especially, and it is known also to a great number of animal species.390.Flemish weavers in England, French refugees in Protestant countries; German miners in Spain, Scandinavia, Hungary and America.391.This, so very largely developed in Egypt and India, where the principle of caste obtains, is very little developed in the despotisms of Asia. The great princes, in the latter countries, build largely from vanity only. Hence their successors seldom complete their works, and scarcely repair them. Nowhere else are there so many half completed and yet decaying buildings.Klemm, Kulturgeschichte, VIII, 86.Riedel, N. Œkonomie I, 259, very correctly remarks that such kinds of coöperation as contribute most to the propagation of skill, both in commerce and manual labor, have less real division of labor, and vice versa.392.CompareLeplay, La Réforme sociale en France (1864).393.Concerning association in general, seeM. Chevalier, Cours, III, Leçon, 24, 25. On this subject so much talked of in our day, see, more in detail, concerning its application to agriculture, my work, Nationalökonomik des Ackerbaues, 4, § 39, 47 ff.; 68, 133 ff.; on its application to industry, especially where there is question of the relation of handiwork and manufactures to large factories; seeRoscher, Ansichten der Volkswirthschaft, II, Aufl., 1861, Abhandlung, IV, V.394.Adam Smithremarked that the laws of the division of labor obtain also in intellectual works; and indeed, among all nations in a very low grade of civilization, the germs of all art and science are found connected with theology; and later, the germs of all poetry and history with the epic. The expression:non defuit homini, sed scientiæ, quod nescivit Salmasius, is a clear proof of the insignificance of the science of the time. Think of the increase during the last hundred years of the branches of study in our German universities. There are now thirty-four regular professors in the Leipzig philosophical faculty, where then there were only nine. But here also the principle proves true, that an excessive division of labor, where the broader connection and the deeper foundation of all sciences disappear from the consciousness, undermines intellectual health and freedom. And the injury here is greater and more irreparable than in the domain of mere physical labor. SeeHufeland, N. Grundlegung, I, 207 ff. If we have just become Alexandrians, we have, however, no Aristotle to hope for.Jurisprudentia est divinarum atque humanarum rerum notitia, justi atque injusti scientia(Ulpian). It is remarkable that nations who possess no real national literature of their own, when they once get beyond the bounds of utter barbarism, learn foreign languages etc., most easily.395.The socialistic utopia ofCh. Fourier(Théorie des quatre Mouvements, 1808. Théorie de l'Unité universelle, 1822. Le nouveau Monde industriel et sociétaire, 1829) are based upon the following fundamental ideas. A. The present civilization is that of a topsy-turvy world, especially in so far as it ascribes a“moral”(a word always used by him in an ironical sense) self-government to man. In Fourier's world, on the other hand, every man is supposed, at all times, to give free rein to everypassion; and the play of these gratifications constitutes theharmonie, in which the poorest find more enjoyment than do kings at the present time. (See § 207 of this work.) B. The main thing to further this is a radical reform in the division and cooperation of labor as they exist at present. Instead of the present villages and cities, we should have only phalansteries, each with 2,000 inhabitants, and situated in the center of the land cultivated by them. Instead of the present nations and states, we should have a universal confederate republic, hierarchically graded, with French as the universal language. According to the demands of thepassion papillonne, each one should carry on the most different kinds of business side by side, and each one of them at most two hours per day; i.e., every one should be a dilettante, no one a master, and everything should be done as badly as possible.Proudhon, Contradictions économiques, ch. 3, objects to this, that a workman must, in some way, be held responsible for his work.Fourierhimself calculates that, in hisharmonieall pleasures are productive labor; and that by this constant change, one might be satisfied with from 4-½ to 5-½ hours of sleep, and that even children 2-½ years old might take part in the work. Thus, there would be a great rivalry between apple-growers and pear-growers, so great“that more intrigues in attack and defense [passion cabaliste] would arise there than in all the cabinets of Europe,”in the settling of which the growers of quinces would act as intermediaries. There are, in addition to all this, wonderful aids; a fructifying crown of light rises over the north pole; oranges bloom in Siberia; the sea becomes as delicious as lemonade; dangerous animals die, and in their stead anti-lions and anti-whales come into being, animals useful to man, which draw his ships for him during calms. These ideas are by no means retracted inFourier'slater works, See Nouveau Monde (Oeuvres) IV, 447. The propositions ofRobert Owen, A new View of Society (1812), have much similarity with those of Fourier. They differ only in the absence of the French barrack-like character of the phalanxes, and the fantastic character of the presentation of the doctrine. He would have all the land divided into districts of 1,000 acres each; each district to have a four-cornered town with 1,000 inhabitants, following a system of production and consumption in common, but not with full equality; carrying on both agriculture and other business. A principal feature here is an entirely new system of education. The author says that man has hitherto been the slave of an execrable trinity: positive religion, personal property and indissoluble wedlock. (Declaration of mental independence.)396.CompareTacitus, Histor., II, 44.397.SeeIselin, Geschichte der Menschheit (1764), III, 7.Bazard, Exposition de la Doctrine de Saint Simon, 1831, 153. Among negro nations deprivation of freedom is one of the most usual punishments for crime; but the criminal has the option of substituting his wife or child for himself.L.A. de Oliveira Mendez, in the Memor. econom. of the Royal Academy of Lisbon, vol. IV, I, 1812. As to slavery on account of crime among the Germans, seeGrimm,D. Rechtsalterth., 328 seq.398.Loss at play was a frequent cause of slavery among the ancient Germans.Tacit., Germ., 24. For the principal causes of slavery among the Israelites, see the books of Moses, II, 22, 3; III, 25, 39; IV, 21, 26 seq.; among the Indians, Laws of Menu, VIII, 415. The first serfs of Russia were prisoners of war and their children. The laws of Jaroslaws recognize, besides, the following causes: insolvency, contracting marriage with a slave, the illegal breach of a contract for service, flight, unconditional contract for service.Karamsin, Russ. Gesch., II, 37.399.At least seed and the means of subsistence until harvest time.400.Cases of voluntary slavery to escape famine.Papencordt, Geschichte der Vandalen, 186;Victor, Chron., V, 17; Tur., VII, 45; Lex Bajuv, VI, 3; L. Fris, XI, I. According to the Edictum Pistense (a., 864), c., 34, one could free himself again by paying back the purchase money and 20 per cent. in addition. It frequently happened that people spontaneously accepted the condition of a vassal in order to enjoy the protection of a powerful personage. SeeStüve, Lasten des Grundeigenthums, p. 74. In 1812, a young Himalayan offered himself to the traveler Moorcroft as a slave in order to obtain food during the famine.K. Ritter, Erdkunde, III, p. 999. The same fact occurred, but in greater proportions under Joseph in Egypt.Moses, I, 47, 18 seq.401.Cæsar, B.G., VI, 13.402.Solonwas the first to prohibit this commerce in Athens.Kindlinger, in his Geschichte der deutschen Hörigkeit, p. 621, speaks of a child promised as a slave before its birth, by its parents, as a species of farm-rent. (See the Edictum Pistense, inBaluz, II, 192.) In Chili, the poorest country people who were not entirely white, sold their children in the towns, where they grew up with the families of their masters, and were then kept as servants in a state of semi-serfdom. There is, it is true, no law governing this condition of things. (Pöppig, Reise, I, 201 ff.)403.Ritter, XIII, 727. For instance, men in South America used for the purpose of riding.M. Chevalier, Cours, I, 251;Lœwenstern, Le Mexique, Souvenirs d'un Voyageur (1843); andStephens, Travels in Yucatan (1841), show how, even yet, in Central America, although the Indians are legally free, yet, by their senseless way of running into debt, a number of legal relations, amounting virtually toglebæ adscriptio, arise. But compare, however,Humboldt, Neuspanien, IV, 263. This condition of things has been produced in Peru, also, by the payment of one or two years' wages in advance. (Pöppig, Reise, II, 225.)404.ThusForbonnais, Eléments du Commerce (1854) I, 364, says of trade with savages:il fait naître dans ces nations le goût du superflu et des commodités, qui multiplie le, échanges et leur donne le goût du travail.405.In very uncivilized nations, among whom serfdom is not known, we generally find the slavery of woman and the temporary bondage of the son-in-law in order to secure the daughter in marriage. This is still the case among the Laplanders.Klemm, Kulturgeschichte III, p. 54. Slavery was unknown among the Greeks in the very earliest times.Herod., VI, 263.F. A. Wolf, Darstell. der Afterthumswissenschaft, III, doubts whether any great advance in the higher development of the mind would have been possible without slavery.406.In Russia, where free peasants and serfs lived side by side, it has been remarked that the latter were never so rich and never so poor as the former. (Kohl, Reise durch Russland II, 8, 300.) The Livonian peasants have become poorer since their emancipation. (Cancrin, Œkonomie der menschlichen Gesellschaften, 41). Many of the serfs refused to accept emancipation. (Büsch, Geldumlauf, Einleitung, § 6.) And soMartius, Reise in Brasilien II, 552 ff., assures us that the negro slaves in Brazil are as a rule a very merry set. He is also of the opinion that they are better clothed, lodged, fed and employed than in their own country. For the remarkable official defense of North American slavery directed byCalhoun, to Lord Aberdeen, see the Allg. Zeitung, 1844, No. 145. In this document, we find a comparison instituted between the free negroes of the north and the slaves of the south. In the north, there was one deaf-mute, a case of blindness and of insanity in every 96; in the south, in every 672; a pauper, invalid and prisoner in every 6 at the north, in every 54 at the south. In Maine, 1/12th of the negroes were afflicted by disease; in Florida, 1/1105th(?). The fact that the slave population of the United States increased, between 1840 and 1860, from 2,873,698 to 4,441,830, while the free negro population of Jamaica, between 1833 and 1843, underwent a frightful decrease, is to the same purport. However, too much must not be inferred from all this, as the negroes in America are very far from being the children of the soil.407.The servants in the Odyssey who cared for hogs and cattle etc. were certainly in a better condition in many respects than the peasants of Attica, who were free, but buried in debt until the time of Solon. Concerning the mildness of the treatment of slaves in very early Roman times, seePlutarch, Coriol., 24, andCato, I, 3, 20 ff.;Cato, de Re rust, 5, 56 ff.;Macrob., Stat. I, 10 ff. On the state of the serfs among the Germans, seeGrimm, Deutsche Rechtsalterthümer, p. 339 ff.; among the ancient Scandinavians etc.,Dahlman, Geschichte von Dänemark, I, 163. SeeTacit., Germ., 25.408.Compare Landnamabok, I, 6.409.The opinions of the ancients for and against slavery are found inArist.Polit. I, 2. See especially the beautiful passages inPhilemon:Meineke, Comicorum jr., 364, 410.Aristotleeven thinks that there are cases in which master and slave might be brought together by a mutual want, each of the other. The former wants hands to execute the work of his brain; the latter a guiding brain for his hands. Where the degree of dependence corresponds exactly to the difference of ability,Aristotle, leaving its abuses out of the question, declares slavery to be just. See, also, Eth. Nicom., VIII, 11. Similarly the PythagoreanBrysoninStobœus, Florid. LXXXV, 15. ButAristotlewould hold up emancipation to all slaves as a reward they might have in prospect. Polit VII, 9, 9; Œcon. I, 5. It is characteristic of the many testaments of philosophers, found inDiogenes Laertius, that they contain declarations giving slaves their freedom. The Essenes and Therapeutics condemned slavery under all circumstances.Philo., Opp. II, pp. 458, 482, Opp. I. SeeSeneca, De Benef. III, 20. Thejus naturaleof the age of the Cæsars recognized the freedom and equality of man. Digest, XII, 664., L. 17, 32. The New Testament does not reject it absolutely, but would sanctify it as well as all other relations in life. Compare Luke, 17, 7; Eph. 6 5 ff.; Coloss. 3, 22; Tit. 2, 9. More especially, I Timothy, VI, 1 ff. It was not until the ninth century that the opinion that slavery was anti-Christian because men were all made in the image of God, arose.Planck, Geschichte der kirchlichen Gesellschaftsverfassung, II, 350. Sachsenspiegel, III, 42. A writer as recent asPufendorfexplains slavery as arising from a free contract;faciam, ut des.Jus naturæ (1672) VI, 3. More recentlyLinguet, Théorie des Lois civiles (1767), V, ch. 30, andHugo, Naturrecht, § 186 ff. have endeavored to prove that slaves are in a condition preferable to that of poor free men. And soMöserPatriot Phantasien, II,. p. 154, seq. Those who withThaerseparate the element of production,“labor”from that of“intelligence,”justify slavery on the same principle that Aristotle did, without knowing it. Per contra, seeF. G. Schultze, N. Œkonomie (1856), 418.410.Turgot, Sur la Formation etc., § 21. The universal empire of the Romans demonstrated this. Then it was, for instance, that during the wars of Lucullus, a slave cost only four drachmas. (Appian., Bell. Mithr., 78.)Sardi venales: on account of the glutting of the market with Sardinian slaves, made through the victory of Tib. Gracchus, 177, before Christ. Many of the lesser wars of the Romans can be looked upon only as slave-hunts. But the great wars also were followed by uprisings of slaves on account of the many new slaves which they made. Thus 198 in Latium, 196 in Etruria. (Bücher, Aufstände der unfreien Arbeiter von, 143-129, v. Chr., 1874.) During the relatively peaceful periods which preceded many of the Roman revolutions, pirates delivered over great masses of slaves. It frequently happened that several thousand slaves were led to Delos and sold in a single day. (Strabo, XIV, 668.) As emancipation was a measure which people could not make up their minds to adopt, these pirates satisfied a“want”for a time, and this partly explains the otherwise incomprehensible forbearance of the state towards them.411.Gregor. Turon., III, 15.412.Grimm, D. Rechtsalterthümer, 323. It is a strange fact that prisoners of war were in several remarkable instances sold as slaves in Italy during the fifteenth century. (Sismondi, Hist. des Républiques italiennes, IX, p. 312 seq.; XI, p. 138 seq.) And even in the sixteenth century, the pope allowed those of states opposed to him to be treated in this way.Sismondi, supra, XI, 251; XIII, 485.Raynold, Ann. eccl. 1506, § 25 ff.413.This graduation of slave, serf and workman, has been carried out especially bySaint Simon, Oeuvres, 328 ff. EvenProudhonadmits that the condition of the lower classes is better now than formerly. (Contradictions économiques, ch. X, 2.) CompareM. Chevalier, Cours, I. Leçons 1 and 2, where he shows that our productive power has increased during the last four or five centuries in the production of iron in the proportion of 1 to from 25 to 30; in the preparation of flour since the time of Homer in the proportion of 1:144; in the production of cotton during the last 70 years in the proportion of 1:320.Aristotlepredicted, long ago, that“when the shuttle would move of itself, and plectra of themselves strike the lyre, we should need no more slaves.”Polit., 2, 5. Every step of true progress brings us nearer the fulfillment of the prophecy.414.The North American planters employed coarse tools rather than fine ones, mules rather than horses, because their slaves took so little care of them.415.It can never obtain as much labor from the slave, as the fear of losing his situation and of not being able to obtain another, will from the free workman. (Hume.)Marlo, Weltœkonomie, 1848, I, 2, 38, grants this to be true only where all the forces of nature are appropriated by occupation, and the number of workmen is greater than the want of workmen.416.Even in Brazil, only free men are, as a rule, employed as sugar refiners, distillers, teamsters etc. (Koster, Travels in Brazil, 1816, 362.)Storch, Russland unter Alexander I, Heft, 23, p. 255, cites the opinion of an eminent Russian manufacturer, that it would first be necessary to liberate the serf factory-hands. Masters have generally given up employing their own serfs in manufactures, allowed them to seek work for themselves, and only required them to pay them a species of tax. When this plan was adopted, it was found that they worked much better, (v. Haxthausen, Studien I, 61, 116.) It was a consequence of slavery that, in antiquity, the very wealthy purchased so little:omnia domi nascuntur! (Petron., 38.)417.ThusHomer, Od. XVII, 322, in whose time even there were day laborers, θῆτες or ἔριθοι. (Od. IV, 644; X, 85; XI, 490; XIV, 102.Hesiod, Opera, 602.) AndVarro, De Re rust. I, 17, advises that difficult labor should be performed rather by day laborers.Coli rura ab ergastulis pessimum est et quidquid agitur a desperantibus.Plin., H. N. XVIII, 7.Omne genus agri tolerabilius sub liberis colonis, quam sub villicis.(Columetta, De Re rust I, 7.) It has been estimated, that, in the West Indies, a negro slave performed only one-third of the work performed by an Englishman in his own country. (B. Edwards, History of the British West Indies, II, 131.) During the one afternoon, in every week, in which the negroes were allowed to work on their own account, they accomplished as much as on other entire days. Edinburgh R. IV, 842. CompareBentham, Traité de Législation I, 319.Ch. Comte, Traité de Législation, 1827, Livre V.;Cairnes, The Slave-Power, its Character, Career and probable Designs, 1862;Olmsted, Journeys and Explorations in the Cotton Kingdom, 1861.418.While the older tyrants had prohibited idleness, Draco and Solon even under pain of degradation (see places inBüchsenschütz, Besitz und Erwerb, 260).Socratescalled the ἅργια the sister of Freedom (Aelian, V.H.X, 14), and the σκολή the most beautiful of all professions.419.B. Franklin, Observations concerning the Peopling of New Countries etc., 1751.420.Monument erected toBernstorffby his peasants, 8, 15. TheZàmoiskiestates yielded, 17 years after emancipation, three times as much as they did when serfdom prevailed.Coxe, Travels in Poland, I, 22. The transformation of the serfs into hereditary farmers costCount Bernstorff100,000 thalers; but the revenue derived from his lands increased in consequence, in twenty-four years, from 3,000 to 27,000 thalers. An English mower can mow a field two and three times as great as a Russian mower in a given time. If the former receives daily wages equivalent to seventy pounds of wheat, and the latter to only twelve, the Englishman's labor is still the cheaper; for he turns out 100 pounds of hay while the latter turns out only eight.Jacob, 43 seq. But the hiring out of serfs in the large cities of Russia yielded less to their masters than in the interior.Storch, Handbuch, II, 286.421.Tucker, Progress of the United States, 1843, pp. 111 ff. We need not call attention to the inaccuracy of these figures, nor remark how little serviceable for our present purpose an average obtained from the density of population in different parts of Russia, where such densities are themselves so very different, would be.422.The Spartans seemed to have counted on an adult free man for twice as much coarse food as a bondsman. (Thucyd., VI, 16.)423.Stewart, Principles, I, 7, in accordance with historical data, says, that the peasantry in our days work for other people, because they have wants which can be satisfied only in this way; because“they are slaves of their own wants.”The unquestionable superiority of free to slave labor, in point of economy, has been dwelt upon especially byTurgot, Sur la Formation et la Distribution, § 28, and byAdam Smith, Wealth of Nations, I, 8, III, 2. But seeJ. B. Say, Traité, I, ch. 19, andStorch, Handbuch, II, 184. WhenHume, Discourses, No. 11, Populousness of ancient Nations, demonstrates the greater cost of slavery from the fact that the master of slaves must either breed or buy them, he forgets that in the case of free workmen he is obliged to provide also for the support of the workman's children. Only, the slaveholder has, indeed, to advance the whole at once.424.Humboldt, Cuba, I, 177.Ashworth, Tour in the U.S. Cuba and Canada, 1861. The slaves in Louisiana were so overworked that they lived, on an average, scarcely seven years. Edinburg Rev., LXXXIII, 73. Even the Stoics were not agreed, whether it was right, in case of shipwreck, to sacrifice a cheap slave in order to save a valuable horse. (Cicero, de Off. III, 23.) Whether the self-interest of masters is an inducement to the mild treatment of their slaves depends on the price for which fresh slaves may be obtained. This is a strong reason why a high degree of civilization, where there are not counteracting influences, must make slavery less endurable. The more valuable slaves are, the worse is their condition. In the unfertile Bahamas, the price was £21; in Demarara, £86. In the former place they were required to do little work and were well fed and well clothed. Hence their numbers have increased there, while in Demarara they have decreased. (Edinburgh Rev., XLVI, 496, 180.)425.Proverb:quot servi totidem hostes.(Macrob., Sat. I, 11, 13.)426.Jefferson, Notes on Virginia, 212. The chastity of both parties especially suffers. Thelenoof ancient comedy was a slave trader! Compare L. 27, Digest, V, 3. In the English negro colonies, it was not unusual for the guests of the planters, even in the best families, on retiring, to ask the accompanying servant for a girl, with as little concern as they would in England for a light. (Negro Slavery, or a Creed of ... that state of Society as it exists in the United States and in the Colonies of the West Indies, London, 1823, 53.)427.Even the law of Upland forbade the sale of Christians. The children of a slave and of a free person were born free. Emancipation was considered a Christian act, to be performed for“the salvation of one's soul.”Voluntary slavery was prohibited in 1266, and Magnus Erichson forbade slavery generally from the year 1335. SeeGeijer, Geschichte von Schweden, pp. 157, 185, 273.Estrup, inFalcksN. Staatsburg Magazin, 1837, 179, ff.428.L. Alam, 137, 1. L. Fris., 17, 5. Decree of 960 concerning the abolition of the trade in Christian slaves between Germany, Italy and the Byzantine Empire.Tafel und Thomas, Urkunden der Staats-und Handelsgeschichte von Venedig, I, 18 ff.429.Tacit. Germ. 25. In the Legg. Walliæ 206 (Wolton) we read:“Hero eadem potestas in servum suum ac in jumentum.”430.The council of London in 1102 forbade men to be sold like beasts. (Concil., ed. Venet. 1730, XII, 1100, No. 27.)Guérard, Polyptiques d'Irminon, Prolegg., 220, describes a pedagogical model emancipation by the Church of its own serfs. On the whole, the church contributed more towards the emancipation of the serfs of others than of its own. See ch. 39, C. XII, qu. 2; c. 3,4; De Rebus eccl.431.In Flanders since the end of the twelfth century.Warnkönig, Flandrische Staats und Rechtsgeschichte (I, 244).432.In what relates to Germany, compareSugenheim, Geschichte der Aufhebung der Leibeigenschaft in Europa, 1861, p. 350 ff. The destruction of the old manorial system (Hofwesen) in the fifteenth and sixteenth centuries, was often unfavorable to bondmen and favorable to serfs.Maurer, Gesch. der Frohnhöfe, II, 92. In Poland, where all were originally equal land-owners, many sank gradually through poverty to the condition of the so-calledkinetes, who, although personally free, were not very far removed from slaves. Beginning with the thirteenth century, a great number of immunities, after the model of those accorded in Germany, were granted, by means of which they lost, for the most part, their direct subjection to the emperor and the empire alone. This was soon followed as a consequence by their personal oppression. (Röpell, Geschichte von Polen, I, p. 308 seq., and p. 570 seq.) In Bohemia, the old form of serfdom had so far disappeared in the fourteenth century, that it might be said it was known only to history. But during the reign of the weak king, Ladislaus II, a new species of serfdom came into vogue, the result of the preponderance of the aristocratic element.Palacky, Gesch. von Böhmen, II, p. 33 seq.; III, 31 seq. Aristocratic Denmark, before the peasant war of 1255-1258, subjected the free peasantry who had been leaseholders for a term of years to unlimited socage duty. Waldemar III, reduced to the same kind of service the land-owning peasantry, which especially from the date of Margaret's reign, developed into a species ofglebæ adscriptio. From the sixteenth century, when the royal power almost disappeared, these public privileges were abandoned to the nobility to such an extent that, in 1650, there were scarcely 5,000 free peasants.Dahlmann, III, p. 73 seq. However the severity oftraeldommade way in the fourteenth century for thevornedskap(modified bondage), a milder species of vassalage. SeeKolderup Rosenvinge, Grundriss der dänischen Rechtsgeschichte, § 94.433.The French expressionmainmortecomes originally from the deprivation of the right of inheritance. In Beaumanoir's time, 1283, it was customary, after a number of serfs had lived together for a year and a day, for their chattels movable to become the common property of the community. (Warnkönig, Französische Rechtsgeschichte, II, 157.)434.In France, Louis X. made it a fiscal speculation to sell serfs their liberty in whole districts, even against their will. His edict, Ordonnances, I, 583, recognizes that all men are by nature free, and that France is not without reason called the land of the Franks etc. Even in 1298, Philip IV. had exchanged the serfdom to the crown of several provinces for a land duty. The last ruler of Dauphiny gave all the serfs of the crown their liberty gratis, in 1394. (Sugenheim, p. 130.) When the so-calledcoutumeswere written, there were only nine provincees in which by local law serfdom was permitted. The defeat of thejacquerieinjured the cause of emancipation in France in the same way that the suppression of the war of the peasants did in Germany. About 1779,mainmortewas abolished in all lands of the crown, and its proof made almost impossible in all others. (Warnkönig, II, 151 seq.) Yet it is said that there were 150,000serfs de corpsin France in 1789. (Cassagnac, Causes de la Revolution, III, 11.) Koloman, who died in 1114, forbade the slave trade in Hungary, and labored to raise all Christian slaves toconditionarii(renters). But the right of migration was abolished in 1351. King Sigismund, and still more, Matthias Corvinus, restored it, after the suppression of the war of the peasants, but in 1514 it was again lost until 1586. Further progress was arrested until the Urbarium of Maria Theresa.435.In Italy, Frederick II. liberated all the serfs of the crown. (Constitutt. Regni Sicil., 164.) A model instance of emancipation at Bologna in 1256. The serfs of the state were simply set at liberty; the freedom of those of private persons was purchased with the money of the state, and a small corn-tithe laid on the emancipated as a compensation for the expense incurred in their behalf. In the future, there was not to be a bondman on Bologna territory. The motives which led to this measure are a strange admixture of Christianity and Democracy. (Muzzi, Annali di Bologna, 1840, I, 479.) Italy, at the end of the fourteenth century, was entirely free from Christian serfdom. (Muratori, Antt. Ital., I, 798.) In the canton of Berne, Switzerland, slavery was gradually abolished, the process commencing about the beginning of the fifteenth century. It continued, however, in the case of ordinary masters until 1798.Sugenheim, p. 530 seq. In England, Alfred the Great's efforts towards the gradual abolition of slavery (Wilkins, Leges, 29) remained without result. The steps taken by William I, towards a much narrower end, however, seem to have been more successful. (Leges Will. Conq., 225, 229;Turner, Hist. of England, I, 135.) From the time of the Norman conquest, prisoners of war ceased to recruit the ranks of slavery. Under Henry III and Edward I, socage tenants became more and more frequent; but, before long, their duties became less onerous, and might be discharged by others hired for the purpose, instead of by themselves. The first remarkable vestige of a class working for wages is met with in the law of 1351, which may be considered an effort made by the nobility to oppose the tendencies in favor of emancipation, which were a consequence of the development of cities. (Eden, State of the Poor, I, 7, 12, 30, 41,)Infra, § 175. Although the peasant war under Wat Tyler and Straw, who wished to abolish servitude at a blow, failed of its object, we find that there were a great many instances of emancipation by individuals in the fourteenth and fifteenth centuries when death or sickness overtook them, in which they declared the moral unfitness of slavery. (Wycliffe:“When Adam dalve and Eve span, who was then the gentleman?”) Elizabeth liberated the last serfs of the crown. Compare 12 Charles II, ch. 24, 1660. Emancipation in the lowlands of Scotland was completed in 1574. (Tytler, Hist. of Scotland, II, 260.)436.Modern Emancipation Laws: in Prussia, 1719, 1807, 1819; Lausitz; 1820, Westphalia; in Austria, 1781 (Bohemia and Moravia), 1782 (other German countries and Galicia); 1785 (Hungaria); Schleswig-Holstein, 1804, after many of the landed gentry had voluntarily emancipated their own serfs; in Bavaria, in 1808; in the kingdom of Westphalia, in 1808; in Hessen-Darmstadt, in 1811; in Württemberg, in 1817; in Baden, in 1783, 1820 in newly acquired countries; in Mecklenburg, in 1820; in the kingdom of Saxony, in 1832; in Hanover, in 1833. The law of 1702, abolishing serfdom in Denmark, was evaded until 1788, and in part, even until 1800 by theSchollband(clod-bond) introduced in its stead. The only Christian people in Europe, who, until recently, kept serfs, was the Russian. The serfs of Russia, in 1834, numbered 22,000,000, i.e., about 40 per cent. of the entire population. In the meantime, the law of February 19, 1861, passed after four years of preparation, fixed the date of emancipation at the beginning of the year 1863. Slavery has been abolished in the United States since January 1, 1863; first of all in all portions of the country engaged in rebellion.437.There is a very interesting discussion in the Journ. des Economistes for June 1863, of the question whether the owners of serfs are entitled to compensation on their emancipation, byLaboulaye,Wolowski,Lavergne,Garnier,Simonand others. In the United States it would have required $2,000,000,000 to fully compensate the slave-holders for depriving them of their slaves. (Quart. R., Jan., 1874, 142.) Compare my view,Roscher, Nationalökonomi des Ackerbaues, § 124.438.Leave a new-born child to its“natural freedom”for twenty-four hours, and it will in all probability be dead at the end of the time!439.Compare Edinburgh Review, LXXXIII, 64 ff., April, 1851, 333.Klein'sAnnalen XXV, 70, ff. Even in the fifth book of Moses, 15, 13, ff., we see that experience had taken into consideration that a freed serf without capital or landed property might very readily be in a worse condition than he was before. In the United States, the anticipation that the emancipated negroes might diminish in numbers has not been realized. The census of 1870 showed a negro population of 4,880,000, nearly ten per cent. more than in 1860. The increase of the number of churches, schools and savings banks also bears testimony to the prosperity of the negro. (R. Somers, The Southern States since the War, 1871.)440.J. S. Mill, Principles, 10, ch. 7.441.As to the Jews, seeEwald, Geschichte von Israel, I 2, p. 198. In general, seeH. Wallon, Hist, de l'Esclavage dans l'Antiquité, II, 1847.442.Thucyd.IV, 27;Xenoph.De Re. rep. Art. I, 10 ff.,Aristoph.Nubes, 6;Antiph.De Caede Herod, 727. In the“Frogs”of Aristophanes, the relation between the slave Xanthias and his master is eloquent testimony to the good treatment he received. Slaves enjoyed great freedom of speech. (Demosth.Phil. III, iii.) Concerning masters accused of cruelty, seeDemosth.Mid. 529, 7. Athen. VI, 266. The slave who had been ill-treated might seek refuge in a temple, after which his master was compelled to sell him. (Schol. Aristoph.Equitt. 1309.Plutarch, Thes. 36.)443.Slaves might purchase their own freedom with theirpeculium. See Petit. Legg., Art. II, 179. There were many who lived entirely on their own account, paying a certain duty or tax to their masters, and who were well able to make savings.R. F. Hermann, Privatalterthümer, § 13, 9, 58, 11 ff. See the instance inPlato, De Rep. VI, 495, where a slave who had grown wealthy asks the daughter of his former master in marriage. Moreover, there was a general indisposition to hold Greeks as slaves. (Philostr.Apoll. VIII, 7, 12.) The case cited inDemosth. adv. Nicostr. 1249 ff., is all the stronger on this account.444.Under Cleomenes, many purchased their freedom with their own means.Plutarch, Cleom. 23. At an earlier period, men like Lysandros, Gylippos, Kallikratidos had belonged to a class composed of the children of slaves brought up as citizens.445.Cicero, pro Muræna, IX, 22.446.Think of the subterraneanergastula, the fettered door-keepers and the gladiatorial exhibitions.447.Even from the time ofPlautus, theservi honestioreswere wont to keepvicarios, or subordinate slaves.Plaut.Asin. I, 4,SenecaDe Tranq. Anim. 8. CompareCicero, Parad. V, 2. Of the slaves of the state, the public scribes were sometimes found in excellent circumstances.448.The peculium was fully developed in the time of Plautus and Terence. CompareTerent., Phorm. I, 1. It was customary to promise slaves their freedom as soon as they had acquired a certainpeculium. (Dionys. Hal., Antt. Rom., IV, 24.Tac., Ann., XIV, 42.) Humane masters permitted their slaves to dispose freely of theirpeculiumby will. (Plin., Ep., VIII, 16.) There were many of the Romans who gave their slaves a fixed salary, from which they could make savings. (Senec., Epist., 80, 7.) Shepherds raised some sheep for themselves alone. (Plaut., Asin., III, 1, 36;Varro, R. R., I, 17, 7.) Premiums were offered for certain products (Athen., VI, 274 d), and there were cases even in which businesses were farmed out to slaves. (Corp. Inscr. Gr., No. 4,713 f.) Theservi publicihad the right to dispose of the half of what they owned, by will. (Ulpian, XX, 16.) Contracts of loan were sometimes made between master and slave. (Plut., Cato, I, 21, L., 49, § 2, Digest, XV, 1.)449.CompareTacit., Ann., XIII, 26 seq. During the time from 356 to 211 A.C., it seems that there were, on an average, 1,380 slaves emancipated yearly. (Dureau de la Malle, Economie polit. des Romains, I, 290 ff.)450.Concerning the highly educated slaves of Atticus, of the like of whom the Greeks had formerly few examples, seeDrumann, Geschichte Roms., V, 66. The high prices, 100,000, and even 200,000 sesterces, paid for slaves, suppose a very high degree of education. (Martial, I, 59; III, 62; XI, 70;Seneca, Ep., 27.) But evenCicerowas ashamed of his affliction over the death of an exceptionally clever slave. (Ad. Att., I, 12.)451.At an earlier period, even the censor had punished cruel masters. But most of what was done to prevent the arbitrary condemnation to death of slaves, their castration etc., and to give them rights against their masters for libidinous acts towards them, for cruelty and insufficient support, or the furnishing them with bad food, was done after the time of Hadrian. (CompareSeneca, de Benef., III, 22; de Ira, III, 40,Sueton., Claud, 25, Dom., 7;Spartian., Hadr., 18;Gaius, I, 53; L., 1, § 2, Digest, I, 6; L., 1, § 8, D., I, 12; L., 1, § 2, D., XLVII, 8; L., 1; Cod., IX, 14; Contra, seeDio Cass, I, V, 17.) However, thevitæ necisque potestasexisted in the time of Justinian. (Zimmern, Geschichte des röm., Privatrechts, I, 2, 661 ff.)452.Salvian, De Gubern. Dei, V, 8.Theod., Cad. V, 4.Eumenis, Paneg Coast. 8, 9.Trebell, Poll. Claud., 9.Justin.Cad., XI, 26, 47. Comparev. Savigny, Ueber den romischen Colonat. Berliner Akad., 1822-23.453.The figures given inAthen., VI, 103, concerning the number of bondmen in Greece are almost incredible. For Attica alone, the estimates vary between 110,000 (Letronne, in the Mem. de I'Académie des Inscr., 1822, 192, ff.) and 400,000 (Athen.1. c.), while the free men are estimated at from 130,000 to 150,000. In Rome, during the time from the expulsion of the kings until the destruction of Carthage, the number of the slaves remained about the same. (Blair, State of Slavery among the Romans, 1833, 10, 15.) On the other hand,Dureau de la Malleis of opinion, that in 576 B.C., the number of slaves was to the number of free men as 1 to 25, and in 225 B.C. (including the metics), as 22 to 27. (Economie polit. des Romains I 270 ff., 296.) CompareCato, de Re. rust. I, 3, IV, X, 1 XI; 1, XVII, XVIII, 1. In Germany, the number of bondmen, from the eighth to the tenth century, was estimated to be at least as great as that of free men. (Grimm, D. Rechtsaltherthümer, 334.) Among the Anglo Saxons, before the Norman conquest, it was much higher, even three-fourths of the entire population. (Turner, Hist. of the A. S., VIII, 9.) Compare on the subject of this whole chapter my paper in the Archiv. der polit Œkonomie, N. F., IV, 30 ff.454.Klöntrupp, Abhandlung der Lehre vom Zwangsdienste, 1801. Frequently, the lord had only a right of preference in case the children of the tenant desired to abandon the parental roof and take service elsewhere.455.InAdam Smith'stime, in England, the presumption was that a servant had been hired for a year. (I, 2, 15 ed., Bas.) Frederick the Great's ordinance of 1769, on this subject, forbade any one to enter into service for a shorter time than this (II, § 1 ff.), while the Saxon ordinance of 1835, on the same matter, allowed engagements by the month, in cities.Darjes, Erste Gründe der Cameralwissenschaften, 2d ed. (1768), p. 432, demands that servants should always hire themselves for at least four or five years, and that their masters should have, during the whole of this time, the right to enforce the contract. In North America, however, service by the month has become customary and general, and no notice of the dissolution of the contract is, as a rule, required. (Deutsche Vierteljahrsschrift, 1853, II, 191.) In Switzerland, contracts for service by the week are frequently made even by country servants. (Böhmert, Arbeiterverhh., II, 157.)456.In the south of England, farm hands were used to change service only at Michaelmas. The choice of such a date made farmers very dependent on them, as it fell in harvest time. (Marshall, Rural Economy of the Southern Countries, II, 233.) A similar complaint in Cleves. (Schwerz, Rheinischwestphälische Landw., 21 ff.) In Jülich, a half year's notice was required, during which time the servant who had received it, performed his work with disgust, and stirred up his fellow servants against their master. (Schwerz, II, 87.)457.The families of day laborers, to whom the owner of the land gives the use of a house, small garden, a cow etc., constitute such a transition; and also, workmen who are fed. In Brandenburg, in 1644, only married persons or widowers with children were permitted to work as day laborers. (Mylius, C. C. March., V, 1, 3, 11.)458.Wakefield, Swing Unmasked, or the Causes of rural Incendiarism, 1831.459.By means of the former, the number of independent small householders was much increased in the country. Masters feel indisposed to hire young men liable to be subjected to military duty, because they may be called away at the moment their services are most needed. The returning soldier, as a rule, feels above doing menial service. (Schwerz, passim, I, 191 ff., 236.) On this account, servants' wages in Cleves rose much higher than those of day laborers. (194.) In Belgium, a farm hand cost, on an average, 400 francs a year; a day laborer, counting 300 working days to the year, only 339 francs. (Horn, Statist. Gemälde, 175.) In the Palatinate, day laborers who receive nothing but their wages cost their masters less than those who receive only their food; and servants are the dearest of all. (Hanssen,Archiv der Politischen Œkonomie, N. F. X, 243.) If servants were relatively more poorly paid in 1813 than day laborers (Lotz, Revision, III, 147), it was because of the at least temporary retrogression of civilization which every great war causes.460.Engel, Preuss. Statist. Jahrb., II, 261. Services which contribute to personal convenience are naturally committed much less frequently to independent day laborers than those which aid in production proper. Hence it is, that, as civilization advances, house-servants, especially of the female sex, constitute an ever-increasing portion of the total number of servants. In Prussia, in 1816, the number of servants who ministered to personal comfort was only 4.19 per cent. of the total number of servants engaged in industry; of female servants, it was 13.4 per cent. In 1861, on the other hand, the percentages were 8.4 and 37.2. In Great Britain, of the total number of servants over 20 years of age, only 2 per cent. were engaged in personal services. In 1841, they were 3-½ per cent. (Meidinger.) In France, in 1851, 2.5 per cent. of the whole population were indomesticité. (Stat. off.)461.In England, now more especially, out of farm-hand day laborers: Edinburgh Rev., April, 1862.462.A chief element in the earlier“organization of labor.”So, also, in the Magdeburg Gesindeordnung (service-regulation) of 1789.463.SaxonLandesordnungenof 1482 and 1543. Cod. August. I, 3, 23. TheGesindeordnung(service regulation) of Frederick the Great, threatened with the house of correction the receivers, and under certain circumstances also the givers of wages higher than the fixed rate of wages; but as a“matter of course,”the payment of wages less than this was permitted. (V, § 7) Great care was taken that wages greater than the law allowed should not be evaded by the payment ofarrhaor payment in produce. The same law forbade the deprivation of the servant of his right to determine the service by making of loans to him on long time (II, § 7.) Evenv. Berg, Handbuch des deutschen Polizeirechts, calls it a duty of the public authorities charged with the protection of property and of the public security, to see to it that there be no lack of good servants, and that the public (as if those who sell their services were not a part of it) should not be made the victims of exorbitant demands in the matter of servants' wages.Jung, more humane, demands that the authorities shall protect, especially, the weaker party. (Grundlehre der Staatswirthschaft, 1792, 700.) In Prussian legislation, the Silesian rescript of March 13, 1809, is the beginning of the new order of things. (Rabe, Samml. preuss. Gesetze, X, 59 ff.) TheObertribunal, or high court, decided, in 1874, that the bringing back of absconding servants by the police, which the law concerning servants of 1810 provided for, should not be allowed to occur any more.464.Ordinance of the elector of Saxony of 1766, prohibiting the inhabitants of cities to take an apprentice from among the peasantry, unless he had served at least four years as a farm hand, beginning with his fourteenth year. Similarly, in Prussia in 1781.465.In Berlin, even before the“populationistischen”period:Fidicin, Histor. diplom. Beiträge zur Gesch. der Stadt Berlin, I, 101. (From the year 1397.)466.I Peter, 2, 18 ff.; I Timoth., 6, 12; Ephes., 6, 5; Philem., 15 ff.467.In the German colonies of Mennonites in Russia, every youth serves a few years in the family of some other peasant. This is considered a sort of school. Wages are of course very large, and the treatment very mild.v. Haxthausen, Studien, II, 185. Southwestern Germany where small landed proprietors are many, something very analogous to this continues. (v. d. Goltz, loc. cit., 452.)468.For a masterly exposition of the doctrine that the right of prescription or limitation is related to the politico-economical necessity of property, seeJohn Stuart Mill, Principles, 3, II, ch. 2, sec. 2.469.Locke, On Civil Government, II, §25-51; and soL. Mendelssohn, Jerusalem (1783), 32;Thiers, Du Droit de la Propriété (1849).470.Modern writers, in their attempt to find a philosophical basis for the right of property, have taken two principal directions, the first a juridical, the second a political one. The axiom,res nullius cedit primo occupanti(compare L. 3, Digest, XLI, 1), explains only the smallest part of the relations of property, and that only because of a very fortuitous circumstance. According toHobbes(Leviathan, 24), property has its origin in the recognition of it by the power of the state, by theautorité publique, thegouvernement(Bossuet, Politique tirée de l'Ecriture, Sainte, L. 3, 4), or asMontesquieu(Esprit des Lois XXVI., 15) more mildly expresses it, in the laws. The application of this principle would, on account of the extreme changeableness of the laws of every state, lead to most extreme insecurity, and to a steady oscillation from one Utopia to another, from one revolution to another, if it were not, at the same time, recognized that each one had a just title to the acquisitions he had made, not because the law, for the time being existing, acknowledged the right, but because they were the product of his labor and saving. The theory which bases the right of property on contract cannot be objected to with as much reason. Thus,Hugo Grotius, Jus Belli et Pacis, II, 2, who even justifies the occupation of things without an owner, on the supposition of the existence of an implied contract. It is very characteristic of the English, that in their political language, the words“liberty”and“property”are so frequently found in each other's company. In one of his classic speeches made by Fox in 1784, he gives a definition of liberty which begins with the words,“It consists in the safe and sacred possession of a man's property”etc. The recent doctrine, not unfrequently to be met with, that every man has a right to an amount of property corresponding to his wants, may be used to sanction all kinds of socialistic inferences. An entirely bewildered and bewildering description is to be found inProudhon'sQu'est ce que la Propriété, 1848, as the precursor of whichBrissot'sRecherches philosophiques sur le Droit de Propriété et le Vol, may be considered. In medieval times, there are always a multitude of other titles to property besides production and saving. The title which is held in highest esteem for the time being is always because of this very extreme vis-a-vis of all other titles, strengthened and made general.471.The word socialism brought into use byL. Reybaudis as ambiguous as the word communism is simple and intelligible. But most socialists agree that actual“society”(which is indeed to be distinguished from the state) is, together with its foundations, the existing relations of property and the family, entirely wrong. A radical reconstruction, they say, is needed to remove forever the chief evil of this system, viz.: the glaring difference between the rich and the poor, the educated and the uneducated. The difference between the doctrines of the socialists and of Political Economy does not, by any means, consist in this, that the former concerns itself more with the welfare of the lower classes, or even that it gives wider scope to economy in common. But socialism is, indeed, a living or housekeeping in common (Gemeinwirthschaft), which goes far beyond the feeling for the common interest (Gemeinsinn). Such economy in common is always opposed to freedom, and, at its first introduction, contrary to law. It can guarantee no compensation to those who have suffered from violence or force, because it leads to a thoughtless and wasteful exhaustion of the nation's resources, inasmuch as it weakens the incentive to industry and frugality. Political Economy, on the other hand, recommends anexpropriationwhen the incentives to industry and frugality are thereby strengthened; and the increased resources thus obtained serve it, as full compensation to those whose property has beenexpropriated.472.SeeRoscher, Betrachtungen über Socialismus und Communismus, Berliner Zeitschrift für Geschichtwissenschaft, 1845, III, 422 ff.473.Vivre en travaillant ou mourir en combattant—the device on the flags of the mutinous silk-weavers at Lyons, in 1832.474.We are so assured byVauban(Dime Royale, 34 seq), of the later years of the reign of Louis XIV, that nearly 1/10 of the French people begged, that 5/10 could give no alms, because they were themselves on the very brink of indigence; 3/10 werefort malaisés, embarassés de dettes et de procès; scarcely one per cent. could be said to befort à leur aise. How much better off is the present Parisian workman! And yet, at that time, there was not the least spread of communistic doctrines. It is indeed seldom that completely down-trodden men react against their wretchedness with great energy.475.“If mycapricebe the source of law, then myenjoymentmay be the source of the division of the nation's resources.”Stahl, Rechtsphilosophie, II, 2, 72.476.That the socialism ofPlato, De Repub., V, was no mere fancy, is proved by the polemic whichAristophanesdirects against it in his Ecclesiazuses. See alsoAristot., Polit., II, 2, Schn. In the contemporary practice of the Greeks, with the increasing democratization of the state, it became more and more usual for it to bear the expense of the outlay for the means of subsistence of the great crowd. (SeePlutarch, Cimo, 10.) Every act of public life was paid for. Citizens were paid for attending popular meetings three oboli per day, while the pay of the soldiers was six, and that of the sailors three. (Thucyd., III, 17; VII, 27; VIII, 45.) The pay of the commonest day laborer was from three to four oboli per day.Aristophan., Eccl., 310, andPollux, VII, 29. The number of magistrates was very large, in order that as many as possible might participate in this species of remuneration. Thus, in Athens, when it had only about 20,000 inhabitants, there were 6,000 judges. In addition to all this, there were numberless feasts, plays, banquets etc., which were offered to the people gratis. The wealthy who were compelled to meet all the expense thus incurred, lived in such a state of terror of the populace, that they considered their own impoverishment as a species of deliverance. (Xenoph., Conviv., 4, andLysias, pro Bonis.)Isocratescalled it much more dangerous to be rich than to commit a crime, since in the latter case one might obtain a pardon or a mild punishment. (De Permut., p. 160.) (Lysias, De Invalido, de sacra Olea, seq.) There is little difference between this state of things and a semi-community of goods. Only that, indeed, the great mass of the slaves were excluded from enjoying them. The contrast which somewhat later distinguished the Cynics from the Cyreno-Epicureans affords a striking analogy to that which, in our own times, exists between the pure socialists and the worshipers of mammon after the fashion of Doctor Ure. Concerning the Utopia ofIambulos, seeDiodor., II, 55 ff.477.Our sources of information concerning the division of the Roman republic into a moneyed oligarchy, and the proletariat are very numerous. Compareinfra, § 205. The speeches of the Gracchi (e.g.Plut., T. Gracchus, 9), and still more the violent discourses of Catiline's conspiracy (Sallust, Cat., 20, 23, 37-39), remind us very forcibly of the shibboleths of modern socialism. We very frequently meet with the expression of a longing desire to return to the most uncivilized and hoary past, when there was no money and no wealth—an aspiration which lies at the very foundation of communism. ThusVirgil, Geo., I, 125, ff.,Tibull.I, 3, 35, ff.Propert.II, 13, III, 5, 11;Seneca, Epist., 90;Senec., Oct. II,Hippol., II, 2;Plin., H. N. XXXII, 3. On the other hand, the practice of supporting the populace at the expense of great candidates or of the state, was developed to a very great extent. The masses lived very largely by the sale of their right of suffrage to the highest bidder. At the election of consuls in the year 54, 500,000 thalers were offered to the century called on to vote first. (Cicero, ad Quintum II, 15; ad. A.H. IV, 15.) EvenCatohad a part in such bribery. (Sueton., Caes., 19.) In the social reform of the younger Gracchus, besides the limitation of large land-ownership, the principal points were the following: the sale of wheat under the market price, but only to the inhabitants of Rome itself; the construction of great highways in Italy; colonization at the expense of the state, and the increase of soldiers' pay. (Ritsch, Gracchen, 392 ff.) The socialistic plans of Rullus went much further. Were his agrarian laws put in execution, he would have confiscated very nearly the entire country in the interest of the poor, and of their demagogues! (Cicero, De Lege agrar.) Rome twice experienced a social revolution of the most frightful character, one by which a great portion of all private goods fell into the hands of the propertyless (soldiers), who knew nothing of how to turn it to account or to invest it—under Sulla, and then under the later Triumviri. (CompareAppian, Bell, civil., V, 5, 22.) Complaints concerning the latter, inHorat., Epist., I, 2, 49;Virgil, Buc., IX, 28;Tibull.I, 1, 19, IV, 1, 182;Propert., IV, 1, 129. The elder Gracchus had promised compensation to the last possessors.Tabulæ novæof Cinna, Catiline, Cælius, Dolebella. Clodius introduced the distribution of wheat, which according to Cicero pro Sext., 25, ate up almost one-fifth of the public revenues. About 320,000 persons were, in this way, supported for a long period of time (Sueton., Caes, 41,Dio C., XLIII, 21; L. LV, 10), but only in such a manner as to keep them from starvation. (Sallust, 268 ed. Bip.) To all this was soon added distributions of salt, meal and oil, also free baths, numberless public plays, colossal banqueting, payment of one year's rent etc.Panem et circenses!(Juvenal, X, 80 seq.) The mere distribution of money under Augustus, in which from 200,000 to 320,000 men participated, cost each time from 2,500,000 to 6,000,000 thalers. (Monum Ancyr., 372 Wolf.) Extraordinary assistance was, by way of preference, accorded to colonies of the poor. (Sueton., Caes, 42.) Concerning this entire policy, seePlin., Paneg., 26 ff. Even in Constantinople, at the time of its foundation, large distributions of bread were made at the expense of Egypt, although there could scarcely be any real pauperism in that new and flourishing city. (Theod., Cod., XIII, 4, XIV 16;Socrat., II, 13.) I can only allude to the plan proposed by the emperor Gallien by the neo-platonist Plotin, to found a city in which the ideas of Plato's republic should be carried out. (Porphyr., V, Plotin., 8.)478.During the two centuries of which the Reformation constituted the middle point, the transition from the peasant system of agriculture to the large farming system of modern times bore very heavily on the inferior classes. Such, too, was the operation of the fall in price of the precious metals. (§140.) The suppression of the many monasteries caused an increase in the wretchedness of the poor; and the numerous poor-laws enacted in England, Spain etc., were not sufficient to supply a remedy. The feeling of the people during this period of tribulation found expression in the War of the Peasants, in the sect of Anabaptists, in the many reformations and counter-reformations, in the revolt of the Netherlands, in the conflicts for the crown in France and England etc. In Italy, the contrast existing between the moneyed oligarchy and the proletariat had been developed several centuries, but from the middle of the sixteenth century, it had become much more oppressive by reason of the universal impoverishment of the country. For an account of the pantheistic“Brethren and Sisters of the Free Spirit,”with their community of goods and of women, seeUllmann, Reformatoren vor der Reformation, II, 18 ff. They were very numerous from the thirteenth to the fifteenth century in Italy and France, as well as in Germany, and lead us to the Adamites in the Hussite war. (Aschbach, Geschichte K. Sigismunds, III, 109.) Earlier yet, we have the sect of the Giovannali, who had their property and women in common, and who, in 1355, had won the third of Corsica, but who were afterwards suppressed by Genoa and the Church. (Lebret, Geschichte von Italien, VI, 208 ff.) The coarse socialist,John Balle, bears about the same relation to Wycliffe, that Münzer and Bockholt did to Luther. (Walsingham, Hist. Angliæ inCamden, Scriptt., 275.) Hans Böheim of Würzburg, 1476, seems to be the direct precursor of Münzer. (Ullmann, I, 421 ff.) It was almost as usual in Luther's time, as in 1848, or in our day, to hear of the deep demoralization of trade—theFuggereiof the Germany of the time—and of the universal system of fraud that prevailed. See the citations inHagen, Deutschland's Verhältnisse im Reform-Zeitalter, II, 313 ff. Münzer's fundamental principle:Omnia simul communia!Sebastian Frank, Chronica, Zeytbuch und Geschychtbibel etc., 1551, fol. VI, 16, 27, 116, 194, 414, 433. John Bockholt's life presents us with a striking contrast. While they were bringing his perfumed women, sparkling with jewels, to his rose-covered bed, hung with curtains of gold cloth, on which he was reclining, his subjects were a prey to the horrors of famine, to such an extent that they were compelled to salt the bodies of children who had died of starvation. How frightful the end of this communistic benefactor of mankind! Libertine community of goods and women. (Calvin, Instructio adv. Libertinos, cap. 21.) English communists in the age of the reformation. (J. Story, Comment. on the Constitution of the U.S., I, 36.) Even under Cromwell, there were many Englishmen who believed that farmers were no longer obliged to pay rent to land-owners. On the sect of Levellers, seeWalker, History of the Independency, II, 152. Even inErasmus, we find some sympathy with communism. (Enchirid. milit. Christ, 80.)Contra, seeMelanchthon, Prolegg. in Cic. de Off., Corp. Reform, XVI, 549 ff. The most remarkable systematic works of this period areThomas More's, Utopia, 1516, andCampanella'sCivitas, solis, 1620.Thomas Morebluntly says that all existing governments are in fact only permanent conspiracies of the rich to further their own interests under the mask of the common good, and to despoil labor. The abolition of money, which should be continued in use only to carry on foreign war, would, he contends, remove all misery. There was no really private property in his Utopia. There should be a rigid superintendence of all work by the public authorities, whose duty it should be to see to it, that no one should abandon agricultural pursuits. All should eat at a common table and dress after the same fashion. Internal commerce should give way to a mutual exchange of gifts under the supervision of the state.Campanella, besides a community of goods, recommends continually varying occupation, to last not more than four hours daily; education in common, especially by means of pictures, popular encyclopedias etc., all under the supreme guidance of a despotism to be composed of the wise, some secular and some spiritual, operating through the confessional. Socialists nearly always succeed better in the critical part of their works than in the positive. CompareR. Mohl, Geschichte und Literatur der Staatswissenschaften, § 1, 165 ff.479.Considering the aversion exhibited against private property byJ. J. Rousseau, and the unlimited power which he accords to the majority for the time being in the state (Contrat Social, 1761, II, ch. 4), it cannot be denied that his freedom and equality contain, to say the least, germs of communism by no means insignificant. But, he would, in the present state of civil society, have a feeling of respect for the rights of property implanted in the mind of the child very early, and even before the feeling of liberty is developed. (Emile, 1762, Livre II.) About the same timeMorellypublished his Basiliade ou Naufrage des Iles flottantes, 1753, a political romance in the interest of communism. See the same author's Code de la Nature, 1755.Mably, in his two works, Doutes proposés aux Economistes, 1768, and La Législation ou Principes des Lois, 1776, recommended the abolition of all inequality and a real community of goods. The introduction of property seems to him,une faute qu'il était presque impossible de faire. EvenBeccariacalls property a dreadful but perhaps a necessary right which has left to the unfortunate nothing but a naked existence. (Dei Delitti e delle Pene, 1765, cap. 22.) The French Reign of Terror came pretty near carrying these ideas into effect. We need only refer to the abolition of the census, the payments made to the workingmen who attended the section meetings, two francs per diem, the enormous extension of confiscation, requisitions and forced loans, the revolution effected in the fortunes of individuals by the system of issuing assignats, the maximum affixed to the price of all the necessaries of life, the abolition of indirect taxes, and of what remained of the economic institutions handed down from the middle ages. According toSt. Just:l'opulence est une infamie; il ne faut ni riches ni pauvres. The Cahier des Pauvres demands, first of all, that salaries“should no longer be estimated in accordance with the murderous principles of unbridled luxury.”See Forster's letter dated November 15, 1793. (Sämmtl. Schriften, IX, 125.) On the conspiracy of Baboeuf, who was executed in 1796, and who wanted to see the completest equality and community of labor, of enjoyment and education, the abolition of large cities etc., seeBuonarotti, La Conjuration de B., 1821. This book contributed powerfully towards the revival of communistic ideas after the July revolution. Among modern communists who are to be distinguished from the more ancient, especially by the industrial coloring given to their theories,Cabet, Voyage en Icarie, 1840, II, holds a very prominent place. He declares the abolition of religion, of the family and of the state, to be open questions, and desires to bring the practice of a community of goods to a successful issue only through the peaceful channel of conviction.CompareReybaud, Etudes sur les Réformateurs contemporains ou Socialistes modernes, 1840.L. Stein, Der Socialismus und Communismus des heutigen Frankreich. See, also, the learned history of socialistic systems inMarlo'sWeltökonomie, I, 2, 435 ff.; and in what concerns the most recent time,R. Meyer, Der Emancipationskampf des vierten Standes, II, 1874, seq.; a book which, in spite of its many defects, both doctrinal and journalistic, is as rich in thought, and in the knowledge of the subject it treats of, as it is permeated by a love of truth regardless of consequences. Among the opponents of socialism and communism,Malthus, On Population, B. III, ch. 3, andB. Hildebrand, Die Nationalökonomie der Gegenwart und Zukunft, vol. I, 1848, hold a very distinguished place.J. S. Mill, Principles, II, ch. 1, 3, calls attention to the fact that hitherto the principle of free property has never been consistently carried out. The first social arrangement of modern society was almost everywhere the result of conquest and violence, large traces of which yet remain. Things have always been made property which ought not to be property. Governments have endeavored to intensify the darkness of the dark side of property, and favored the concentration instead of the diffusion of wealth etc. Hence, no one can claim that the social wrongs, so-called, had their origin in property as such.Schäffle, Kapitalismus und Socialismus, 1870, has made a very note-worthy effort to recognize whatever of truth there is in socialism, and to combat its errors.480.Saint Simon'sreproach to the liberals, that their fundamental principle was:ôte-toi de là, que je m'y mette, is well known.481.CompareMalthus, Additions to the Essay on Population, 1817, IV, ch. 7.482.Thetravailleurs égalitaireswished to murder not only the king, the court, and the ministry, but also the Liberals and all owners of property.483.As soon, indeed, as this true love disappears in the married state, the community of goods even there degenerates only too easily into a spoliation of the better party by the worse.484.The community of goods of the first Christians at Jerusalem, so frequently cited and extolled (James, I, 1), was only a community of use, not of ownership (Acts IV, 32), and, throughout, a voluntary act of love, not a duty (V. 4), least of all, arightwhich the poorer might assert. Spite of all this, that community of goods produced a chronic state of poverty in the church of Jerusalem. Hence, Paul had collections taken up for them on all sides, without, however, anywhere establishing a similar institution. (Romans, 15, 26; I. Corinth., 16, 1.) CompareMosheim, De vera Natura Communionis Bonorum in Ecclesia Hierosol., in his Dissertatt. ad Histor. Eccles. pertinentes, II, 1 ff. As to whetherBarnabas(Epist., 19) desired to say anything more, compare Epist. ad Diognetum, 5. For a real recommendation of a community of goods, on economic grounds, seeJoh. Chrysostom., in Acta Apost., Hom. XI. AlsoClemens Rom.c. 2 C. 12, qu. 1. Community of goods among the Essenes:Philo.Opp. II. 457 ff.Joseph. Bell, Jud., II. 8.Bellermann, Geschichtliche Nachrichten über die Essener. (1821.) In many monasteries, there has been and is a species of community of goods. There was once a singular contest on this subject, carried on between the Minorites and the Pope, in the time of Louis of Bavaria. The Minorites claimed that property was a thing, so much to be condemned, that even food, at the moment of eating it, did not belong to the person using it. The Pope taught on the other hand, that even Christ and the Apostles possessed property, part personal and part in common. (Raynaldi, Ann. eccl., XV, 241, 285 ff.) Community of goods of the Homiliates, later of the Brothers of Common Life, after the manner of the monks, but of a much higher kind. (Ullmann, Reformatoren v.d. Reform, II, 62 ff.) The first settlers of New Haven, Connecticut, held their property in common. Land was divided among families in proportion to the number of persons in them, and of the number of cattle they had brought with them; and all sales and purchases were made on account of the whole community. And so in Massachusetts during the first seven years of the colony's existence. (Ebeling, Geschichte und Erdbeschreib. der Vereinigten Staaten, II, 391, I, 557.)Herrnhutcommunity of goods in Pennsylvania, from 1742 to 1762, but which was done away with when the number of colonists became too great. (Ebeling, IV, 717.) Community of goods of the Shakers and Lutheran Rappers. (Buckingham, Eastern States, II, 214, 427.Prinz Neuwied, Reise in Nord Amerika, I, 136, ff.) Russian sects with community of goods. (v. Haxthausen, I, 366, 407.)Harless, christliche Ethik § 501, distinguishes very well between the“anti-christian”and“pseudo christian”stand point, from which it is sought to establish the doctrine of a community of goods. The Christian view of this subject (compare Ephes., 4, 28, I; Thess., 4, 11, II, 3, 12; Matth., 6, 24; Pet. 4, 10; Matth., 26, 7-11) is accused of hypocrisy by many socialists. It is very easy, they say, when one is himself in comfortable circumstances, to represent to the poor that their poverty is a school for heaven, and to preach a contempt for riches etc. They entirely forget, that the first promulgation of the Gospel was made at a time when the worst kind of pauperism prevailed; and that even the Master Himself, and the greater number of His Apostles belonged to the lowest stratum of society.Luke, 9, 58. Many of the Fathers of the Church, however, in their exhortations to benevolence, used language in which modern Socialists have found a rich mine which they have sedulously worked. (CompareVillegardelle, Histoire des Idées sociales, 1846, 61 ff.)485.EvenAristotlesays that what is common to many is a matter of little concern to any one. (Polit., II, 1.)Bastiatremarks:“We compete to-day to see who works most and best. Under another regime, we should emulate one another to see who should work least and worst.”(Harmonies Econ., ch. VIII.) When the first settlers of Virginia, in 1611, gave up the system of common labor and of joint-stock companies, as much work was performed in a day as formerly in a week, or as much by three workmen as formerly by thirty. (Purchas, Pilgrims, iv, 1866.Bancroft, History of the United States, I, 161.) Even in New England, therefore among men both steady and accustomed to labor, who for conscience sake had sacrificed so much, a community of goods was accompanied uninterruptedly by famine. A change for the better took place, for the first time in 1623 with the introduction of the institution of private property which was followed in 1624 by the right of inheritance. (Bancroft, I, 340.) The military colonies of Algeria, also, in which husbandry in common was carried on, begged, at the end of a year, that the system should be abandoned, for the reason that it was good for nothing but to generate idlers; and yet, these colonists were all powerful men of about the same age, and accustomed to order and service in common. They were, moreover, assisted by the nation with pay and food. CompareBugeaud'saccount: Revue des deux Mondes, June 1, 1848.“The French associations (after 1848), whose object was labor in common, have nearly all died out.”M. Chevalierin the Journal des Débats, Feb. 3, 1851. In the United States, sixteen phalansteries of Fourierites, founded between 1840 and 1846, had all collapsed in 1855. (D. Vierteljahrsschrift, October, 1855, 205 ff.)486.Even in New Harmony, the members considered the task which they had to perform to obtain food, clothing and shelter, as villeinage in the worst sense of the term. (H. Bernhard v. Weimar, Nordamerikan. Reise, V, 134 ff.; 151, 310, ff.) It is very inconsistent in socialists to continue the proprietorship and heirship of the state. To be consistent they should give both these rights only to mankind as a whole. CompareKiraly, Ueber Socialismus und Comm., 1868, 35.487.It would not be entirely fair to take a partisan view of theateliers nationauxof 1848, and claim them as a practical refutation of socialistic utopias, since no serious experiment was made with them. CompareE. Thomas, Histoire des Ateliers nationaux considérés sous le double Point de Vue politique et social, 1848.488.Socialists generally overlook the fact, that the greater number of enjoyments from which the poorer classes are excluded, by the right of property, would not exist at all were it not for that very right. (Spittler, Politik, 356 ff.) This remark may also be made ofHugo'singenious objections. (Naturrecht, § 208 ff.) One of the most effective pieces of socialistic declamation is that the lower classes have a much shorter average of life than the upper. Hence the institution of private property is charged with being a species of spoliation of the poor of so many years of life, and the entire“present society”condemned on that account. Here again it is not borne in mind, that a few centuries ago the general average of life was probably still smaller; and that it was precisely the growth and development of“present society”that lengthened the days of the poorer classes even, although it may have lengthened those of the rich in a still greater proportion. See § 246.489.But a community of goods would not, by a great deal, accomplish as much as is generally supposed. In Prussia, for instance, in 1867, only about three per cent. of the entire number of families in the community had a yearly income of 1,000 thalers; only nine per cent. had 500 thalers or more, and only 6,465 returned an income of more than 4,000 thalers, while only 590 returned one of 16,000 thalers. (Preuss. statist. Ztschr, 1868, 83.Held, Die Einkommensteuer, 197 ff) How little, therefore, could the poor here gain by the spoliation of the rich! Besides, the purely personal consumption of the rich is, after all, not so great; and if all luxury were abandoned, an innumerable number of men would lose their gains. (CompareAd. Smith, Wealth of Nations, I, ch. 11, 2.) It would be to kill the hen that had hitherto laid the golden egg in order to divide its flesh a little more equally.490.Babeufdeclared all arts and sciences to be evils. He would have no one learn anything but Reading, Writing, Arithmetic, and a little of the Geography of France; and have the strictest censorship enforced to keep every one within these limits. Compare the able criticism ofProudhon, Contradictions, ch. 12.491.According toUmpfenbach, Nationalökonomie, 201, where a community of goods obtains, there can be but the alternative, viz.: whether each person or each family shall receive just the same amount. (The former would be more in harmony with principle, but what an over-population would be the consequence!) Precisely so, too, if each person were to come and take his own portion (anarchy!), or if it were parcelled out to each by a board of distributors (despotism!).492.This expression came into vogue, principally, throughL. Blanc, Organization du Travail (1841), the leading ideas in which work are the following: The suppression of competition by the establishment of state industries; equality of remuneration for labor; equality and legislative determination of the rate of interest; the choice of superintendents by the workmen. With many modern socialists, the shibboleth is not so muchlibertéassolidarité. Besides,Fichte'sNaturrecht (1796), and his geschlossener Handelsstaat, are, without doubt, among the most remarkable works favoring an“organization of labor.”They aim at the destruction of the present social system, which, at most, needs only to be reformed and rejuvenated; and to galvanize the dead body into a new and different life (Medea's magic cauldron!). CompareCorvaja, Bancocrazia o il gran Libro sociale, 1840.493.Cabet's Icarian colony in America numbered 298 adults and only 107 children. Yet spite of this condition, so favorable to production, it did but a very sorry business. Its government was very similar to that of a house of correction or a penitentiary. Even in religious matters, spite of all pretended toleration, those members who did not agree with Cabet were described in the official weekly paper asdes infames ou des aveugles. (D. Vierteljahrsschrift, 1855, October, 205 ff.)494.An eastern sage says, that land possesses the ideal of legal security through which a beautiful woman, decked with pearls, might travel without danger. What would such a sage say of a European country, in which even orphan children have their property not only preserved to them, but find it increased from having been placed at interest, as soon as they reach their majority? (Barrow.)495.“The equality of communism is the worst species of inequality, because it guarantees to one for two hours of poor labor as much as it does to an other for four hours of good work.”(Bastiat, Harmonies économiques, ch. 8.)496.Proudhon, Qu'est-ce que la Propriété, 283, says, very justly, that“a community of goods is the spoliation of the strong by the weak.”497.Called a negative community of goods, byZacchariä, Vierzig Bücher vom Staate, IV, 146, in contradistinction to the positive and universal community of gain, as desired by the communists.498.Community of goods and of women among the Ichthyophages on the Red Sea, who lived in caves, went naked for the most part, plundered all shipwrecked people, and never reached an advanced age.Diodor., III, 15 ff.Peripl., Maris Erythr., 12. Concerning the Scythians, seeStrabo, VII, 300; the Spaniards,Plutarch, Marius, 6; the Rhetians,Dio Cass.LIV, 22; the Triballi,Isocr., Panath., § 237; the Kilici,Sext., Empir. Pyrrh. Hypot. III, 24. Community of goods among the Caribs who performed all their work in common, and had, at least in the case of males, a common table and common stores with supplies. (Petr. Martyr, Dec. VII, 1.Rochefort, II, c. 16.B. Edwards, History of the West Indies, I, 43 ff.) Among the Kuskowimers of Russian America, all the able-bodied men of the tribe live together. (v. Wrangell, Nachrichten, 129.) Among the inhabitants of the Aleutian islands, at least in times of scarcity of food, the produce of the fisheries is divided according to their need. (V. Wrangell, 185.) The organization of labor is rigidly enforced among the Otomacs, on the banks of the Orinoco, and they are, nevertheless, more civilized than their neighbors. (Depons, Voyage, I, 295.) A community of goods must, however, be considered an advance, in the case of an isolated people; and it is an error to look upon it as the most primitive condition, as does, for instance,Ambrosius, De off. Minist. I, 28, andFrederick II, in the preface to his general code. (Allgemein. Gesetzbuche, 1231.) The hospitality of the inhabitants of the Friendly Islands borders on a community of goods. (Mariner, Freundschaftsinseln, 75, 81.Klemm, Kulturgeschichte, IV, 398.) Concerning the beginnings of property among the Esquimaux, SeeKlemm, II, 294.499.Οὐκ ἄδοξον ἧν παρὰ τοῖς παλαιοῖς ληστεύειν, ἀλλ᾽ ἔνδξον. (Didym., ad Odyss. II, 73, IX, 252.)500.In Mexico, the Spaniards found land ownership among the most distinguished of the natives, but only a species of possession in common and common store houses among the peasantry. (Robertson, History of America, § VII.) Hence, the agriculture of the country was so unimportant that the little army of theconquistadoresfrequently produced a famine by their marches.501.The Tcherkesses considered robbery honorable provided the robber was not caughtin flagrante. CompareKoch, Reise in den kaukasischen Isthmus, I, 370 ff.Bell, Journal of a Residence in Circassia, I, 181, II, 201. The organized robber bands of ancient Egypt, when it was so highly civilized (Diodor., I, 80) may, on the other hand, be accounted for by similar conditions actually existing in the large cities of our own day.502.What a frightful organization of labor we find in Sparta, combined with a community of goods! Let us recall the exposing of children authorized by law, the mode of education which must have cost the life of all whose constitution was weak, thecryptia, the stern hierarchy of age etc.Plut., Inst. Lac. 2, appreciates the bad taste of the black broth at its true value. The Cretan community of goods was based chiefly on the unnatural relation created by the authorities known as paiderastia; and which was a very efficient means to prevent over-population. (Plat., De Legg, I, 636.Arist., Polit. II, 8.)503.Remarkable reasons therefor inCæsar, Bell. Gall., VI, 22.504.There are, especially in Russia, a multitude of such institutions among the inhabitants of the country still. SeeRoscher, Nationalökonomik des Ackerbaues, § 71 ff.505.In the Corpus Juris Canonici, that crown of medieval theology, politics and jurisprudence, the ideal of a community of goods occupies a place almost as prominent as in the works of modern socialists. The only difference is, that in the former the opposition to private property arises from a one-sided religiousness and contempt of the world, while, in the latter, it arises generally from irreligiousness and over-estimation of worldly goods.506.This does not include the cost of the schools, churches and benevolent institutions.507.According toLassalle, System der erworbenen Rechte, 1861, § 259, history shows that law, as civilization advances, curtails more and more the proprietary sphere of private individuals, inasmuch as it tends more and more to place a greater number of objects outside the circle of individual ownership.508.Saint Simonism is a warning example of this tendency. Saint Simon never lost an opportunity to give vent to his utter contempt for the liberals, and for constitutional government—ce bátard du régime féodal et du régime industriel; and to counsel the crown, after the example of Louis XI. to place itself at the head of the working class, and in opposition to the middle class. (Oeuvres deSaint Simon, éd. 1841, 44, 148, 209.)Bazard, Exposition, 76, demanded that all antagonism between the temporal and spiritual powers, all opposition for the sake of freedom,méfiance organiséeof parliaments, and all competition, should cease. Even education he would have bestowed according tocapacité, which he would have determined by thechefs légitimes de la société(280). To the criminal court should be referred all cases ofdelicts, that is, all inopportune acts, even in the scientific and artistic departments. They should be tried after the manner of the“courts of trade;”that is, in a summary way, without appeal, and by experts (317 ff). All the relations of property should be determined by thedécision arbitrale des chefs d'industrie(326).Bazardeverywhere insists that the reign of genius and of self-sacrifice on the one hand, and on the other of confidence and obedience, is the only true policy (330). Saint Simonism was nearly related to Bonapartism.509.Schäffle, Nat. Œk., III, Aufl., I, 61.510.If we remove in thought, all injurious elements from a community of goods, and add to it all the incentives and restraints necessary to be added, we shall have a state of things entirely similar to that in a nation whose public and private affairs are carried on in accordance with the principles of a healthy system of Political Economy as understood to-day. (Edinburgh Review, January, 1851.)511.How true freedom is accompanied by whatBastiatcalls“true Saint Simonism and true communism,”seeinfra, § 210.512.The experiments of a community of goods, which have proved successful in practice, were all based on the more or less complete celibacy of the members of the societies. CompareHermann, Staatsw. Unters., II, Aufl., 45.513.ThusProudhon(Contradictions, ch. 5) says that the many socialists, who would construct their societies after the type of the family, as themolscule organique, are all wrong. The family has a“monarchical, patriarchal”character. In it, the principle of authority is formed and preserved. On it, ancient and feudal society was based; and“precisely against this old patriarchal constitution, modern democracy protests and revolts.”Fouriercalls marriage,un groupe essentiellement faux: faux par le nombre borné à deux, par l'absence de liberté et par les dissidences du goṅt, qui éclatent dès le premier jour. (Nouveau Monde, 57.)514.On the Indians of North America, seeSchoolraft, Information respecting the Indian Tribes of the United States, II, 194; on the South Americand'Orbigny, Voyage, IV, 220, and passim, on the South Sea Islanders, the Novara-Reise, II, 418; on the ancient Albanians,Strabo, XI, 503.515.The hereditary transmission of property to posterity has an obvious tendency to make a man a good citizen. It ranges his passions on the side of duty, and induces him to make himself profit the common good, and it assures him that his reward shall not die with himself, but that it shall be handed down to those to whom he is joined by the dearest and most tender feelings. (SeeBlackstone'sCommentaries, II, 11.) Without the right of inheritance, credit is scarcely possible, since with the death of the debtor the only stay of the creditor would cease.516.Testamentary freedom (which obtained in places there about the beginning of the eighteenth century) prevails completely in England at present, contrary to the principle of the Roman law requiring an obligatory portion (la légitime) to be left to the heirs, which is still binding in France, but in a very much developed form. The consequence is that last testaments are as frequent in England as they are rare in France. There were, in Paris, in 1825, 7,649 judicial, and only 1,081 testamentary partitions of property. (Monnier.) In Great Britain, in 1838, the number of testamentary alienations of property taxed stood to those in which there was no will, in the proportion of 8:3; and the values of the alienated property as 10:1. (Porter.) Among a people noted for their high moral tone, testamentary freedom is a powerful means of strengthening paternal authority on the one hand, and of keeping alive, in the minds of parents, on the other, a sense of responsibility for the future of their children. CompareHelferich, Tübinger Zeitschr., 1854, 143, ff.517.Polyb., XX, 6. Hence it was, that all (?) the wealth of Thebes, when it was destroyed by Alexander the Great, was only 440 talents. (Athen., IV, 148.)Drumann, Gesch. Roms. etc., VI, 333 ff.Cicero, Phil., II, 16.Hoeck, Röm. Gesch., I, 2, 118.Sueton., Octav., 66. An especially scandalous instance inPetron., 140. For a masterly theory of legacy-hunting, seeHorat., Sat., II, 5. CompareLucian, Dialogues of the Dead, 5-9.Petroniusspeaks of aturba hæredipetarum. (124.)518.Even the revolutionary shibboleth,paternité, really means nothing more than the equal right of inheritance of all, i.e., the abolition of the right of inheritance! (R. Meyer.) The strongest attack, from a scientific point of view, made on the right of inheritance in more recent times, comes from Saint Simonism. The founder himself, after a life rich in experience but poor in action, spent in the search of much but in the finding of little, succeeded only in arraying the industrial and proprietary classes against each other, in declaring the poorest class to be the most important of all, and in basing the newreligion of loveon the emancipation of labor. His disciples went further. In order to abolish all the privileges of birth,Bazard, Exposition de la Doctrine de Saint Simon, 1831, p. 172, ff., taught that it was not enough to distribute public employments according to merit, and in the interest of the people generally, but that the distribution of property should be made in accordance with the same principle. The inequality of ownership should correspond with the inequality of merit. Every one may, during his life, keep what he had acquired himself, but give it to the state at death. Thus would a reconciliation be effected between the general interest and private interest; and the public revenue, supplied in this way, might easily be employed in place of the revenue raised by such taxation as weighs most heavily on the inferior classes.F. Huet, also, Le Regne social du Christianisme, 1853, III, 5, would have all private property, after the death of the owner, fallégalement à tous les jeunes travailleurs. The practical consequences of this system may now be seen in Turkey. There, the principal military fiefs are held in this way. Hence it is, that the Turkish owner of such a fief builds as little as possible. When one of his walls threatens to fall, it is kept standing by means of props. If it falls in fact, the only consequence is that there are fewer rooms in the house, and the owner settles beside the ruins. (Denon, I, p. 193.) In the Butan, there exists a species of practical Saint Simonism.Robinson, Descriptive Account of Assan, 1841.519.It was chiefly fear of the consequences of the declamations of the socialists and their declamation against“monopoly”that inducedBastiatto reduce all the value of landed property to that of the capital employed in its manuring, improvement etc. (Harmonies, ch. 9.) We may, however, unreservedly grant him that, as a rule, until the time of its original possession by man, land had novaleurwhatever (278).520.Kantthinks the very contrary: Metaph. Anfangsgründe der Rechtslehre, (Werke, IX, 72 ff).Contra,Grotius, J. B. et P., II, 2.Graswinkel, in his Schriften für die Freiheit des Meeres, 1652 ff., inLaspeyres, Geschichte der niederländischen N. Œk., 12.Hufeland, Neue Grundlegung, I, 307.521.“A district of Tartary of ten square miles, in which several hordes pasture their flocks, may contain between 400 and 500 shepherds, who find employment in this mode of production.”In Brie, in France, on the same area, 50,000 peasants who own no land, live and draw their sole income from their labors in the fields (J. B. Say).522.Schubert, Reise durch Frankreich und Italien, I, 188.523.“Without labor, the earth bestows nothing on man but a stopping place. Hence, the reasons for private property do not extend so far as to prove that the great land and water highways should not be reserved as common property, and as a home to every man.”(Zachariä, vom Staate, VII, 43.)524.This is the practice in Taway.Ritter, Erdkunde, V, 130. And so in ancient Germany.J. Grimm, Rechtsalterthümer, 92. Right of the“dead fire”in Spain and Portugal during the middle ages.S. Rosa de Viterbo: Elucidario das Palavras etc., I, 470. In many parts of Persia, the land belongs to anyone who has provided it with water by canals or wells. (Fraser, Journey in Chorasan, ch. 7.) Especially after the Mongolian devastation about the beginning of the fourteenth century, it was decreed that land which had remained uncultivated for a long time should belong to the person who made it productive. (d'Ohsson, Hist. des Mongols, IV, 418.) Similarly, in the time of the ancient Persians (Polyb., X, 28, 3), the harvest for the first five years belonged to the person who first irrigated the land. On the upper Euphrates, likewise, the land is very often neither sold nor leased. Anyone who will till it and pay one-tenth of the produce to the bey may have it for nothing. (Ritter, X, 669; compare VIII, 468; IX, 900.) So, too, among the Fulah and Mandingo negroes, and even among the Tscherkessans. (Klemm, Kulturgeschichte, III, 337 ff.) As the latest stages of development so often present instances of a reversion to the earliest, we find that Theodosius and Valentinian decreed that theagri desertishould, after two years' cultivation, belong to the possessor. L. 8, Cod. Just., XI, 58.525.Thus anyone may burn his own coat or throw it in the water; but no one may set fire to his own house or drown his land by the destruction of a dam. Even the non-user of a large area, in a thickly populated region, would scarcely be permitted. The taking of property by the state, at the present day in times of peace, is confined almost exclusively to land.526.ThusP. v. Arnim, in a work entitled“Ideen zu einer vollständigen landwirthschaftlichen,”Buchführung, 1805, a treatise on“agricultural book-keeping,”considers the farmer as a state official who should cultivate whatever he believed in conscience, or what the state declared to be, most necessary. He suggests that the state should subject all new purchasers of land to an examination to ascertain whether they are rich and noble enough to act in this way.527.Thus, for instance,Herbert Spencer, Social Statics, 1851, 114 ff., and to some extentSpinoza, Tract. polit., VI, 2. There are now in England several Land-Tenure-Reform-Associations, some of which would“expropriate”all land and vest the title in the state. The programme of the others embraces not only opposition to the right of primogeniture, to familyfidei commissaand the assertion of the right of freedom of trade in land, and of a more democratic use of common lands, but also the appropriation by the state of the increase in the rent of land which is caused by no labor of the landlord, but solely by the increase of population and of the wealth of the community or of the nation.Newmarch, on the other hand, very correctly remarks, that since it is impossible to draw a line of demarkation showing the increase of the value of land growing out of the increase of population etc., the owner of land in making improvements would never know whether he made them for himself or for the state. (Statist. Journal, 1871, 488 ff.) CompareWolkoff, Sur la Rente foncière, 1854, andH. H. Gossen, Entwickelung der Gesetze des menschlichen Verkehrs (1854).528.In Congo and on the gold coast of Guinea the land, in whole villages, is tilled in common and the harvest distributed among the families per capita. Wherever absolutism reigns, the prince is also the owner of all the land. (Klemm, III, 337.) In China, where the original tenure in common of the land by all was broken through in the third century before Christ, all the land of the country now belongs, strictly speaking, to the state; and the possessor of land who permits it to go untilled is punished. (Plath.in the phil.-hist. Sitzungsberichten der Münchener Akad., 1873, 793 ff.) In Corea, private property in land is unknown; arable land is divided by the state according to the number in a family. (Ritter, IV, 633.) The example, on the largest scale, of a country without private property in land is the British East Indies. Compare the paper byCh. Campbell, in the Essays published by the Cobden Club; System of Land Tenure in various Countries, 1870.529.The legal and economic difference between property in land and property in capital is well defined byJ. S. Mill, Principles, II, ch. 2, 6.“The reasons which form the justification, in an economical point of view, of property in land, are only valid in so far as the proprietor of the land is its improver. In no sound theory of private property was it ever contemplated that the proprietor of land should be merely a sinecurist quartered on it.”He here alludes specially to Ireland. The Fourierist,Considérant, distinguishes accurately between the capital produced by labor and saving, and the increase of the value of land caused by capital and labor, and its original value. Only the first two elements can justly be made property. But as, for prudential reasons, it is necessary to grant individuals the right of private property in land, those who are not such proprietors must, as a compensation for the common property which they have lost, be guaranteed the right to labor. (Théorie du Droit de Propriété et du Droit au Travail.) In England, the opinion that the compulsory support of the poor was introduced in compensation to them for the establishment of private property in land has met with considerable favor.Bishop Woodward, On the Expediency of a Regular Plan for the Maintenance of the Poor in Ireland, 1775. CompareEden, State of the Poor, I, 413. However, the poor rates, in a country like England, are much more than an equivalent of what its soil could produce without the assistance of capital.530.The principal classical work on this subject isNebenius, Der öffentliche Credit, 1820, 2d ed., 1829. Previously,Salmasius, De Modo Usurarum, 1639; and evenDemosthenes, adv. Dionysiod, 1283. Compare furtherSchäffle, in the Deutsch. Vierteljahrsschrift, No. 106, II, 289 ff.531.Compulsory loans by the state, for instance, occupy an intermediate position between taxes and credit-operations, properly so called.532.Besides loans proper, all payments in advance, or delays made in the payments of earnest-money, all leases and lettings, whichCourcelle-Seneuilcallsun médiocre degré de crédit, insurances and even all contracts for wages where the payment is delayed for a long period of time, are species of credit. For a nice distinction between leasing (Pacht) and letting (Miethe), seeKnies, Tübinger Ztschr., 1860, 180 ff., and the Freiburger Univ. Programm., 9. September, 1862.D. Wakefield, Essay upon Political Economy, 1804, 35, distinguishes between“loan-credit”which is given to a poor man in the hope of his paying it by means of his labor, and“exchange-credit,”or credit between property owners.Cieszkowski'sdefinition:le crédit c'est la métamorphose des capitaux stables et engagés en capitaux circulants et dégagés. (Du Crédit et de la Circulation, 2d ed., 1847.) According toKnies, Tübinger Ztschr., 1859, 568, every credit-operation is an exchange or sale of services, one of which is to be performed in the present, and the counter-service of the other party in the future. According toMacleod, it is“a sale of debts.”533.Personal credit, of course, preponderates in commerce. Hence it is, that in mercantile life, information concerning the personal status, reputation etc. of his colleagues, plays so important a part with the merchant. This information was made more accessible in England by the Lloyd institution. On similar North American institutions, seeTellkampf, Beiträge, I, 51. Credit given on security is a modification, sometimes of personal and sometimes of real credit. Compare,infra, the theory on bankers, brokers etc.534.In despotisms, credit is almost entirely personal.MontesquieuEsprit des Lois, L.V., 15. In New York, saysM. Chevalier, a merchant with resources worth 200,000 francs, can do a business of from 1,000,000 to 1,500,000 francs. In Paris, under similar circumstances, the same man would find it difficult to be credited to the extent of 500,000 francs. In Holland, two hundred years ago, a person who hypothecated his property was obliged to pay a higher rate of interest than in business (Becher, Polit. Discurs, 1763, 699), while the stationary period, one hundred years ago, made personal credit extremely difficult. In Zurich, it was encouraged by the prohibition of loaning money out of the country. (Büsch, Geldumlauf, III, 40.)535.Schäffle, Nat. Œk., II, Aufl., 112.536.Schäffle, according to the purpose which it is intended to subserve, divides credit into production-credit (investment of loans in immoveable property and in moveable property engaged in industrial operations), consumption-credit and clearing-credit, or loans made to pay respited purchase and earnest money, inheritances etc. (Kapitalismus und Socialismus, 552.)537.Pinto, Traité de la Circulation et du Crédit, 1771, considers loans bearing interest as new portions of the resources of a country (p. 161), and that government loans not made in excess of its powers areune alchymie réalisée dont souvent eux mêmes qui l' opèrent n' entendent pas tout le mystère, (p. 338.) Similarly and earlier,v. Schröder, F. Schatz-und Rentkammer, 238 ff;Mélon, Essai politique sur le Commerce, 1734, ch. 6; next,Hamilton, Report to the House of Representatives on the subject of Manufactures, Dec. 5, 1791;Von Struensee, Abhandlungen, 1800, I, 259. See infra, § 210. More recently,St. Chamans, Nouvel Essai sur la Richesses des Nations, 1824, 83 ff. To some extent, evenDietzel, System der Staatsanleihen, 1855, 200. This is a dangerous error, since to every credit there is a set-off in the nature of a debit of an equal amount; and the evidences of debt are nothing but claims on the future revenue of the state. This was fully recognized byCantillon, 291 ff. One of the principal advocates of that view among writers on Political Economy is the vivacious, acute and practically not unskillful, but sophistically superficialMacleod. (Elements of Political Economy, 1858, ch. 3, Dictionary, 1862, v. Credit.) The creditor's assignable right of demand, he considers immaterial capital. While bills of lading, warehouse receipts, dock yard receipts etc., only represent goods, the bank note is new goods. Even metallic money has only a credit-value, inasmuch as it can be used only to effect exchanges. To the - of the creditor may correspond a + of the debtor; but the latter is negative only in the sense that we speak of negative electricity, a negative thermometrical degree. When an estate is leased, the owner has, in his demand for rent, a vendibleplus; but the lessee no correspondingminus. (Not so. To the same extent that the proprietor has his future payments on the lease discounted, the present sale-value of his estate is diminished; or if it is not sold, the last party obtaining the discount has made his available capital as much less by the advance as that of the lessor has been increased.) The“discounting of the future,”that is, the apparent capitalization of hopes, so much in vogue at the present time, may be a great spur to production as it may also be to baseless extravagance.538.Many theoreticians ascribe a direct creation of new capital to credit, in so far as the capacity of the evidences of debt to circulate as a medium of exchange effects a real saving, and permits the former very costly and intrinsically valuable instruments of exchange to be used in some other way. (§123.) CompareRicardo, Proposals for a secure and economical Currency (1817).J. S. Mill, Principles, II, 174 and 36.McCulloch, Commercial Dictionary, art. Credit. And so it was in the first four editions of this book of mine. But here, too, there is, immediately, only a transfer of already existing capital. The person, for instance, who accepts a bank note for payment, loans a part of his capital to the bank; and the advantage to the whole community of such credit-operations consists chiefly in this: that so large a quantity of cash-capital which lay idle in banks etc., may be used more productively.539.WhenRoeslersays that credit is capital, the product of saving, and very serviceable in further production (Grands., 300), he confounds credit itself with the foundations of credit, which are, indeed, in large part material or moral capital.540.Compare Discourse on Trade, Coyn and Paper-Credit, London, 1697, 72 ff.541.CompareBuron, Guerre au Crédit, 1868.Schäffle, Tüb. Ztsch., 1869, 296 ff. With a thorough understanding of its politico-economical bearing,O. Michaelis, (Berliner V. Jahrsschr. 1863, IV, 121,) says: The capital-value of my credit is not equal to the nominal value of my evidences of indebtedness [notes etc.], but to the capitalized amount of the extra surplus which I have obtained in my business by means of credit, after deduction is made of the costs and of the risk-premium.542.We shall, in the books to follow this, inquire with great care, what are the means best calculated to remedy this dangerous tendency. We need only remark here, that it is to be found in a judicious association of small capitalists, and also in the capitalization, so to speak, of personal qualities. A well organized society of work-men, without capital, may indeed obtain credit, as for instance, the Schultze-Delitsch societies, the Russianartel-schnicks(market-aid societies) etc. prove. (Frühauf, Die russ. Artels inFaucher'sVierteljahrsschrift, 1868, I, 106 ff.) We may also mention the greater credit accorded to a land-owner the moment he becomes a member of a land-loan association as compared with what he could obtain before he had joined it. The popular belief of the ancient Egyptians afforded them a very great instrument of credit in the pledging of the remains of their ancestors. (Herodot., II, 136.)543.B. Hildebrandis of opinion that the Political Economy of the future may be characterized as credit-economy, in the same way as the Economy of the present may be called money-economy, and that of the past as barter-economy of barter. (National Œkonomie der Gegenwart und Zukunft, I, 276 ff.)Hildebrand'sview is correct in so far as that, with every advance in civilization, credit comes to have absolutely and relatively an ever increasing importance, although in the middle ages, especially under feudal forms (Lehensformen), there were numberless operations in credit. Otherwise, however,Hildebrand'sthree kinds of economy are, by no means, coördinated. While barter and purchase through the instrumentality of money, in every instance, entirely exclude each other, it is impossible to imagine a credit-transaction of which the promise of a barter-performance or of a money-performance does not constitute the base. During a“money-economical (geldwirthschaftlichen) period”[i.e., one during which money is the medium of exchange, and not notes; and when barter does not obtain.—Translator.] the service rendered by money as a medium of exchange may, for the most part, be supplanted by credit. Money, as a measure of value, still remains the substratum of credit itself. (SeeKniesin the Tübinger Ztschr., 1860, 154 ff.; and in the Freiburger Programm, 9 Sept., 1862, 19.) Earlier yet,A. Wagner, Beitr. zur Lehre von den Banken, 1857 ff. Among the most practical propositions of Saint Simonism is that of asystème genéral des banques, intended to administer all the goods of the nation, and to loan them to individuals engaged, in production. (Bazard, 205 ff.)544.It is destructive of credit to allow the debtor to await several decrees or judgments before his liability is established; to allow him, on easy terms, delays, reversals of judgment, the costs of the case etc. The term within which a creditor might bring in his claim before the meeting of creditors in the Amsterdam Boedel-chamber was formerly thirty-three and a third years. (Büsch, Darst. der Handlung, Zusatz, 82.) In the presidency of Bengal there were, in 1819, 81,000 cases in arrears, and in 1829, 140,000. Westminister Review, XIX, 142.545.And yetMelonis of opinion that the state should favor the debtor as much as possible. (Essai politique sur le Commerce, ch. 12, 18.) This was the view entertained on this subject by the older practitioners. In Bengal, thedhura, a species of“judgment of God,”in which the party who could hold out longest against hunger was declared the victor, was the only means to compel a debtor to pay his debt. As a consequence, the Bengal peasant could not borrow money at less than 60 per cent. per annum. Edinburgh Review, XXII, 67. On the damages attending the credit-laws and credit-courts of Russia, by which all foreign goods are rendered exceedingly dear, seev. Sternberg, Bemerkungen über R., 100 ff. In a country in which a great many powerful personages are above the laws, an incorporated loaning bank may be an indispensable necessity. (Storch, Handbuch, II, p. 23 ff.) In Naples, even as recently as 1804, no debtor could be arrested during the last six months of the queen's pregnancy. At a previous period, one might fail in business there and escape all punishment by exposing the hindermost part of himself in a nude state publicly before a column of theVicaria. (Rehfues, Gemälde von Neapel, I, p. 203 seq., 222.) In Schwytz, the rate of interest is so high, because the law allows the debtor to pay his creditor, whether the latter will or not, in articles of household furniture, clothes etc., estimated at a very high value. (Hermann, Staatsw. Untersuchungen, 202.) It has now become quite usual in the United States, on account of the many delays granted to the debtor by“democratic”laws introduced there, instead of mere mortgage, to give full warranty deeds when capital is loaned. By this means, the creditor is in danger, when misfortune overtakes him, to see himself compelled to let his property go at one-fourth of its value.546.See the Heliast oath inDemosth., adv. Timocr., 746. The Roman system of credits in the time of Polybius was much better than the Carthaginian.Polyb., VI, 56, XXXII, 13.547.Sachsenspiegel, III, 39.J. Grimm, Deutsche Rechtsalterthümer, 612 ff.Dahlmann, Dänische Gesch., II, 245, 339.Hermann, Russ. Gesch., III, 357. On slavery for debt among the Malays, see Ausland, 1845, No. 157.548.Beaujour, Tableau du Commere en Grèce, II, 176.549.C. 2 X. De Pignor. An appropriate provision in a priestly government.Diodor., I, 79.550.Staying in a place by the debtor until the creditor is satisfied, and other degrading stipulations, which, however, were prohibited by the police regulations of the Empire in 1548, art. 17.551.Marten'sUrsprung des Wechselrechts, 1797. Statuta Mediol., 1480, fol. 238 ff. The municipal law of Florence unconditionally imprisoned the father or grandfather for the debt of the son, when the latter engaged in industrial pursuits with their consent. (Stat. Flor., I, 201.) In Bologna, the brothers of a bankrupt who had constituted one household with him were held responsible for his debts. (Statuti dell' Università de Mercantati della Città di B., 1550, fol. 110.) The law of Geneva excluded from all positions of honor the son who had left his father's debts unpaid.Montesquieu, E. des Lois, XX, 16. The consequence was, that among the higher classes not a creditor lost anything for centuries. (K. L. v. Haller, Restauration der Staatswissenschaften, VI, 519.) Compare the“Nurenberger Reformation”of 1479, fol. 61 and 68 of the edition of 1564.552.Compare the R. P. O. of 1548, art. 22. And so, by the Code de Commerce, III, 4, I, even the simple bankrupt in contradistinction to the fraudulent bankrupt is punished, and every person unable to pay his debts is declared asimplebankrupt, who, among other things, has made excessive household expenses, or lost considerable sums by play etc. CompareSully, Mémoires, Livre XXVI, who declares it to be his most wholesome law, that fraudulent bankrupts should, like thieves, be punished with death, and that all their fraudulent assignments, gifts, etc., should be declared void. Further, Ordonn. de Louis XIV., sur les Failletes, art. 11;J. de Wit, Mémoires, 77 ff;v. den Heuvel, Sur le Commerce de la Hollande, 110 ff. Frederick William I., in 1715, threatened with the galleys all light-headed bankrupts, and, in 1723, all those who, knowing their insolvent condition, should effect further loans.Mylius, Corp. Const. March. II, 2, 31, 40. For China, seeDavis, The Chinese, I, 247 ff.Gr. Soden, Nat. Oek., III, 231, demands that, in case of doubt, the guilt of the bankrupt should always be presumed.553.In England only one-tenth of the number of bankrupts are considered innocent.Elliot, Credit the Life of Commerce, 1845, 50 ff.554.Thecontrainte par corpsof debtors was abolished in France in 1792, but restored in 1797. EvenTurgotremarked that since slavery had ceased there was no further fear (?) that the poor would be oppressed by imprisonment for debt. (Sur le Prêt d' argent, § 31.) According toDroz, the question is not one of weighing“freedom”against“miserable money,”but the deprivation of a few of that freedom and the non-fulfillment of obligations entered into, that is against the destruction of public confidence.555.A similar development among the Greeks:A. Rigorous slavery for debt, which Kypselos moderated at Corinth. (Pausan., V. 17, 2), and Solon abolished in Athens. (Plutarch, Sol., 15.Demosth., de fals. Legat., 412.)B. The reckless creation of debts as seen in Aristophanes; while outside of Athens slavery for debt lasted yet a long time. (Hermann, Griech. Privatalterth., § 57, 20.) In the time of Demosthenes, the merchant in arrears in the payment of his debts was cast into prison, and the bottomry-debtor who deprived his creditor of his security might be punished with death, (Demosth.adv. Pharm., 922, 958), and this although thecessio honorumwas introduced.Hermann, § 70, 3. CompareXenoph., Vectigg., 3,Demosth.adv. Apat., 892; adv. Lacrit., and adv. Dionys. In Corinth, the state superintended expenses made by parties. This was part of its credit-policy. (Athænæus, VI, 227.) For a remarkable Rhodian law relating to debts, seeSext.Emp., Hypot. I, 149.In Rome:A. The chief characteristic of the ancient law in this matter was the eventual sale of the person of the debtor on the getting of the loan (nexum); the power of the creditor to put theaddictusto death or to sell him in foreign parts; finally, thein partes secanto, in the concourse of creditors. Without these rigorous provisions, the borrower might easily have evaded his debts, by the emancipation of his son and turning over his property to him. (Niebuhr, Rom. Gesch., II, 770 ff;Savignyin the Abb. der Berliner Acad., 1833.Zimmern, Gesch. des röm. Privatrechts, III, 131 ff.)B. Later, we find nothing of the execution of the debtor, or of the sale of his person; but he might be compelled to do slave labor for his creditor without any protection against ill-treatment. Slavery for debt was restricted by the Lex Poetelia. (Niebuhr, III, p. 178;Mommsen, III, 494.) The Prætorian law introduced the custom of putting the creditor in possession of the goods of the debtor, with power of sale, which proceeding rendered the debtor infamous. See several passages inWalter., Röm Rechtsgesch, 763 ff;Tertull., Apol., 4; Tab. Herac. I, 115 ff. Later, Cæsar's Lex Julia permitted the honest debtor to escape imprisonment by the assignment of his goods.C. The moneyed oligarchy which prevailed in Rome caused the adoption of exceedingly severe measures against delinquent debtors. (Plut., Lucull., 20.Cic., ad. Att. V. 21, VI.), although its members themselves incurred debts in the most reckless manner. Cæsar, in the year A.C. 62, excluding his active (activen), owed debts to the amount of 25,000,000 sesterces; M. Antonius, in the year 24, 6,000,000; in the year 38, 40,000,000; Curio, 60,000,000; Milon, 70,000,000. (Mommsen, Römische Geschichte, III, 486.) CompareGellius, XX, 1, XV, 14.556.Whenever a new shop-keeper, who sells goods on monthly credits, settles in a district, the number of poor persons invariably increases. (McCulloch, Commercial Dictionary.) The ruinous credit given by the Jews to the Westphalian peasants begins with an account for the goods which they have succeeded in pressing upon them, after five or six years have elapsed. The Jew seldom sues accounts at law; but he besieges the debtor and discovers where his last head of cattle and his last little supply of provisions are to be found. As he is willing to accept everything that has any value, sometimes in payment of arrears, and sometimes in payment for some new piece of trash, he is sure to obtain his dues in the end, but not until his victim, who is sunk deeper and deeper in the abyss of debt by every“accommodation,”is entirely ruined. (Schmerz, Rheinish-Westphäl. L.W., 396 ff.)557.In the lower and middle stages of civilization, we find a multitude of laws by which minors, students etc., but especially land-owners are limited to a minimum of credit, which, however, varies very much with the person, and is subjected to a number of embarrassing forms, the consent of a third person, for instance etc. (Compare Bayerische L.O. von 1553, fol. 83.) Such laws, however, give as much room to the play of dishonesty as they take away from that of want of reflection.558.On the municipal regulations (Städteordnungen) of the 14th and 15th centuries, which compelled Jewish creditors especially to have their evidences of indebtedness redeemed within from every two to five years, seeStobbe, Juden im Mittelalter, 129. Compare further the Würtemberg L. O. of 1515, Statut. Ferrar, ed. 1650, lib. II, rub. 37, 289. According to the other provisions of the laws in North America, some book accounts were required to be sued on within six and others within seventeen years. (Ebeling, Gerchichte und Erdberschreibung der v. Staaten, II, 247, 298.) The Prussian law of March 31, 1838, provides a period of limitation of three years for all ordinary commercial debts. A similar law was passed in the Kingdom of Saxony, in 1846. In London, there has been found a great number of hatters, tailors, boot and shoe dealers etc., whose books showed credits of more than £4,000, most of them not to exceed over £10. How much of all this must be lost entirely, and how that loss must increase the sums paid for boots, shoes and hats by the prompt payer! (McCulloch, v. Credit.) We find, even in Athens, that the period of limitation was shortened in the interest of credit, and that in the case of minors, it did not exceed five years. (Demosth.adv. Nausim., 989.) Security for a debtor not over one year. (Demosth., adv. Apatur., 901.) The prohibition of Zaleukos to issue any evidences of debt whatever goes much farther. (Zenob., Proverb. V, 4.)559.Compare the report of the Dresden Handelskammer, 1864, 11.560.A. Mayer, inFaucher'sVierteljahrsschrift, 1865, IV, 65.561.We learn from the debates in the English parliament of February 9, 1827, that, in two years and a half, there were, in London and its environs, 70,000 cases of imprisonment for debt, the costs of which were from £150,000 to £200,000. In 1831, there were in one debtors' prison 1,120 prisoners, who owed on an average £2 3s. 2d. (McCulloch, l. c.) There was, in 1792, a case of a woman who, for a debt of £19, remained in prison 45 years, and others like it. (SeeArchenholtz, Annalen, IX, 87 ff; X, 169 ff, XIII, 125.) In England in 1844, arrest for sums less than £19 was prohibited.Johnsonhad already proposed a similar provision. (Idler, 1758, Nos. 22 and 38.) Imprisonment for debt was abolished in France, England and Austria in 1867; in the North German Confederation, on the 29th of May, 1868, but arrest for security's sake was retained.Sismondifinds fault with nearly all laws in the premises, because they attack the person of the debtor rather than his personal property, and his personal, rather than his immovable, property. He would have all this just the contrary of what it is. The first interferes with the very source of wealth, the productive power of labor; the second causes goods to be sold much below their value. Neither of these evils attends the last. (N. Principes, I, 250.)562.A law of the North German Confederation allows the pledging of future wages, only in the case of public officers, and those holding permanent places in the service of private parties, whose salaries are over 400 thalers per annum. The original draft had excepted only the things necessary to workmen and those directly depending on them; while the law as passed makes the prohibition general. This was undoubtedly done for the convenience of employers as well as of courts; as for instance in the circuit of Dortmund, there were, in one year, 10,000 cases in which wages were garnisheed. (Annalen des N.D. Bundes und Zollvereins, 1869, 1071 ff.) But the recklessness of those workmen whose wages are below the average, might have been just as well guarded against without dragging those whose wages are above the average down to their level, if a distinction had been made between production-credit and consumption-credit, and the latter had been limited by providing that no suit should be instituted for supplies made to public houses, taverns etc.563.In the second book ofMoses, 22, 25 ff., and the fifth, 24, 6. A very old Norman law provides that in actions for debt, execution should not issue against effects of the debtor which are indispensably necessary to him to maintain his position, such as the horses of a count or the armor of a knight. (Dialog. de Scaccario.) Magna Charta extended this provision so as to include the agricultural implements and cattle of the peasantry. The moment these laws, in consequence of a false principle of humanity, except anything but what is absolutely necessary, they injure credit. Thus, for instance, in Brazil, a law of 1758, providing that nothing immediately employed in or directly necessary to the production of sugar should be seized on execution, caused great injury to the production of sugar. (Koster, Travels in B., 1816, 356 ff.)564.§ 2, Cod. De Prec. Imper. Off., I, 19. The diets of the Empire had granted such letters in the fourteenth century. (Wachsmuth, Europ. Sittengesch., IV, 690.) They were granted, as a rule, only with the previous knowledge of the Emperor, by the police ordinances of the Empire of 1548, art. 22.565.So in Austria, Saxony, Brunswick, the electorates of Hesse and Baden. In Prussia, they could be granted only after a juridical decree to that effect; and an appeal to a superior court was allowed to reverse or affirm it. CompareMittermaierin the Archiv. für civilist. Praxis, XVI, and alsoP. de la Court, Aanwysing der politike Gronden en Maximen van Holland etc., 1669, I, ch. 25. Nürnberg obtained as a privilege, in 1495, that nomoratoriumshould be valid as against its citizens. (Roth, Geschichte des Nürnb. Handels, I, 86.)566.Compare the discussions in the French National Assembly, in the month of August, 1848. It is much less disadvantageous in times of great commotion, when all business is brought to a stand still, to extend the time in which bills of exchange etc. are payable. Such a measure prevents a number of bankruptcies which the real balance of debts due to one and owing by him does not render necessary.567.In the persecution of the Jews in the middle ages, the so-calledBrief-todten(letter-killing), or the destruction of titles, was very common. In 1188, the French government released all crusaders from the payment of interest on their debts, and granted them an extension of three years' time to pay off the principal. (Sismondi, Hist. des Français, VI, 82.) Similar compulsory measures were provided against the Jews and usurers in 1223 (Ibid, VI, 539 ff.); and in 1299 (Ordonnances, I, 1331), on the formal request of the nobility. (Ordonnances, II, 59.) Again, in 1594, there was a release of one-third of the interest on all national and private debts. (Sismondi, XXI, 318.) The generalmoratoriumof the Milanese for a term of eight years, introduced in 1251, after their war with France, was of an essentially different character. (Sismondi, Geschichte der italienischen Republiken, III, 155.) The same is true of the generalindultgranted by Philip II. in Belgium. (Boxhorn, Disquisitt. politicæ, 241 ff.)568.The abolition or release of debts, so frequent in ancient revolutionary times, reminds us, in many ways, of the crises precipitated in modern times by paper money and produced by the state. The ancestors of Alcibiades and Hipponikos laid the foundation of an immense fortune, in Solon's time, by purchasing land in large quantities with money borrowed from several citizens, a short time before the abolition of debts. (Plutarch, Sol., 15.)569.Enormous consumption of wax in the churches of the middle ages. In the cathedral of Wittenberg alone, a short time before the Reformation, more than 35,000 pounds of wax candles etc. were burned yearly. At the same time, honey was generally used instead of sugar. How much more important, therefore, at that time must bee-culture have been, considered from the point of view of circulation as compared with what it is to-day. And so in Catholic countries, a difference in the external manifestation of religion causes the relative importance of the consumption of fish to increase and decrease. In 1803 there was little demand in France for ivory crucifixes, rosaries etc. In 1844, the demand for them and forprie-Dieufor the bed-room etc. was increased. (Mohl, Gewerbwissenschafliche Reise, 101.) To engage successfully in the sale of sugar in Persia, it is necessary to know that in that country it is liked only in little hat-shaped lumps, which are used only as semi-voluntary gifts; and that, in such case, custom fixes the number of lumps. (Steinhaus, Russlands commercielle etc. Verhh., 151.) In the Levant, workmen prefer bars of iron which are small and of varied form because they find it difficult to manipulate the large ones. The English bear this in mind much better than the Russians. (Steinhaus.) A merchant sending wood to Southern France must be acquainted with the form of the staves used in the manufacture of barrels there. CompareBüsch, Geldumlauf, VI, 2, 2.570.The circulation of goods compared to the circulation of the blood: byMirabeau, Philosophie Rurale, ch. 3.Turgot, Sur la Formation etc. § 69.Canard., Principes, ch. 6.571.Eiselen, Volkswirthschaftslehre, 98 ff. If in ancient times commerce played a much less important part than it does among the moderns, it was, asMontesquieusays, because the whole commercial world was then more uniform in climate and the character of its products than it is now. (Esprit des Lois, XXI, 4.)572.Of the successive steps, sheaves, corn, flour, bread,—flour has the greatest capacity for circulation. And, indeed, the last operation of labor on a great many goods, because of their consequent more narrowly specialized utility, is accompanied by a decrease in their capacity for circulation. As an illustration, we may mention ready-made clothing as compared with cloth. The capacity for circulation of a commodity is very much advanced when the demand is wont to increase with the supply, as is the case with gold and silver, but not with learned books, optical instruments etc. Many commodities have but little circulating capacity, because no one desires to purchase them but at first hand. SeeMenger, Grundsätze, I, 245 ff.573.Knies., Die Eisenbahnen und ihre Wirkungen, 1853, 79.574.CompareSchmitthenner, I, who calls attention and with reason to the importance of loans on chattel mortgages. ButBerkeley, Querist, No. 265, remarks that a squire with a yearly income of £1000 can,“upon an emergency,”do less good or evil than a merchant with £20,000 ready money.575.A very important difference between Russia and England.576.Storch, Handbuch, I, 273 ff. There is also a useless circulation which is not calculated to promote the division of labor, but to employ idle time or idle capital, as in the case of games of hazard, speculation in stocks, wheat etc. Even impoverishing consumption may produce rapidity of circulation, as in Germany during the war years 1812 and 1813. (F. G. Schulze, N. Œkonomie, 1856, 667.) Relying on this fact,Hume(1752) on Public Credit, Discourses, No. 8, argues in favor of the old opinion, that all circulation is wholesome and to be encouraged.Boisguillebert, Traité des Grains, I, 6, went so far as to laud war because it accelerated the circulation of wealth. On the necessity of acirculation sans repos, see ibid., II, 10. In a similar wayLaw, Trade and Money, 1705, andDutos, Réflexions Politiques sur le Commerce, over-valued the circulation of wealth as such. Concerning the Mercantile System, see § 116.Darjes, Erste Gründe der Cameralwissenschaft, 1768, 531. And evenBüsch, Geldumlauf, I, 29, 32 ff., III, 96, who in other places nearly always overlooks real production and sees only the circulation of money caused thereby. Thus he calls the poor when they are helped in money, and spend it, useful members of society! (IV, 32, 39. Similarly,v. Struensee, Abhandlungen, 1800, I, 282 ff., 400 ff.)577.As, for instance, happened in France in 1577, when all commerce, and in 1585 all industry, were declared to bede droit domanial. Louis XIV. was of opinion that the king was absolute master of all private property of priests and people. (Mémoires histor. de Louis XIV., II, 121.) CompareDuclos, Mémoires, I, 14 ff.578.Compare Theod. Cod., V, 9, 1; Just. Cod., X, 19, 8; XI, 47, 21, 23; XI, 50, 51, 52, 55, 58. How full the really classic period of the Roman jurists was of the idea of freedom of competition, we see inPaullus: L. 22, § 3, Dig. XIX, 2. The provisions concerninglœsio enormisappear first in the time of Diocletian. (Just. Cod., IV, 44, 2.)579.Benjamin Franklinsays that the freer the form of government is, the more the people show themselves in their true aspect. Ancient Rome, with the early development of its rational disposition, soon learned to favor freedom of commercial intercourse. CompareMommsen, Römische Geschichte, I, passim. This was, certainly, an element of its greatness, but also of the proletarian evils developed in it an early date, and which were weighed down only by the absolute growth of the state and the development of its economic interests during centuries.580.Nor must it be forgotten that competition raises prices as well as lowers them. The expressions higher price and lower price denote only different sides of the same relation.M. Chevalieris of opinion that our present breathless competition is characteristic only of a period of transition prolific in new inventions, a competition soon to be followed by peace. (Cours, II, 450 ff.)581.Ἀγαθὴ ἔρις: Hesiod., Opp., 10 ff.582.“Whoever speaks of competition suppresses the existence of a common aim,”saysProudhon, although he adds, afterBileam'sway, that to cure the evils of competition by competition, is as absurd as to lead men to liberty by liberty, or to cultivate the mind by cultivation of the mind.583.CompareBastiat, Harmonies économiques, ch. 10.584.If all classes were protected against competition, no class would derive any advantage from it, since a“universal privilege”is an absurdity. If only certain classes or individuals are protected, it is done at the cost of all others.585.The question should not be formulated thus:“Caprice or rule?”but“Rule of morals, or rule of law?”Schmolleragainstv. TreitschkeinHildebrand'sJahrbb.586.Concerning the arguments by which the commercial restrictions of the middle ages were defended, see below. They were, for the most part, well founded for the age in which they were advanced. A judicious education will often be compelled to provide limitations, but always with the intention, by this means, of making possible a really greater independence. Thus the current of commerce may be too weak in a poor and thinly settled country in order that supply and demand should always and everywhere meet and be satisfied. Under such circumstances, their artificial concentration at certain points is among the most efficient means of promoting the economy of the whole people. The policy of freedom of commerce was recommended even in the seventeenth century byJ. Child, byNorthandDavenant. W. Roscher, Zur Geschichte der englisch. Volkswirthschaftslehre, 65 ff., 85 ff., 113 ff., 142 ff. And earlier yet, in Holland, bySalmasius, De Usurus, 1638, 583 andde la Court. Compare Tübinger Ztschr., 330 ff. ThusBoisguillebertsays:Il n'y avait qu'à laisser faire la nature et la libertê, qui est le commissionaire de cette même nature. (Factum de la France, 1707, ch. 5.) See, also, Dissertation sur la Nature des Richesses, ch. VI; Détail de la France, 1697, II, ch. 13; Tr. des Grains, II, 8. For the most part dictated by a reaction against Colbertism.See further,Mélon, Essai Politique sur le Commerce, 1734, ch. 2.M. Decker, Essay on the Causes of the Decline of Foreign Trade, 1744, 31 ff, 106 ff.J. Tucker, Essay on the advantages and disadvantages which respectively attend France and Great Britain with regard to Trade, 1750.Forbonnais, Elémens du Commerce, 1754, I, 63.Genovesi, c. I, 17, 3, is of opinion that at least in case of doubt, commerce stood more in need of freedom than of protection.Verri, in his Meditazioni, goes still farther. The Physiocrates, with theirlaissez allerandlaissez fairerecommend competition as the best means to increase the net income of a people. According toDupont, 147 ff, éd. Daire, the province of legislation is confined to declaring the laws of nature. His motto is:liberté and propriété.Adam Smithasks that the state should do only three things: insure protection against foreign states, the administration of justice at home, the establishment and maintenance of certain institutions of advantage to the whole community, but which private interest could not establish for want of means to cover the expenses attending them. (Wealth of Nations, V, ch. I, 2.) Hence he demands (III, ch. 2) the abolition of all kinds offidei commissa, of royalty in mines (I, ch. 11, 2), of all corporate and exclusive privileges, of all protective duties etc. (IV, ch. I ff), but especially of the colonial policy hitherto in vogue. (IV, ch. 8.)The attacks of the Socialists on freedom of competition were begun byFichte, Geschlossener Handelsstaat, 126, in which it is called a robber-system or system of spoliation. He would have the state have more solicitude for human industry than if men were so many swallows. See further,Sismondi, N. Principes, passim, who everywhere demands the protection of the government for the weaker.Fourier, N. Monde industriel, 396, who thinks thatle monopole généralis always apreservatif contre le commerce.Bastiat, Harmonies économiques, ch. 10, has a very valuable refutation of these follies. Recently,Rodbertus, Hildebrand's Jahrbücher, 1865, II, 272, is of opinion that“social individualism”has ever had in history the task of dissolving decaying societies, as, for instance, under the Cæsars.587.Whoever would sell to others must purchase of them. (Child., Discourse of Trade, 358.) SimilarlyTemple, Works III, 19, andBecher, Polit. Discurs, 1547. This view seems to have become the national one first in Holland. Compare alsoQuesnay, 71 andMirabeau, Philosophie rurale, 1763, ch. 2.588.We often hear it said:“nothing sells because there is no money.”But the real cause here is, in most instances, not a want of money, but a want of other goods which might serve as a counter-value. In bad times, for instance, there is many a weaver who would consider himself fortunate, even if he could get no money for his cloth, to obtain instead, meat, bread, wood, raw material etc. If money only were wanting, that might easily be as favorable a symptom in commerce, as when there are not enough shops, steamers etc., to carry on the business of the country. CompareNorth., Discourses upon Trade, 1691, 11 seq., but especiallyJ. B. Say'scelebrated theory of Markets, traité I, ch. XV.589.SeeHumboldt'sobservations as to how, in Spanish America, agriculture in the vicinity of the mines increases and decreases with the wealth of the latter. (N. Espagne, III, 11 ff.) See alsoHarrington(ob. 1677), On the Prerogative of a Popular Government, I, ch. 11;Cantillon, Nature du Commerce, 16. And soStein., Lehrbuch, 122 seq., points out how great enterprises produce especially for the consumption of the small householder without capital, and how, therefore, the flourishing condition of the one determines that of the other.590.Those indeed who live by the spoliation of others, as robbers, deceivers etc. are interested in the economic prosperity of the latter only so long as their spoliation of them is not endangered. Only to this extent can it be claimed withFr. Listthat the nobility of the Middle Ages, in obeying the selfish calculation which led to the oppression of the peasantry, engaged in as bad a speculation as a manufacturer of our day would who should feed his steam-engine with nothing but saw-dust or scraps of old paper. The cities of the middle ages had a much more undoubted economic interest in the emancipation of the peasantry as a class than the nobles or the clergy.591.Such exceptions there certainly are, even if it were not true“that the most godly cannot rest in peace unless he is acceptable to his ungodly neighbor.”Nations that furnish the same products as we do may, indeed,“spoil our market,”just as at home the selfish shoemaker may desire the prosperity of all wearers of shoes, that is of all other industries, but not that of all other producers of shoes. The view that long prevailed, that one man's gain was always some other man's loss (Th. Morus, Utopia 79, ed. Colon. 1555;Baco., Sermones fideles, cap. 15;quid-quid alicubi adiicitur, alibi detrahitur;M. Montaigne, EssaisI, 21:les prouficit de l'un est le dommage de l'autre) prevailed much longer in international affairs where observation is much more difficult than in national affairs; although even here,P. de la Court, Maximes politiques, 1658, contrasts the economic interest of Holland with that of the rest of the Netherlands and prefers it to theirs. EvenVoltairesays:“The desire of the greatness of the Fatherland includes the desire of evil to our neighbor. Evidently no country can gain except what another loses.”(Dict. philosophique, v. Patrie.) Compare, however, thepeut-êtrein his Histoire de la Russie, I, 1, on the occasion of the English-Russian treaty of commerce. Similarly,Galiani, Della Moneta, I, 1, IV, 1;Verri, Opuscoli, 335, and recentlyv. Cancrinwho says that“in every-day life, property is acquired only at some other person's expense.”(Weltreichthum, 1821, 119. Oekonomie der menschl. Gesellschaft, 1845, 23.) The cosmopolitan view (Xenoph., Cyrop., III, 2, 17. Hier., 10) which prevails in Adam Smith's school was introduced byHume, Essays, 1752, On the Jealousy of Trade.Quesnay, Encyclopédie, v. Grains, 294, ed. Daire;A. Smith, Theory of moral Sentiments, 1759, p. 6, sec. 2, ch. 2.Pinto, Lettre sur la Jalousie de Commerce, 1771, andJ. Tucker, Four Tracts on commercial and political Subjects, 1776, 34 ff and 42 ff.“The system of states exercises no influence whatever on the world's commerce.”(Lotz, Handbuch I, 11.) More recently,R. Cobden, in his Russia, Edinb., 1836, among others argued, that the conquest of Turkey by the Russians would be useful to England, because then more (?) English products would probably be sold there. Russia would become no stronger thereby, as conquests always injure the conqueror more than they benefit him. The idea of European equilibrium is therefore a chimera, because no state can be prevented from having an internal growth, as great as may be. Thus, in the summer of 1853, we heard the London Times sometimes preach that every cannon-shot fired by the English at the Russians might kill an English debtor or an English customer. The Venetians entertained a similar view at the beginning of the fifteenth century. CompareM. SanudoinMuratori, Scriptores, XXII, 950 ff. See above, §12.Moreover, Malthus had recognized that there were natural rivalries between nations which produced exceptions to Tucker's laws. (Principles, Preface.) SimilarlyGarve, in Cicero's Pflichten (1783), III, 146 ff.592.B. Franklin, Works, vol. III, 49.Sismondiclaims for all civilized nations the right of interfering with the governments of other nations with whom they have or might have commercial relations, and of insisting that they shall have a good government under which commerce may freely develop. (N. P. VII, ch. 4.)593.As for instance when theami des hommessays that he felt towards an Englishman or a German as he did towards a Frenchman with whom he was not acquainted.Mirabeau, Philosophie rurale, ch. 6.594.Thus, for instance, the Stoic, Zeno:Plutarch.De Alex, fort, 1, 6.595.Compare evenLauderdale, Inquiry, 274 ff.596.How well, for instance, the English sustained Napoleon's continental blockade, the evils produced by which were intensified by several bad harvests. Its worst time did not, indeed, coincide with that of the struggle with the United States. The ancient Athenians, during their contest with Philip of Macedon, considered the question of the supplies from the Bosphorus etc. as one of life and death. But this can be looked upon only as a cogent proof of the small development which their commercial talents had received at the time. How easily might they not, according to our ideas, have obtained corn from Sicily or Egypt.597.According to the acute analysis of language made byF. J. Neumann, Tübinger Ztschr., 1872, 317 ff., the word“price”has reference to an actual purchase or sale, while the expression“value in exchange,”generally called simply value, is based upon a valuation, or intimates in a general way that an object possesses value; value in exchange is, so to speak, the average of several price-determinations. Price, according toSchäffle, is the external consequence of value in exchange, a means of representing the latter. (N. Œk., III, Aufl., I, 218.) Only through the difference between value in exchange (universal possibility) and price (special reality) is thelaesio enormisof the jurists possible. (Schmitthenner, Staatswissenschen, I, 416.)598.By market price,prix courant, is meant the money-price of commodities, determined by competition.599.A problem very similar to that of the motion of bodies in space.600.Lotz, Handbuch, 50 ff., calls those commodities costly which are obtained only at a high cost of production, and dear, those whose price is above the cost of production.601.CompareCanard, Principes d'Economie politique, ch. 3. Almost simultaneously,H. Thornton, 1802, Paper-Credit of Great Britain.602.SeeJackson'sAccount of Morocco, 284, for cases in which, in the Sahara, when the burning winds of the desert had dried up the water in the leathern bottles of the caravan, a drink of water cost from $10 to $500.603.The North American aborigines very frequently consent, in their exchanges, to take any offer made to them by their equals, however insufficient it may be, because they fear revenge.Schoolcraft, Information etc., II, 178. As to the effects of cunning, the Tungusi, when they get a glass of brandy from the Russians, grow almost idiotic, and give away their goods at mock-prices in drink. (v. Wrangell, Nachrichten, I, 233.) In the higher stages of civilization, on the other hand, very distinguished people are, by no means, privileged because of their position, in the struggle for prices. In modern times, claims (reclamen) have taken the place of greater physical or political power. CompareE. Hermann, Leitfaden der Wirthschaftslehre 1870, 91 ff.604.ThusGalianisays, that before one of the two parties has expressed his want to buy or to sell, the pans of the scales are in equilibrium. The first that speaks breathes on one of them, and it drops. (Dialogue sur le Commerce des Bleds, 1770, No. 6.) This has been verified in a striking manner in California, where the most valuable commodities were often purchased at auction at the lowest prices, while when purchased from merchants and even the most wretched shopkeepers, they were sold enormously dear. (Gerstäcker, in the Allg. Zeitg., May, 1850.) Thus there were harvested in France, in 1817, 48,000,000 hectolitres of wheat, valued at 2,046,000,000 francs, in 1820, 44,500,000 hectolitres valued at 895,000,000 francs. (Cordier.) This vast difference in price existed, because in 1817, the whole world was still trembling under the impression made by the failure of the crops in 1816, while in 1820, the feeling of comfort and security caused by the rich year 1819, still prevailed. Low prices at forced sales under decree etc. See below, § 5. That travelers are so frequently taken advantage of in effecting changes of money is explainable partly by their urgent wants, which are well known to the opposite party, and partly by their supposed ignorance in the matter. And so, at auction sales, out-bidding one another has something very seductive in it for ignorant or hot-headed purchasers.605.It was considered immoral by his contemporaries, when William the Conqueror introduced the custom of farm-letting to the highest bidder. (A. Thierry, Conquête de l'Angleterre, II, 116, éd. Bruxelles.) It is repugnant to poetic and delicate minds to think that everything has a price exactly fixed. (§ 2.) I need only refer to the picture of Helen which Zeuxis exhibited for money, which act of his was characterized, by his cotemporaries, as a species of prostitution.Val. Mac, III, 7.Ælian, V, 4, IV, 12.Socratesjudgment on the payment of the sophists.Xenoph., Memor., I, 6, 13.606.Competition has only a negative influence on prices, inasmuch as it modifies the extreme operation of the other grounds of their determination.Thornton, Paper Credit.Lotz, Revision, 1811, I, 74 ff, 241 ff.607.The expression,“intensity of demand,”inMalthus, Principles, ch. 2, sec. 2. As early a writer asSir J. Stewartcalls attention to the difference between large and high and small and low demand. A high demand will always raise the price, as when, for instance, two wealthy virtuosi compete at an auction.Paucorum furore pretiosa, as Seneca says. An English penny of the time of Henry VII, once sold, on such an occasion, for £600. In 1868, at the Lafitte auction, seven bottles of wine sold to Rothschild at 235 francs a piece after theMaison doréehad offered 233. (N. freie Presse, Dec. 17, 1868.) A great demand has frequently no result but to increase the supply, and the price rises only in so far as the demand is too sudden to permit a parallel growth of the supply. (Principles, Book II, ch. 2, 10.) The present price of tea could not remain unaffected, if ten different private merchants, competing one with another, or the agent of a privileged commercial society, should send orders to China for an equal quantity of tea. (Verri, Meditazioni, IV, 8 ff.)608.Immense weight laid on theæqualitas permutationis(afterAristot., Eth. Nicom., V. 7,) in the ethics and economics of the scholastic middle ages, and in the time of the Reformation. CompareMelancthon, in Corp. Ref., XVI, 495 ff, XXII, 230.609.A very barbarous theory of price inXenoph., De Vectigg., 4. The ancients made little progress in this respect, although there are not wanting ingenious observations on certain phenomena of prices. (SeeAristot., (?) Oecon. II;Cicero, De Off. III, 12 ff.)Mariana, De Rege et Regis Institutione, 1598, III, explains price as the relation of value to quantity. According toLocke, the price of a thing is determined by the relation between“quantity”and“vent”: the increase or diminution of its useful qualities influences it only so far as it alters that relation. (Considerations on the Consequences of the Lowering of Interest etc, 1691, Works II, 20 ff.)Law, on the contrary, says that the“vent”can never be greater than the“quantity,”but that the“demand”may be. Wherefore, he proposes the formula: quantity in proportion to the demand. (Trade and Commerce considered, 1705, ch. 1.) In chap. 6,Lawdistinguishes three elements in price: quality, quantity and demand. The expression“quantity”is, certainly, very unsatisfactory. How many examples does notTooke(Thoughts and Details, on the high and low Prices of the last thirty Years, 1823, part IV) give to illustrate how, when the supply was smallest, prices were lowest andvice versa! It was so almost always after the market was over-filled, when a great many speculators had lost and no one dared to purchase anew.Montanari(ob. 1687) furnishes us with an excellent theory of prices. (Della Moneta, 64 ff., Custodi.) And a still better one,Sam. Pufendorf, Jus Naturæ et Gentium, 1672, V. 1, who must be considered the best authority on the laws of prices beforeStewart.Boisguillebert, Traité des Grains, II, 1, 10.Galiani, Della Moneta, I, 2, knows only the factorsutilità, andrarità, although in his exposition of the latter, he discusses many points which would be called the cost of production in our time. The wisdom of Providence has granted us the most useful things in the greatest abundance to make them cheap.Stewart, Principles II, 2, 4, rendered a great service to the theory of prices, tracing back supply to the cost of production, demand to want and ability to pay; and his deserves to be called the immediate predecessor ofHermann'sremarkable theory. (Hermann, Staatsw. Untersuchungen, 66 ff.) For a peculiar theory of prices, seePaganini, Saggio sopra il giusto Pregio delle Cose, 189 ff.Neri, Osservazioni, 1751, 127.Gust. Menger, Grundsätze, I, 179 ff., has made an interesting attempt to explain the formation of prices in its simplest shape, in the supposition of a monopoly in the seller, and by then going over to the subsequent modifications introduced by the competition of many sellers.610.“Instead of separating, in the same matter, the points of view of the buyer and seller, we may distinguish the consideration of the thing to be acquired and the thing to be given by one and the same person.”(Rau.) The possessor of the more current commodity appears especially as demanding, that of the less current as offering or supplying, (v. Mangoldt.)611.This is for free goods=0, for monopolized goods=1/0.612.The obvious fact that every price supposes a comparison of two commodities, and that every buyer is, at the same time, a seller, has been overlooked by only too many writers. And henceDutot'sopinion, that, as all men buy and few only sell, the state, in case of doubt, should favor the buyer. (Réflexions sur le Commerce et les Finances, 1738, 962, éd. Daire.) And so the often-mooted question whether universal dearness or cheapness is more useful: the latter advocated, for instance, byHerbert, Police générale des Grains, 1755;Verri, Meditazioni, V; the former byBoisguillebert, Traité des Grains, I, 7, II, 9; and by the Physiocrates. (Quesnay, Maximes générales, Nr. 18 ff., I, Problème Économique; also byA. Young, Polit. Arithmetics, ch. 8.) The laity in Political Economy understand by dearness only the general cheapness of the medium of circulation or exchange, andvice versa.613.Thus, even a poor man in Naples sometimes requires a glass of ice-water. The introduction of the extensive use of snow into Sicily improved the condition of the public health. (Rehfues, Gemälde von Neapel, I, 37 ff.) On the other hand, furs, in the far north, are articles of prime necessity. Newspapers in a free country satisfy a want much more urgent than in countries which are not free. And so,Seniorsays that shoes are“necessaries”to all Englishmen, since without them, their health would suffer. To the lower classes of Scotland they are“luxuries.”Custom permits them to go barefoot without hardship or degradation. For the middle classes of the same country, they are“decencies.”Shoes are worn there, not to protect the feet but one's civil position. In Turkey, tobacco is a decency and wine a luxury. The reverse is the case in England. (Outlines, 36 ff.)614.As to the relativity of the opposites of“temperance”and“excess,”every person should attend to the following points: a, not to exceed one's income; b, to provide for one's self and one's family; c, to lay by something for a rainy day; d, to place one's self in a position to care for the poor; e, to indulge in no pleasure injurious to body or mind; f, to give no bad example. (Tucker, Two Sermons, 29 ff.)Menger, Grundsätze, I, 92 ff., endeavors to compare the value in use of different commodities from the point of view, that the means of gratification of a less urgent want, when the more urgent wants of the present are satisfied completely, should be preferred to the means of over-gratifying the latter.615.Thus the price of many dark articles of apparel rises in a moment of unexpected universal mourning. A very remarkable case in Paris, at the death of Henry II. (Montanari, Delia Moneta, 85, Custodi.) On the other hand, a change of fashion may greatly depress the price of many commodities. Such a change may take place even in the case of precious stones; as, for instance, now in London, a perfect emerald is most highly prized. (King, Precious Stones and Metals, 1871.) The rise of many drugs in times of cholera, and of leeches, for example, in Paris, 600 per cent. Rise of the price of powder, horses etc. at the outbreak of a war, and of the price of iron caused by extensive railroad building. In Circassia, a good shirt of mail was formerly worth from 10 to 200 oxen: but since it was discovered not to be a protection against cannon balls, its price fell 50 per cent. (Bell, Journal of a Residence in Circassia, I, 403.)616.On“connected”(connexen) goods, the use of one of which supposes the use of the other, as, for instance, sugar and coffee, wood and stone used in the construction of buildings, seeSchäffle, Nat.-Oek, II. Aufl., 179.617.Observed byNecker, Sur la Législation et le Commerce des Grains, 1776. CompareRoscher, Ueber Kornhandel und Theuerungspolitik, 1853, 1 ff. In Athens, for instance, themedimnosof wheat cost ordinarily five drachmas, but during the siege by Sulla it rose to 1000 drachmas. (Demosth.adv. Phorm., 918.Plutarch, Sulla, 13.) Compare II. Kings, 6, 25, 7, 1. In Paris during the siege by Henry IV. it rose to 5000 per cent. of the ordinary price. (Lauderdale, Inquiry, 60 ff.) During the siege of Breisach, in 1638, a mouse was finally worth 1 florin, the quarter of a dog, 7 florins, a quarter of wheat, 80 thalers. (Röse, Leben H. Bernhards, M., 11, 269.) CompareStrabo, V, 248 seq.618.Wheat is still more indispensable than meat. Hence, in the ten principal markets of Prussia, the price of rye rose much more from 1811 to 1860 than the price of beef; the former between 0.32 and 1.03 silver groschens and the latter between 2.32 and 4.94 silver groschens. (Annalen der preussischen Landwirthschaft, 1869, No. 9.) And so in the Rhine district, the wine harvests have undergone much greater changes in price than the prices of must, although the years differed very largely in the quality of the yield. Thus the crop of 1830 was only 225, that of 1868, 10,845 pieces, and yet the minimum price between 1831 and 1865 was only from 3 to 58 flr. per ome. (Engel, Preuss. Statist., Ztschr., 1871, 168 ff.)619.In England, the price of wheat has not unfrequently risen from 100 to 200 per cent. when the harvest was from one-sixth to one-third under the average, and when a supply from abroad had modified even this condition of things. (Tooke, History of Prices, I, 10 ff.)Tookeis of opinion that in a country with poor-laws like those of England, a deficit of one-third in the wheat crop, if there were no stores remaining and no importation from abroad, would cause the price of wheat to rise, 500, 600, and even 1000 per cent (p. 15.)620.SeeDavenant, Political and Commercial Works, London, 1771, II, 224. Tooke was somewhat acquainted with Davenant. According to this law, a deficit in the harvest of 10 per cent. would raise the price of corn 30 per cent.; one of 20 per cent. would raise the price of corn 80 per cent.; one of 30 per cent. would raise the price of corn 160 per cent.; one of 40 per cent. would raise the price of corn 280 per cent.; one of 50 per cent. would raise the price of corn 450 per cent.621.In England, it is 38.8 per cent. of the supply that comes to the market. (Quart. Review, XXXVI, 425.) In Belgium 40, and in Saxony at least 50 per cent. (Engel, Jahrb. der Statistik etc. von Sachsen, I, 276.) In Germany, the farmers consume on an average two-thirds themselves. (v. Viebahn, Zoll.-v-Statist., II, 958.) With thisPlato, De Legg., VIII, agrees remarkably well.622.On the difference in this respect between England, Germany and northwestern Norway, seeHermann, p. 71.623.Hence it not unfrequently happens that grain grows dear not from any real want of it, but because it is generally supposed that such want exists. For an explanation of why it is that wheat and similar commodities have an almost invariable price, when the average is taken of a long series of years, seeinfra§129.624.Case in Naples in which after a poor harvest the price of corn remained very low, because the oil-harvest had also failed, and the poor could earn nothing in that industry in which they were largely employed, andvice versa. (Galliani, Della Moneta, II, 2.) ThusAdam Smith, Wealth of Nations, I, ch. 7, distinguishes between“effectual”and“absolute”demand. SimilarlyJ. Steuart, Principles I, ch. 18. Care should be taken to distinguish in this respect between desire and demand.625.Thus, in the famine in Ireland in 1821, during which potatoes rose to fabulous prices, but wheat scarcely at all, and had therefore to be exported.626.InTooke, History of Prices (2d edition of the Thoughts and Details etc.), we meet repeatedly with the assertion that when the price of wheat rises, the price of colonial products and manufactured articles sinks, andvice versa. Thus, in England, the price of the evidences of national debt increases from two to three per cent. in fruitful years above what it is after a bad harvest. (Lauderdale, Inquiry, 93.) The British nation paid for the cotton it needed for their own consumption in 1845 over £19,500,000; in 1847 only £9,500,000. (Banfield, Organization of Industry, 162.)627.HenceJ. B. Sayhas said that the disposable wealth of a people is like a pyramid, with the scale of prices of the various commodities inscribed on its side. The higher a commodity is in this scale of prices, the smaller is the corresponding section of the pyramid. CompareSir W. Temple, Essay on the Origin and Nature of Government, Works I, 23 ff.628.This fact, in connection with the preceding, explains the well known puzzle, why the remnant of a piece of goods is comparatively cheaper than the whole piece, while a small share in the public debt is dearer than a large one. (Lauderdale, ch. 1.)629.Rhode Island was, it is said, bought from the Indians in 1638 for a pair of spectacles. (B. Franklin, Political ... Pieces, 1707.) According toChalmers, it was bought for 50 threads of coral, 12 hatchets and 12 overcoats. (Political Annals of the U. States.) CompareEbeling, II, 108. Holland cloths and opium were exchanged for a long time at Sumatra for gold dust worth ten times their value. (Saalfeld, Geschichte des holl. Kolonialwesens, I, 260.) The Hudson Bay Company realized, it is said, at the beginning of this century, in trading with the Indians, a profit of 2000 per cent. (Anderson, Origin of Commerce, a. 1751.) When Altai was discovered, the natives gave as many sable-skins for a Russian kettle or boiler as could be crammed into it. With 10 rubles in iron it was an easy easy matter to gain 500-660 rubles.Storch, Gemälde des russ., R., II, 16;K. Ritter, Erdkunde, II, 557. Similar cases among the Germans:Tacit., Germ., 5.630.A seller not actually engaged in the business of selling for a livelihood, and who has not purchased or produced with the intention of selling, is apt to consider instead of this the market price, towards the determination of which those actually engaged in trade have coöperated. Somewhat inaccurately, the amount of the cost of production is called byAdam SmithandRicardo,“natural price,”byJ. B. Say,prix naturel, alsoprix originaire, because the commodity at its first entrance into the world cost so much.SismondiandStorchcall itprix nécessaire, andLotz, Kostenpreis. P. Cantillon, Nature de Commerce, 33 ff., understands by theprix intrinsiqueof a commodity, the amount of land and labor, taking the quality of both also into consideration, necessary to its production.631.The cheapest cotton thread is numbered from 60 to 80. The coarser is dearer on account of the quantity of raw material in it, and the finer because of the greater amount of labor in it. (Babbage.) For similar reasons, the Venetian chains cost perbraccio, No. 0, the finest, 60 francs; No. 1, 40 francs; Nos. 2 and 3, 20 francs; No. 24, coarsest, 60 francs. (Rau.)632.If a person engaged in production has himself furnished certain of the elements of production; if, for instance, he has worked with his own hands, employed his own capital etc., he is wont to charge as much for these as they would be worth, if he hired himself out or loaned his capital.633.The greater number of political economists consider the cost of production only from the standpoint of the individual engaged in production. ThusDarjes, Erste Gründe, 218 seq.;Ad. Smith, Wealth of Nations, I, ch. 6.J. B. Saycalls even production an exchange in which the productive services of natural forces, of labor and of capital are parted with in order to obtain products. The estimate put upon the value of these services is the cost of production. For some interesting examples as to how the cost of production, in this sense, is calculated, seeHermann, I ed., 136 ff.634.Jacobtranslated bySay, 1807, II, 450.Hufeland, N. Grundelgung, I, 309.635.CompareL. Lauderdale, Inquiry, 124, against the Physiocrates. (Riedel, Nat.-Oekonomie, 1838, I, 68.) A country which possesses advantages over other countries, in respect to the cost of production of a commodity, can offer it in the market cheapest. Where, for instance, with the employment of the same amount of capital, a specially large quantity of wheat can be produced, whether it be because of the unusual fertility of the soil, or because of theextensivenessof agriculture (farming over a large area), wheat will, the demand being the same, be specially cheap, whatever the proportion of the three branches of income may have been. If relatively a great number of workmen have been employed in its cultivation, each will receive smaller wages, andvice versa.636.Copper and steel engraving affords an example of the different kinds of wear of fixed capital, and the influence it may have on prices.Canard, Principes, ch. IV, considers that one of the most important elements in the cost of production is the length of time that capital must“stagnate”for the sake of production.637.On this risk depends, for instance, the high price of vanilla (Humboldt, N. Espagne, IV, 10,), sparkling wines and articles of fashion.638.Mangoldt, Lehre vom Unternehmergewinn, 1855, 81 ff. Comparev. Thünen, Der isolirte Staat, II, 1, 80 ff.639.Wool and mutton, brandy and fattened cattle, calves and milk, honey and wax, gas and coke, hens and eggs etc.640.Adam Smithhimself remarked that all artificial lowering of the price of skins or wool must necessarily raise the price of the meat, andvice versa. (Wealth of Nations, I, ch. 11, 3.) For a very elaborate theory on this subject, seeJ. S. Mill, Principles, III, ch. 16, § 1. Thus Australian wool did not rise as much in price as the production of gold there might have led us to suppose, for the reason that mutton rose to an exceedingly high price.641.It is an important and correct remark ofCarey's, that the price of a commodity depends much more on the cost of producing its like than on its own cost of production, which already belongs to the past.642.CompareJ. S. Mill, III, ch. 3, § 1. A much too high price, caused by speculation, or a much too low one, by depreciation, is regularly followed by an ebb or flow just as much too great. (Tooke, History of Prices, III, 55.) AndLaw, Trade and Money, 41, remarks that the price of a commodity always tends to coincide with the“first cost.”This factAdam Smithexpresses by saying that the cost of production is the center about which the market price always gravitates. (I, ch. 7.) But here there is still the error lurking, that the producer's profit is a part of the cost of production. CompareMalthus, Definitions, ch. 6.643.The English view, one very characteristic of the people, is that the equilibrium of prices depends on this, that all commodities should have a value equal to that of the labor they have cost. (CompareAristot., Eth. Nicom., V, 5.) The same doctrine is to be found in its germinal state inHobbes, Leviathan, 24, 1651, andRice Vaughan, Discourse of Coin and Coinage, 1675. More exhaustively inPetty, Treatise of Taxes and Contributions, 1679, 24, 31, 67. (CompareLocke, Civil government, II, § 40 ff.;B. Franklin, Inquiry into the Nature and Necessity of a paper Currency, 1729; Works, ed. Sparks, vol. II.)Adam Smithadmits this to be true only of the first beginnings of society, before the origin of property in land and in capital. (Wealth of Nations, I, ch. 5.) Most largely developed inRicardo, Principles, ch. I, 4, 30.Marx, Zur Kritik der polit. Œkonomie, 1859, 6, endeavors to improve on this by calling all values in exchange“a determinate quantity of thickly curdled working-time,”meaning by work an averagedqualitätslose, social work of production.Per contra, compareHufeland, N. Grundlegung, I, 134, 156 ff.; andMalthus, Principles, ch. 2, secs. 2, 3, who claims very earnestly that price is not determined by the cost of production, but by the relation existing between demand and supply, the cost of production influencing it only to the extent that it influences this relation. He calls attention to the poor-rates by which the cost of production of labor is raised, but its wages decreased; also to the case of bank notes etc. (Tooke, History of Prices, V, 49 ff;J. S. Mill, Principles, III, ch. 16, 2.) For a very marked case of reaction against Adam Smith and Ricardo, seeMacleod, Elements, ch. 2, who, however, is much too one-sided in considering only the amount necessary to the purchaser, and his means. EvenCondillachad said:une chose n'a pas une valeur, parcequ'elle coûte, mais elle coûte (du travail ou de l'argent), parcequ'elle a une valeur. (Commerce et Gouvernement, 16.)Ricardo'sdoctrine is more tenable than appears at first blush. We need only to interline his theory of rent, admit that capital is accumulated labor, subtract all objects constituting a natural monopoly, and not forget that the intrinsic value of labor is one of the causes of the difference of price of different sorts of labor.Ricardodoes justice to value in use evenen passant. A strange effort byMcCullochto make labor the cause of the non-use of capital. (Principles, III, ch. 6, 2.)McCullochhas not unfrequently exaggerated the half-truths of his doctrines to such an extent as to produce unwittingly areductio ad absurdum. According toTorrens, before any separation of capitalists from workmen, price depends entirely on the work done, and afterwards on the capital expended, inasmuch as wages, rent etc. are covered by the capital of the person who engages in the enterprise. (Production of Wealth, ch. 1.)644.Ce que l' on appelle chereté, c'est l' unique remède à la chereté.(Dupont de Nemours.) Tenders of division in common, in England, increase and decrease according to the higher or lower price of corn during the preceding year. (Tooke, Thoughts and Details, III, 105 ff.) The cotton famine after 1861 increased the price of flax-yarn in a short time fifty per cent., although the raw material of flax did not rise in price, but only because care was not taken to increase the number of flax-spinners. (Ausland, I, 1865.) However, there were in 1864, 490,000 flax-machine spindles in course of erection. (Report of the Chemnitz Chamber of Commerce, 1864, 101.)645.By the discovery, for instance, of new natural forces, the invention of machines, improved division of labor, improved roads etc. In France, in consequence of technic improvement, a quintal of saltpeter fell from 100 to 9 francs. See a similar instance inChaptal, De l' Industrie française, II, 64, 70, 434.646.Hermann, Staatsw. Untersuchungen, 212.647.The highest but unattainable ideal of such progress would consist in this, that all products should be obtained without cost. If this ideal were attainable, every one would be infinitely rich and all wealth would be free, like the air and the sunshine. (CompareJ. B. Say, Traité, II, 2.) The complete victory of mankind over nature would consist in that all men should be free and all the forces of nature the slaves of man. (Smitthenner.)Careyintimates something similar when he says that, with the advance of civilization the tendency is for men to become more and more valuable and commodities to have less of“value.”648.We might here speak of an aristocratic and democratic principle of the determination of prices. The greater utility of the latter is advocated in the Discourse of Trade, Coyn and Credit, London, 1697.Baconhas a good word to say for the maxim:“Light gains make heavy purses; for light gains come thick, whereas great come now and then.”Similarly,GurnayinCliquot de Blervache, Considérations sur le Commerce etc., 1758, 48, 54. As to how Morrison, the celebrated merchant, became rich by adhering to the principles:“to sell cheap as well as to buy cheap,”and“always tell the truth,”seeChadwick, in the Statistical Journal, 1862, 503. Compare the related opinion ofAdam Smith'scontinuator in an ethical direction,Garve, zu Cicero's Pflichten, III, 100. The contrary principle, the cunning of the Judæans, according toStrabo, XVII, 800, was followed by the Dutch East India Company, when it, in 1652, caused the greater number of the vegetable roots on the Moluccas to be destroyed.Saalfeld, Geschichte des holländischen Kolonialwesens, I, 272. Also, when great quantities of roots were destroyed by burning in the East Indies. (HuysersBeschryving der Oostindischen Etablissmenten, 1789, 22.) For a clever argument against such practice, seede la Court, Anwysing der heilsame Gronden, 1663. The principle similar to that of the patent, mentioned in the text, works at the same time democratically and aristocratically, both words understood in their best sense.649.This is true, first of all, in those industries which are intimately connected with one another, or of those which are carried on with scarcely any fixed capital; also in lower stages of civilization, where the lights and shades caused by a highly developed division of labor are not very intense. On the numerous difficulties overlooked by Ricardo in every other case, seeSismondi, N. P., II, ch. 2. The workman thereby loses his former skill, that is his principal capital, and can certainly not wait until he has acquired other and different skill.650.When a lowering of prices is expected, demand is less than consumption:“postponed demand;”whereas, an expectation that the price will rise, produces“anticipated demand.”Tooke, History of Prices, II, 155.651.Thus, for instance, if the workmen were exposed to starvation, or were likely to take their departure; if great stores of raw material were in danger of spoiling; if fixed capital of great value were engaged in one industry and could not be easily transferred to another. The first and third causes are frequently met with in mining, and give rise to the mode of carrying on the operation known asZubusgruben, that is, a species of working mines upon shares. In England, after the spring of 1862, cotton yarn was not so much dearer than raw cotton, that the loss caused by the decline could be made up. (Ausland, 24 Sept., 1862.)652.Besides, in the time immediately following, the price lowered by too great a supply, may produce a species of desperation among producers, which would lead them, in the hope of covering their losses, to increase the supply still more, until many of them were ruined. Generally, when a time of high prices is followed by a time of low prices, we find an interval during which sellers endeavor to defend themselves against the decline, and during which, as a consequence, scarcely any business is transacted, while high prices are nominally continued. And sovice versa.Tooke, History of Prices, II, 62.653.Thus, for instance, when the change of fashion brought about the disuse of long periwigs in every-day life, their price did not cease to fall until they had entirely disappeared. But, if a person wishes to have one made to-day for a masquerade, for the stage, etc., he would pay as much for it as its former price. On the other hand, the price of whalebone has never been again as high as it was in the time when hooped petticoats were worn.654.The great plague in the time of Edward III. caused during the first year, on account of the decreased consumption, an extraordinary cheapness of provisions. In the following year, however, they became alarmingly dear, because there were few producers, especially among the humble classes. A quarter of wheat cost in 1348, 4s. 2d.; in 1349, 5s. 5d.; in 1350, 8s. 3d.; in 1351, 10s. 2d.; while in 1346 and 1347, its average price was 6s. 8-7/8d.Rogers, History of Agriculture and Prices, I, 232.655.As for instance when new taxes or excises are imposed. Generally when the cost of production has largely increased, purchasers do not wait until a decrease of competition among sellers compels them to exact higher prices, but meet them half way, especially when many greatly desire the commodity, and the increase of the cost is only small. (Rau, Handbuch, I, § 163.)656.Under this rule fall, according to §33, most products of industry properly so called.“If we lose a market for a year, we generally lose it for all time,”said an experienced manufacturer before the parliamentary hand-loom weavers' committee, 1840-42. Of course the cost of transportation as far as the market must be estimated as part of the cost of production. In consequence of this, as well as of the difference of taxation duties etc., the superiority of one producer to another may be more than overcome. In the case of colonial commodities, which go into the interior of a country from different sea-ports, the territory supplied from each port is determined for the most part by these data. Thus, in Switzerland, for instance, we find the districts supplied by Havre, Genoa and Rotterdam; in Austria, the districts supplied by Hamburg and Triest contiguous, but the boundary line subject to many changes. (Rau, Lehrbuch, I, § 164.) It must be understood that we do not here speak of abnormal expenses made by producers individually, whether in consequence of want of skill or because of accident.657.This is true especially of agricultural production, in which, as a rule, beside the most fertile and most advantageously situated land, the worse must be used. WhatWhatelycalls“surplus-profit”appears here in the form of rent, whereas, in other cases, it takes the shape of unusually high wages, or profit on capital. This is very beautifully and systematically developed bySchäffle, N. Œk., II; Aufl., 192 ff. According toSenior, Outlines, 15, the price-relation of two commodities to each other depends not on the quantities of them which come to market, but on the relative power of the difficulties which stand in the way of an increase in these quantities. If the same producers can pursue the cheaper mode of production which does not suffice to supply the market, as well as the dearer, we have, generally, a price which is the mean between the two costs of production. The same is true in the case of“smuggled”goods which ought to have paid duty. (Hermann, loc. cit., 83, seq.)658.To this section belong the secrets of production which may be taken advantage of eitherad libitumor within certain limits. In agriculture, advantages of production can seldom remain secret. Compare, however, the case mentioned inGarnier'stranslation ofAdam Smith, V, 119, and that of the orchards which yielded £1,000 yearly for every 32 acres, and which were a result of the recent introduction of the culture of the cherry in Kent, in the reign of Henry VIII. (Anderson, Origin of Commerce, a, 1540.) There is therefore, a certain odium attached by agricultural producers to keeping secret a means of agricultural improvement.659.CompareBoisguillebert, Traité des Grains, II, ch. 2.John Stuart Millspeaks of an equation: the price of a commodity in a given market is always high enough to produce a demand corresponding to the present supply, or to an expected supply. The price of such commodities only which may not be increased to any desirable extent depends on supply and demand. In the case of all others, on the other hand, demand and supply depend on the price, and this on the cost of production. Supply and demand always tend to an equilibrium which is never really attained where the price is high enough to cover the cost of production (?). (Principles, III, ch. 2, § 4; ch. 3, § 2.)Schäffle'stheory of prices is topped by the proposition that all competing sellers and all competing buyers, after an economic fashion, do not wish to sell below individual cost-value, nor to rise above individual value in use, in purchasing. Hence, in a throng of competition of supply the costliest productions step out of the field of competition in a descending cost-value series; and in a throng of competition of demand, the most wearied cravings in an ascending value-in-use series; until the quantities offered in supply and asked for cover each other without loss, and have placed each other in quantitative equilibrium. (N. Œk. Aufl., I, 188 ff.; compare 173, 185.) It is, however, to say the least, an instance of baseless solicitude, whenWade, History of the middle and working Classes, 214, says that one unemployed workman might depress the aggregate wages of labor, almostad infinitum.660.Hufeland, N. Grundlegung, I, 78;Ricardo, Principles, ch. 31.661.Dunoyer, Liberté du Travail, VIII, ch. 4;Rau, Lehrbuch, I, § 158.662.For a good classification of monopolies, seeSenior, Outlines, 103 ff.Menger, Grundsätze, I, 195, shows that no monopolist can arbitrarily determine the extent of the market for his monopoly-product when the price is fixed, nor when the extent of the market is known, the height of the price. Moreover, the price may remain longer above than under the cost of production, for the reason that it is easier to abandon a business than to begin one, and that the fear of loss is more frequently an incentive to action than the hope of gain. Hence the price of corn, when everything else is very dear, is more apt to vary from the average price, than in times when everything is very cheap. For instance, the Munich prices from 1750 to 1800 show that its highest price was 147 per cent. above, and its lowest 47 per cent. below the average of twenty years. (Rau, Lehrbuch, § 162, 182.)663.Chance plays a great part here. Thus, Murillo's Conception which Marshal Soult had offered several times for 150,000 francs, but in vain, was sold in May, 1852, for 586,000 francs. Paul Potter's young bull at the Hague, which cost 625 florins in 1748, was valued before the middle of the nineteenth century at 200,000 florins. (Dethmar.)664.The purchaser resolves to do so because it would, in all probability, cost him more to go to India or Brazil in search of precious stones. Besides after the working of the Brazilian mines in 1728, and again after the French Revolution, the price of diamonds fell greatly; in the one case, from an increase of the supply, in the other from a decrease of the demand. (Ritter, VI, 355, 365.)665.Thus, the Champagne and Johannisberg grapes, when transplanted to the Crimea, lost most of their native taste. On China's practical monopoly of tea culture, and Ceylon's, especially in its southwestern part, of cinnamon, at least so far as the peculiar aroma is concerned, compareRitter, Erdkunde, VI, 123 ff. The small deer of Angora no sooner leave the little district of Asia Minor to which they belong, than they are in danger of degenerating. (Revue des deux Mondes, May 15, 1850.) Indian birds-nests cost no more than 11 per cent. to gather, dry etc., of the market price. (Crawfurd, East India Archipelago, III, 432 ff.;Hogendorp, Sur l'Ile de Java, 201.)666.Poor material for fuel, poor day-laborer work—dwellings, medical attendance. (Menger, Grundsätze, I, 116.)667.Thus sea fish, oysters etc. were formerly much cheaper during the summer than during the winter, at Ostend and Scheveningen, because during winter they could be sent to a distance. At Billingsgate market, in the mackerel season, fish cost per hundred 48 to 50 shillings at 5 o'clock in the morning, 36 shillings at 10 o'clock, and 24 shillings in the afternoon. (H. Schulze, Nat-Œkonomische Bilder aus England, 1853, 241.) In the Rhine country, the price of fruit does not vary so much as in Saxony, because it is customary there to employ the surplus in the manufacture of cider, of preserves etc., thus making it transportable and durable. Frequently, after a very abundant crop of grapes or olives, under-prices prevail, sometimes on account of a want of vessels, cellar-room etc.; they must, therefore, be sold rapidly.668.CompareAdam Smith, Wealth of Nations, I, ch. 7.;Tooke, History of Prices, I, 97. Furs vary very much in price, sometimes 300 per cent. in a year, because, in the case of this entirely natural product, every thing depends on the stores of them, on the temperature etc. (McCulloch, Commerc. Dict., s.v.) On the other hand, the price of coffee usually varies only after periods of a number of years, because new plantations produce only after a lapse of years. (Ibid.) Pigs vary much more than cattle in price, because the former may be made ready for the slaughter house in one-third of the time required for the latter. (Thaer, Rationelle Landwirthschaft, IV, 374.)669.Thus the rent of farms, where a numerous proletarian population will live exclusively from agriculture, depends on scarcely anything but the number of people and the extent of the land. (J. S. Mill, Principles, III, ch. 2.) In retail trade, where personal want comes in question, prices are much more subject to be modified by small circumstances, than in wholesale trade, where both parties are only intent on“doing business.”(J. S. Mill, III, ch. 1, § 5.Tooke, II, 72 f.)670.Hucksters, butchers, dealers in corn, inn-keepers etc. A remarkable case where Parisian dealers in hare-skins attempted to ruin the new fashion in silk hats by distributing a great number of them among the rabble, at mock-prices. (Hermann, 1st ed., 91.) The author witnessed a similar but unsuccessful attempt in Berlin in 1838-39, by the tailors against the so-called Macintosh coat. On the conspiracy of the English dealers in second-hand goods against auctions, see Athæneum, Dec. 5, 1863. It is one ofMcCulloch'scharacteristic exaggerations, that he says that conspiracies to raise the price of a commodity by artificial means, are broken just as soon as they begin to obtain their object by the interest of the individual members to profit by the advanced prices. (Edition ofAdam Smith, Edinb., 1863, p. 59.)671.J. S. Mill, Principles, II, ch. 4.672.Monopolies universally prohibited: L. un. C. De Monopol. (IV, 59.) Police-order of the Empire, 1548, tit. 18.673.Privileges which the purchaser voluntarily accords to the seller are wont to be useful to both parties. (Hermann, loc. cit. 155, 158.)674.Besides, guilds, castes, corporations etc. may, when the vent diminishes, produce under-prices as readily as they may monopoly-prices when the vent is very good. (SeeAdam Smith, Wealth of Nations, I, ch. 7.)675.Thus, for instance, the traveler who wanted to cross a stream, would find himself delivered over to the tender mercies of the ferry-man, without protection of any kind against his demands. But repeated impositions in the matter of prices would have for effect to bring a point into disrepute as a place of crossing, and would induce the public to seek another. Similarly in the case of hackney-coachmen and carriers in large cities, and in that of innkeepers, at hotels and postal termini etc.676.Fixed prices by governmental authority were soonest attempted after bad harvests, but, indeed, with a strange ignorance of the natural grounds of the increase in price of bread-stuffs. Thus in the time of Charlemagne. (Capitul. a, 805;Baluz, I, 423.) Similarly in the case of other articles of universal necessity, when oppressively but necessarily dear. (See § 175.) During the last centuries of the middle ages, with their multitude of actual monopolies, and at the beginning of the modern era, fixed prices became more and more general. The earliest instance in the history of England of a fixed price for bread was in 1202 (v. Raumer, Hohenstaufen, V, 372), and in 1266, 51 Henry III. The earliest in Prussia was in 1393. (Voigt, Geschichte von Preussen, II, 659.) Many instances of fixed prices in the Rhine provinces of Austria in 1530. InMylius, Corp. Const. March, V, 2, 587 ff., we find an ordinance of 1653 fixing prices in Berlin, and including 72 industries. There is a very complicated system of fixed prices in the police ordinance of the electorate of Saxony of 1612, and in the decree concerning the coin of 1822. As to how, in Saxony in 1578, an attempt was made to ascertain the cost of the production of shoes by shoemakers, seeJoh. Falke, Gesch. des Kurf. August in volkswirthschaft. Beziehung, 1868, 252. There was an enormous extension of governmental fixing of prices under Philip II.; one of the principal causes why Castile was so far behind Aragon economically. (Townsend, Journey through Spain, II, 221.) Sometimes these measures were adopted to prevent distress-prices; as in Hochheim, in favor of the vintners. (Becher, Polit. Discurs, II, 1652.) The predilection especially of German authorities for the fixing of prices by governmental power, in the sixteenth and seventeenth centuries is very remarkable. ThusLuther, vom Kaufhandel und Wucher, 1524;Calvin, Leben Calvins, byHenry, II, Beilage, 3, 23;Bornitz, De Rerum Sufficientia, 1625, 246;Seckendorff, Teutscher Fürstenstaat, 5th ed., 1776, 210;Becher, II, 1823 ff.;Horneck, Oesterrich über Alles, wenn es will, 1684, 123;Leibniz ed. Dutens, VI, I, 250;Thomasius, Göttl. Rechtsgelahrtheit, 1709, 209; evenFrederickthe Great,Mylius, N. Corp. Const. March, I, 190. Similarly,Mariana, De Rege et Regis Institutione, III, c. 9. Compare, however, III, c. 8, andBacon, Serm., 15; Historia Henrici, 1037, 1040. On the other hand,Child, 1690, andNorth, 1691, reprove all such measures.Roscher, Zur Geschichte der englischen Volkswirthschaftslehre, 65, 90 f. Earlier yet,Salmasius, who would allow the freefori ratioto govern. (De Usuris, 1638, 583.) For a very rigorous price-tariff in the old Indian laws, by which,inter alia, the price of provisions was to be fixed anew every fourteen days, seeMenu, Laws, VIII, ch. 401 ff.677.Where trade is free, thefilet de boeuf, for instance, is worth four times as much as the flesh of the ox's neck or throat; but prices fixed by a government can scarcely take cognizance of the difference. How easily might not a fixed price for beer, for instance, be evaded by diluting that beverage with water, or fixed prices for inn-keepers by dealing out portions smaller in quantity or of an inferior quality. Moreover, as early a writer asDe la Court, Polit. Discoursen, 1662, c. 4, remarks that the establishment of fixed prices by governmental authority raises the average price of all commodities rather than lowers it, for the reason that the few who are sellers by trade can do more to influence the authorities than the many buyers, whose interests are divided among numberless different commodities.678.Schäffle, Nat.-Œkonomie, II, 384 f.679.Banfield, Organization of Industry, 120.“Where the economic life of a people is still undeveloped, and the production of one enterprise is not from the first based on the estimated consumption of another, the circulation of goods brings with it great profits and great losses; whereas, profits and losses grow smaller, but at the same time more uniform and regular, in proportion as the circulation of goods increases in rapidity and regularity.”(Stein, Lehrbuch, 212.)680.In Belgium, during the last forty years, the price of wheat has become more constant every year, while the price of rye has become more variable; for the reason that rye has gradually ceased to be an article of popular consumption, and therefore to be an important article in trade, and is consumed almost entirely and directly by its producers. (Horn, Statist. Gemälde von B., 1853, 185.)Rodbertusrightly conjectures that the price of wheat was much more variable in ancient times than it is with us. (Hildebrand'sJahrb., 1870, I, 36.) That it was so may be inferred from the surprisingly large family supplies which were laid in, as appears from Digest, XXXIII, De Penu legato.681.In Würtemberg even officials etc. buy their own wine almost always directly from the vintner. This causes prices there to be exceedingly variable, frequently from hour to hour. (v. Reden, Statist. Zeitschrift, Nov. 1847, 1008.) How greatly the mere presence of a regular market has contributed to make prices more constant, may be seen in the suburbs of Hamburg, where fish offered for sale on the street are sold in the evening for one-third of the price asked for them in the morning. Besides, purchases made with a view to speculation may increase the variations of price, if the speculation is unskillfully conducted, especially when a low rate of interest, and of the profit of the person engaged in it, has produced a blind race among the speculators. Here the price of a commodity rises, not from any natural cause, but because it once rose before, andvice versa. (Senior, Outlines, 17 ff.;Hermann, 90 ff.)682.That fixed prices suppose that men are engaged in the production of the commodity in question, as their calling in life, seeGarve, Zu Cicero's Pflichten, III, 64 ff. Chess-like commerce of colporteurs, and in caravans etc. Concerning the dreadful higgling of the Bedouins, seeWellsted, Reise in Arabien,Rödiger'stranslation, I, 147; and the still worse bantering in Cashmere, where the merchant, in the first place, always denies that he possesses the desired commodity, then begins to search for it, in order to discover what value the purchaser puts upon it etc. (K. Ritter, Erdkunde, III, 475.) On the practices in Indian fairs, seeTh. Skinner, Excursion in India, 1832, I, ch. 6; on the bazaars in Asia,Andree, Globus XII, 7, 211.Herbersteinsays of the Russians in the sixteenth century:mercantur fallacissime et dolosissime nec paucis verbis ... mercatores nonnunquam non uno tantum aut altera mense suspensos detinent, verum ad extremam desperationem perducere solent. Hence the great variations in prices and commodities. (Rerum Moscov. Commentt., ed. Starczewski, 39 f.) Similarly also, in 1674, according toKilburger: Büsching's Magazin, III, 249. But, on the contrary, it is said of the Plescovers, educated by intercourse with the Hanse;tanta integritas ... in contractibus, ut uno tantum verbo res ipsas indicarent omni verbositate in fraudem emptoris omissa. (Herberstein, 52.) In the England of the present day, the custom of marking each piece of goods with its price is very general. Concerning the rapidity and the paucity of words with which prices are settled in that country, where business men do not even salute their customers, nor customers the business man, seeC. G. Simon, Observations recueillies en Angleterre, 1835, I, 129 f. The Athenian laws (?), that fixed prices should be asked, and that sellers should not sit down that that they might sell more rapidly, points to something similar. (Athen., VI, 226 f.Plato, De Legg., XI, 916 f.) Athenian law prohibiting mendacity in the markets. (SeeDemosth., Lept., 459.)683.Thus the German book-trade has fixed prices. Many merchants never make an offer to their educated customers who are wont to do so with peasants etc.; because they are aware that the latter purchase only after they have compelled the seller to come down greatly from his first proposed price. Among the Quakers it has been a rule from the beginning, never to ask more for their wares than they were determined to accept. (Hume, History of England, ch. 62.)684.Sir William Temple, Observations upon the Netherlands, Works I, 134, compares honor in trade to discipline in an army. Similarly,Law, Trade and Money, 209 f.Ferguson, History of Civil Society, III, 4. Where the seller is not obliged to make known the existence of certain defects in his wares to the purchaser before sale, there is always scope for fraud. Compare Digest De Edict. aedilit., XXI, I. On the meaning of the German legal maxims:Hand muss Hand wahren, andEin Wort, ein Mann, seeEisenhart, Deutsches Recht in Sprüchwörtern, 311 f., 319 f. It is a principle in matters of business, that the person who through malice or carelessness recommends a man of whose probity there is already some doubt, should bear the damage caused by his recommendation. (Martens, Grundriss des Handelsrechtes, 24 ff.) Many attempts at dishonesty are prevented by laws which in important contracts, especially in sales of land etc., require the presence of witnesses, and this particularly in the lower stages of civilization. (MeierandSchömann, Attischer Process, 522; Roman, Emancipatio;Grimm, Deutsche Rechtsalterthümer, 608 f.), or even a public proclamation before the assembled community, at least written documents invested with all legal formalities as practiced among civilized peoples. On Greek laws of this nature, see especially,Theophrast., inStobaeus, Sermon., XLIV, 22. Very remarkable in Sparta.Schol. Aristophan., Aves, 1284.685.CompareLotz, Revision, I, 255 ff. In England the price of wheat scarcely ever varied more than from 1 to 2. In Ireland the price of potatoes varied from 1 to 6. (McCulloch, Comm. Dict., v. Potatoes.) CompareEngel, Jahrbuch für Sachsen, I, 491 ff. The custom of asking enormous prices with the expectation of being beaten down, is usual in Italy and carried to a frightful extent, and related to the bad custom prevalent there of begging a little after-payment to every little gratuity or drink-money which has been received.686.Storch, Handbuch, I, 311.J. B. Say, Traité I, ch. 16. As to how commerce, when fully developed, is wont to be more moral than when only half developed, seeGarve, loc. cit., and Versuche IV, 149 ff. How fortunate for the public economy of nations that the prices of corn especially have been growing more steady all the time since the middle ages. SeeRoscher, Ueber Kornhandel, 56, 61.687.Trade by barter was very general in several states of the American Union about the close of the eighteenth century. In Vermont, for instance, it was usual for a doctor to exchange his medicines against a horse, and for the printer to buy corn, butter etc. with a newspaper. (Ebeling, Geschichte und Erdbeschreibung, II, 537.) In Maryland, the Assembly fixed by law the relative proportions at which tobacco, pork, corn and wheat should be exchanged the one against the other. (Ebeling, V, 435 ff.Douglas, Summary of the British Settlements in N. America, 1670, V, 2, 359.) Even as late as 1815, children were wont to run the streets of Corrientes, crying:“Salt for candles, tobacco for bread etc.”It was commerce with England that first led to trade by money in the United States. (Robertson, Letters on South America, 1843, I, 52.) Similarly in Rhokand until the end of the eighteenth century, where the cities, as a consequence, presented the appearance of a fair the whole year round. In the beginning of this century, the khan introduced the use of copper money made from Persian cannons; and much later yet, there were scarcely a million rubles in money to a million men. (Ritter, Erdkunde, VII, 753.)Basil Hallfound the uncivilized inhabitants of the Loo-Choo Islands ignorant of the use of money. (Voyage of Discovery, 1818.) Concerning trade by barter in the Homeric age, see the Iliad, VII, 472 ff. A supposed law of Lycurgus prohibited the use of money in purchases, and allowed barter only. (Justin., III, 2.) According toPausan., III, 12, only barter existed in India (?) in his time.688.The person who has been used to paying for four pounds of meat with twenty pounds of bread, and is asked to give twenty pounds of bread in exchange for some other article, must of course have some unit of measure in his mind to serve as a means of comparison between the value of that article and that of four pounds of meat. In Denmark, during the rule of the aristocracy, there were fixed prices sanctioned by the tradition of long usage, in accordance with which the prices of all commodities were estimated in relation to a ton of barley or rye—a natural consequence, apparently, of the want of a common measure to govern in the greater number of transactions.Bergsoe, Archiv der Polit. Œk., IV, 314;Graugan'sIcelandic Code contains a remarkable fixed price of this nature in the supplement to theKaupa-Balkror Commercial Code, I, p. 500. Similarly among the ancient Persians.Reynier, Economie publique des Perses, 308.689.That is, (200x(200-1))/2. CompareRauinStorch, Handbuch, III, 253. The“at least”has reference to the fact, that in barter, the many different kinds of most commodities has to be borne in mind. (Knies, Geld und Credit, I, 218.)690.This transportation of values supposes an equality of values of the money in two places, while the transportation of goods supposes different values of the same kind of goods in both places. (Knies, Geld und Credit, I, 218.)691.While the wordspecunia,danaro,dinero, andargent, are all derived from unessential qualities, the German word for money,Geld, corresponds with the essential quality of money, since it denotes that which is of value everywhere (gilt). On the other hand,nummusand νόμισμα from νόμος, (Bœckh.Metrolog. Unters., 310.),moneta(the English, money), are from the temple of Juno Moneta, in which the Roman coins were for a long time stamped. In old German, the word for money,Geld, means everything that is paid by any one. (Grimm, D. Rechtsalterth., 382.) The present meaning of the word is to be met with in a very old document of 1327. (Arnold, z. Geschichte des Eigenthums in den deutschen Städten, 89.)692.The wrong definitions of money may be divided into two classes: those which convey the idea that it is more than a commodity, and those which imply that it is less.This was a point which was contested even among the Greeks. There were many who claimed that wealth consisted exclusively in the possession of much money; as we find, for instance, in the pseudo-Platonic dialogue Eryxias; while others insisted that money was something purely imaginary (λῆρος), and the creation, exclusively, of human laws. (Aristot., Polit., I, 3, 16, Schn.) Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (Plato, De Rep., II, 371.)Anacharsiscompares money to counters. (Plutarch, De Profectt in Virtute.)Aristotle, himself, subscribed to the second opinion, although he saw clearly, that only useful and current things (χρείαν εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3, 14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.)Xenophonascribed properties to money which no other commodity possessed; especially when he said that it could never be too plentiful, and that its price could never fall. (De Vectt. Ath., 4.) The finest ancient explanation of the nature of money is that of the jurisconsultPaullus, L. I.; Digest, XVIII, 1; and it well deserves the long commentary devoted to it byP. Neri, Osservazioni etc., inCustodi, P.A., VI, 324, ff.Among the moderns,Melancthon., Corp. Ref., XVI, 498, andSeb. Frank, Chronik., 760, consider money as a mere symbol. On the other hand, the over-estimation in which the precious metals were held by the adherents of the Mercantile System was owing, without doubt, to their very superior utility as money; for we very frequently find that the adherents of that school insist that the precious metals must circulate. (See §9and § 210.)v. Schröder, Fürstl. Schatz- und Rentkammer, III f., considers new copper coins as an increase of the national wealth, but not other copper which is merely a commercial commodity. He frequently calls money, thependulum commercii, and expresses ideas concerning it as enthusiastic as they are obscure (p. 86.)Horneck, in his Oesterreich über Alles wenn es will, 1864, calls gold and silver“our best blood, the very marrow of our strength,”and“the two most indispensable universal instruments of human activity and existence.”(p. 188.)Th. Mun, England's Treasure by forraign Trade, 1664, (ch. 2) considers cash-money and resources as synonymous in every way. Only, he says (ch. 4) that it is sometimes advisable to allow one's money to remain in foreign countries, and to use bills of exchange, banks etc., at home, as a substitute.F. Gee, Trade and Commerce of Gr. Britain, edition of 1738, laments the“stiff-necked folly of those who think money a commodity like any other.”It is one of the most common demands of the adherents of the Mercantile System that the home mines of gold and silver should be worked at no matter what sacrifice, since the money employed in working them continues to remain in the country and the newly coined precious metal is clear gain. CompareSchröder, loc. cit. 109 ff., 181.Horneck, loc. cit. 173.Broggia, Della Monete, 1743, cap. 33;v. Fusti, Staatswirthschaft, 1755, I, 246:Forbonnais, Finances de France, 1758, I, 148.Ulloa, Noticias Americanas, 1772, ch. 12. We seldom meet with the correct view on this subject in the seventeenth century.Sully, of whom Henry IV. said that he never found anything to be possessed of beauty which cost double its real value, had it at times. (Economies royales, LXXIII.) So hadv. Seckendorff, Teutscher Fürstenstaat, 1655, 5th edition.It is in accordance with the usual course of human development that the exaggerations of the Mercantile System led to a reaction characterized by an exaggeration in the opposite direction. EvenDavanzati, Sulle Monete, 1588, traces the value of money back to human convention and refuses to find it in nature. A natural calf, he thinks, ispiù nobilethan a golden one; although he elsewhere expresses his admiration of the precious metals, calls themcagioni seconde della vita beata, and lauds them because they procure ustutt'essi beni(20, 21, Cust.)Montanari(ob., 1687) demonstrates from the use of leather money etc., that the authority of the state is the only power which gives money its character as money. (Della Moneta, 35.)Davenant(ob., 1714) carries his inclination to call money“the servant of trade, measure of trade,”so far as to compare it to a ticket or counter. (Works, I, 355, 444.) Strongly asLaw, himself, opposes the convention theory (Trade and Money, ch. I; Sur l' Usage des Monnaies, 1720, p. 1.), his discipleDutot, in his Réflexions polit. sur le Commerce et les Finances, 1738, 905, éd. Daire, contrasts not only paper money but also gold and silver as representative wealth, with real wealth.Berkeley, Querist, 1735, teaches that the real notion of money is not that of a“commodity, standard, measure, pledge, but [No. 23] ticket or counter, entitling to power and fitted to record and transfer such power.”(441, 475.) Even if the names,livre, shilling etc., remain, and the metal is dropped, every article may still as well as before be counted and sold, industry promoted and the course of commerce preserved. (p. 440.) According toMontesquieu, Esprit des Lois, XXI, 22, gold and silver are arichesse de fiction ou de signe. Compare Lettres persanes, II, 18.Benjamin Franklinalso maintains that the value of gold, for instance, is principally a credit-value. Remarks relative to the American Paper-Money, 1765, Works, II, Sparks' edition.Forbonnais, Finances de France, I, 86 f., calls money, simply a means to put commodities, which alone have value originally, in circulation. Hence it is, in itself, a matter of indifference whether, for a given quantity of coin, a person gives one thaler, or ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a distinction betweenrichesses naturelles(raw material),artificielles(manufactured products), andrichessesde convention (money.)von Schlözer, Aufangsgründe, 1805, 100, 138, calls money something imagined; andTh. Smith, Essay on the Theory of Money and Exchange, 1807, asserts, that true money is only an ideal measure of value, of which coins in turn are only the representatives. Compare, however, Edinb. Review, Oct., 1808.Oppenheim, Die Natur des Geldes, 1855, grants that in the beginnings of trade, money possessed the character of a commodity; but says that as soon as the services of circulation of the money-commodity prevailed over its services in consumption, it lost all its importance for the latter purpose, and that all relations dependent thereon ceased. At present, he claims money is only the representative of commodities, but no commodity itself. See, on the other hand,Roscher'scritical analysis in the Literarisches Centralblatt, 1855, December.The true doctrine was advocated in a classic form byNicolaus Oresmius(ob. 1382). See his Tractatus de Origine et Jure nec non et Mutationibus Monetarum, newly edited byWolowski: Paris, 1864. SeeRoscher'sessay in the Comptes rendus of the Académie des Sciences morales et politiques, vol. 62, 435 ff. Based on the latter we haveGabr. Biel(ob. 1495), De Monetarum Potestate simul et Utilitate, 1542, andG. Agricola, De Re metallica, 1556, I, 4 ff. This true doctrine was acclimated earliest in England and Holland, and before the mercantile system invaded them. CompareHobbes, Leviathan, 24, in which theconcoctio bonorumis described by means of money, and the full and clear chapter 12 ofSalmasius, De Usuris (1638), who, among other things, shows how Midas, who turned everything into bread, died of thirst.Pettyshows very clearly that national wealth does not consist exclusively nor mainly in money. Every country, he says, needs a certain quantity of money to carry on trade. It would be a waste to increase the former, the latter remaining the same. But the precious metals, by reason of their durability and universally recognized value, possess the character of wealth in a higher degree than other commodities.On the whole, the use of money in a nation is like the use of fat in the individual. (Quantulumcunque concerning Money, 1682.) CompareRoscher, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.DavanzatiandHobbeshad compared it to the blood, as has recentlySchmitthenner, Staatswissenschaften, 1839, I, 459.Northcalls money a commodity of which there may be an excess as well as a want. (Discourse on Trade, preface and postscript.) CompareLocke, Considerations on the Lowering of Interest, 1691, Works II, 13 ff., 19.Galiani, 1750, Della Moneta, IV, holds a very happy middle place between the alchymists and the philosophic contemners of gold. See, further,Quesnay, éd. Daire, 64, 75 ff.Turgot, Sur la Formation des Richesses, § 30 ff, had many clear views on this subject.Verri, Meditazioni, 1771, II, 1, calls money the universally current commodity. The expressions, measure of value, pledge, representative of all commodities might be true also of all other wares. It cannot, however, be denied that most modern political economists have not borne sufficiently in mind the peculiarities which distinguish money from all other commodities, as is apparent from the doctrine of the balance of trade prevalent in Hume's and Adam Smith's time. To this extent, therefore, the semi-mercantilistic reaction instituted byGanilh, Théorie de l'Economie politique, 2822, II, 380 ff., 426;St. Chamans, N. Essai sur la Richesse des Nations, 1824, ch. 3; andColton, Public Economy for the United States, 1849, 203 ff., who bring into relief the difference between“money as the subject”and“money as the instrument of trade,”was not wholly unfounded.Ad. Müllerexaggerates a correct thought, and causes it to degenerate into a species of mystic pleasantry, when he calls every individual in the state and every commodity that possesses value, in exchange or a social character, money.The highest object of the state is to develop this money-character more and more. (Elemente der Staatskunst, II, 194, 199.) The statesman, he says, should be money. (III, 206.) A very valuable monograph on this subject isM. Chevalier'sDe la Monnaie, 1850, constituting the third volume of his Cours d'Economie polititique.Knies, Geld und Credit, I, 1873, is here most thorough and acute, especially in keeping separate, by well defined lines of demarcation, the five different functions of money: measure of value (by proper division into parts: price-measure), instrument of exchange, means of transportation of values, and means of storing up and preserving values.693.Kniesshows how the making of money legal tender by the state, although of only secondary importance, is by no means an irrelevant matter, since persons must then have it, even if they do not want it for purposes of use or exchange, to discharge their liabilities thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)In all these cases, barter-economy (Naturalwirthschaft) meets with greater and greater difficulties as civilization advances. How, for instance, could 50 days annually of socage-service or labor be redeemed by the achievement at one time of 1,000 days of socage-service or labor? The rich man requires money principally as a means of payment, the poor man as a medium of exchange. The requirement or need of a people of media of payment is much more susceptible of extension or contraction, than that of media of exchange, made especially so by the intervention of claim-rights instead of money.(Knies, loc. cit, 200 ff.)Ravit, Beitr. z. Lehre vom Gelde, emphasizes this feature of money altogether too much after the manner of a jurist. But he is entirely right in adopting the exclusion of therei vindicatioagainst the honest possessor as necessary to the completion of the idea of money.694.Sismondi, N.P., I, 131, very rightly remarks that this has made practice as much easier as it has theory more difficult.695.Law, Trade and Money, 19. Hence, before the invention of money, scarcely anything but the things most indispensable to existence were produced. Were there no money, there would be very few scholars, artists etc.; for the classes who produce most of the things indispensable to existence make but few demands for them.Büsch, Geldumlauf, I, 11 ff., 36, II, 54.696.Turgot, Formation et Distribution, § 48 ff. Commodities which perish rapidly could be produced by persons devoting themselves to their production as a business only after the invention of small coin. (Lueder, N. Œk., 1820, 283.)697.CompareKnies, Geld und Credit, I, 219.698.CompareSchmitthenner, loc. cit., I, 457. One of the principal advantages of money consists in this, that every producer can discover what there is an over-supply or under-supply of in the nation, by means of the relation of the price in money of his products to the cost of producing them, estimated in money, (v. Thünen, Isolirte Staat, II, 2, 235.)699.Hence it is that so many socialists attack money.Th. Moreassures us that with the simple abolition of money, vice and misery would, for the most part, disappear of themselves. Hence in his Utopia, criminals are bound in golden chains and the chamber-pots are made of gold and silver in order to make these metals contemptible. (Ed. 1555, ff., 197 ff.) Similar views among the over-cultured Romans. (Compare §§79, 204.)Auri sacra fames.Virgil, Æneid, III, 56.Pliny, too, would recall the days of trade by barter. (H. N., XXXIII, 3.) Even inBoisguillebert, Factum de la France, ch. 4, we find, together with many correct views on the nature of money, passionate declamation against it because of its darker side.Argent criminel. (Détail de la France, 7. Dissertation sur la Nature des Richesses etc.) More recently this darker side has been dwelt upon byF. Möser, Patriot. Phant., I, 28;Ortes, Economia nazionale, II, 17, and the would-be restorer of the middle ages,Ad. Müller. While the latter writer lauds the feudal system as a“sublime fusion of person and thing”(Elemente I, 221), the present system of wages, because it is a system of compensation, he blames, and prefers the feudal for the opposite reason (?).“The onlymeritwhich the state recognizes in our day is oneof service.”(III, 259.)Kosegarten, Geschichtliche systematische, Uebersicht der N. Oek., 1856, 146 ff., is no friend to the economic system to which money gives a distinctive character.Per contra, compareBastiat, Maudit Argent, 1849.700.Mirabeau, Philosophie rurale, 1763, ch. 2, adds as the third great invention thetableau économiqueof the Physiocrates. For a comparison of money and language, seeHamann, Werke, II, 135 ff., 509.Hehn, Kulturpflanzen und Hausthiere, finds it characteristic of the race, that wine, writing with letters, and money, all owe their origin to the monotheistic stem of the Semitic people.701.Where every man becomes a merchant, and the society itself a commercial society.Ad. Smith, Wealth of Nations, I, ch. 4.702.Just as descriptive is the German wordbillig(equitable) for cheap. Here it is plain that language takes sides with the possessor of money!703.The contrast between barter-economy and money-economy is of great and fundamental importance. It repeats itself with so much regularity in the history of every highly developed nation, that political economists gifted with perception for the historical, could not possibly overlook it. Thus,Aristotle, for instance, establishes with the utmost care and accuracy the difference between οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and artificial economy, corresponding to the difference between value in use and value in exchange. (Polit., I, 3, Schn.) SimilarlyD. Hume, who allows a period of luxury, culture, industry, of trade and manufactures, of freedom and circulation of money, to be preceded by one in which the feeling of wants is not awakened, in which coarseness and idleness prevail, one in which agriculture is alone pursued, and monetary economy and freedom decline, and trade by barter obtains. (Discourses, passim, especially On Interest and on Money.) A similar contrast we find frequently, and as one of his fundamental thoughts, inJ. Steuart.As to how the transition from barter-economy to monetary-economy is generally effected, seeF. G. Hoffmann, Lehre vom Gelde, 1838, 176 ff. In the Tyrol, as late as 1820, the greater portion of purely mechanical work, such as that of the smith, the carpenter, and the washerwoman, were purely feudal duties. On the other hand, payment in money was the rule, in the beginning of the fourteenth century. (F. Beidermann, Technische Bildung in Oesterreich, 3.) Yet, for a long time after, the functions of a measure of value were performed by pieces of land, and those of an instrument of exchange by cattle and natural products. (Arnold, Gesch. des Eigenth., 207.) In France, money-economy, i.e., trade by money, had grown to importance earlier. (Nitsch., Ministerialität und Bürgerthum, im 11. und 12. Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated the rent of land in“cauldrons of victuals.”(Moryson, Itinerary, 1617, III, 155.) In ancient Italy, during the first three centuries of Rome, there was, with the exception of the Greek colonies, only trade by barter.Mommsen, Römische Gesch., I, 293, shows that the oldest ases were not money in the higher sense of the word, but belonged rather to the stage of barter-economy. On the other hand, we find in the time of the classic jurists, much as slavery had limited the sphere of action of money, the principle:pecuniæ nomine non solum numerata pecunia, sed omnes res, tam soli quam mobiles, et tam corpora quam jura continentur. (L. 222, Digest L. 16; compare 4, 5, 178.) Similarly inCicero, Top. 6. De Invent, II, 21. De Legg, II, 19, 21; III, 3. CompareDionys. Hal., N.R. IV, 15.704.Were money nothing but a measure of values in exchange, it should on that account, if on no other, have value in exchange itself, as a measure of length must necessarily have length itself. (We measure time on a clock by means of the revolution of the hands on the dial.) Again, value in exchange supposes value in use. The so-called“money of account,”such as the East Indianlac de roupies, the Portuguese reis, and the earlier Englishpoundsterling are no imaginary magnitudes, which would disappear with the figures of our system of counting (seeHufeland, N. Grundlegung, II, 33, in reply toStruensee, Abh., III, 501); but real coin-values which can not be represented by only single pieces of coin, units of value for the most part no longer recognized by the state, but which the people still retain. SeeM. Park's(Travels, 27) refutation of the fable circulated byMontesquieu, Esprit des Lois, XXII, 8, that the regular standard money of the Mandingo negroes was a mere imaginary standard.Hobbes, Leviathan, 24, exhibits a very good knowledge of this subject.705.CompareP. Neri, Osservazioni, 1751, VI, 1.Lord Liverpool, Treatise on the Coins of the Realm, 1805. The person who takes money as such must always harbor the hope of being able to dispose of it again as money. Hence, such an acceptance always supposes the existence of a certain amount of commercial confidence. The savage Goahiros, between Rio de la Hacha and Maracaibo, are too“distrustful”to take anything in trade but commodities fit for the most immediate use. (Depons, Voyage dans la Terrefirme, I, 314.) Similarly in the twelfth century, the heathen Laplanders. (Arndt, Liefl. Chronik, II, 3.) Commodities which barbarians can consume immediately are objects of the first necessity, whereas more civilized people, who are in a condition to undergo greater expense, look more to the technic qualities of money, such as divisibility, capacity for transportation and durability.v. Scheelshows in a very happy manner how, as commerce increases, money comes to be, as it were, subjected to a process resembling that of distillation: first mere increase of stores for use, next preponderating values in exchange, lastly mere orders for the same possessing no independent value.Hildebrand'sJahrbb., 1866, I, 16.706.The last circumstance continues to be one of great importance for a long period of time in the frigid zones. Thus, the beaver-skin continues still to be the unit of measure of trade in much of the territory of the Hudson Bay Company. Three martens are estimated to be equal in value to one beaver, one white fox to two beavers, one black fox or a bear to four beavers, a rifle to fifteen beavers. (Ausland, 1846, No. 21.) The Esthonian word,raha, money, means in the related language of the Laplanders, fur. (Krug, Zur Münzkunde Russlands, 1805.) Concerning skin-money in the middle age of Russia, seeNestor,Schlözer'stranslation, III, 90. The old wordkung, money, means marten. By degrees it came to pass that instead of whole skins, only two“snouts”were given or other pieces of leather about a square inch in size, which were probably stamped by the government and redeemed in whole skins at the government magazines. Hence, there is here supposed a species of assignats, and of disturbances of credit. The Mongolian conquerors would not recognize them, and they therefore became suddenly valueless. In Novgorod and Pskow, the system continued some time longer, for the reason that these places had little trade with the Mongols. In the rest of the kingdom it now became necessary to introduce silver money, and in the north to return to real squirrel and beaver skins.Karamsin, Russ. Gesch., I, 203, 385; I, 96, 191 f. Voyage de Rubruquis, inBergeron, Voyages I, 91.Herberstein, Rer. moscov. Commentt, 58 ff. Even in 1610, a Russian military chest was captured by the enemy, and in it were found 5450 silver rubles, and 7000 fur rubles. (Karamsin, XI, 183.)707.When the Danes progressed so far as to practice agriculture, they used grain instead of cattle, in quantities corresponding to the value of one cow or one sheep, for money, to the end that their idea of a unit of measure might not become obscured. (Ravit, Beiträge, 3.)708.Homeric determination of prices in oxen. Iliad, II, 449; VI, 236; XXI, 79; XXIII, 703 ff; Odyss., I, 431. Compare, however, II, VII, 473 ff. In Draco's time, money-fines were imposed in cattle (Pollux, IX, 60 ff.), and in Athens, before Solon's time, even the metal coins were, for the most part, stamped with the figure of an ox.Plutarch, Theseus, 25.Böckh., Metr. Uuntersuch., 121 ff. Among the most ancient Romans (Cicero, de Rep., II, 35) the imposition of fines in property, the coins first stamped by Servius,boum oviumque effigie(Plin., H. N., XVIII, 3,Cassiodor., Var., VII, 32), and the wordspecunia,peculium,peculatus, derived frompecus, point to something analogous. (Varro, De L. L., V, 19; De Re rust., II, 1;Cicero, De Rep., II, 9;Ovid, Fast., V, 281;Plutarch, Publicola, 11.) Old German fines in cattle, inTacitus, Germ., 12, 21; Lex Ripuar, 36, 11; Lex Saxonum, 19.Ulfilastranslates αργύριον δοῦναι (Mark, 14, 11),faihu giban. Very old German documents, of the seventh and eighth centuries, name horses as purchase-price. (Grimm, Deutsche Rechtsalterth., 586 f.) Otho the Great imposed cattle-fines. (WidukCorb., II, 6.) Similarly, in King Stephen's laws of Hungary (Wachsmuth, Europäische Sitturgesch., II), in the old Irish Brehon laws (Leland; History of Ireland, 36 ff.), as well as in the Scotch collection of laws,Regiam Majestatem, of 1330. (Honard, II, 263 f, 537.)Viva pecuniaof the Anglo-Saxons in the laws of William I. In ancient Sweden, all property was estimated infä=cattle (Geijer, Schw. Gesch., I, 100), just as now, in Icelandic,fe=property. In Berne, the Germanvieh, cattle, is used to express commodities. Among really nomadic races this is, of course, still more the case. Thus the Kirghises use horses and sheep as money, and wolf-skins and lamb-skins for small change. (Pallas, Reise durch Russland, 1771, I, 390.) Among some of the Tartar tribes, everything is stipulated for in cows. (v. Haxthausen, Studien, II, 371.) Among the Persian nomads, sheep are used as money; or when they are held in subjection in the cities, corn, straw and wool. (Ritter, Erdkunde, VIII, 386.) Oxen in use as money among the Tscherkessens. (Klemm, Kulturgeschichte, IX, 16.)W. B. Hermanndoubts, however, whether cattle were ever used as a medium of exchange. He thinks rather they were employed only as a measure of price. (Münchener Gel. Anz., 580.)709.That of vanity which presents itself among some people sooner than that of clothing.710.In Genesis, 1, 24, gold appears only as a valuable ornament. Abraham paid for his purchases in silver.711.For this reason, zinc-money is just as natural with the Malays and Chinese as iron-money with the Senegambians. (Mungo Park, Travels, 27.) And soPlutarch, Lysand., 17, may be right when he calls iron the earliest universal means of payment. In Sparta, too, where industrious efforts were made to maintain the lower stage of culture, this medium of payment was longest maintained. Compare, however,St. John, The Hellenes, III, 260 ff. The first copper coins were stamped a short time before Philip, father of Alexander the Great. (Eckhel, Doctr. Numm, I, XXX ff.) On the other hand, Italy, partly because it had mines of its own, and partly because of its intercourse with Carthage (Cyprus), had become, at a very distant period, so rich in copper that the circulation of copper, or to speak more accurately, of bronze, was naturally introduced. CompareNiebuhr, Röm. Gesch., I, 475 ff. (Aes alienum, obæratus, ærarium, æstimare.) Copper was all the more adapted to this end the more frequently it was found unmixed. It was generally used in preference to iron because of the greater facility of working it. (Hesiod., Opp., 150 f.;Lucret., V, 1285 f.) In modern nations copper money seems to have been employed only after silver money. Thus, it was not stamped in England before the time of James I. (Adam Smith, I, ch. 5), nor in Sweden before 1625. (Geijer, Schwed., Gesch., III, 56.) Money was struck from the metal of molten bells during the French Revolution!712.In Russia, between 1763 and 1788, there were 76 million rubles of gold and silver coins struck, against 54 million of copper rubles. (Hermann). On the other hand, in France, between 1727 and 1796, there were struck only 40 million francs of copper, 10 million ofbillonor base coin, and 3967 million of gold and silver.713.Michaelis, De Pretiis Rerum apud veteres Hebræos, 183.714.Strabo, VIII, 358. Hiero, tyrant of Syracuse, found it exceedingly difficult to obtain gold. When the Spartans wished to make an offering of gold at Delphi they were obliged to have recourse to Crœsus. (Herodot., I, 69;Theopomp., inAthen, VI, 231 ff.)Aristoph., Ranae, 720, calls gold“new”in contradistinction to the“old money,”that is, silver.715.Plin., H. N., XXXIII, 13. Compare, however,Dureau de la Malle, Economie polit. des Romans, I, 69, afterVarro, apud Charisium, I, 81. (Putsch.) It is certain, however, that when Italy was conquered, the Romans had introduced a circulating medium of silver, and that it was the prevailing medium; but in the time of Cæsar and Augustus, a gold circulation was the prevalent one. Yet the state treasure was deposited in gold during the period of silver circulation, because gold was, without question, better adapted to storing up and transportation.716.Muratori, Antiquitt., IV, Diss., 28.717.Henry was obliged to issue an order to the mayor and sheriffs of London, to get his gold into circulation; but he soon saw himself compelled to desist from executing his design. Edward III. was able only after a voluntary circulation of them had continued for a long time, to prohibit any one's refusing the rose-nobles. (L. Liverpool, loc. cit.)718.German., 5. Still more striking is the example cited byHerbelot, Bibliothéque Orientale (1697), 485.Rubruquis, Voyage, ch. 13. In the time of Nadir-shah, the Kurds gave, without the slightest hesitation, a pound of gold for a pound of silver or copper. (Ritter, Erdkunde, VIII, 395.)719.Recommended even byAdam Smith, ch. 5, and for Germany byF. G. Hoffmann, Drei Aufsätze über das Münzwesen, 1832. In Egypt, also, for a long time the wealthiest country of the middle ages, the circulation of gold prevailed until the twelfth century. (Macrisi, Historia Monetae Arab., cap. 3 ed.,Tychsen.) Harun Alraschid's income was estimated at about 7,500 cwt. of gold. (Ritter, Erdkunde, X, 235.) Something similar related of the Carnatic,“the land of ancient emporiums.”Ritter, Erdkunde, V, 564, afterFerishta.720.The use of thecauris(Cypræa moneta) in India this side and beyond the Ganges, in upper Asia, and in southern Africa depends on their employment for purposes of ornament, on their greater uniformity, and on the rarity of copper which would otherwise be better suited to purposes of change. In Calcutta, 1280caurisare equivalent to about half a shilling. (McCulloch.) CompareK. Ritter, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III, 233, 739; IV, 53, 420;Salin, III, 62;Botz, in the Tübinger Ztschr. Similarly among the fishing population of Northwestern America. (Stein-Wappäus, Handbuch I, 352.) Salt as money on the Chinese-Birman boundary (Marco Polo, 38), but especially in the interior of Africa, where nature does not at all produce it, but into which it is brought by caravans from the deserts, where salt is found in great quantities.M. Polo, Travels, 305, found the current price of a salt-tablet, two and a half feet long, one foot, two inches broad, and two inches thick, to be equal to the value of two pounds sterling among the Mandingos. In Abyssinia, the salt-bars are generally six inches long, three inches broad, one and a half inches thick, and they are bound with an iron ring to protect them against fracture. Sixty of them are worth one thaler. (Ausland, 1846, No. 35.) Slaves used as money:Barth, Reise, III, 338, 344. Tea-blocks in upper Asia and Siberia; and they are given by the Chinese to the Mongols as pay for troops. (Ritter, Asien, III, 252,) In Keachta, a tea-block is equal in price to one paper ruble. (Ausland, 1846, No. 20.Timkowski, Reise nach China, 143.) Date-money in the Sivah oasis. (Hornemann, Reise, 21.) Also in the Persian date-country, where, formerly, the lowest silver piece of money was coined in the form of a date (Ritter, Asien, VIII, 752, 819.)The ancient Mexicans used as money cocoa-nuts, in bags of 24,000 pieces, cotton-stuffs, small pieces of copper, and gold dust in quills. (Humboldt, N. Espagne, IV, 11.) Cocoa-beans are still used as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes weighing one pound are used. (Smyth, Journey from Lima to Para, 1836.) Among the ancient inhabitants of Rügen, linen (Helmold, I, 39); and still among the Icelanders, the so-calledVadhmâl. During the middle ages, 120 ells ofVadhmâlwere equal in value to one milch cow or six milch sheep, or two and a half ounces of silver. (LeoinRaumer'shistor. Taschenbuch, 1835, 515.) That the ancient northern mode of valuation, by theVadhmâland in cows is older than by themarkis shown byWilda, Gesch. des deutschen Strafrechts, I, 331. The cod-fish money used by the Icelanders was, on account of its great commercial importance as an article of export, an advance upon the use of theVadhmâl. Among the Caffirs, besidescauris, mats, javelins, glass corals, but particularly brass rings, are used as money. From three to four hundred of these rings are strung together, and two such strings are equal in value to one cow. (Klemm, Kulturgeschichte, III, 308, 320 f.) Ivory used as money in the neighborhood of the Portuguese colonies in Africa. (Martius, Reise, II, 670.) In Logone,Denham(1822) ff., had met with pieces of iron as a medium of circulation; but on the other hand,Barth(1849), with small strips of cotton from 2 to 3 inches in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.) In colonies, money of this nature is continued for a long time. Thus cod-fish used in Newfoundland, sugar in the English West Indies (Adam Smith, I, ch. 4), tobacco in Maryland and Virginia. (Douglas, V, 2, 389;Ebeling, V, 435 ff.) The last was related to the inspection and storage of the tobacco intended for exportation. Payment was made in orders on the stored and inspected tobacco, even as late as the end of the eighteenth century. In 1618, the forced circulation of tobacco was decreed in Virginia, and under severe penalties. (Gouge, History of Paper-Money and Banking in the United States, ch. 1.)721.When the caravans no longer touched at the oasis Agades, gold and silver money fell into disuse, and grain, stuffs etc. did service as instruments of circulation. (Barth, Reisen und Endeckungen, I, 144.)722.Ad. Müllersays very pertinently, but in a very mystical vein, that the precious metals combine in a very high degree and yet in a very simple manner, the principal qualities in which man's greatness finds expression: rarity, flexibility, uniformity, mobility, durability and beauty. (Elemente, II, 266.) In another place, he says, the highest ideal good is God, the highest material good, gold! (III, 65.) The mysticism of gold was most highly developed among the alchymists of the sixteenth and seventeenth centuries.723.Iron beds are worked only when they contain at least 18 per cent. of metal. Generally it is estimated that the furnace should yield 30 per cent. In the copper mines of Mansfield, Norway, Agordo and Venice, it goes as low as from one to three per cent. On the other hand, silver mines which yield 0.17 per cent. of metal are considered worth working. Lastly, gold is so rare that generally it can be extracted only from time to time by the ordinary mining processes. As a rule, men are content to gather it where nature has charged itself with its refining. The extreme limit of the working of gold appears, according toPlattnerandHaussmann, at Goslar, to be reached when in 5,200,000 parts of mineral earth there is one of gold. Spite of this, however, by reason of their great ductility, the precious metals have been able to penetrate even into the meanest huts in one form or another. It has been estimated that a silver leaf may be attenuated by beating to a thickness of only 0.00001 of an inch, and a gold leaf to 0.0000035 of an inch. An ounce of gold spread on a silver thread may attain a length of 13,000 English miles. (McCulloch.)724.How easily, for instance, could leather-money, such as was used by the ancient Galls (Cassiodor., Varia, II, 32,) be increased to any desired quantity, and thus its price brought down.725.Engel, at the usual tariff for land and railroad freight (10 and 5pfennigsper mile and hundredths of a mile) estimates the enhancement of the price of the following commodities, for one mile of transportation of a custom-hundred-weight (Zollcentner) at the following percentage of their average value:Gold, value 47610 GermanReichsthalerper cwt., 0.000007 by land, 0.0000035 by railroad.Silver, value 3000, 0.00111 by land, 0.00055 by railroad.Cotton, value 45, 0.074 by land, 0.037 by railroad.Tin, value 24, 0.1389 by land, 0.0694 by railroad.Lead, value 8, 0.416 by land, 0.208 by railroad.Iron, value 2.5, 1.333 by land, 0.666 by railroad.Rye, value 2, 1.666 by land, 0.833 by railroad.Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.Coal, value 0.12, 27.777 by land, 13.888 by railroad.Their great specific gravity, also, makes the precious metals easy of transportation. ThusCazeaucalculates that a given value of gold is 17,222 times as easy to transport as the same value in wheat. But as, where the weight is the same, the labor of transportation is inversely as the volume, this number must be multiplied by 26, and we therefore have 447,772 times. In the case of silver, the relation to wheat is as 1:15,554. Concerning copper, seeStorch, Handbuch 1, 488.Chevalier, Cours, III, 17 ff.726.This, at bottom, is also true, of the various kinds of copper; only, here, complete refining is impracticable on account of the relation between the cost of production and the product-price.727.On the other hand, copper, and still more zinc, tin and lead lose much of their value in the fire. Pearls may lose their entire value by fire, and diamonds more than half of it.728.Aqua-regia, a mixture of nitric and muriatic acid, dissolves gold. Chlorine and bromine attack it. It has been noticed to vaporize at a very high temperature. A gold thread vaporizes when a strong electric current is passed through it. A small ball of gold gives off a great deal of vapor if placed between two carbon points and subjected to the action of a powerful galvanic pile. (K. F. Naumann.)729.CompareHatchett, Experiments and Observations of the various Alloys, On the specific Gravity and comparative Weight of Gold, 1863. The French five-franc pieces wear away, on an average, in a year, 0.00016; the English crown, 0.00018; the half crown, about 0.00173; and the shilling, about 0.00456. (L. Liverpool, Treatise on the Coins. 204;M. Chevalier, Cours, III, 128 ff.) The wear from use of the south German gulden is 0.292 per 1,000. (Rau, in the Archiv. N.F.X, 256.) According toJacob, the average wear of coin is 2.38 per 1,000. (Historical Inquiry into the Production and Consumption of the Precious Metals, ch. 23.)730.Adam Smith, Wealth of Nations, I, ch. II, Digr.731.Solera, Sur les Valueurs, 1785, 271 ff.;Custodi. Half an ox, for instance, is worth half the value of a whole one only for a few well defined purposes. As to how much the value of the diamond varies with the size etc., seeDufrênoy, Traité de Minéralogie, II, 77 f. On the other hand, the separated parts of a piece of metal are very readily reduced to a whole.732.In the case of the ox, it is impossible to imagine a mark which might not be eluded by its losing flesh.733.The cost of coinage since 1849 has been ¾ of 1 per cent. in the case of silver, and in that of gold not quite 2 per 1,000. (M. Chevalier, Cours, III, 110.)734.Platinum possesses many of the properties necessary to an instrument of exchange in as high a degree as gold and silver,—great value in exchange, great specific gravity and great durability. On the other hand, its pliability as to form is very small, and therefore the cost of coining it would be high. The conversion of platinum coins into utensils, and of utensils into coin, which would contribute to the supply of money when needed, and to a diminution of that supply when the demand decreased, would be much more difficult on this account; and also because of the small degree of beauty possessed by that metal, which renders it little adapted to purposes of luxury. Under these circumstances, the rarity in nature of the metal is a great drawback; for the discovery of a new mine would create a great perturbation in prices. For this reason, the Russian platinum coins have been generally very much undervalued since 1828 in the commercial world, and the whole experiment was given up in 1845-46. CompareJ. Schòn, National Œkonomie, 128 ff. Aluminum, discovered by Wöhler, and which can be prepared from argillaceous earth, is capable of manipulation in a very high degree (malléable et ductile à peu près sans limite, excessivement fusible), almost as indestructible as the precious metals, but easily distinguished from silver by a fine bluish color, which has been compared to that of tin; by its small specific gravity, from 2.5 to 2.67, and its ring like that of iron. Hence it is very doubtful whether aluminum can be made to play the part of a substitute for silver, and still more so whether it can be used for coining.735.Lingot, bullion. In India, beyond the Ganges, and in China, bars are very much used. (Sycee.) In the latter country, besides these bars, there is no coinage except that of a mixture of copper and lead, for small change. (Th. Smith, An attempt to define some of the first Principles of Political Economy, 31.Timkowski, Reise nach China, III, 366.) Concerning Brazilian trade by bars, seeSpix und Martius, Reise, I, 346 f. They are stamped with the national coat of arms, the sign of the mint, the number by which registered, that of the year and of the degree of fineness. Concerning the Persian bars, thelaries, seeNoback, Handbuch der Munzverrh., III, Taf. 29.736.Concerning the utility of the precious metals for purposes of money, seePliny, A.N. XXXIII, 3;Oresmius, De Mutatione Monetarum, ch. 2;Law, Sur l' Usage des Monnaies, 683 f.Daire, where we read that before the invention of money, silver had served all kinds of useful purposes, but that now it served its most important purpose, namely the making of the best material for money on many accounts. YetLaw'sbook, Money and Trade considered (1705) is based mainly on the idea that pieces of land are much better adapted for purposes of money than the precious metals (185)!Galliani, Della Moneta, 1750, I, 3, 4, andP. Neri, Osservazioni, 1751 ff, Cust., have very correct ideas on this subject.737.North, Discourses upon Trade, 16. The capacity of money to act as a storer of wealth has been as much over-estimated by the so called Mercantile System, as its capacity to transfer wealth has been by the so called currency-school.738.Adam Smithcompares money to a large wheel, by means of which a due share of the means of subsistence and of enjoyment is distributed to each member of society. Elsewhere he compares its utility to streets and roads. (Wealth of Nations, II, ch. 2.)Hume, On Money, Pr., prefers to compare it to the oil with which the wheels of circulation are greased.Sismondicompares money to porters. (N. Principes, II, ch. 2.)“Money is to commerce what railways are to locomotion, a contrivance to diminish friction.”(J. S. Mill.) According toSchmitthenner, 455, it bears the same relation to other commodities that the written language of a people's literature does to their dialects.739.Law'sviews on money are, in part, excellent. Thus, for instance, he says that the debasement of the coin from financial necessity is as great a folly as it would be to try to enlarge a piece of goods too small for the purpose for which it was intended, by diminishing the length of the yard-stick. (Sur l'Usage des Monnaies, 697.) A country entirely isolated from all others could get along as well with one hundred pounds sterling as with a million. (Money and Trade, p. 88.) Elsewhere, he confounds money and capital to such a degree that he considers every increase of the amount of money in a country as an enrichment of the people, a means to give employment to the poor, to carry on manufactures etc. (Money and Trade, 23, 26 ff., 168.) A given quantity of money is capable of giving employment at most only to a certain number of men. (21.) A nation's power and wealth depend on the population and its stores of goods, these on commerce, and commerce in turn on the amount of money. (Pp. 110, 220.) The advice given, in 1848, to the National Assembly of France, but which it had the good sense to reject, to overflow all France with the so-calledbons hypothécaires, is akin to Law's practical propositions.M. Chevalier, Cours, III, 8, rightly ridicules the literal construction of the words:l'argent est abondant, when merchants find it easy to obtain credit, and considers it as well grounded as it would be to infer from the maxim:l'argent est le nerf de la guerre, that rifles and bullets were made of silver.740.Adam Smithwas not entirely clear, in his own mind, on this point. Thus inconsistently enough, he calls money unproductive—“dead stock,”for the reason that it leaves no material traces behind it of the goods which it has transferred from one hand to another. (II, ch. 2.) Is not the same true of trade itself? And yet Adam Smith calls trade productive. His error is doubtless a remnant of the Physiocratic doctrine, to which Smith still held. CompareQuesnay, 94, éd. Daire. EvenTwisssays that money employed as money is unproductive, but that, when employed as a commodity, it is productive. (View of the Progress of Political Economy, since the sixteenth Century, 1847.) Besides it is not a peculiarity of money alone, that, after it has served the purposes of production, it comes out of the product unaltered. The same is true of quicksilver employed in amalgamation. (Hermann, 2nd edition, 302.)741.Senior, Three Lectures on the Value of Money, 1840, is, in so far, not wrong when he says that the value in exchange of the precious metals is still ultimately determined by the want of such commodities as are luxuries. This last determines to what extent the production shall be extended by the working of the poorest mines, whereas the wants of circulation can be met as well by small as large quantities of the metals.742.The good or bad result of this production depends on many different elements which may compensate on another. In California and Australia gold is to be found in large quantities, and is easily mined; but the workmen make large demands which the nature of the country renders it difficult to meet. In the Harz mines, where the cost is scarcely covered, (Lehzen, Hannover's Staatshaushalt, 1853, I, 139), the shafts are sometimes 175-½ fathoms deep, but this is made up for in a measure by the moderate demands of the workmen and their skill in mining. Among the Mandingos, the auriferous material is so rich that ⅓ per 1,000 of the weight of the sand is washed out into pure gold in ten minutes (M. Park, Journal, 53 ff., addenda, XIX), while in Europe, where the proportion is only 1/100 per 1,000, mines are still considered worth working. But then, what workmen there are there! In Peru, the burdensome height of the mines above the level of the sea and the want of combustible material more than counterbalance many favorable advantages, while in Norway the cheapness of wood compensates for a great many disadvantages. Another thing which contributes towards the uniformity of the price of the precious metals is the circumstance that the great amount of fixed capital required in the greater number of mining enterprises, postpones for a long time the working of good mines as well as the abandonment of poor ones.743.Older writers have estimated the amount of money necessary in a country at 1/5, 1/10 (Petty), 1/15, and even 1/30 of the yearly income of a people (Adam Smith, II, ch. 2.) According toCantillon, Sur la Nature du Commerce, p. 73, it is from 1/6 to 1/10 of the annual gross production of a nation.744.Davanzati, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that all terrestrial things which serve to satisfy the wants of men are, by virtue of agreement, equal in value to all the gold, silver and copper; and that the parts comport themselves as the whole. The price of a commodity is based on this, that men find in it as much of theirbeatitudineas is afforded them by a given quantum of gold etc. Similarly,Montanari, who adds as a limitation the quantity of moneyspendibile in commercio. (Della Moneta, 45, 64, Cust.) The same opinion leadsLocketo the singular conclusion, that, as there is now in the world, ten times as much silver as there was previous to the discovery of America, each single piece of silver, separately considered, and taken in relation to such commodities as have not varied, is worth only one-tenth of what it was then.Locke, here, starts out with the gross assumption, shared even byGanilh, Théorie, II, 386 ff., that in the case of money the demand is always, relatively speaking, equally strong and just as great as the supply, or as the amount in the market. (Works, II, 23 ff.) Further,Montesquieu, Esprit des Lois, XXII, 7, 8. Per contra, however, seeMontesquieu, ibid. XXII, 5, 6, andHume, On Money and on the Balance of Commerce, Essays II, 1752.Hume knew perfectly well, that only circulating money and circulating commodities operated on price, but failed to take the rapidity of circulation into account. Similarly,Forbonnais, Eléments du Commerce, II, 212; evenCanard, Principes, ch. 6;Fichte, Geschloss. Handelstaat, 93 ff., andStein, Lehrbuch, 58. Contested byLaw, Trade and Money considered, 140, a work directed especially against the Mercantilistic essay, Britannia languens; 1680, byMélon, Essai politique sur le Commerce, ch. 22;Genovesi, Economia civile, 1764, II, 1, 15;Steuart, Principles, II, ch. 28;Verri, Meditazioni, XVII, 3 ff.;Büsch, Gedlumlauf, II, 40. The simple taking of an inventory of most private resources which possess so much greater value in other commodities than in money is enough to demonstrate the error ofDavanzati'sdoctrine. Thus, in France, in Necker's time, the cash money in the kingdom was estimated at 2,200,000,000 livres, and the average value of the wheat crop alone at 1,000,000,000.Necker, Législation et Commerce des Grains, 1776, I, 215. Recently,Michel Chevalier, estimated the amount of money in France at from 3-½ to 4 milliards, while the official estimate of its immovable property alone was over 83 milliards.745.When money becomes dearer, less of it is of course needed; and when cheaper, more, for the same purpose.746.In contradistinction to presents, acts of spoliation, but especially to barter.747.The discoverer of this truth is supposed by many to beBandini, Discorso economico, 1737, 141 f., Cust.Berkely, however, in the Querist, 1735, 477 f, writes:“A sixpence twice paid is as good as a shilling once paid.”Much earlier yet, in 1797,Boisguillebert, Détail de la France, II, 19, had the germ of this doctrine, but he confounds circulation with consumption. AndLocke, Considerations, II, 13 ff., presented it in 1691 with great clearness, although he did not always remain true to his theory. CompareQuesnay, éd. Daire, 64;Cantillon, 159 ff., 382.748.If the number of annual exchanges effected by 1 dollar = u; the total number of dollars in the store of money = m; the rapidity of circulation, that is the number of exchanges effected on an average by each dollar in a year, = s: then is u = m s, s = u/m, m = u/s.749.Since good money is so easily stored away and preserved, no one is in haste to get rid of it.St. Chamans, N. Essai sur la Richesse des Nations, 122 ff.750.Among the Kurds, all the money in their camps is used for head-ornaments for their women. (K. Ritter, Erdkunde, X, 887.)751.Thus,Sir David North, Discourse on Trade, 1691, Postscr.752.Lotz, Handbuch, 377, is of opinion that even in England £100,000 employed in trade in land can scarcely effect exchanges to the amount of £1,000,000 in a year. The same sum employed for the same purpose in London, in stocks and in the trade in commodities, will effect exchanges to the amount of £160,000,000.753.Cernuschi, Mécanique de l'Échange, 1865, 132 ff.754.ThusPetty(ob. 1687) is of opinion that England needed as much money as ½ of all its ground-rents amounted to, as the ¼ of all house-rents, and 1/52 of all the wages of labor for a year; for the reason that ground-rents are paid semi-annually, house-rents quarterly, and wages weekly. (Several Essays, 179; Political Anatomy of Ireland, 116.)Locke, on the other hand, assumes 1/50 of the wages of labor, ¼ of all the revenue of land owners, and 1/20 of the amount cash money taken in in a year by merchants. Of these amounts, there should be always, at least, one-half in ready money on hand, if commerce would not be brought to a stand-still. If leases were to be paid for on short terms, a great saving of money would be possible. (Works, II, 13 ff.)Pinto, Traité du Crédit et de la Circulation, 34, calls special attention to the case of Tournay, in which the commandant, during the siege of 1745, made 7,000 florins serve him for seven weeks to pay the garrison; by borrowing that sum anew every week from the inn-keepers etc.; which they, again, had received from the soldiers.755.If all were to commit their payments to the care of the same banker, it would be possible to do with almost no money. But even now, if 100 separate merchants were obliged to keep each 3,000 dollars in their money-chests for unforseen contingencies, a banker might accomplish the same for them with 50,000 dollars, because it is not probable that the unforseen contingencies in question would occur to all at the same time.756.In the London Clearing-House, in 1839, £954,401,600 were paid by means of the use of £66,275,600 as a circulating medium, for the most part notes of the Bank of England. (Tooke, Inquiry into the Currency Principle, 27.) From May, 1868, until May, 1869, £7,068,078,000. (Statist. Journal, 1869, 229.) The New York Clearing House, in 1867, effected payments to the amount of £5,735,031,900 (Ibid., 1867, 577), and in 1868, $30,880,000,000. (Hildebrand'sJahrb., 1869, II, 168.)757.This system began in the middle of the seventeenth century. (A Discourse of Trade Coyn and Paper Credit, 64.) As early a writer asSir J. Child, N. Discourse on Trade, 46, says, that for some time, every man who had from £50 to £100 in money, sent it to his banker, and that since that time, all the money flowed towards London and the country was deprived of it. (127 ff.) As a rule, the goldsmiths were also bankers. One such smith had at the time of the Great Fire of 1666, emitted £1,200,000 in notes. (A Discourse etc., 67.) The Bank of England, as a money center, dates from 1694. The London banks developed into intermediaries principally before the time of the French Revolution. (Thornton, Paper-Credit of Great Britain, 1802.) This remarkable institution had grown to vast dimensions even in Thornton's time, although it has been much enlarged since 1825. (Tooke, History of Prices, 152 f.) Similar conditions among almost all highly civilized peoples. Thus in Greece, compareBecker, Charicles, I, 294. Concerning a person who had 14 talents' worth of resources, 26 minæ, and therefore three per cent. in cash, see Lysias, adv. Diog., 6. In Rome, comparePolyb., XXXII, 13.Cicero, pro Font., I, 1. For Italian analogous cases, part of which may be traced back as far as the twelfth century, seeLobero, Memorie storiche della Banca de S. Georgio, 1832; or the Dutch“cassiere”Richesse de Hollande, I, 376, ff. In France an ever increasing centralization of the money-trade is to be noticed in Paris (M. Chevalier, Cours., III, 418); and now of the money-trade of Germany in Berlin.758.CompareFullarton, On the Regulation of Currencies, 1845. Among the Dutch, the custom of using all commercial commodities as much as possible, as a basis of the circulating medium, was much earlier developed. (Child, Discourse on Trade, 65, 264 f.) In Great Britain, the aggregate amount of bills of exchange put in circulation was, in 1839, £528,000,000, which sum has been increased annually at the rate of about £24,000,000. (Tooke, Inquiry into the Currency Principle, 26.) Between 1828 and 1847, there circulated at the same moment, on an average, £79,127,000 in bills of exchange in England, and in Scotland, £17,380,000 (Athenæum, 1850, No. 175), and in Great Britain and Ireland, from £180,000,000 to £200,000,000. (Tooke, History of Prices, VI, 588,) According toMacleod, the bills of exchange and promissory notes together amounted to £500,000,000; bills of exchange, bank-notes and bank-credits, to over £600,000,000. (Elements, 12, 325.)Macleodcalls the currency the sum total of all debts due by every individual in the country. (Elements, 43.)759.A case in England, in 1857, in which a house with £10,000 capital failed with liabilities amounting to £900,000. (Report of the select Committee on the Bank Act, 1858, XV.) Or where a speculator with £1,200 made purchases on credit to the amount of £80,000, and then failed with a deficit of £16,000. (Fawcett, Manual, 442 f.)760.Remarked by as early a writer asDavenant, Works, IV, 106 ff. Compare, however, II, 238.Quesnay, éd. Daire, 75 ff.Lord King, Thoughts on the Effects of the Bank Restriction, 1804, 17 ff. Exhaustively treated byChevalier, Cours., III, 397 ff. He very much laments the fact that the customs of France cause it to need from 3½ to 4 milliards of cash money, while England does a much larger trade with 1,200 millions. (I, 207 ff.) In France, it is said that the amount of money, in 1812, was 1,500,000,000 francs(?). (Peuchet, Statistique élémentaire, 473.) In Prussia, in 1805, it was 90,000,000 thalers. (Krug, Betracht. über den Nationalwohlstand des preuss. St., I, 244.) The annual amount of production in the former country was, 7,036,000,000 francs; in the latter it was estimated at 261,000,000 thalers, so that in Prussia the relation of money to national income was, as 1:2.9; in France, as 1:4.69.761.It is scarcely possible to determine exactly the amount of money in a country; for the reason that, outside of the suppositions of bankers etc., there is no authority which can be safely relied on, unless it be the reports concerning the coinage, and of the emission of paper money. The information, no less necessary, to be derived from the statistics of the importation and exportation of money, the melting down of coin by gold smelters etc., can never be exactly obtained. In England, at the end of the sixteenth century, the circulating medium was estimated at £4,000,000 (Hume, History of England, ch. 44, App.); under Charles II., at £6,000,000, when the population was 6,000,000. (Petty, Several Essays, 179.) About 1711,Davenant, New Dialogues, 11 ff., mentions £12,000,000 as the amount; andAnderson, Origin of Commerce, a., 1659, £16,000,000 in 1762. The circulation of gold, shortly before 1797, was estimated byRoseat, at least, £40,000,000; by LordLiverpool, at £30,000,000; byTooke, at only £22,500,000. (History of Prices, V, 130 ff.)Moreau de Jonnés, 1837, assumed £43,500,000 (Statistique, I, 329), andHelferich(Schwankungen der edlen Met., 1843, 147), £45,000,000.Sir Robert Peel, estimated the amount in 1845 at £59,000,000, to which was to be added an average of £28,000,000 in bank notes, after deduction made of the metallic reserve. According toJevons, the amount of British money is now £80,000,000 in gold, £14,000,000 in silver, £1,000,000 in copper; the sum total, including bullion and bank notes, after the deduction of their metallic representatives, £134,000,000. (Economist, December, 1868, July, 1869.) In France,Vauban, Dîme royale, 104 (Daire), estimated the cash money at about 500,000,000 livres, over 750,000,000 francs, with whichVoltaire, Siècle de Louis, XIV, ch. 30, agrees so far as the year 1683 is concerned. In 1730,Voltaire, assumes the amount to be 1,200,000,000 of the coins of that time.Necker, Administration des Finances, III, 66, estimated it, in 1784, at 2,200,000,000 livres;Mollien, about 1806, at 2,300,000,000. The valuations in Louis Philippe's time varied from 2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13, 1847), and 4,000,000,000. (Blanqui.) The valuations of 1870 were, according toWolowski, 4 milliards; and toBonnet, from 5 to 6 milliards. CompareWolowski, L'Or et l'Argent, 383 ff., Euquête, 42. The German Zollverein is said to have had, at the beginning of 1870 (Soetbeer) 480,000,000 or 520,000,000 thalers (Weibezahn) cash money.In Wirtemberg,Memminger, 1840, estimated the resources of the country at 1,600,000,000 guldens, of which 36,000,000 were cash; and the yearly gross income at 179,000,000 guldens; so that the money was 20 per cent. of the latter and 2¼ per cent. of the former. The annual sales = 226,000,000. Therefore the coin currency must have circulated on an average between six and seven times in a year. In the electorate of Hesse, there wereper capita4 thalers, 18 sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers, paper-money. (B. Hildebrand, Statist. Mitth., 1853, 185.) The amount of money in Naples, in 1840, was estimated at 42,000,000 ducats. (Scialoja.) It has been estimated that, in 1830, Spain possessed 1,725,000,000 francs. (Barrego von Rottenkamp, 330.)762.Montanari, Della Moneta, 52 ff.763.David Hume'svery influential essay on the balance of trade does not give expression to this error, but he certainly was the occasion of making a great many of his disciples advocate it. It is related to the error mentioned in §123.Quesnay, 101 (Daire) saw this point in a much clearer light. So didGraumann, Gesammelte Briefe vom Gelde (1762), 12 ff.; 73 ff.764.This is seen, for instance, when paper money is issued, in times when trade is thriving, and is withdrawn when this conjuncture ceases.765.Very well elaborated byFullarton, On the Regulation of Currencies, 71 ff., 139 ff. Compare, however,Becaria, Economica publica, IV, 4, 27. When England on the occasion of the removal of the bank restriction in 1821 and 1822, caused £9,520,759 and £5,356,788 to be stamped, this powerful demand scarcely affected the gold-agio in Paris. (M. Chevalier, Cours, III, 157.) And, on the other hand, the system of assignats, developed during the first French Revolution, on so large a scale, had no influence on the price of silver in the rest of Europe. (Lord King, Thoughts on the Bank Restriction, 1804.) And so,Tooke, History of Prices, I, 205, describes a very large increase of the medium of circulation, after which the prices of commodities remained unchanged, corn fell, colonial products rose in price, both as they had done before, and from causes inherent in the commodities themselves. During the first years of the bank restriction, 1799-1801, grain rose very rapidly in price, while all trans-Atlantic products sank. (Tooke, I, 232 ff.) The unusually large importation of wheat from January 1, 1846, to January 14, 1847, was paid in France by a decrease of the bank metallic reserve (encaisse) to the extent of 172,000,000 francs. (M. Chevalier, Cours, III, 470.) An experienced practitioner in England is of opinion that an increase of bank notes to the amount of about £5,000,000 would not raise prices nor increase the tendency to speculation, but only enlarge the deposits of the bankers. But, if on the other hand, £5,000,000, by any sudden contingency, were to be put into the hands of the working classes, this money would, for the most part, enter immediately into circulation; the price of commodities would, therefore, rise and continue to rise until that amount had come into closer fists, as it would after some time. (Tooke, III, 156 ff., II, 323.)766.This explains the high price of gold in Farther Asia, which was formerly separated from America, the principal source of supply of the precious metals, by a journey around the earth, the then usual course of the world's trade.The precious metals are generally higher in country places than in large cities, and in the interior than on the sea-coast. Since the public highways etc. in Germany have been so much improved, the difference in the value of money in upper and lower Germany has almost disappeared. (Rau, in the Archiv der polit. Oek., III, 338.)767.Happy beginning of this doctrine inHume, On the Balance of Trade. Further,Thornton, The Paper Credit of Great Britain, ch. 11.Adam Smith, on the other hand, claims that gold and silver, because they are costly superfluities are uniformly paid most dearly for, in the richest countries. (Wealth of Nations, I, ch. 11, 3: Digr.)768.Similarly in China, and even in Upper Egypt, the China, so to speak, of antiquity! CompareHerodot., II, 112 ff;Homer, Od., IV, 354 ff. The religion of the Egyptians prescribed to them a mode of life which was scarcely practicable in foreign parts. They were systematically inspired with a horror for everything foreign. They had a strong antipathy for salt, fish and pilots. In Egyptian mythology, Osiris represents the Nile, Typhon the desert and the sea! (Plutarch, De Iside, 32.)769.The other party, of course, makes a profit also. He is in a better condition than if he wished to produce the desired commodity in his own country.770.The first clear germ of this doctrine, which is one of the most important theoretical principles of international-trade politics, is to be found inDavid Hume, On Interest;Cantillon, Nature du Commerce, 226, 369 ff.Ricardo, Principles, ch. 7.“Gold and silver having been chosen for the general medium of circulation, they are, by the competition of commerce, distributed in such proportions amongst the different countries of the world, as to accommodate themselves to the natural traffic which would take place if no such metals existed, and the trade between countries were purely a trade of barter.”Rebenius, Oeff. Credit, I, 29 ff. Still further developed, especially byJohn Stuart Mill, Elements, 1821, III, 4, 13 f.;Torrens, The Budget, 1844.John Stuart Mill, Essays on some unsettled Principles of Political Economy, 1844, No. 1, and Principles, III, ch. 19, § 3, 5th ed.:“The opening of a new branch of export trade from England; an increase in the foreign demand for English products, either by the natural course of events or by the abrogation of duties; a check to the demand in England for foreign commodities, by the laying on of import duties in England, or of export duties elsewhere; these and all other events of similar tendency, should make the imports of England, bullion and other things taken together, no longer an equivalent for the exports; and the countries which take her exports would be obliged to offer their commodities, and bullion among the rest, on cheaper terms, in order to re-establish the equation of demand; and thus England would obtain money cheaper, and would acquire a generally higher range of prices.”Obscurely surmised byBeccaria, E.P., 3, 18, and even byGaliani, Della Moneta, II, 2.Senior'sadmirable work, Three Lectures on the Cost of Obtaining Money, 1830, follows up the thought that every country obtains indigenous and foreign products at a cost which grows smaller in the same proportion as the productiveness of its people's labor is large. This would, certainly, explain why it is that perhaps one hundred English days' work in cotton manufactures will exchange against as much silver as is produced by two hundred days' work in Mexican mines and foundries. This would not, by any means, produce a lowering of the price of the precious metals relatively to other English commodities, but the influence would be felt equally by all the products of English national industry.771.To be found in germ inCantillon, Nature du Commerce, 1755, 249 ff. 307.Büsch, Geldumlauf, 14.Kaufmann, Untersuchungen, I, 75 ff. Many of the doctrines of the so-called Mercantile System, of which I shall treat in my projected work on the Political Economy of Commerce, have given expression to this truth in an inexact and exaggerated way; but they were not entirely erroneous, as is supposed by the adherents of Hume and Smith. However,J. S. Mill, Principles II, ch. 19, § 2, does not fully admit the degree of the cheapness of money in England usually assumed. According to him it is wants of luxury (luxury-wants) become such through habit, that produce“the dearness of living in England.”772.Pettyconsiders the search for a measure which could be applied both to land and labor as one of the principal problems of Political Economy. (Political Anatomy of Ireland, 62 ff.)Sir J. Steuart, Principles, III, ch. I, took the matter very easy by considering the so-called“coin of account,”for instance,“bank-money,”as an invariable value-magnitude. CompareJacob, Grundsätze der National Œkonomie, II, 441 ff.Cazaux, Economie politique et privée, 1825, 16 ff., has a not uninteresting study on this subject; but he goes, throughout his argument, on the assumption that the rate of interest is the price of money! If the rate of interest in two countries = I and i, the prices of the same commodity = P and p, the true thing-values, V and v; then we have v: V:: i p: I P!773.Law, Trade and Money, 181. Before him, and quite correctly,Montanari, Della Moneta, I, p. 84 ff., compares the means employed of measuring one commodity by another, to the means used to estimate time in terms of space, as when it is measured by the revolutions of the hands of a clock, and again, space in terms of time.774.The solvability or capacity to pay of buyers cannot be taken into consideration here, because it is synonymous with the amount of counter-values which are to be measured.775.Adam Smith, Wealth of Nations, I, ch. 5. SimilarlyLuther, vom Kaufhandel: Werke, ed.Walch, X, 1098 f.B. Franklinconsidered the labor employed in the production of wheat as the best measure of prices. (Letter to Ld. Kames: Works, ed.Sparks, VII.) As Adam Smith, so alsoSismondi, Richesse commerciale, I, 371 f.;Kraus, Staatswirthschaft, I, 84,; v.Schlözer, Anfangsgründe, I, 41. AlsoMalthus, in the second and succeeding editions of his Principles, ch. I, 6, and Definitions, ch. 8, 9. The Measure of Value, 1823.Zachariä, Vierzig Bücher, VII, 53 f., maintains that, at least within the limits of every separate nation, the average labor-power of one man is invariable. Assuming this principle, therefore, to be true, the means of subsistence necessary to support a laborer for one work-day constitutes, indirectly, a measure of prices.Tooke, History of Prices, I, 56, says that the amount of a day's wages is always a better measure of the price of the precious metals than the price of wheat. Even in 1750,Galiani, Della Moneta, II, 2, had denied the impossibility of an entirely invariable measure of price in this world of change, but he considered man himself the least variable of measures, and in a country where slavery prevailed, slaves. He thought that themacutaof the negroes were a part of the average price of slaves. Practically, Adam Smith's proposed measure was used in the French constitution of 1791, in as much as it provided that participation in primary assemblies should depend on the participant's paying an annual tax equal to the wages of three days' work, and eligibility as anèlecteur, on the possession of an income equal in value to the wages paid for two hundred days' day-labor.Owenendeavored to base the value of the paper money in circulation in his Utopian commonwealth, not on any metal of a certain weight or stamp, but on hours of labor as the unit. (Reybaud, Réformateurs Contemporains, I, 255.)776.The wretched condition, until within a short time since, of the Irish working class, is well known; how they dwelt in mud cabins without windows, board-floors or chimneys etc., in the same apartment with their pigs; how they lived almost exclusively on potatoes, and went about in rags. These same Irish,coelum, non animum mutantes, received in North America for the coarsest kind of labor, 50 to 75 cents wages, besides wheat bread and meat three times a day, coffee and sugar twice a day, butter once, and seven or eight glasses of whisky or brandy. (M. Chevalier, Lettres sur l'Amérique du Nord, I, 159.)777.Thus in Mauritius, the immigration of the coolies has produced a decrease of negro wages, but an increase of negro industry. In the Barbadoes, the negroes are more industrious and their wages lower than in Jamaica. The wages of good workmen, as for instance during the commercial crisis in Manchester, often sink, while the wages of bad workmen rise; as, for example, in a village through which a railroad is made to pass. CompareLauderdaleInquiry, ch. 1;Sartorius, Abhandlungen, 1806, I, 16 ff.;Lotz, Revision, I, 99 ff.;M. Chevalier, Cours, III, 88 f.778.Besides the passages cited in §107, compare alsoHarris, On Money and Coins, II, 1757 f.;Jacobalso precededRicardo. See the German translation ofSay, II, 435, 507.779.The introduction of the words“the socially necessary time of labor”into the formulæ does not make the measure any more practical for political economists or for socialists.780.Cantillon, who reduces all the cost of production to land and labor, considers the“at par”between these two to be this: that the labor of the meanest slave corresponds to the quantity of land which the owner is obliged to employ for his support, and the support of the slave and of the children who are to take his place. (Nature du Commerce, 42.) The Physiocrates thought that the internal (innere) value of two commodities stood in the same relation to each other as the area of land directly or indirectly necessary to their production.Schlettwein, Grundfeste der Staaten, 1792, 230.781.The so-calledSachwerth(thing-value, real-value) ofHermann, St. Untersuchungen, 101 ff. ThusPoulett Scroperecommended a“tabular standard,”to be officially established and renewed from time to time, to serve as an anchor to those persons who wished permanently to fix their money in such a manner as to make it exchangeable for an equal value inthings. (Principles of Political Economy, 1833, 406.) Something of this kind was tried for 50 commodities, between 1833 and 1837, byPorter, Progress of the Nation, 1st ed., II, 236 ff., then for 40 commodities byJevonsin the Statistical Journal, 1865. Of course, all commodities of a given price are not equally important in this respect. Thus, for instance, a fluctuation in the price of diamonds would have no effect on the thing-value or real-value of a day's wages, but it certainly would on the thing-value of a princely income. There are some excellent remarks on this very important subject inLowe'swork, On the Actual Condition of England, chs. 8 and 9. The controversy carried on betweenJevons, A serious Fall in the Value of Gold, and its social Effects, 1863; Statist. Journal, 1865; andLaspeyres,Hildebrand'sJahrb., 1864, 81 ff.; 1871, I, 296 ff; in which the former recommends the geometric mean of the relative prices of separate commodities at different points of time, in order to calculate the average relative price: and the latter, as usual, the arithmetical mean, is very thoroughly reviewed and criticised byDrobisch, who shows that neither of these methods is sufficient, but that the quantity of every separate commodity must also be taken into account, for which he furnishes practical formulæ. (Math. phys. Berichte derK.Sächs. Gesellsch., 1871, I, 143 ff, 416 ff.) It is certain that a fixed income in money could maintain its real value or thing-value (Sachwerth) just as little if the cwt. of bread rose by as many dollars as the cwt. of pepper had fallen; as if the increasing price of bread depended on a decreasing price of pepper.782.Senior, Outlines, 187. In addition to this, we may draw from the thing-value of a day's wages a right conclusion as to the economic condition of the majority of the people; and assuming the customary division of the national wealth, also as to the degree, to which the people have subjected the forces of nature to their service.783.Ricardo, ch. 22, refuted, indeed, only the view that an increase in the wages of labor produced by the higher prices of corn, would necessarily make all goods or products of labor, correspondingly dearer.784.Compare §103. In Paris, in 1817, thesetierof wheat cost March 5, 55½ francs; April 2, 57 fr.; April 23, 60 fr.; May 14, 63 fr.; May 21, 66 fr.; May 28, 75 fr.; June 4, 82 fr.; June 11, 92 fr. (Tooke, History of Prices, II, 17.)785.Locke, 98. WhenCondillacasserts that wheat is the best measure of prices, he adds, when free trade in wheat obtains. (Commerce et Gouvernement, 1, 23.)Fichte, on the other hand, while advocating the despotic guidance of all trade by the state, would employ wheat as the fundamental measure of prices. (Geschl. Handelstaat, 47 ff.) That grain does not afford a good measure of prices in very highly cultivated nations nor in barbaric ones, seeHermann, II, Aufl., 451.786.The average price must be based on the prices of a great many years, since crops vary not only from year to year in price, but from decade to decade. SeeRoscher, Nationalökonomik des Ackerbaues, § 152, andRoscher, Kornhandel und Theuerungspolitik, 47 ff. Great wars are wont to disturb agriculture in such a manner that the price of corn is very much increased by them. Hence, it is not unfrequently possible to use the prices of grain as a species of barometer to determine the real pressure of a war upon the economic life of a people. Judging by this standard, England suffered much less from the War of the Roses in the fifteenth century, than from the civil wars in the seventeenth; and less than France from the religious wars of the sixteenth. The war year 1631-2, in which Gustavus Adolphus and the emperors had to spare the country, must have been far less oppressive for Saxony than the later Swedish campaigns.Roscher, in the Tübinger Zeitschrift, 1857, 471.787.Most countries go through these successive periods in their corn trade: in the first, exportation preponderates; in the second, there is an equilibrium; in the third, importation preponderates. (M. Chevalier, III, 74 ff.) CompareTacit., Ann., XII, 43. Omitting the two dearest and the two cheapest years, the Prussian provinces were circumstanced as follows:In The Whole Kingdom, the price of Rye, 1816 to 1837, was 40. silver groschens. The population per square mile, 2,776In Prussia, 32.2 silver groschens, and 1,827In Posen, 34.3 silver groschens, and 2,180In Brandeburg, Pomerania, 38.4 silver groschens, and 2,093In Saxony, 40.3 silver groschens, and 2,366In Silesia, 38.0 silver groschens, and 3,612In Westphalia, 47.7 silver groschens, and 3,600In Rhine Province, 49.4 silver groschens, and 5,078Rau, Lehrbuch, I, § 183. As to when it may be assumed that the price of corn has remained unchanged, seeHermann, loc. cit., 125 ff.788.Pettyrecommended the average daily food necessarily required by one man as the measure of price, estimated on the basis of the cheapest means of subsistence. (Polit. Anatomy of Ireland, 62 ff.)Thaerused as such a measure the smallest day's wages; as he supposed, expressed in rye, that is, 1/9 of the Prussianscheffel. Similarly,Malthus, in his first edition, andBuquoy, Theorie der Nationalwirthschaft, 240. But this is simply to substitute for wheat an arbitrarily determined quantity and quality of the same as a measure of prices. For practical experiments of this kind, made by the depreciation of paper money during the French Revolution, seeM. Chevalier, Cours, III, 98; and Constitution de 1795, V, 68, VI, 173.Count Soden, Nat. Œk., II, 338 f., demands that all taxes, salaries of state officials etc., should be regulated in accordance with the price of corn. This same view has been suggested recently in many German States.789.Recognized generally byLocke, Considerations 24. Further,Galliani, Della Moneta, II, 2;Adam Smith, I, ch. 5.Schäffle, N. Œk., II, Aufl., 127, maintains that a constant measure of price, such as would enable a person to stipulate for a salary for instance that would be always of the same value, is impossible. Similarly,Hildebrand'sJahrb., 1871, 315 ff.790.CompareJ. Tucker, Four Tracts on political and commercial Subjects, 28 ff., who maintains that it is a rule, almost without exception, that“operose or complicated manufactures”are cheapest in rich countries;“raw materials,”in poor ones. Thus, for instance, corn (?), garden products in the former; cattle, wool, milk, skins, flesh-meat, in the latter. Ships and movable property are cheaper in the former, whereas wood may be said to be almost the free product of nature here. See especiallyAdam Smith, Wealth of Nations, ch. 11, Digr.791.Senior, Outlines 119 f., makes the following calculation: Of the 15d. which a loaf of bread costs in England, 10d. goes to buy the wheat, the other 5d. to the miller, baker etc. If now, we suppose, that in consequence of an increased demand, and therefore of increased production under more unfavorable circumstances, the price of wheat should rise to 20d., the cost of production would possibly, because of an improved division of labor, come down to 3-¾d., and hence the price of the loaf of bread would be increased to 23-¾d. It is quite the reverse in the case of lace, because here a piece of raw material worth only 2 shillings may, by reason of the labor expended on it, become worth as much as £105. If the consumption of lace should increase so that the value of the raw material rose to 4 shillings, the simultaneous decrease of the cost of manufacture to the extent of one-quarter of the aggregate price, would leave the price of the manufactured article £78, 19s.792.When, for instance, the inhabitants of the Baltic coasts, by way of preference, kept up their relations with the Hanseatic cities, the Dutch and English, that is with the most important industrial and commercial nations in their own sphere, they in all this pursued only their own interest. As to how this intercourse between“old”and“new”countries is susceptible of the very highest development, seeTorrens, The Budget: On Commercial and Colonial Policy, 1844, and earlier,Wakefield, England and America, II, 1823.793.The clearing up of primeval forests, the cultivation of natural meadows, etc.794.In Hungary, during the sixteenth century, the choicest venison was consumed by plebeians and nobles alike.Herberstein, Rer. Moscov. Comm., 97. In Russia, even the lowest classes not unfrequently partake of roast hare and duck etc.Kohl, Reise in Russland, II, 386. Still, in St. Petersburg, wild-fowl game rose between the time of Peter the Great and Alexander I. 600 per cent. in price. (Storch, Handbuch, I, 368.) In Pittsburg, in 1807, mutton, beef and veal cost from 4 to 6 cents a pound, and game only from 3 to 4-½ cents a pound. (Melish, Travels through the United States, II, 57.) The more the game laws are enforced, the longer does the low price of game continue, especially when it is not easy for the poor to procure them. The moderns have seldom thought of raising game artificially; among the Romans, artificial raising was confined to the hare and fieldfare. (Varro, R.R., III, 12 ff.;Columella, R.R., VIII, 10.) Hence, the enormous prices paid for game, of whichPliny, H. N. X., 43, relates an example from the time of the emperors. On the other hand, Polybius assures us that, in his time, game was to be had as good as gratis in Lusitania. XXXIV, 8, 7.795.In Buenos Ayres, in the nineteenth century, beggars on horseback were to be seen. (Robertson, Letters on South America, II, 294.) In Krasnojarsk, in 1770, 1-½ rubles was the price of an ox, 1 ruble of a cow, from 2 to 3 of a horse, from O.3 to O.5 of a sheep; O.15 of a deer. (Pallas, Sibirische Reise, III, 5, II 12.) According to the Tables of Prices inSir F. M. Eden, State of the Poor, Append. I, andRogers, History of Agriculture and Prices (1866), I, 245, 361, the following prices obtained in England;(On an average.)in 1125-26, one ox, 1 shilling; one quarter of wheat, 20 shillings;in 1260-1400, one ox, 13 shillings 1-¼d; one quarter of wheat, 5 shillings 10-¾d;in 1406, one ox, 9-½ shillings; one quarter of wheat, 4-½ shillings;in 1463, one ox, 10-20 shillings; one quarter of wheat, 1-⅔-4-⅔ shillings.CompareHume, History of England, a. 1327. Under Henry VIII. veal, beef, mutton and pork were food for the poor in England, and cost on an average 1-½d per pound; while wheat cost from 7 to 8 shillings a quarter. (24 Henry VII, c. 3.Price, Observations, II, 148 f.) The same appears from the“reasonable prices”which Charles I, in 1663, had established by sworn juries viz.: that the different kinds of meat were much cheaper comparatively than corn in our days.(Rymer, Foedera, XIX, 511.Anderson, Origin of Commerce, a. 1633.) In many places in the highlands of Scotland, in the middle of the seventeenth century, one pound of oat-bread cost as much or more than one pound of the best meat. The union of Scotland with more highly civilized England soon changed the relation, so that inAdam Smith'stime, good meat, in nearly all parts of Great Britain was worth from 2 to 4 times as much as the same weight of wheat bread. (Wealth of Nations, I, ch. 11, 1.) The Thomas Hospital in London paid, on an average, for good beef per stone weight:1701-1710: 1s. 7.9d.1764-1773: 1s. 3.7d.1794-1803: 1s. 5.d.1804-1821: 1s. 10.9d.1822-1842: 1s. 1.5d.(Porter, Progress of the Nation, III, 112.) Among the most certain proofs of the high degree of economic civilization attained in upper Italy about the close of the medieval times is the fact, that the price of cattle, compared with that of wheat in the thirteenth and fourteenth centuries, varies very little from what it is to-day. (Cibrario, Economia politica del medio Evo, III, 335-383.) CompareRau, Lehrbuch I, § 185. In Athens, the cost of amedimnosof wheat was as great as that of a sheep in Solon's time. In the age of Demosthenes, it cost only half as much. (Böckh, Staatshaushalt der Athener, I, 107, 132.) It is obvious, however, that the price of meat compared with that of corn, was lowered by the great extension of the artificial cultivation of meadows; for, when the former has reached its maximum, it becomes a great spur to the promotion of the latter. Thus, in England, the price of meat, at the beginning of the sixteenth century, was on an average, higher than inAdam Smith'stime. (loc. cit.) To the same cause is to be ascribed the state of things in Prussia mentioned byv. Podewils, Wirth schaftserfahrungen, II, 15.As a common basis for such calculations, the following may be accepted. It is plain that meadows, pasturages and forage-fields must yield as much in meat, as corn-fields of the same dimensions of equal goodness, and situated as favorably, in corn. According toBlock, a Prussian acre (Morgen) of the best quality, used as a meadow, produces a hay-value equal to 1,000 pounds, a clover-value equal to 2,420; as a vegetable field, a beet or potato-value equal to 6,050-6,930 pounds,v. Lengerke'sestimate is that 110 pounds of cattle-fodder expressed in terms of hay, produces on an average 40 pounds of milk, and from 3-½ to 4 pounds of meat. This would, at most, give 36, 88 and 220-252 pounds of meat. The yield of wheat,v. Lengerkeestimates, on the best soil, and on an average, at 14 Prussianscheffels(at 80 pounds, i.e. 1,120 pounds) yearly per acre (Morgen). The three periods in the history of the prices of cattle were clearly recognized byThaer, Landw. Gewerblehre, 1815, 100.796.It is a very characteristic fact, in relation to the river fisheries, that the fable that servants formerly stipulated not to eat salmon except twice a week is to be found in so many places. Thus on the Elbe and the Rhine. CompareThaarup, Dänische Statistik, I, 112. In Scotland, about the end of the seventeenth century, the story in places ran, that it was five times a week. (Walter Scott, Old Mortality, ch. 8.) In England, fish seems to have been a tid-bit among the poorer classes in the fourteenth century. (Rogers, I, 606.) It was dearer especially during Lent. (Statist. Journ., 1861, 544 ff.) The artificial production of sea-fish seems to have been tried only by the ancient Romans. On the whole,Adam Smith'slaw that a ten-fold demand can, as a rule, be met only by a greater than ten-fold labor, applies here. (I, 370, ed. Basil.) But this relation is obscured to a certain extent, from the fact that the source of the production of sea-fish, the ocean, which may be claimed at any time by occupation, is, practically, boundless. Here, therefore, the improvements made in nautical science, and the progress of geographical knowledge, may yet for a long time compensate for the exhaustion of the nearer seas, and even more than counterbalance it.797.Among a great many nations in a low stage of civilization, agriculture consists in the burning down of the forest. In 1594, the Lauenförder forest produced 1,110 thalers' worth of food for hogs, and wood to the amount of 44 thalers. (v. Berg, Staatsforstwirthsch., 213.) The Harzgerode woods, at the ducal line of Anhalt-Bernburg, were estimated at 6,000 thalers. A hundred years later, they brought in yearly 70,000 thalers, although, in the meantime, very little progress was made in the science of cultivating them, (v. Justi, Staatswirthschaft, II, 211.) We may form a notion of the relativity of the idea of the dearness of wood from the fact that in Bavaria, for instance, in 1840, there was a great deal of complaint, that in the district of Isark the price rose from 6 to 9 florins; in the districts of Regen and the lower Maine, from 11 to 14 florins to from 15 to 18; in the Rhine district, from 20 to 26 florins per cord (Klafter). (Rau, Lehrbuch, III, § 150, a.) Besides, the price of wood in the forest rises, with an advance in civilization, much more rapidly than it does in the market; in which last, labor and capital play a greater part. (Rau, I, § 385.)798.Plan for the artificial production of pearl oysters. (Novara-Reise, I, 303.) Ostriches seem now to be ceasing to be objects of mere occupation, and to be becoming objects of breeding. (Ausland, 1869, § 13.)799.Thus Wolff's experiments made at Möckern have shown that in the case of sheep fed with hay, the wool becomes much heavier and the flesh leaner than those of sheep fed with a more concentrated food. While it is estimated in England, at the present time, that the wool of South-Down sheep is worth scarcely one-tenth what their flesh is (Jacob, On Corn Trade, 166), mutton, from the year 1260 to 1400, was, on an average, worth 17 pence; and this even at a time when prices were gradually rising; but the wool of one animal (1 lb., 7-¾ ounces), 5-¼ pence. (Rogers, I, 362, 395.) Even under Anglo-Saxon kings the fleece was worth 40 per cent. of the value of the whole sheep, (David Hume.) And soW. Macann, Two Thousand Miles Ride through the Argentine Provinces, 1853, I, 151, says that in the interior of Buenos Ayres, he purchased 8,000 sheep at 18 pence a dozen, and after a march of 200 English miles, sold the skins for sixty pence a dozen. In Goya, formerly, a live horse cost 3 pence, its skin on the coast 12 pence; and the slaughtering of the beast cost 3 pence, the removal and cleaning of the skin 3 pence; and 3 pence were paid for transportation. (Robertson.)In Ireland, in 1763, it not unfrequently happened that the skin and tallow of an ox cost as much in a commercial city as the whole ox had cost in the nearest market town. (Temple, Works III, 13.) In England, from 1260 to 1400, the average price of a whole cow was 9s. 9d.; of the hide 1s. 8d., and cows were cheapest in the first decade, i.e., 6s. 2d., and the hides dearer than they were generally afterwards, i.e., by from 1-9-¼d. (Rogers, I, 361, 451.) In Saxony, according toEngel(1853), the average price of horned cattle was about 46 thalers; of their hide, 4 thalers and 21 silver groschens. Russia exported, 1842-1847, 72,636,166 silver rubles worth of tallow, 1,832,137 silver rubles worth of horse hair, 10,811,735 worth of bristles (Borsten), 7,387,140 of uncured skins, 36,159,452 of sheep's wool, but flesh-meat only to the amount of 370,362 rubles, and entire animals to the value of 6,853,241 rubles. (P. Storch, Der Bauernstand Russlands, 289 ff.) Tallow is there ten times dearer than the same volume of wheat. (Steinhaus, Russlands industrielle und commercielle Verhältnisse, 294 ff.); while in Saxony, according toEngel(1821), a pound of wheat cost on an average 7.8pfennigs, and a pound of tallow 30p.However, Russia's recent progress in civilization has had for effect: that the exportation of tallow (1833 = 4-½ millionpuds; 1869 = 2-¼ mill.) has greatly fallen off; while that of butter and live stock has increased. (v. Lengefeld, R. im 19. Jahrh., 220 ff.)In England, during the fourteenth century, a pound of meat cost, on an average, ¼d.; of lard, from 1-½ to 2. (Rogers, I, 411.) On the other hand, from 1848 to 1856, the average January price of beef from America was 110 shillings; of tallow from St. Petersburg, 48s. 11d. per cwt. (Newmarch.) And so, in the time ofPallas, the Cossacks chased the deer of their steppes only for the sake of its skin and horns. (Pallas, Reise, III, 524.) While the Greeks got horn from Macedonia and Thrace (Herodot., VII, 156), it is a striking proof of high civilization that at Athens (?), about the time of the hundredth Olympiad, an ox-hide was worth only 3 drachmas, and the whole ox 77 drachmas. (Böckh, Staatshaushalt, I, 105 ff.)As the ox is primarily serviceable as an object of food and an instrument of labor, and the sheep on the other hand, only an instrument to produce wool, it is easy to understand why, with the further advance of civilization, the price of oxen rises comparatively much more than the price of sheep. In Athens, during the time of Solon, an ox was equal in value to five sheep. (Plutarch, Solon, 23.) So also in countries with a low civilization in the time of Polybius. (Polyb., XXXIV, 8;Gell., XI, 1.) Why the same was the case in Rome at the beginning of the Republic? (Plut., Popl., 11). In England the proportion between the price of an ox and that of a sheep was,in 927 as 6:1 (Henry.)in 1125 as 3:1in 1182 as 6.3:1in 1197 as 9:1in 1229 as 8:1 (Eden.)in 1260-1492 (av.) as 9.2:1 (Rog.)in 1497 as 10:1in 1500 as 11.6:1in 1511 as 8:1in 1528 as 10:1in 1529 as 12.8:1in 1531 as 9.4:1in 1551 as 10.6:1in 1597 as 8.2:1 (Eden.)At present the proportion may be from 10 to 20:1. In Saxony, it is as 48 thalers to 5.27. (Engel.)800.About 1793, Russia exported 10,000 rubles worth of fish, 452,000 of sturgeon bladders, 188,000 of caviar. (Storch, Russland, II, 184.) But this had undergone a great change even in 1850. At present, there are 64 per cent. of sturgeon bladders, 27 of caviar, and 7 of whole fish. (Steinhaus, Russland's industrielle und commercielle Verhältnisse, 102, 368.) Yet the Astrakan fishermen still throw the greater number of the sturgeon they catch back into the water. (Pallas, Reise im süd. Russland, I, 189;Steinhaus, 99.) Salt fish are adapted for transportation to a distance not only because they can be preserved, but also because they may be caught and prepared on the great highway of the water. Athens got from the Black Sea besides wood, tar, wool, hides, cordage, honey, wax and slaves, also salt fish. (Wolf, z. Demosth. Leptin., 252;Bockh, Staatshaush. I, 51.) The latter from Sardinia, Egypt and Spain. (Pollux, VI, 48.)801.The principal countries that produce potash are Russia and North America. It is estimated that a cwt. of potash requires, on an average, 480 cwt. of wood. (Pfeil, Grundsätze der Forstwirthsch. in Bezug. auf National-Oekon. etc., I, 128.) From 1800 to 1840, wood for fuel in Würtemberg trebled its price; for building material the price increased 1.6 times. (Deutsche Vierteljahrsschrift, 1847, No. 4, 104.)802.Whereas barbarous nations take little trouble to turn the milk from their cows to account (Roscher, Ideen z. Politik und Statistik der Ackerbausysteme, Archiv. der politische Œkonomie, neue Folge, III, 202),Reuning, in 1844, calculated that the milk from all the cows in Saxony amounts to a value of 10,000,000 thalers, their meat to over 2,000,000, and the labor performed by them in various ways to 3,000,000. In Silesia, in the last decade of the eighteenth century, a quart of milk was estimated to be worth 2pfennigs(Festschrift der deutschen Landwirthschaftsversammlung, 1869, 343), whereas as now it is sold almost everywhere for 12pfennigs. (Schmoller.) In the rather high state of civilization which Saxony had reached at the end of the sixteenth century, when game was already dear, and the prices of other meat were almost as high as in 1800, asheffelof rye was worth 44 measures (Mass.) of milk, and recently 82-⅔ measures. (Schmoller, Tübinger Ztschr., 1871. 336 ff.)803.The principal cheese-producing countries and cities are Holland, Limburg, Switzerland, Gloucester, Chester, Ayrshire etc. CompareRoscher, loc. cit., 195 ff.804.In England, in the year 1000, a cow was worth only as much as two sheep. (Anderson, Origin of Commerce, a., 979.) The best butter was worth only 1d. per pound in 1550, while pork was worth 1-1/8, veal and mutton, 1-½, and beef, 2-¼d. The price of butter was exceedingly variable in the sixteenth century. (Eden.)805.During the middle ages, pork constituted the most usual animal food even of the best classes. (Büsching, Ritterzeit und Ritterwesen, I, 164.) Immense importance attached to pork by theLex Salica. (Tit., II, XIV; Emendatt. Caroli Magni, II, 1 ff.) The archbishop of Cologne used every day 24 large and 8 medium-sized hogs, and four more on the three great festivals. The abbot of Corvey used daily five fat and one lean hog, besides two young ones. (Kindlingen, Münsterische Beitr., Urkunden, 147, 126.) In 1345, at the court of Dauphiny, there were used annually for 30 persons, 30 salt and 52 fresh hogs; whereas, in modern Paris, with 800,000 inhabitants, only 32,000 hogs are consumed yearly. (Roquefort, De la Vie privée des Fr., I, 310 f.) Compare herewith the place occupied by the swine-herds in the Odyssey in Greece's age of chivalry. In England, in the time of William I., woods were taxed according to the number of hogs they might feed. At present, there is an enormous production of hogs in Servia, which, in many places, constitutes the only source of ready money to the agricultural population.And about the end of the eighteenth century, it is said that Servia received from Austria alone 1,300,000 florins yearly for hogs. (Ranke, Serb. Revolution, 95.) In 1864, Servia's total exports amounted to 62,500,000 piasters, of which 28,162,260 were for hogs, 7,043,000 for wool, 7,662,000 for the skins of sheep and deer, 5,732,000 for cattle, 1,222,400 for tallow. (Kanitz, Serbien, 598 ff.) Great production of hogs also in the Moldau and in Wallachia, in the United States and Mexico, where, instead of butter, only lard and suet are used; also in Lombardy, the Prussian Rhine province, Belgium, the English milk-producing districts, Gloucester, Wilt, Dumfries, Galloway and the districts where agricultural proletarians abound—Ireland and Yorkshire. It is a consequence of the same law that, among the South Sea Islanders, the hog was the principal domestic animal, as it still is among the Chinese. Similarly in the whole of Asia, beyond the Ganges (Ritter, Erdkunde, IV, 938, 1101); in semi-barbarous upper Italy in the time ofPolybios(II, 15); in Gall itself, in the time of Augustus. (Strabo, IV, 192, 197.) The America of the ancient Greeks, Sicily, exported hogs, mainly, in the time of Hermippos. (Athen., I, 27.) And even among the Romans, the consumption of pork was much greater than the consumption of beef. (Marquard-Becker, Handbuch, V, 2, 39.)806.In the cities of Prussia subject to a tax for the privilege of maintaining slaughter houses, a pound of beef cost on an average, in 1846, from 2 silver groschens, 5pfennigs, to 3 s. gr. 4 pf.; pork, from 3 s. gr. 2 pf. to 4 s. gr. 4 pf. (Dieterici.) In Moscow, also, the latter is dearer at present. Before the time of Peter the Great, it was cheaper. (Storch, Handbuch I, 364.) It was a sign of high civilization, too, that in Florence, in the fifteenth century, veal cost, on an average, 2-½ soldi; mutton, 2-⅓ soldi; but pork, 4 soldi. (Pagnini, Saggio sopra il giusto Pregio delle Cose, 325 f., Cust.) It is especially the lower middle class who ask for fat meats. The very fat English sheep are taken not to London, but into the manufacturing districts. (Lauderdale, Inquiry, 322 f.) As to whether the relatively high price of pork, and the fact that in the later times of Rome, the wild boar was the most fashionable dish, compareBecker, Gallus, II, 186.807.The production of fowl is similar in this, that they are frequently fed from remains of consumption; only their production is not adapted to uncivilized countries, because it is difficult to protect them there. In Texas, it is said, it costs more to raise ten chickens than to bring up ten children. (Kennedy, Czarnkowski's translation, 1846, 115.) The independent breeding of fowl is advisable only where there are a great many rich consumers; for the reason that they are naturally a delicacy. Enormous production of pigeons in Cambridge, Huntington etc. (McCulloch, Statistical Account, I, 189.) In Paris the consumption of pork and fowl has gained somewhat since the Revolution. (M'Chevalier, Cours. I, 113.)808.According toSchuckburg, Philosophical Transactions of 1798, andKraus, Vermischte Schriften, I, tab. I, the prices of the following species of animals rose in England between 1550 and 1795: horses, 904 per cent.; oxen, 896 per cent.; sheep, 876 per cent.; cows, 2050 per cent.; hogs, 1964 per cent.; geese, 300 per cent.; butter rose from 5d. per pound to 11-½d.; beer from 1d. per gallon to 2-¾d.; agricultural day wages from ½s. to 1s. 5-¼d.; wheat 326 per cent. Compare, however, Edinburg Review, III, 246 ff. In Germany also, cows and hogs have increased much more in price than horses and sheep. (Tübinger Ztschr., 1871, 342.)Dutot, Réflexions, 946 ff., éd. Daire, says that the value of the precious metals in France decreased in value between the times of Louis XII. and Louis XV. in the ratio of 3-79/91:1. On the other hand, the prices of different commodities rise in very different degrees:Fat sheep, from 7 sous to 10 livres.Lean sheep, from 5 sous to 5 livres 10 sous.Hogs, from 10 sous to 25-35 livres.Capons, from 1 sou to 12 sous.Hens, from 1-½ sous to 6 sous.Pigeons, from 1-½ sous to 3 sous.Deer, from 1-½ sous to 15 sous.809.Thus, in Thuringia, the average price in silver of corn from the sixteenth century until the period 1848-61 increased in the ratio of from 1 to 3-4; the price of the different kinds of animals, on the other hand, from 1 to 5-10. (Knies, inHildebrand'sJahrbb., 1863, 78.) The price of the different kinds of corn as compared with one another may, however, be modified by many different circumstances. Thus the Capitulare Saxoniæ of 797, c., II, estimated the prices of rye, barley and oats to be to one another as 30:30:15; while the Magdeburg Chamber of 1804 estimated them to be as 17:14:8. In the kingdom of Saxony, in 1841-9, the average prices of wheat, rye, barley and oats stood to one another in the ratio of 144:100:75:47 (Engel); while, in the middle ages, wheat, rye and oats were as 9:6:3 (Gersdorf, Cod. Depl. Sax., II, p. XXXIV); under Prince August, corn, barley and oats were as 24:22:12. Assuming the price of rye to be equal to 100, the cost was:At Brussels, in the 16th century, wheat 126.7, barley 80, oats 50At Brussels, in the 17th century, wheat 138.8, barley 82.9, oats 51.9At Brussels, in the 18th century, wheat 147, barley 86.7, oats 55.2At Brussels, 1815-1844, wheat 156At Brussels, 1841-1850, wheat 153, barley 82.7, oats 51At Berlin, 1789-1818, wheat 135, barley 74.8, oats 54At Berlin, 1819-1832, wheat 143.5, barley 74.9, oats 52(Rau, Lehrbuch, I, § 183.) To understand this, it is necessary to bear in mind the relatively great increase of wheat bread, beer made of barley, and horses, as objects of luxury. The unusually low price of oats in North America, as compared with the price of wheat, is dependent on the facility of exporting the latter. In Florence, in the fifteenth century, the price of wheat was 22-⅔, of rye, 12, of barley, 8soldi. (Pagnini, Sopra il giusto Pregio delle Cose, 325.)810.The English so called custom-house prices (Zollhauspreise) correspond to the market prices of 1696. If these are assumed = 100, the priceOf steel and iron was, in 1826, 83, in 1831, 56Of coal was, in 1826, 47, in 1831, 45Between 1835 and 1850, Scotch iron had already become cheaper by one-half (Meidinger, 387), and coal in London by one-third (Porter).811.Rogers, History of Agriculture, I, 67.812.In England, in 1172, an ox cost 2 shillings; in 1175, green cloth cost per ell, 2-10/12 shillings; red cloth, 5-½ shillings. (Eden.) In the western states of North America, the farmer gives two pounds of coarse wool for one pound of woolen yarn; he sends 4 bushels of wheat to the miller for the flour of three bushels (Ausland, 1843, No. 68), while in Ravenna, in the thirteenth century, the miller's fee was 1/10 (von Raumer, Hohenstaufen II, 437); according to the fixed prices inFantazzi, (Monumen. Ravennet.); in Germany, during the last centuries of the middle ages, 1/8 (J. Grimm, Weisthümer, III, 8); at the end of the sixteenth century from 1/8 to 1/5 (Coler, Oeconomia, II, 3); in modern Germany, generally 1/16 of the raw material, and in the steppes of southern Russia, when the wind is still, in summer, even the half. (Mitth. der freien ökonom. Gesellsch. zu Petersburg, 1853, 85.) In Guiana, in 1806, a very ordinary saddle and bridle could not be had under 10-½ guineas. (Pinckard, Notes on the West Indies, III, 1806.)Count Görtzwas obliged to pay 2 dollars, in Demarara, for the cleansing of a rifle, and another person for the oiling of a carriage, 5 dollars. (Reise um die Welt, 1864, 327.) A lady's dress in Mobile costs four times as much as in London or Paris. (Ch. Lyell, Second Visit to the United States, II, 70.) In Athens, articles of clothing, even for the poorer classes, were never as cheap as they are in civilized countries to-day. (ComparePlutarch, De Tranquill. Anim., 10.)813.In Upper Italy, between 1261 and 1400, a lady's chemise and the making of it cost 14.77 lire; Rheims linen, 7.04; ordinary mourning cloth, O.45; black cloth from Moriana, 2.83; cloth from Mecheln, 43.83; from Ypres, 47.04; scarlet cloth, 80.44 per ell. (Cibrario, 1. 1.) On the other hand, to-day, in the Leipzig market, the difference in price of the dearest and of the cheapest cloth will scarcely surpass the ratio 18:1. EvenScaruffi, Sulle Moneta, 1679, 163, Cust, remarks that hemp-linen and similar coarse articles had increased much more in price than brocades; but he ascribes this circumstance to the disordered state of the coinage. It is much better accounted for byAdam Smith, Wealth of Nations, I, 386, ed. Basil.814.Before the plague in the fourteenth century, the cwt. of lead was worth 10-½d.; of iron, 4s. 1d. (Rogers, I. 599.) On the other hand, between 1848 and 1856, the average January price of bar-iron was £7, 11s.; of lead, over £20. (Newmarch.)815.Thus, in England, the price:Of glass was, in 1826, 387; in 1831, 369 per cent.Of leather was, in 1826, 285; in 1831, 123 per cent.Of silk goods was, in 1826, 158; in 1831, 249 per cent.of the price of the same articles in 1796. (Rau.) Of 29 chemical products of the Parisian manufacture, the wages of labor is on an average only 7.4 per cent. of the selling price; and, in some cases, only from 1 to 2 per cent. (Chabrol, Richerches Statistiques sur la Ville de Paris, 1821;Hermann, Staatsw. Untersuch., 137.) In Buschtiehrad, between 1670 and 1870, barley rose from 1 to 4.8; hops to 6.52; fire wood to 6.14; the excise to 6.54; but beer only to 2.81; although wages increased ten fold. (Inama Sternegg, Gesch. der Preise im österreich. Ausstellungsbericht von 1873, 43.)816.A silk cloak lined with fur cost in the time of Charlemagne, 400 scheffels of rye, one not so lined 200. (Hullmann, Finanzgeschichte, 212 ff.) In Florence in the fifteenth century, one pound of sugar was equal in value to 15 pounds of mutton. (Pagnini, 326.) In Turin, in the fourteenth century, 1 pound of pepper was equal in value to 28 pounds of salt. (Cibrario, III, 359, 362.) As late as the middle of the fifteenth century, the court of Duke William of Saxony paid for one pound of sugar 1 thaler and 8 groschens, while ducal fees paid to servants and workmen seldom exceeded 2 gr. Hence, even at a princely meal, often scarcely ½ a pound was consumed. (Büsching, Ritterzeit, I, 137 f.)817.Charlemagne's capitularies suppose a merchant's profits to be from 100 to 200 per cent. (a. 809, c. 34.) And even in our own day, merchants in the markets of Cabul are frequently not satisfied with a profit of from 300 to 400 per cent. (K. Ritter, Erdkunde, VII, 244), and the caravans which leave Maroc for the Soudan are wont, in exchange for commodities amounting in price to 1,000,000 piasters, to return with a supply of other commodities worth 10,000,000. (Stein-Wappäus, Handbuch, Africa, 33.) According toBüsch, Geldumlauf, II, 10, the price of East Indian products in Hamburg was some 70 per cent. higher than at home, whilePliny, H. N. IV, 26, speaks of a price one hundred times (?) as high; and its spices, at the time of Portuguese dominion, were sold at a profit of at least 600 per cent., in Europe. (Crawfurd, History, VII, 360;Ritter, Erdkunde, V, 872.)818.When Humboldt found a missionary near Cumana who paid 7 piasters for a cow, and was obliged to pay 17 piasters for blood-letting, rather unskilfully performed, he found an illustration of one of the peculiarities of colonial life—to have all the wants of higher stages of civilization but not the means of satisfying them. (Relation historique, I, 374.)819.Enormous payments made to distinguished virtuosi, actors, sophists and hetares at the time in question, also to Appelles, Aristides etc., for works of art. (Plin., XXXIV, 19, 2, XXXV, 36, 19.) The actor Aesopus (see § 233, note 6) had a fortune worth 20,000,000 sesterces, while Pompey, for instance, had 70,000,000. Roscius received from the state for every day he played, 286 thalers, and earned 43,000 a year. (Mommsen, Römische Geschichte, III, 483, 547.) CompareCicero, pro Roscio Comœdo, 10, andPlin., H. N. IX, 59, X, 72. The zither-player, Amoebaeos, received one talent for each appearance. (Athen.XIV, 623.) According toPliny, H. N. XXIX, 5, the Romanprincipesgave the most distinguished doctors yearly 250,000 sesterces, and even more as an honorarium. At the end of the eighteenth century, the greatest Parisian actors received from 4,000 to 5,000 francs per annum. Now 100,000 is considered a moderate income for one. (Journ. des Economistes, May, 1854, 279.) It is said that Frederick Hase earned $30,000 in America in ten weeks. (Leipz. Tagebb., 15 Jan., 1871.)Steuart, Principles, II, ch. 30.Adam Smithfrequently represents it as a rule, that superfluous goods like gold and silver, are dearest among the richest nations, necessary goods among the poorer, andvice versa. But the supply has much more to do with the permanent price of a commodity than the demand for it has. And the principle above mentioned applies only in so far as the supply is here an unlimited and there a limited one. Hence, the comparison of silver with painters' and sculptors' works is not an apposite one—in the case of these there is a natural monopoly, while the former, on account of its durability and capacity for transportation, may, on the contrary, be increased almost at pleasure.820.BesidesBöckh., Staatshaushalt der Athener, 1817, Book I, compareArbuthnot, Tables of ancient Coins, Weights and Measures, 2d ed., 1754,Reitmeyer, Ueber den Bergbau der Alten, 1785, and Michaelis, De Pretiis Rerum apud veteros Hebræos, in the Comment. Societ. Gottingensis, vol. III. The principal sources of information among the ancients areDiodor., V;Strabo, III, V;Plin., H. N., XXXIII.821.The money revenue of the Persian king, to the amount of 14,560 talents yearly, was transformed into bars and thus deposited in the treasury.Herodot., III, 95 f. Even the little vassal prince Pythios of Celænæ had a treasure of 2,000 talents of silver and 4,000,000 pieces of gold. (Ibid, VII, 26 f.) On the money stores of private persons, seePlin., H. N., XXXIII, 47.822.An ox was worth, in Solon's time, 5 drachmas; in 410 B.C., 51 dr.; 374 B.C., 77¼ dr.; a medimnos of wheat in Solon's time, 1 dr., about 390, 3 dr., under Alexander the Great, on an average, 5 dr. (Böckh., I, 102, f.) The usual amount of ransom paid for a prisoner of war, in Kleomenes' time, was 2 minæ (Herodot., V, 77, VI, 79); under Dionys., I, 300 m. (Aristot., Oeconom, II, 21); under Philip of Macedon, from 300 to 400 m. (Demosth., De fals. Legat., 394); under Demetrios Poliorketes, 1,000 for a free man, 5 for a slave. (Diod., XX, 84.)823.This booty for Susa alone amounted to from 40,000 to 50,000 talents; for Persepolis, to 120,000; for Pasargadæ, to 600.Curtius, V, 2, 6;Strabo, XV, 731;Justin, XI, 14;Arrian, III, 16;Diod., XVII, 66, 71;Plutarch, Alex., 36.824.Oros., VI, 19;Dio, C., LI, 21;Suet., Aug., 41. Decline of the value of money under Constantine the Great, when the precious objects of the heathen temples were coined. (Monitio ad Theod., Aug. de inbidenda Largitate,Thes., Antt. Renn., XI, 1415;Taylor, ad Warm. Sandvic, 38.)825.Compare I Kings, 10, 14, 27 ff.; I Chron., 22, 2 ff.; II Chron., 9, 15 f., 12, 10 ff. On Ophir:K. Ritter, Erdkunde, XIV, 407 f.; on the wonders of the discovery of Spain:Herodot., IV, 152.Aristot., De Mirab., 146; Diodor, V, 35 ff. On the other hand, of Greece,Athen.VI, 19 ff.826.ComparePlin., H. N., XIV, 1. Yet the value of money in the time of the Cæsars seems to have stood much higher than it is now, as is proved, for instance, by the endowments by Trajan (16 sesterces per month for boys, and 12 sesterces per month for girls), as thealimentafurnished them according to Digest XXXIV, 1, embraced their entire support. Compare the excellent essay on this subject byRodbertus, inHildebrand'sJahrbb., 1870, I.827.The conquest of the Avares seems to have temporarily produced a considerable cheapness of the precious metals. (Guérard, Polyptiques, I, 141.) Increase of the value of money in Scandinavia, during the later part of the middle ages. (Wilda, Gesch. des deutschen Strafrechts, I, 323 ff.)828.In England, from 1279 to 1509, there were coined on an average only 6,868½ pounds sterling; from 1603 to 1830, on the other hand, 819,415 pounds sterling. The average in the time of George IV., per annum, was 4,262,652 (Jacob, ch. IV.) An evidence of the uncertainty of the history of prices in the middle ages is, thatJacob, ch. 12, infers, from the price of corn, that the price of silver remained rather stationary from 1120 to 1550, whileAdam Smith, I, ch. 11, 3, infers from the same fact, a remarkable rise in the price of silver from 1350 to 1570. Concerning the latter, seeLeber, Fortune privée au moyen Age, 16 f.Tooke-Newmarch, History of Prices, VI, 391; whereasRogers, Statist. Journ., 1861, 544 ff., finds that in England, between 1300 and 1532, there was no change whatever in the price of silver. According toSoetbeer, Forschungen zur deutschen Geschichte, VI, 94, wheat and rye were, as compared with silver, worth during the Carolingian period, about one-fourth of its value, between 1750 and 1850.Hegel, Shassburger Chroniken, II, 1012, ascribes to gold over 2½ times as great a purchasing power in the 13th and 14th centuries as in the 19th century; and to silver, a purchasing power about three times as great.829.The silver ores of Peru and Mexico yield, on an average, only from 2 to 3 per 1,000 of metal; those of Potosi, at present, scarcely 1 per 1,000; those of Mexico, according toHumboldt, on an average, from 3 to 4 ounces per cwt.; so that many of the European ores are decidedly richer. While the veins of the Saxon mine, Himmelsfürst, have a breadth of only from 0.2 to 0.3 meters; the Veta-Madre of Guanaxuato, is in few parts less than 8, and it is sometimes even 50 meters broad; and the Veta-Grade of Zacatecas is from 5 to 10 meters in breadth. In Pasco there are veins of silver ore which have 114 and even 123 meters.Tschudi, Reise in Peru, K., 12;Chevalier, Cours, III, 184 ff., 241 ff. According toHumboldt, Essai sur la Nouvelle Espagne, III, p. 413, eleven times as many miners are needed at Himmelsfürst as at Valenciana to obtain the same quantity of silver.830.Thus, for instance, the celebrated ransom-money of Athahualpa (even according toGarcilaso de la Vega) amounted to only 5,000,000 thalers, while the French King John, after the battle of Poitiers, in 1356, had to pay 41,000,000 francs for his ransom. (Leber, Fortune privée au moyen Age, 121 ff.)831.CompareM. Chevalier, III, 190 ff. Discovery of the quicksilver mines of Guancavelica, 1567.832.The yield of Potosi amounted from 1545 to 1638, to 395,619,000 pesos. (Ulloa, Viage, II, I, 13.) Up to the present time, the aggregate yield there has been estimated at from 6,000 to 7,000 million francs.833.On the worse grounded assumptions of former writers, seeHumboldt, N. Espagne, IV, 237.834.There was really introduced into Spain, about 1525, not much over 2,000,000 francs annually; and after 1550, six times as much. (L. Ranke, Fürsten und Völker, I, 347 ff.) CompareHumboldt, Ueber die Schwankungen der Goldproduction, in the Vierteljahrsschrift, 1838, IV, 18.835.On the Brazilian exports of gold in the 18th century, seeSchäfer, Gesch. von portugal, V, 192 ff.836.According toHumboldt, N.E., IV, 218, the amount up to the beginning of this century was 17,000 kilogrammes of gold and 800,000 kilogrammes of silver.837.Thus, for instance, Mexico, during this period yielded, on an average, 65,000,000 francs, instead of the former amount of from 130,000,000 to 140,000,000. In Carro de Potosi, there were, in 1826, of the former 132 pool-works only 12 in operation. CompareAdams, The Actual State of the Mexican Mines, 1822.Jacobassumes that about 1830, the quantity of money in Europe and America was 1/6th less than in 1809. (Ch. 28.)838.Of this, 1,800 kilogrammes of gold from the United States.839.Fischer, Geschichte des deutschen Handels, 2d ed., II, 616 ff., 673 ff. But the Schwaz mines, in the Tyrol, are said to have produced, until 1523, 55,000 marks annually; the Freiberg silver mine, from 1542 to 1616, 16,000 marks annually. Comparevon Langen, Kurfürst Moritz, II, 56.840.The Russian gold ores, quite insignificant before the year 1814, have made very great progress since 1840. Their aggregate yield, between 1814 and 1861, not taking into account the amount embezzled, amounted to 37,000puds, thepudbeing equal to 16.3 kilogrammes. The best year, 1847, gave a yield of 1,757puds; 1852-1861, an average of 1,556puds; 1861 alone, 1,442puds, of which 1,041 came from the private Siberian gold-sand washings. (Walcker, in Faucher's Vierleljahrsschrift, 1869, II, 115.)841.Spanish silver production yielded, in 1845, over 184,000 marks; in 1850, over 291,000. (Willkomm, Halbinsel der Pyranäen, 1855, 537.)842.Annales des Mines, X, 831 ff.843.Of this amount, there came to Europe, not including Russia, 150,000 kilogrammes of silver, 2,650 kilogrammes of gold; to Russia, 24,000 kilogrammes of silver and 30,000 kilogrammes of gold (embracing the quantities probably withdrawn without the knowledge of the custom's authorities); to the rest of Asia, 100,000 kil. of gold; to Africa, 4,000. (M. Chevalier.)844.According toHumboldt'sassumption before the time of Columbus, Europe had a circulation of 170,000,000 piasters; about 1600, of 600,000,000; about 1700, of 1,400,000,000; in 1809, of about 1,824,000,000. Up to 1803, there was produced in America, 9,915,000 marks (Spanish) of gold, and 512,700,000 of silver. (N.E., 245.)Gallatinestimates that, before Columbus, there were 1,600,000,000 francs; in 1830, in Europe and America, from 22,000,000,000 to 27,000,000,000 francs. (Considerations on the Currency and Banking System of the United States, 1831.) According toM. Chevalier, 1850, all the silver which America produced had a volume of only 11,657 cubic meters; and all the gold of only 151 cubic meters. The latter, therefore, would not even fill the half of a French gentleman'ssalon.845.All the more in favor with governments because they affect principally foreign consumers. Thus, the Spanish government at first imposed a tax of 50 per cent. of the gross yield of the raw material, on the purchaser of silver; since 1503, under Orando, of 33-⅓ per cent.; and later yet, of 20 per cent. This last tax was therefore in full force under Cortes. This tax was reduced in Mexico, in 1725, and in Peru in 1736, to 10 per cent., and later, in the case of gold, to 3 per cent. Heavy taxation of Russian gold ore (35 per cent. of the raw material), by virtue of the ukase of April 14, 1849. CompareM. Chevalier, III, 274.846.Cantillon, Nature du Commerce, 215, 236, shows very clearly how the increase of the price of commodities was produced, in the first instance, by the increased consumption of the possessors of gold, and how it, therefore, first affected those commodities which they especially desired.847.This is the opinion ofAdam Smith. Similarly ofDavid Hume, On Money. According toLetronne, Considérations sur l'Evaluation des Monnaies Grecques et romaines, 119, andBöckh, Staatshaushalt, I, 88, the average value of wheat in relation to silver was, in Athens, 400 B.C., as 1:3146; in Rome, 50 B.C., as 1:2681; in France, shortly before 1520 after Christ, as 1:4320; in the nineteenth century it is as 1:1050.Th. Smith, De Republ. Anglorum, I, assumes that the price of silver, from the age of chivalry to 1625, decreased in the ratio of 120:40. The Spaniard,Moncado(1619), says as 6:1. (Jacob, ch. 19.)Jacob, himself, in comparison with his own time, as 7:1 (ch. 15.) Much more moderate isNewmarchinTooke'sHistory of Prices, VI, 345 ff., who assumes an increase in the prices of commodities of about 200 per cent. The estimated value of tithe-wine (Zehntwein) about doubled in lower Austria, during the sixteenth century. (Oberleitner, Finanzlage N. Oesterreichs im 16 Jahrhundert, 36.) According to the important researches ofMantellier, Mémoires de la Société Archéologique de l'Orleanais, vol. 1, 103 ff.; extract ofLespeyresinHildebrand'sJahrb., 1865, I, 1, the purchasing power of silver as compared with the average value of twenty-seven commodities, assuming it to have been 1 from 1750 to 1850, was, from 1350 to 1450, 2.9; from 1450 to 1550, 2.8; from 1550 to 1650, 1.5; from 1650 to 1750, 2.1. According toRogers, the prices of corn in relation to silver were from 1596 to 1636, at most 2.3 times as high as from 1260 to 1400; from 1637 to 1700, 2.6 times; from 1701 to 1764, 2.1 times; from 1726 to 1820, 3.2 times. (Rogers, I, 180.)848.In Germany, the rise in prices was first observed in the price of foreign groceries, which partly rose 400 per cent. Popular opinion looked for the cause in the evil disposition of the large commercial houses. In order to facilitate the competition of the smaller houses with the larger, the Reichstag, in 1522, prohibited all companies with a capital of more than 50,000 florins; and, in 1524, the royal treasury wished to bring suit against the violators of this law. But the cities contrived to avert the blow. (L. Ranke, Geschichte der Reformation, II, 42 ff., 134 ff.) In Spain, the government, especially between 1550 and 1560, endeavored to oppose the growing dearness of goods of all kinds, by prohibiting the exportation of the most important commodities, and by putting obstacles in the way of retail trade. The lower classes in England ascribed the rise to the suppression of the monasteries (Percy, Reliques of ancient Poetry, II, 296), while Henry VIII. endeavored to improve the condition of things by laws against luxury, the governmental establishment of fixed prices, the expulsion of foreign merchants etc. (21 Henry VIII.) The first writer who seems to have clearly seen the true cause of the changes in price wasBodinus, Response aux Paradoxes de Mr. de Malestroit touchant l'Enchérissement de toutes Choses et des Monnaies (1568). This work was translated into Latin byH. Conring, 1671; and done over in the work: Discours sur les Causes de l'extrême Cherté, qui est aujourd'hui en France (1574). Next, we have the English authorW. S., A Compendious or briefe Examination of certayne ordinary Complaints of divers of our Countrymen of these our Days, London, 1581. InBefold'sVitæ et Mortis Consideratio politica, 1623, 13 f., we have a right explanation of thecaritas sine inopiawhich is to be considered as the common property of his time.849.SimilarlyQuesnay, 77, Daire.Sir J. Stewart, Principes, ch. 3.Kraus, Vermischte Schriften, II, 131 ff.Hermann, Staatsw. Unters., 127.Helferich, Von den periodischen Schwankungen im Werth der edlen Metalle, 1843, 70 f.850.According toCibrario, a hectolitre of wheat was worth, in Turin, from 1289 to 1379, on an average, 905 gr. of fine silver; that is, about three times as much as in Paris before the discovery of America, and as much as in Paris from 1546 to 1556. In Turin, from 1825 to 1835, it was worth about 1702 gr. In the fifteenth century even, the foreign embassadors complain of the enormous cost of living there. So, for instance,Raumer'shistor. Taschenbuch, 1833, 162. Compare also,Carli, Del Valore della Proporzione dei Metalli monetati con i Generi in Italia prima delle Scoperte dell' Indie, 1760, in which he, indeed, exaggerates the matter, and seeks to prove his views by the coarsest sophistry.851.The chief result ofHelferich'sexcellent researches. (Helferich, loc. cit.) The general opinion, indeed, is that thisstatu quoof the value of the precious metals was interrupted about the middle of the eighteenth century by another decline, and that the latter yielded to a subsequent rise in 1815 and afterwards. ThusDavid Hume, History of England, ch. 44, App. 31, ch. 49, App. A.Young, Political Arithmetics, ch. 6. More recently,Rau, Lehrbuch, I, § 176.M. Chevalier, Cours, III, 320 ff. One of the principal advocates of the opinion that every increase made in the medium of circulation produces a corresponding depreciation isNebenius, Deutsche Vierteljahrsschrift (1841). In England a quarter of wheat was worth, on an average, 38s. 8/9d., from 1595 to 1685. On a similar stability of corn prices in Belgium, seeSchwerz, Belgische Landwirthschaft, III, 37. According to Suckburg (l.c.), the value in exchange of money from 1640 to 1700 declined 32-2/9 per cent.; from 1700 to 1760, 43 per cent.; from 1760 to 1806, 84 per cent.852.From 1637 to 1700 the price of corn in England averaged 51 shillings; from 1701 to 1764 only 40½ shillings.853.Thus, the dearness of wheat in Germany, during the first thirty years after the Thirty Years' War was caused, in large part, by the depopulation produced by the War.854.In Germany, also, the cause of the enhanced dearness of so many goods during the Thirty Years' War is to be sought for in the goods themselves.855.Since 1815, most Birmingham and Sheffield wares have fallen from 50 to 70 or 80 per cent. in price—at least from 20 to 30. (McCulloch, Statist. Account, I, 705.) The Quarterly Review, May, 1830, speaks even of an average decline of prices of English commodities in general, of 50 per cent.856.Excellently carried out inTooke, History of Prices, III, 1838. That the world's market is not so very readily affected by an increase of the medium of circulation, is established by this fact, among others, that the immense exportation of French metallic money in consequence of the issue of paper money between 1716 and 1720, and again in 1790 and the following years, is coincident with very low prices of wheat in the neighboring countries. (Helferich, loc. cit., 139, 190 ff.) And yet, in the former case, the amount was 400,000,000 francs, and in the latter, at least 1,000,000.857.Jacobestimates this part at only 2-½ per cent.,McCulloch, at 20,Loweat 25,NeckerandHelferichat 50,Humboldtat 66-⅔ of the whole quantity worked. It certainly is, in our day, on account of the ever growing aggregate supply, greater than hitherto; but it is very different in different countries.Nebenius, Deutsche Vierteljahrsschrift, 1851, 56 seq., estimates the aggregate consumption of new gold and silver for industrial purposes at 14-½ piasters yearly, and in addition to this seven millions of old gold and silver (Bruchgold und Bruchsilber). The annual wear and tear of previously existing articles of gold and silver, it is estimated, amounts to 4,420,000 piasters (1/420); the annual increase of their aggregate amounts in Europe to 6,000,000 piasters (1-½ per cent., corresponding to the increase of population), and 4,200,000 (one-fifth of the entire consumption), is employed, as he claims, in gilding, plating etc. The last item is probably much increased by galvanic silver-plating, the invention of photography etc.858.Jacobembraces in the amount of metal employed in industrial purposes, in the sixteenth and seventeenth centuries, 1/5 of the amount which, after deducting the loss in Asiastic trade, was added to the gold and silver stores of Europe; i.e., in the seventeenth century, about 2,500,000 piasters yearly; in the eighteenth century, ⅔ (!); that is, annually, 15,000,000 piasters; in 1830, in England, £2,457,221; in France, 120,000; Switzerland, 350,000; in the rest of Europe, 1,605,490; in North America, about 300,000; altogether, £5,900,000.Humboldt'sestimate is 21,000,000 piasters;McCulloch's, £6,050,000. According to the records of the ParisMonnaie, the amount of silver ware in France increased seven fold between 1709 and 1759. (Humboldt.) In England, between 1807 and 1814, 8,290,000 ounces of silver were stamped for manufacturing purposes, from 1830 to 1837, only 7,387,000; in 1851, 924,000.McCullochestimates the annual consumption of silver, in Birmingham alone, for plating purposes, at 150,000 ounces; in Sheffield, at 500,000; and the gold consumption in the pottery districts at £650 per week. Birmingham consumed (1831) for gilding purposes, £1,000 gold yearly. (Whately.) It now employs weekly 3,000 ounces of gold and 6,000 ounces of silver in the manufacture of gold and silver ware, besides the quantity intended for gilding and silver-washing purposes. (Quart. Rev., April, 1866, 381.) The jewelers of New York manufacture yearly 3,000,000 of dollars worth of gold and silver ware, mostly new material. (Economist, April 16, 1853.) There were in Vienna, in 1781, only 167 workers in gold and silver; in 1840, 229; in 1847, 539. (Baumgartner, in the Wiener Akademie, May 3, 1857.)Jacobestimates the aggregate mass of gold and silver ware, in plate, instruments etc., in Europe and America, to be 1-¼ as great as that of the ready money; and in England alone to be twice as great (ch. 28); whileTengoborskithinks that at the beginning of the nineteenth century, the coin constituted ⅔ of the entire amount of the precious metals. Sometimes a movement in the opposite direction takes place, as, for instance, in those revolutions in which the silver of the church was confiscated; in the unfortunate wars of Louis XIV., etc.Nebenius, loc. cit., 17, mentions a South German silversmith who melted down in the years succeeding 1802, monastery silver to the amount of 11,000,000 guldens.859.On the wear and tear of coin, see §120, andHermann, in the Archiv. der politischen Oek., I, 1841. Compare also,Faust, Concilia pro Aerario, 1641, 263 ff. This wear and tear is so great thatM. Chevaliersupposes that it alone would suffice to reduce an amount of money under Constantine the Great of 5,000 millions to 300 millions, in the time of Philip IV. (ob. 1314.) Cours, II, 322. How great a number of coins, especially of the smaller denominations, are entirely lost is evident from the fact, that at the time of the demonetization of the 15-sous and 30-sous pieces of 1791-92, amounting to 25,000,000, only 16,000,000 were presented for redemption. Of the 10-centime pieces stamped with an N, amounting to 3,286,932 francs, there were only 2,000,000 left when they were withdrawn from circulation, and this although individuals had added to the coinage. (M. Chevalier, III, 321.) The total loss caused on this score,McCullochestimates at 1 per cent. per annum, andHelferich, at ¾ per cent. The greater the aggregate stock of gold and silver, the greater the absolute amount of wear and tear. If, therefore, there were annually an equal influx of mineral products to the markets, the pressure of this increase of supply from that cause alone would take the shape of a converging series of prices. (Tooke, History of Prices, II, 151 ff.)860.The British East India Company exported gold and silver on an average per annum from:1711-1720, £434,0001721-1730, 532,0001731-1740, 487,0001741-1750, 631,0001751-1760, 571,0001761-1770, 152,0001771-1780, 43,0001781-1790, 393,0001791-1800, 352,0001801-1807, 852,000Milburn, Oriental Commerce, 1813, 419. According toM. Chevalier, Introduction aux Rapports de l'Exposition de 1867, the trade of Europe and North America, with India, China, Japan and the Australian islands, amounted in 1800, to only 410 million francs, in 1866, to 4,024 million. Yet, for a time, the largely increased exportation of English manufactures to East India and of East Indian opium to China, had changed the relation so that the exportation of the precious metals from South Asia, by a great deal, more than counterbalanced the imports. On the other hand, between 1853 and 1856 240,000,000 thalers were shipped to India and China from England and the Mediterranean harbors; in 1863 and 1864, even as much as 300 millions, to be, for the most part, buried there. Moreover, the immense quantity of cash money—often as much as from 12 to 15 million in pounds sterling—in the state treasury, and silver ornaments (§§ 44, 123) customary in India, demand a considerable yearly supply to make up for wear.Newmarchspeaks of 400 million pounds sterling which can be maintained in its condition hitherto by a yearly increase of 1 per cent. (History of Prices, VI, 723.) From 1865 to 1869, English steamships carried gold and silver to the East in the following quantities, yearly: 93.9, 66.3, 24.6, 70.2 and 60.4 million thalers, in addition to which almost as much came directly from California. Statist. Journ., 1871, 122 seq.861.Tooke-Newmarch, History of Prices, VI, 147 ff., estimates the aggregate stock of gold at the end of 1848 at £5,600,000; in 1856, at £172,000,000 more. According toLavasseur, the amount of silver in the East increased, between 1848 and 1857, from 22 to 24 milliards of francs; and the amount of gold from 9-½ to 15-½ milliards. (Annuarie d'Economie politique, 1858, 632.) The total amount of gold and silver in the civilized world,Wolowskiestimated at from 55 to 60 milliards of francs, in 1870. (L'Or et l'Argent, Enquête, 19.) CompareMason, The Gold Regions of California from the Official Reports, 1848.Tengoborski, Sur les Gîtes aurifères de la Californie et de l'Australie, 1853. Goldfield's Statistics issued from the Mining Department in Victoria, 1862.W. R. Blake, The Production of the precious Metals, or statist. Notice of the principal Gold and Silver producing Regions of the World (New York, 1869).862.Soetbeer'sDenkschrift betr. die deutsche Münzeinigung Mai, 1869, and earlier yet, inFaucher'sVierteljahrsschrift, 1865, II. According toM. Chevalier, all the mines of the world, a short time previous to 1865, produced 284,000 kilogrammes of gold, and 190,000 kilogrammes of silver in a year: a total of 373,000 thalers (Journal des Economistes, June, 1866), while, in 1848, the total amount of gold coinage in the world was estimated at 560,000,000; Great Britain, France, North America and Sidney had, since that time and up to 1871, added to this £597,780,000. The additions have been made in decreasing quantities: thus, 1857-59, 37.2 millions annually; 1869-71, 16.99 millions annually. (Statist. Journ., 1872, 376 ff.) The estimates as to how much a gold-digger might make in a day have been variously estimated. Thus,Larkinestimates it from $25 to $50;Mason, at $10;Folson, at $25 to $40;Butler King, at $16, reckoning one ounce at $16. All these estimates seem to give an altogether too high average. In Australia, according toKhull, Colonial Review, June, 1853, a digger can produce only one ounce daily, or less than 4 thalers. According toW. Stamer, Recollections of a Life of Adventure, II, 1866, a gold-washer in Victoria earned in 1858, on an average, £250 per year; in 1865, only £70; while day labor was worth 15 shillings. Hence, great hopes have to be built on the lottery-nature of gold-washing. On the Rhine, a gold-washer is satisfied with ⅔ of a gramme of gold, that is worth from 13 to 18 silver groschens. (Daubrée, Comptes rendus de l' Académie des Sciences, XXII, 639.) It should be borne in mind, however, that the Rhine-lander devotes to gold-washing only the leisure time which his avocation as a fisherman leaves him, while the gold-washer in the new world, as a rule, devotes his whole time to it; and that his labors are interrupted by the long rainy season, attacks of fever etc. To this must be added the great difference of the average prices of the means of subsistence and the difference of all social conditions.863.Compare, for instance, on the early productiveness of the Brazilian gold districts which soon ceased:Spix und Martius, Reise nach Brasilien, I, 262 f., 350.Gardner, Travels in the Interior of Brazil, 1846. On Hispaniola, seeBenzoni, N. Mundo, I, 61, andPeschel, Gesch. der Entdeckungen, 304, 556. Hitherto, gold had been obtained by the usual mining process, only in very few places. As a rule, it has been found in alluvial land not far from the surface. CompareAnsted, The Gold-Seekers' Manual, 1849. These circumstances have made the production of gold important from the first; and they still make it comparatively easy, while it causes little demand for capital but for great skill. As soon, therefore, as the greater part of the country washed for gold has been worked, which does not require a long time, the whole is abandoned, while in the production of silver the great amount of capital fixed in pits, shafts, kilns etc. ties the parties engaged in the enterprise to the spot, and necessitates the continuation of the enterprise. In recent times, however, Australia and California have developed the mining and machine production of gold to a surprising extent. According toLaur, La Production des Métaux précieux en Californie, 1862, 33, and the Journal des Economistes, Nov. 1862, Californian gold-quartz produced, in 1851, on an average, 635 francs per ton; in 1860, only from 80 to 85 francs; but the gold-washing methods have become cheaper in the ratio of 2,500:1. However, the production of the precious metals seems even now to be decreasing. According to the Statist. Journal, 1866, 99, it amounted on an average to:in 1849-51, gold £23.9 million, silver £15.5 million.in 1852-56, gold 38.7 million, silver 16.1 million.in 1857-59, gold 36.5 million, silver 17.1 million.in 1860-63, gold 33.5 million, silver 18.2 million.in 1864-68, gold 30.0 million, silver 19.5 million.The number of gold-diggers in Victoria steadily decreased from 125,764 in 1857, to 63,053 in 1867.864.One of the chief difficulties in the way of the production of gold is the loss by embezzlement, which is estimated at an average of 20 per cent. Small companies of men working on their own account would be less exposed to temptation, and the Anglo-Saxon races and the North Americans are very well adapted thereto. (M. Chevalier, III, 261.)865.Gold is in a certain sense one of the most widespread of metals, although it is found anywhere only in small quantities; so that on the Rhine, for instance, it takes from 17 to 22 millions of gold grains to make a kilogramme. An extraordinary large number of places owe their civilization to gold-seekers. CompareTacitus, Agr., 12. I select the following“finds”fromRitter'sErdkunde. The Shangallas (I, 249); still more the terrace of Fazoglu itself (I, 253, compareBruce, Travels, V, 316, VI, 255, 342), in Monomotapa (I, 140); in Manica, west from Sofala (I, 145), especially since the suppression of the slave trade (I, 305, 471); in Mandigo land (I, 360, 372); on the road from Gambia to Timbuctoo (I, 457); on Lake Mangara (I, 493); between Timbuctoo and Finnin (I, 445); in Nubia (I, 667, seq.); unused silver and quicksilver mines on the lower Bagradas (I, 493); gold wealth at Malacca,aurea chersonesus(V, 6 f., 27); Tonkin, Lao and Ava (III, 926, 1, 216, IV, I, 213); Assam (IV, 294); smaller Thibet (III, 657); Kashmere (III, 1,155); on upper Setledsch (III, 654 ff., 668); in the mountainous sources of the Indus (III, 508, 529, 593, 608); on the Cabool (VII, 23); in Peshaver (VII, 223); Badakschan (VII, 795); rich silver mines abandoned for want of wood near Herat (VIII, 243); in Armenia (X, 273). It is said that in southern China there are great treasures of the precious metals, the removal of which has been opposed thus far. (IV, 756.) Arabia's richness in gold mines, spoken of byDiodor., II, 50, III, 45, andAgatharch, De Mare rubro, 60, is of doubtful existence, as no traces of them are to be found in the country to-day. On the other hand, on both shores of the Pacific Ocean, the portions of the earth richest in volcanoes seem to possess almost everywhere quantities of gold equal to those of California and Victoria. (Edinburgh Review, Jan., 1863, 82 ff.) What an amount of treasure can be obtained at times from old and long since forgotten“finds”is proved by the Altai (that is gold mountain), which even the old Tschudi had rummaged (K. Ritter, II); and where Herodotus' (III, 16) love of truth, so frequently called in question, has recently been so brilliantly vindicated. Comparev. Ungern-Sternberg, Gesch. des Goldes, 1835.A. Erman, Ueber die geographische Verbreitung des Goldes, 1835. According toMurchison, Siberia, ch. 17, gold is to be found only“in crystalline and paleozoic rocks, or in the drift from these rocks, which is a tertiary accumulation of the pliocene age;”and that it is found most abundantly“in quartz-ore, vein-stones and traverse altered Silurian slates, chiefly lower Silurian, frequently near their junction with eruptive rocks.”866.CompareHumboldt, N. Espagne, IV, 147 ff.;St. Clair Duport, Essai sur la Production des Metaux précieux en Mexique, 1843;M. Chevalier, Cours., III, 483 ff.867.The cost of a kilogramme of silver, expressed in terms of silver itself, up to the moment that it is shipped, is estimated byDuportas follows: salt andmagistral, 61 grammes; quicksilver, 112 grammes; stamping it, 171 grammes; transformation of the ore, 72 grammes; rent and superintendence, 38; duties etc., 145; smelting, transportation and shipping, 35. There remains as profit for mining it, 336 grammes. As to how the production of American silver increases and runs parallel with the cheapness of quicksilver, seeHumboldt, N. Espagne, IV, 91 ff.868.Wolowskicalculates that the absolutely much smaller yearly increment to the amount of the precious metals in the sixteenth century, frequently 1/12, now constitutes only 1/50 of the greater existing amount. (L'Or et l'Argent Enquête, 50.)869.In the United States the stock of cash money in 1820 was estimated at 5.1 thalers per capita; in 1849, at 8.6 thalers; in 1854, on the other hand, at 13 thalers.870.The weight of the mass of gold introduced into Europe annually stood to that of silver in the ratio of 1:60-65 in the seventeenth century; in the first half of the eighteenth century, in that of 1:30; in the second half, in that of 1:40; and yet the variations in price were not in the least parallel. According toSœtbeer(Beiträge und Materialien zur Beurtheilung von Geld und Bankfragen, 1855, 102 seq.), the average silver-course (silbercurs) of gold had, 1852-54, sunk only 2.05 per cent., as compared with that of 1800-40. And yet the value of the annual production of gold stood to the annual production of silver, in the beginning of the nineteenth century, as 29 to 71; in 1846, as 47 to 53; in 1848-56, as 3 to 1.871.While the public, even since 1850, think they have noticed a depreciation in the value of money, there are a great many learned political economists who are by no means prepared to grant it. The principal advocates of this opinion areTooke, andNewmarch, in vol. VI. of the History of Prices (1857). AlsoLavergne, in the Journal des Economistes. And really the enhanced dearness of many kinds of goods up to 1857, might have been accounted for by causes affecting the goods themselves: diminished supply by reason of bad harvests, commercial gluts etc.; increased demand by capitalization on a gigantic scale, speculation, but especially by the elevation of the lower classes etc.The London wholesale prices were on the 1st day of January, 1869, nearly all lower by 10 per cent. than on the 1st day of July, 1857. Only indigo, cotton and meat had risen. (Hildebrand'sJahrb., 1870, I, 328.) In many instances the enhanced dearness is entirely local, by reason of the greater facilities for transportation in places where prices were already higher. But as new truths are very easily exaggerated by their discoverers, much of Tooke's view concerning these events depends upon a polemic carried too far against the theory of the balance of trade which was customary in the so-called currency school. Compare, in opposition to Tooke,Lavasseur, in the Journal des Economistes, March, 1838, andM. Chevalier, La Baisse probable de l'Or, 1858.Lavasseur, from the difference between the official and real custom-house prices in France, calculates that raw materials in 1856 were on the average 63 per cent., and in 1858, 20 per cent. higher than in 1826; and that manufactured articles were in 1856, just as high, and in 1858, 6 per cent. lower than in 1856. An average made of all commodities showed, in 1856, an enhancement of 30 per cent, and in 1858 of 9 per cent. (Hildebrand'sJahrb., 1864, II, 118.)In the Hamburg market in 1847-65, 87 articles declined in price, 183 rose in price, and 24 remained about stationary. (Amtl. Statistik von 1887, 18 ff.)Jevonsassumes a general rise in the price of commodities between 1849 and 1869 of about 18 per cent. (Economist, May 8, 1869.) He makes this estimate from the average March prices of 50 of the principal articles. Assuming the average March price of 1849=100, we have, according to him, for the following years, respectively: 101, 103, 101, 116, 130, 125, 129, 132, 118, 120, 124, 123, 124, 123, 122, 121, 128, 118, 120, 119. Previous years showed: 1789=133; 1799=202; 1809=245; 1819=175; 1829=124; 1839=144. (Compare supra, §129, note 1.) The budget of a Swiss teacher's family consisting of five persons has become dearer since 1840 ff., their consumption remaining the same and of only the simplest articles, by 72.5 per cent. (Böhmert, Arbeiterervhältnisse etc., I, 302 ff., 355.) That, however, the depreciation is under-estimated most precisely in England and over-estimated in Germany,Kniesvery well accounts for by the price-leveling effects of the more modern means of communication. (Tübinger Zeitschr., 1858, 280 ff.)872.CompareLeibnitz, on the consequences which would follow the realization of the dreams of the alchemists. It would be a great misfortune, since then a pocket would no longer suffice for the transportation of money, and people would have to use wheel-barrows as they do now in Sweden. (Opera ed. Dutens, V, 199, 401.)873.Beccariaconsiders it equitable that the debtor should always pay the original value of the metal. (E.P., IV, 2, 17.)Galiani, on the other hand, would not permit individuals, even when the state arbitrarily causes a diminution in the real value of money, to maintain the real value of the coinage in their contracts. (Della Moneta, V. 3.)874.It is precisely this class which first comes to an understanding of the essential nature of the change effected.875.Thus the English lessees, who in the sixteenth century had leases for a long term of years, saw themselves rise in the social scale in consequence of the revolutions in price—a fact of importance in the political struggles of the seventeenth century. CompareSir F. M. Eden, State of the Poor, I, 119 ff.876.Too much stress is laid upon this byTooke-Newmarch, who, on that account, considers almost every increase of the precious metals as a blessing. As a matter of fact, the population of Australia, of the United Kingdom, and of the United States, increased, between 1848 and 1871, 44.5 per cent.; the production of coal and of railroads in England, between 1856 and 1869, by about 60.6 per cent.; the English production of woolen goods, linen and cotton and yarn, between 1848 and 1870, by from 110 to 335 per cent. (Statist. Journal, 1872, 376 ff.)877.Luther'scomplaint concerning the poor condition of the clergy. SeeSchmoller, in the Tübinger Ztschr., 1860. This very clearly shows how much surer for the crown domains are than a civil list, and donations of land to a church than payments in money. Law of Elizabeth, 18 Eliz., that, in the case of university property, ⅔ of the lease rent should be paid in metal and ⅓ in corn. InAdam Smith'stime, this latter third was worth as much again as the other two. (I, ch. 5.)878.In the sixteenth century, this class was of small importance in most countries; in our times, their ruin would cause general disturbance. The wiser class of capitalists would, indeed, find means to exchange their credits for more certain values, or make it a condition that they should receive in the end a large sum.879.Thus, for instance, the son of a deceased land owner who retains the lands as his own acquits himself towards his brothers who have entered the military or civil service of their country by paying them a certain sum periodically. If a revolution were really impending, the owners of land would soon emulate one another to improve their estates by borrowing capital, if for no other reason, to turn the depreciation of the medium of circulation to their own advantage. In the sixteenth century, the indebtedness of land owners was relatively unimportant.880.It appears fromRoger'sTables, Statist. Journal, 1861, 551 ff., that, between 1583 and 1620, a time during which the population of England increased neither in wealth nor in numbers, there was a considerable increase in the price of nearly all English commodities. Thus, for instance, wheat was, from 1591 to 1600, 468 per cent., and from 1611 to 1620, even 495 per cent. higher than from 1530 to 1533. The Saxon laborer earned, in 1599, in corn, only half as much as in 1455. (Tübinger Ztschr., 1871, 354.)881.When labor is indispensable to employers, it may happen that a small decline in the supply may largely raise the price. Wages, in almost all branches of labor, rose between 1851 and 1856, by about from 15 to 20 per cent.882.This, also, was of little significance in the sixteenth century, but how important now!883.Income taxes,ad valoremduties and tithes rise and fall in their nominal amount as the price of the medium of circulation falls and rises.884.Thus, for instance, the victory of the English Parliament over the unlimited power of the crown, in the first half of the seventeenth century, was very much promoted by the fact that the crown, in spite of all its economy, was always in financial straits in consequence of the depreciation of money. (Power of the purse, power of the sword!) However, any force kept steadily in action is a two-edged sword. While under favorable circumstances, it may be thereby developed, under unfavorable circumstances it may be thereby exhausted. How great a number of representative assemblies, during the revolutions in prices in the sixteenth and seventeenth centuries, allowed their energies to grow dormant!885.Most of the above points are very well discussed in the workW. S., cited above, §137.886.As no one then doubted: CompareW. Raleigh, The Discovery of Guiana, Pref. I refer to Philip of Macedon.887.CompareRoscher, Kolonien, Kolonialpolitik und Auswanderung, 1856, 145 ff.888.Something similar might have been observed in England in 1819 etc., at the restoration of a depreciated paper currency. Among nations in a comparatively low stage of civilization, a variation in the medium of circulation is of less importance than among more highly civilized nations, because trade in money, and still more, credit, are relatively speaking undeveloped.889.Fawcettgreatly exaggerates when he says that with an increase of population and wealth, an increase of money is as much a want as hunger. (Manual, 370.)890.Galiani, Dellab Moneta, III, 1. At the time of the Lex Salica, 10:1. After the Edictum Pistense of Charles II., ch. 24 (Pertz, Mon. Germ., III, 488), 12:1. At the time of the Sachsenspiegel (III, 45), again, 10:1. Under Saint Louis, King of France, 12.5:1. (Leblanc, Traité historique des Monnaies de la France, ch. 1, 2.) In Poland, 1356, 12:1. (Muratori, Dissertt. Medii Aevi, II, 28.) In England, 1262, 9.6; 1272 = 12.5; 1345 = 13.7:1. (Rogers, 1, 593 ff.) Under Henry VI., and in 1494 = 12:1. (Anderson, Origin of Commerce, a. 1422, 1494.) In Denmark, under the former Kings of the Union = 8:1. (Dahlmann, Dänische Geschichte, III, 52.) And so throughout almost the whole of Scandinavia's medieval period, as for instance in the Graugans. (Wilda, Gesch. des deutschen Strafrechts, I, 329.) In Italy, 1579 = 12:1. (Scaruffi, Sopra le Moneta, 1582.) In Holland, 1589 = 11.6:1.Bodinus, De Republ., 1584, II, 3, maintains 12:1 as the general ratio; but the Apostolic Chamber adopted the ratio of 12.8:1. In Germany, according to the instances cited byA. Riese, 1522 = 10:1. The monetary laws of Germany give it in 1524 = 11-⅓:1, in 1551 = 11:1, 1559 = 11-3/7:1;Budelius, De Monetis, 1591 = 11-¼:1. At the beginning of the seventeenth century the relation in Spain was = 13.3; in Germany = 12.16; in Flanders = 13.22; in England = 13.5:1. (Forbonnais, Finances de la France, I, 52.) About 1641, in Flanders, it was 12.5; in France, 13.5; in Spain, 14.1. Immediately after Colbert's death it was, in Genoa, 15.03; in Milan = 14.75:1. (Montanari, Della Moneta, 80.) While in the seventeenth century gold rose, it sank in the eighteenth, on account of the Brazilian gold washings and the many bank notes in circulation, which were for the most part of a large denomination. (Steuart, Principles, III, ch. 13.) Still it was in Amsterdam in 1751 = 14.5:1.891.In Hamburg, the relation of the price of gold to that of silver bars, varied, between 1816 and 1852, from between 15.11-16.2 to 1 (Soetbeer); in London, from 1816 to 1837, between 15.80 and 14.97 to 1.892.In Asia, it is generally lower than in Europe—for centuries mostly = 10:1. But in Birmah it is = 17:1, mostly on account of the extent to which indulgence in luxury is carried there. (Crawfurd, Embassy, 433.Ritter, Erdkunde, V, 244, 266.) Concerning China, seeM. Chevalier, Cours, III, 359. In Africa, gold is low as compared with silver, in proportion to the distance from the civilized world. Thus, an ounce of gold in Shenaar cost 12 piastres; in Suakim, 20; in Djidda, 22. (Ritter, Erdkunde, I, 538.) In Timbuctoo, Mungo Park found the relation of gold to silver to be as 1-½:1. Compare Marco Polo, II, 39 seq.893.In antiquity, a similar course is to be observed. According to Manu's Indian laws, VIII, 134 seq., = 2-½:1; in the East, for a long time, = 10:1; under Darius Hystaspis, = 13:1. (Herodot., 111, 95.) In Greece, in the time of Lysias, = 10:1 (Lysias, pro bonis Arist., Conon); according toPlato,= 12:1 (Hipparch., 231); according toDemosthenes, adv. Phorm., 214, = 14:1 (Böckh, Staatst., I, 43); Menander's estimate, = 10:1, probably because Alexander's victory had made gold cheaper. (Pollux, IX, 76.) Among the Romans, about 189 B.C., = 10:1 (Livy, XXXVIII, 11); somewhat later, = 11.9:1 (Mommsen, in the histor. phil. Berichten der K. Sächs. Gesellschaft, 1851, 184 ff.); in the fourth century after Christ, = 14:1. (Theod., Cod. VIII, 4, 27.) We sometimes find sudden variations. Thus, according toPolyb., XXXIV, 10, gold, in Italy, sank about ⅓ in consequence of the opening of the mines at Aquilea. It sank to the proportion of 9:1 when Cæsar spent the contents of the Roman treasure, which consisted of gold. (Surton., Cæs., 54.) The ratio of 17:1, during Hannibal's wars, was a species of National bankruptcy. SeePlin., H. N., XXXIII, B.894.After the February revolution, the gold-agio, as compared with silver, rose from 10-17 to 70 per 1,000. (M. ChevalierCours, III, 346.) On the other hand, since the discovery of America, gold, as compared with commodities, has declined much less than silver. CompareHermann, Ueber den gegenwärtigen Zustand des Münzwesens, inRau'sArchiv., I, 151 ff. According toLord Liverpool, Treatise on the Coins of the Realm, the value of gold coin in the London market, as compared with bank notes, varied in 40 years, almost 5½ per cent.895.In recent times, it has become possible to extract from ancient silver coins a small quantity of gold, and with some advantage. European industry produced in this way about 1,600 kilogrammes of gold per annum. One half of this amount is obtained in France and the rest in Hamburg, Amsterdam, Brussels and St. Petersburg. (Michel Chevalier, Cours, III, 302.)896.Senior, On the Value of Money, 77 ff. It is certain that a simple variation in prices would not induce people to have gold table services, or architectural ornaments of silver.897.Rau, Lehrbuch, 6th ed., I, § 277 c. In Rau's opinion (loc. cit.) we may, in the course of the next decades, expect a decline of the price of gold of about 76 per cent., and of only 10 percent. of the price of silver (because of the low prices of quicksilver.) But here he seems to overlook entirely what influence a change of standard in important commercial districts would have.898.Compare the works already mentioned.Fleetwood, Chronicon preciosum, or an Account of English Gold and Silver Money, the Price of Corn and other Commodities etc., for Six Hundred Years last past, 1707;Dupré de Saint Maur, Essai sur les Monnaies ou Réflexions sur les Rapports entre les Denrées et l'Argent, 1746;Unger, Ordnung der Fruchtpreise, 1752;Paucton, Métrologie ou Traité des Mesures etc., des anciens Peuples et les modernes, 1780; the appendix toMacpherson'sAnnals of Commerce, 1805; the tables inGarnier'stranslation of Adam Smith, vol. II, 1822;A. Young, Inquiry into the progressive Value of Money in England, as marked by the Price of Agricultural Products, 1812;W. F. Lloyd, Prices of Corn in Oxford, in the Beginning of the fourteenth Century, and also from 1583 to the present Time, 1830;Helferich, in the Tüb. Zeitschrift, 1858, 471 ff. There are some very interesting notes on the history of prices during the Merovingian and Carolingian periods inGuérard, Polyptiques, I, 141 ff.899.Thus, for instance, the bonds (and their coupons) of states, cities, great corporations, certificates of stock, mortgages, bills of exchange, checks.900.A Prussian regulation of 1765 (Goldschmidt, Handbuch des Handelsrechts, I, 550), calls money-paper (Effecten), instruments of trade in which a value or avalutais designated.901.Garnier, French translation of Adam Smith, II, 143 ff., distinguishes between coin-paper and promise-paper: the latter is never found in circulation at the same time with the capital which it represents.Saysays that, for instance, evidences of state indebtedness, state bonds, call for money if they would circulate, but they seldom act as money in circulation. (Traité, III, ch. 2.)Sismondivery well determines the difference in his Richesse Commerciale, I, 160.Rau, Lehrbuch, I, § 293, requires of all good paper money: a., that its mere transfer, even without any proof of its rightful acquisition, should suffice to vest the property in it in the receiver; b., that the power emitting it should enjoy universal confidence or be able to compel universal recognition; c., that its redemption should not be fixed for any definite point of time.902.That it is not possible to keep paper money from declining in value, by the payment of interest, the people of North America learned from more than one experiment during the eighteenth century. (Benjamin Franklin, Remarks and Facts relative to the Paper Money of America, 1765.) The same phenomenon was observed in the case of the Spanishvales, which were created during the North American war in consequence of the absence of the silver fleet. (Bour-going, Tableau de l' Espagne, II, 38 ff.Humboldt, N. Espagne, II, 808.) When the Portugueseapolices(since 1797) still bore six per cent. they depreciated in value; and when the payment of the interest was suddenly stopped, the rate of exchange did not become any lower. (Balbi, Esai statist. sur le Portugal, I, 323.) In Austria, in September, 1820, the bank notes which bore no interest were at a premium as compared with the imperial treasury notes, which did bear interest of 1 per cent., although the credit of both kinds of paper had ultimately the same foundation, namely, Austrian state-credit.903.The attempt to make paper money pay interest suggests (as the Saint Simonists recommend it should, with much ado;Enfantin, Ser les Banques, d' Escompte in the Producteur, 1826), that awkward sword, invented by Count Wilhelm von Bückeburg, to the blade of which a pistol is affixed! Shortly before each term for the payment of interest, the circulation of such paper money would be arrested. If the rate of discount should sink below the rate of interest such notes bore, they would be sought after eagerly and disappear in quantities, and, not be ever seen again until the rate of discount had risen to a high figure, when they would be suddenly presented for redemption. Such interest-bearing paper money, therefore, would be a serious element to aggravate the fluctuations of the money-market between good and bad times. When interest-bearing paper money pays interest at the rate usual in the country, it is hoarded by misers, (v. Struensee. Abhandlungen, III, 387.) CompareForbonnais, Principes économiques, p. 234, ed. Guill., whereasv. Prittwitz, Kunst reich zu werden (1840, 359), takes delight in elaborating the idea of an interest-bearing paper money.904.Of jurists, seeThöl, Handelsrecht, I, § 51, and the authorities for and against inGoldschmidt, Handelsrecht, II, Kap. 4, 1, 2. The compulsory circulation of paper money is an essential element only in reference to the person that issues it. Of political economists, especiallyA. WagnerinBluntschli'sStaatswörterbuch, Art. Papiergeld, Band, VII, who, however, is very soon compelled to oppose to paper money“proper,”another kind not“proper.”Adam Smithunhesitatingly accounts bank notes also paper-money. (W. of N., II, ch. 2, p. 28, Bas.)Huskissonunderstands by“paper-money”only the irredeemable paper-money of the state, while bank notes should be considered as“paper currency.”(The Question concerning the Depreciation of our Currency, 1810.)905.Seyd, Münz, Währungs- und Bankfragen in Deutschland, 50 ff., distinguishes four classes of paper-money: 1st class, paper-money covered by cash; 2d class, bank notes covered after the manner of banks; 3d class, state paper-money; 4th class, such paper money as the notes of the Southern Confederacy after its defeat.906.EvenPlato, De Legg., V, 742, was acquainted with money after the Spartan type, intended only for internal trade: νόμισμα ἐπιχώριον, αὐτοῖς μὲν ἔντιμον τοῖς δὲ ἄλλοις ἀνθρώποις ἀδόκιμον. Besides the state kept for foreign trade a supply of the universal Hellenic money, of which in case of need, private individuals could acquire what portion they needed by exchange. When Dionysius I. issued tin instead of silver money, all the Syracusans, although they noticed the forgery, acted in their intercourse with one another as if they considered the coins genuine. (Aristot., Œcon., II, 21,Pollux, IX, 79.) Timotheos behaved more honorably when, pressed by the dearth of money, he gave his troops copper coin tokens, which passed for the time being for their full value in the camp; but which were later to be redeemed at their full value in silver. (Aristot., Œc. II, 22.) ComparePolyæn, Strateg., IV, 10, 2. The iron money which the Klazomenians exchanged with the rich for silver, which bore interest, but which the rich were forced to take, had a longer duration; the silver was used to pay foreign state creditors, the iron money circulated for the time being in the city, and was gradually redeemed. (Aristot., loc. cit, II, 17.)We are still more forcibly reminded of paper money by the Carthaginian leather money, where any object whatever of the size of a coin was shut up in a leather envelope with the state seal, and then circulated as if it were the coin it purported to be.Mieris, Beschryving der Munstn, 1726, explains the saga of Dido's ox-skin by means of this leather money. Certain it is, however, that the surprise with which the sophistical dialogue, Eryxias, mentions the matter, is a proof how foreign it was to the Greeks. Concerning the Roman plated denarii which were stamped with the silver coins, but which were also accepted by the state treasury, seeMommsen, R. G., I, 405.907.In the middle ages, leather money was issued as a promise of future payment: by the doge of Venice in the wars of 1122 and 1126 (Montanari, Della Moneta, 34); by King John, of England, during the struggle of the barons (Camden); Emp. Frederick II. at the siege of Faventia (Malespini, Hist. Fior., 130,Villani, Hist. Fior., VI, 21); by Louis IX. during his captivity (v. RaumerHohenstaufen, V, 461), John of France, 1360 (Anderson, Origin of Commerce). On the Frankfurt lead marks which were afterwards redeemed by theRechnerei:Kirchner, I, 541. Lavallette's copper tokens during the siege of Malta had the inscription:non æs sed fides. The paper money which was issued during the siege of Leyden, the inhabitants afterwards would rather preserve than have redeemed,ad perpetuam liberationis divinæ memoriam. (Bornitii, De Nummis, 1605, I, 15. Distress coins,melacs, during the siege of Landau and of the HungarianRagoczy,Marpurger, Beschreibung der Banquen, 213.Krones, Zur Geschichte Ungarns im Zeitalter R's, 1870.)908.The Chinese have had various kinds of paper-money in their country since the 7th century after Christ. Sometimes they called them“flying coins, convenient coins,”and sometimescoupons,bons,conventions(Klaproth, Mémoires relatives à l'Asie, I, 375 ff.), against which the caravans, as soon as they had passed the limits were obliged to exchange their silver (Pegolotti, Pratica della Mercatura in Della decima etc., III, 3). These had compulsory circulation in China. The great Mongolian khans here became acquainted with paper-money. (M. Polo, II, 21.) Thus, especially in Persia, where refusal to accept such money and the imitation of it was punished with death (1340). CompareFerishta, ed.Briggs, I, 414 ff.d'Ohsson, Hist. des Mongols, IV, 101 ff.; II, 487. Even here there occurred cases of state bankruptcy and finally withdrawals of the depreciated paper. (Klaproth, loc. cit.) In Japan, according toOliphant, Narrative of L. Elgin's Mission to China and Sapan (1859), all foreign coins were required to be exchanged against paper-money at the offices of the state bankers.909.Adam Smith mentions North American paper money of the amount of 1 shilling, and Yorkshire bank notes of the amount of 1-½ shillings. Sweden had, until 1828, notes of 28pfennigs.910.Hence in Sweden, with its copper standard of long duration, the system of banks of issue was developed very early. The transport-notes (Transportzettel) (to be found in that country as far back as 1661) of the Stockholm bank are considered the oldest bank notes. Compare, however,Palgrave, in the Statist. Journal, 1873. When, in 1768, Catherine II. introduced paper money into Russia, the people gladly paid ¼ per cent. exchange to the state treasury for it. (Brückner, inHildebrand'sJahrbücher, 1863, 49.) According toCancrin, Oconomie der menschl. Gesellschaft, 116, private individuals in from four to five months exchanged 40 millions of silver roubles for paper. And thus, in 1780, Berlin bank notes stood a few per cent. above par, and the notes of the S. Carlos-Bank, in 1788, from 1 to 1-½ per cent. (Rau, Archiv., II, 161.)911.When at times in which paper money is looked upon with diffidence, peasants and others bury their metallic money, this advantage of course is lost. On the other hand, the exportation of precious metal money, caused by the emission of paper money, must not be considered a necessary evil, but rather as the condition precedent which in most cases makes the above advantages of the paper money possible for the first time. CompareAd. Wagner, Die russische Papierwährung (1868), 22, 24, 33.Ricardo, Proposals for an economical and sure Currency, 1816, estimated that England, after the abolition of the bank restriction, needed twenty million pounds sterling. The interest on this amount of capital inclusive of wear and tear etc., should be estimated at at least ten percent.; that is for the whole kingdom at at least from two and one-half to three millions a year. On thisRicardofounded his proposal to base the bank notes on gold bars. In its time, the essay: Guineas an unnecessary and expensive Incumbrance on Commerce, or the Impolity of repealing the Bank-Restriction Bill considered (London, 1802), met with great approval.912.Adam Smithcalls attention to the analogous case in which a manufacturer replaces a costly machine by a cheap one, sells the former and employs the difference between the old one and the new in enlarging his business. (W. of N., II, ch. 2.) When, indeed, all nations have introduced the use of paper money, the greater portion of the advantages which the one nation was able to obtain by its means cease, and the only ultimate result is a depreciation of the value of money and of the precious metals. Formerly the advantage reaped by the single nation that emitted paper money was greater than its share in the depreciation. (Wolowski, Enquête de 1865, 108.)913.When E. Seyd calls bank notes more costly than metallic money, because the former in England require an outlay for administration of 1-½ per cent. per annum, while the wear and tear of metallic money amounts to 1 per cent. only in 20 years (Statist. Journal, 1872, 511), he overlooks the loss in interest and the costs of coinage in the latter case.914.Related to this is the fact that in France, during the assignat-crisis, the large bills of 10,000 francs were harder to get rid of than the small ones. (A. Schmidt'sPariser Zustände, III, 22.)915.The numbering of paper money. A state which should neglect this would not only reserve to itself the possibility of an unlimited increase, but would surrender all control of its officials charged with the emission of the paper money.Law, Trade and Money, 162, advises that a large money reward should be paid to any one who should show the existence of a higher number than allowed by law, or of a duplicate number. And indeed, as comptroller-in-chief, he caused theprévôt des marchandsto be removed, because charged with the duty of burning the paper withdrawn from circulation, he (theprévôt) noticed that the same number reappeared several times.916.If a traveler wished to pay his inn-keeper in the note of a bank entirely unknown in the place, the latter would certainly refuse it. If, on the other hand, the traveler were to offer him a silver coin, the stamp and inscription of which were not familiar, still it would be taken at the value of the metal it contained, after deduction made of the costs of testing it, re-coining it, and compensation for the trouble caused. Ignored byBerkeley, who, indeed, considered metallic money nothing but“counters”or tickets (Querist, No. 23, 26, 441, 475), and who ascribes important advantages to paper money,—which by“stamp”and“signature”is made as costly as gold (440)—over metallic money (226).917.Any person who has witnessed a tax-execution, or sale of property for the non-payment of taxes (Stuerexecution) will admit that a tax receipt is at least as real goods as an umbrella or a glass window that protects one from the storm.Michælisconsiders the amount of running payments to the state for duties, taxes etc., as the only right basis for full-value paper money. (Berliner Vierteljahrsschrift, 1863, III.) Better yet whenHöfkenadvises that only as much paper money should be issued as amounted to the average balance (Bestand) in the national treasury. The tax-basis is defended with great warmth byL. Stein. Louis XIV., in 1704 issued paper money bearing 7 per cent. interest, the acceptance of which by all the royal officers of the treasury was prohibited! (Dutot, Réflexions, 863, Daire.)Law, Trade and Money (1705) ascribes to parcels of land the greatest constancy of value, because they cannot be replaced, because they can be neither increased nor decreased, and because they help to produce all other goods (p. 170). While silver cannot but depreciate, they have a prospect but to rise (188). HenceLawrecommended notes based on parcels of land as the best money. (163, 191, 195.) Similarly,Benjamin Franklin, Modest Inquiry into the Nature and Necessity of a Paper Currency: and the Paper Money of Pennsylvania, New York and New Jersey was actually based on parcels of land, and was to be extinguished by the enfeoffed owners, and the interest paid by them. (Ebeling, Gesch. und Erdbeschreib, von N. Amerika, III, 621, IV, 649.)918.F. Renonard de Ste Croix, Voyage aux Indes orientales (1810), I, 32, describes a species of paper money based on parcels of land which had lost 40 per cent. of its nominal value, although the holders of them were invested with the fief at only one-half their value. The Frenchmandats territoriauxof 1796, declined in five months to 5 per cent. of their nominal value, although they contained the provision that the holders might, without public sale (Auction), have a certain amount of the national estates allotted to them in exchange for themandats. The assignats were still more defective after their redemption (at theCaisse de l'extraordinaire), which was at first intended, and their drawing of interest were not fulfilled. Leaving the tax-basis out of consideration, the notes might, at the sale of the national estates, be brought in as means of payment: a thing which would not have been inoperative, provided the amount of the paper money had been strictly limited to the price of the pieces of land estimated in money. On the 1st of April, 1790, 400,000,000 francs in assignats were issued, and in September, 800,000,000 more, both together about equal to the secularized property of the church. (Ad. Schmidt, Pariser Zustände, II, 97.) But as afterwards all proportion between these two magnitudes ceased, or rather as up to January 1, 1793, 3,626,000,000 assignats were issued; up to September, 1794, over 8,800,000,000; up to September, 1795, 19,700,000,000; and finally up to September, 1796, 45,578,000,000 francs, of which perhaps 6,500,000 were either burned or demonetized, the price of the national estates on lands must naturally have risen as vastly as the assignats declined.919.The paper money issued by Colbert's successor, Chamillard, soon lost on account of its too great amount, 25 per cent. of its value, spite of the fact that it bore interest, and that ¼ of all payments to private persons had to be made in it. (Forbonnais, Recherches et Considérations, II, 182.) When the people of the United States, in 1775, issued paper money, it did not decline in value up to the end of 1776, so long as the amount did not exceed $20,000,000, as it was considered a matter of honor to take it at par. Afterwards, when the amount issued continued to increase, not even the law that a refusal to accept it, or insisting on taking it below par, should be punished with the loss of the commodity, and that the guilty party should be declared a national enemy, could keep it from declining in value; so that in May, 1871, a dollar in specie was worth $200.5 in paper. CompareFranklin, Works, ed. Sparks, II, 421, VIII, 328, 505.France, during the Reign of Terror, on the 2d day of April 1793, threatened the claiming of a discount in the taking of assignats with six years' confinement in chains, and on the 1st day of August, on Couthon's motion, with twenty years' confinement. In addition to this, maximum prices for the principal necessities of life were fixed and the exceeding of them was punished by severe penalties; and in France, and still more in the neighboring conquered countries, there were many persons who preferred to take assignats instead of payment rather than permit themselves to be robbed by requisitions. And yet on the 4th of June, 1796, one franc in specie exchanged for 800 francs assignats. CompareBüsch, Geldumlauf, III (§ 58 ff.,d'Ivernois, Etat. des Finances Française, 1796).920.The Prussian treasury notes of 1806, by virtue of a decree published in 1807, were to be taken by all at a rate of exchange to be officially published from time to time. Between December 1, 1807, and February 28, 1809, the highest“normal course of exchange”was 71, and the lowest 27 per cent. In January, 1815, a refusal to take them at par, except in certain cases, was threatened with from 500 to 1,000 thalers of a money-fine or from 6 to 12 months' imprisonment. But indeed, in December, 1812, of 8,000,000 thalers, there were only 731,625 still circulating. Compare § 7 of the decree of the 19th of January, 1813. In April, 1815, it was ordered that the half of all taxes should be paid in such notes, or that if not, 8-½ per cent, should be added as a penalty. This penalty, reduced in 1827 to 1 silver groschen, was not formally abolished even in 1870, although it had long fallen into disuetude. There was a run of the owners of the notes in 1830, for redemption, and again in 1841 and 1848; in 1848 to the extent of at most 40,000 thalers in one day, and altogether not over 100,000 thalers. (Bergius, in the Tübinger Zeitschr., 1870, 226 ff.) About 1846, it was estimated that scarcely 1/250 a year of Prussian paper money was presented for redemption, while ⅓ of the state receipts came in in the shape of paper money. (Rau, Archiv., V, 125, 207.) The Saxon treasury notes never lost over 2 per cent., although the state treasury redeemed them up to 1804 only at anagioof 9pfennigsper thaler, and afterwards of 1pfennig.921.Those entitled to make money claims are either compelled to accept the paper money at its nominal value or only at its current value for the time being. In the latter instance, the unjust compulsion is much smaller, but at the same time the whole expedient is much less productive to the state; and hence the former is the more usual. It was provided in Austria on the 22d of May and the 2d of June, 1848, that the former should be the rule, and that the latter should govern in cases in which gold or foreign silver had been stipulated for. (Höfken, Oesterreichs Finanzprobleme, p. 53.) On the 7th of February, 1856, it was permitted to contract by express promise for loans in the metallic currency of the country, both for the interest and the repayment of the principal. Hence a species of parallel-currency. If it be made entirely impossible for private individuals to protect themselves against the compulsory circulation of paper money, the more prudent are forced to send their capital into foreign countries, which operates very disadvantageously to poor countries especially. (Wagner, Tübing. Zeitschr., 1863, 441.)922.Thus, for instance, the Frederick coins, and for a time the French assignats were helped by the popular enthusiasm, while Gustavus III., of Sweden, could give little value to his paper. (v. Struensee, Abh., III, 577.) In France, in 1796, 2,400,000,000mandatswere issued instead of all the outstanding assignats; that is, as many as there were assignats at the close of the year 1792. And yet the latter were then only 25 per cent. below par; the former, before one month had elapsed, 80, and in nine months, almost 98 per cent. below par. (St Chamans, Nouvelle Essai sur la Richesse des Nations, p. 150.A. Schmidt, Parisier Zustände, III, 121 ff.) In Austria, in 1811, the volume of paper money was contracted, but in a manner so violent and destructive of credit that its rate of exchange did not rise in consequence. (Tub. Zeitschr., 1763, 1874.) After 1848, also, the rate of exchange of Austrian paper money was much more perceptibly influenced by the variations in the political state of affairs than by the changes in its volume. (Tub. Zeitschr., 1856, 129.) In the summer and winter of 1866, about 650,000,000 paper rubles circulated, with scarcely any increase or decrease; and yet the ratio of exchange was, during a part of the summer, 66, and in winter, 84 per cent. of the silver value of the ruble. (Wagner, Russ. Papierwährung, 74.) Instances in which the increase in the price of commodities began to be more general only after the volume of paper money had decreased; in Austria, in 1851 and 1866; in Russia, in 1857 (loc. cit).923.Then precious metal money becomes a commodity of which great stores may be collected in the country itself, at the banks, but chiefly for foreign trade. It is said that Austrian business men in 1860 and the following years invested“hoards”to the amount of several hundred million florins in exchange on metallic-currency countries. (Tüb. Zeitschr., 422.) Good paper money will never drive out the whole supply of cash money out of a country, because a good portion must always be kept for purposes of redemption; depreciated paper money operates much farther in this direction. Even the exportation of small change may become a profitable speculation as soon as the amount of depreciation of paper money exceeds the seigniorage. Then usually small change of a worse kind is stamped, as, for instance, in Austria, copper instead of silver; and in 1860, 12 millions florins of paper small change. Here the exportation of the better money is not a consequence, but the motive to the manufacturing of the worse.924.During the assignat-period it could happen that a land owner, after the term for which he had farmed out his land, might be compelled to surrender it to the farmers, for the reason that the taxes, requisitions, etc., paid by the farmers, amounted to more than the farm rent. In the case of the former, the calculation was based on the recent depreciated value of the assignats; in the case of the latter, on the higher value the assignats had at the moment that the contract was concluded. (Büsch, Geldumlauf, III, 62.) A writer in the Revue des deux Mondes, April 15, 1865, thinks that one reason why the American civil war was so popular in the northwest was because the paper money issued during the rebellion made it easy for that part of the country to pay off the mortgage-debts which had burthened it since 1848. Even of the two law catastrophes,Duclos, in his memoirs, remarks that they produced a great admixture of those who had been formerly separated by differences of class and wiped out the previous ideas of decorum, fitness, etc.925.During the time that the clipping of the coin was practiced, it is scarcely possible to show that money was debased below 11 per cent. of what its value should have been. See, on the other hand, §3. In Austria, in 1810, a person had to give 1,200 florins in paper money for 100 florins in silver. (Tüb. Zeitschr., 1861, 593.) In North America, in 1781, it took $280 in paper to purchase $1 in silver. (Ebeling, Gesch. und Erdbeschreib., von N.A., 1856, III, 580; IV, 440; V, 437.) During the American civil war, the paper money of the Southern States declined to ½ (December, 1863) and even to 1/35 (October, 1864) of its nominal value. CompareHock, Finanzen der V. Staaten, 514 ff. Observed even byStorch, Handbuch,Rau'stranslation, III, 141 ff. (See, on the other hand,C. King, Thoughts, p. 113.) In Paris in July, 1795, the greater number of commodities estimated in assignats were worth as much as if the rate of exchange of the latter was 6-14 per cent. of their nominal value, while it actually amounted to only 3-½ per cent.926.Where anagioof exchange of metallic money as compared with paper is prohibited, the decline of the latter will manifest itself not only in foreign rates of exchange, but also in the price of bars of the precious metals.927.The changes of the agio or premium depend mainly on the supply and demand of the precious metals, that is, on the extent and intensity of the business transactions which have to be made in these metals themselves. (Wagner,Russ. Papierw., 87.) Hence, for short periods of time, it may be said in a paper currency country, that business transactions based on cash money have a great element of variation in them. (WagnerinBluntschli'sStaats-wörterbuch, III, 971.) The purchase and lease-hold prices of fixed capital, of houses, for instance, rise much less because most people look upon the distress as transitory, and of short duration. (A. Walker, Sc. of W., 133.) In Austria in 1859, the rise of the agio of exchange of silver from par to 40 per cent., and its subsequent fall within 7 months to 20 per cent., left the price of coin almost entirely unaffected. (A. Wagner, Gött. Anz., 1860, 114.) That country people in general suffer more from a bad paper currency than the towns people and inhabitants of cities, seeBonamy Price, Currency and Banking, 175, seq. In the northern states of the American union, in 1864, 12 home kinds of commodities had risen 148 per cent., 7 foreign kinds of commodities, 164 per cent., and 7 which could be obtained only from the southern states, 353 per cent. (v. Hock, 186 seq.) As too great issues of paper money are so frequently made on account of war, it is comparatively easy to understand why it is that articles for which war creates a demand should rise in price very soon and very high; while the very opposite happens in times of taxation-distress, in the case of a great many articles of luxury, which can readily be dispensed with.Büschremarks (Werke, VII, 91), that retail dealers frequently raise their prices in order not to be obliged to pay out so many small coins as change for the paper dollar.928.CompareHufeland, N. Grundlegung, II, 241. Self-seeking undertakers (Unternehmer= men of enterprise) have, on this account, both in Austria and Russia (Wagner, Russ. P.W., 105), but more so in North America (v. Hock, 556 ff.), opposed measures intended to restore values (Valuta), on the ground that they were anti-national. EvenSperauskyexperienced this in 1809, when he published very correct ideas on paper money, while in the“fairy”times of Catherine II., no one even thought that state paper money is a state debt. (Bernhardi, Russ. Geschichte, II, 2, 636.) One of the principal representatives of this course isH. C. Carey, Our Resources (1866), and in the New York Herald, 1865. On the other hand,Faucherrightly calls the more active exportation of countries, with a bad paper currency, an exportation of barbarous nations, the commerce of misery, to which any price paid in metal or in any higher-standing product of civilization is acceptable. (Vierteljahrsschrift, 1868, IV, 167.) The nation in the aggregate loses in international trade for the simple reason that its foreign creditors will accept its paper money at most at its current rate of exchange against specie, while foreign debtors force it upon the nation at its nominal value.929.The different provinces also of a large empire may have very different degrees of depreciation of the same paper money. Thus, in the interior of Russia its rate of exchange against specie had for a long time not declined beyond 50 per cent. of its nominal value; while the foreign rate of exchange supposed a decline to 33-⅓ per cent. (Cancrin, Weltreichthum, 68.)930.An enhancement of duties, taxes (Abgaben) etc., will seldom be able to progress in the same measure as the paper money sinks; in any case, a law would be necessary to effect this, which, however, comes always later than the decline. (Sismondi, Du Papier Monnaie, 27.)931.Wagner, Russische Papierwährung, 142, estimates that the Crimean war depreciated the average current rate of exchange of Russian paper money by 11.1 per cent., the Italian war of 1859 by 14.5 per cent., the German war of 1866 by 19.4 per cent., spite of the fact that Russia did not participate directly in the last two wars.932.The more than forty-five milliards French assignats, estimated at their rates current, really produced to the state only about six milliards. (Gentz, Histor. Journ., 1800, II, 317, afterLecoulteux.)933.Very well explained byH. Thornton, Paper Credit of Great Britain, ch. 10. As to how, in Austria, the paper-money crisis contributed to bring the rigid national resources into a molten state, and to shake off the national inertia by the feeling of insecurity, seeBuquoy, Theorie d. Wirthschaft, 1816, 347 ff.Schäffle, System, 3 aufl., 254 seq., thinks that if Austria should first adjust its values, and then, in case of another war, have recourse to a second depreciation, the disastrous disturbances of its national economy consequent herein would be produced twice instead of once, and not without reason.934.The Prussian treasury-bills stood, in June, 1809, at 36 per cent. of their nominal value; June, 1810, 84-½ per cent.; January, 1812, 13-½; December, 1812, 44-½; June, 1813, 26-½; July, 1813, 24-½; December 31, 1813, 49-½; January, 1815, 88; January 5, 1816, 99 per cent. Austrian paper money expressed in terms of metallic money, amounted, on an average, between 1849 and 1855, to 292,000,000 florins: but at certain moments, it fluctuated from 231,000,000 to 337,000,000. (Tübing. Zeitschr., 1856, 124.) The agio of silver fluctuated during theBancozettel(bank-billets, a species of Austrian paper money) period from one day to another on Change 40 and even 100 per cent.: thus, on the news of Napoleon's entry into Paris, between the 25th of March and the 4th of April, from 330 to 440; on the receipt of the news of the result of the battle of Waterloo, in three days, from 458 to 412; after Napoleon's abdication, from 412 to 320. (Gentz, Werke, V, 62.)Huskissonrightly calls a depreciated paper currency a much worse thing than clipped coin: the clipping of the coin is, so to speak, one great blow after which people can again calculate with certainty; but bad paper money is one continual fluctuation.935.“The only difference here is that it is not left to individuals to say whether they will join in the game or not.”(Helferich.)936.During the later assignat-period every house was full of commodities, every pocket of samples; every“exquisite”and every lady was a merchant, because no one had any further confidence in the money. People had retrograded to the barbarous condition of trade by barter. (Goncourt, Histoire de la Société française pendant le Directoire, 1854.) The French constitution of 1795 fixed the salaries of members of the Directory at the value of 50,000myriogrammesof wheat (art. 173, 68). In Delaware, while the depreciation of paper money lasted, farm rent was usually required to be paid in produce. (Ebeling, V, 37.)937.“Of all contrivances for cheating mankind, none has been more effectual than that which deludes them with paper money.”(D. Webster.) The American Secretary of the Treasury,McCulloch, says, in the report of December 7, 1868, of the legal tender notes:“there can be no doubt that these acts have tended to blunt and deaden the public conscience, and they are chargeable in no small degree with the demoralization which so generally prevails.”Niebuhrattributes the decline of old Spanish honesty which was formerly so much relied on in all great money centers, principally to thevales. (Nichtphilol. Nachlass, 489.)938.This calls to our mind the impersonal mass-crimes to which our own times so frightfully incline, when many a man who would recoil in horror from an ordinary act of pocket-picking or from manslaughter with intent to commit larceny, robs thousands in cold blood by means of a swindling enterprise, or, for the sake of a fraudulent insurance, destroys the lives of a whole ship's crew.939.Saxon loans of two million thalers treasury notes (Kassenbillets), August, 1813, which were then to bear interest in silver and to be paid in silver. The purchase of the precious metals, or loans made by the state in foreign countries, with the intention of redeeming paper money, effect the same end at a much greater cost. (Peschel, D. Vierteljahrsschrift, 1858, III, 254.) If the currency consists of bank notes endowed by the state with compulsory circulation and an irredeemable character, such a metallic loan made in order to reimburse the bank for a loan to the state in depreciated notes is a gift made to the bank without reason; and the metallic money brought into the country flows back into foreign parts when the bank restriction is removed, because it, together with the appreciated notes, creates a too abundant circulation.940.Although in England the suspension of the redemption of notes had lasted from 1797 to 1819, depreciation of notes during the greater part of this time either did not occur at all (Summer of 1797 to 1799, 1802 ff.) or was very small; and even during the last five war years, it did not amount to much over 30 per cent. About 1817, the notes of themselves again rose to par, and had lost but little during the following years, in consequence of the great loans of the continental powers in the English market. Under such circumstances, the repeated promise of the state to make the notes redeemable at their full nominal value was certainly a cogent reason for the Peel's Act of 1819. In favor hereof are especiallyTooke, Hist. of Prices, II, p. 60 ff., andJ. S. Mill, Principles, III, ch. 13. Opposed to it, the so-called Birmingham-Atwood school and alsoLord Ashburton, in his statement before the Agricultural Committee, 1836. But according toRob. Muschet, Tables, exhibiting the Gain and Loss to the Bondholders arising from the Fluctuations in the Value of the Currency (1826), the state creditors, on the whole, lost more by the depreciation of the notes than they gained by their subsequent rise.Ad. Wagneralso is decidedly in favor of the course A.941.This has occurred not unfrequently in the case of the paper money of subdued revolt: thus, for instance, the Hungarian of 1849; in the case of the Southern Confederacy. But the assignats, too, came to this end, although, according toBüsch(Werke IX, 526), the intentions of the country at first were good; and in Austria, in 1810, many prophecies looking in this direction were made. (Per contraRehberg, Sämmtl. Schriften. IV, 334.) Not very differently did it fare with the Swedish coin-tokens (Münzzeichen) of Charles XII, which were altered 7 times between 1715 and 1718; and where besides, the tokens called in in a much too short space of time were transformed into small change coins 1/32 their value hitherto. (BrücknerinHildebrand'sJahrb. 1864, I, 161, ff.)942.Thus it was, for instance, in Austria, in 1811 and 1820, at 1/5 and 2/5 of the nominal value, in 1799 in the United States, in 1813 in Denmark with the currency notes (Courantzettel), in 1816 in Norway with the royal bank dollar notes, in Sweden in 1814 with the bank notes (Bancozetteln) at 37-½ per cent., in 1839 in Russia with thebankassignationen, at 2/7 of their nominal value. Of theoretical writers this course is recommended among others byJacob, Staatsfinanzwissenschaft, § 980 ff.;Nebenius, Œff. Credit, 2 Aufl., ff.; Deutsche Vierteljahrsschrift, 1841, I, 65;Rau, Lehrbuch, III, § 528;Helferich, Tüb. Ztschr., 1856, 435 ff. According tov. Rotteck, Lehrbuch, IV 402, it may be assumed that paper money is spread among the people of a country in proportion to their resources: which is also the hypothesis on which all direct taxation is based. Hence the gradual depreciation of paper money operates like the imposition of a tax and thereduction of value(Deralvirung) is, so to speak, only the release of the same. BesidesGentz(Werke by Schlezier, IV, 58) shows from the example of Austria in 1811, that in the case of the taking up of a depreciated paper currency it makes a better impression to give 100 florins in specie for 1,000 florins in paper, than 200 florins in a new kind of paper. The holders of the old paper money have now lost confidence in all paper currency. Of similar import is the immediate abolition of the compulsory circulation of paper money at its nominal value (Prince SmithinFaucher'sVierteljahrsschrift, VII, 126 ff.), and the introduction of compulsory circulation in accordance with the day's quotations of the actual value of the paper as compared with specie. (Strache, Die Valuta in Œsterreich, 1861;per contra,Ad. Wagner, Tüb. Zeitschr., 1861, 606 ff.)943.Such measures as were adopted in Austria, in 1811, where a“redemption and extinction deputation,”independent of the government was established and sworn to prevent a further increase of paper money, are not sufficient of themselves alone.944.The Code Civil (art. 1895) makes the nominal value entirely conclusive; so, also, the Prussian Landrecht (I, § 790): which is to proclaim the omnipotence and infallibility of the state power in the most ingenuous or else in the most brutal manner. The power given byPuchtato metallic value (Pandecten, VII, aufl., § 38) is applicable neither to paper money nor to small coin; and it ignores entirely that stamped coins and currency money are something different from mere metallic commodities and even from metallic bars. The Austrian civil law (bürgerliche Gesetzbuch) decides in favor of the current value (986 seq.): a view which most modern jurists sinceSavigny(Obligationenrecht, I, 404; earlier yet,Hufeland, Ueber die rechtliche Natur des Geldschulden, 180) entertain. But they even fail to recognize that the depreciation, for instance, of paper money as compared with specie and general decrease of purchasing power are identical only in the case of such paper money or reduced coins which have no compulsory circulation. (A. Wagner, Tüb. Ztschr., 1863, 478 ff.)945.Let us suppose that at the moment the state could perform its duty to its servants only to the extent of one half. If it should frankly admit this, pay one-half in good money and remain in debt for the other half, it might subsequently, in better times, make good to them or to their heirs what it had now refused; and thus private credit, from the disturbance of which the state can only suffer, suffer no diminution. Both are quite different when the state disguises its insolvency under the mask of apparent full payment in paper money which has lost 50 per cent. of its nominal value. In opposition to the myth that the assignats saved France, seeLevasseur, in the Acad. des Sc. m. et. p.946.It not unfrequently happens that a nation's paper money has been directly or indirectly affected by an unfriendly state. Thus for instance, England, in 1794, tolerated an assignat manufactory at Lambeth, while Frenchmen imitated English bank notes. (Archenholz, Aenalen XI, 429.) Napoleon in 1812 issued forged Russian bank notes. (Cancrin, Œconomie der menschl. Gesellschaft, 136.Niebuhr, Gesch. der Revolution, II, 314.) When Maria Theresa first wished to introduce paper money, Bolza, her minister of finance, in his urgent appeal to her to desist from adopting such a measure, foretold the subsequent bankruptcy etc. (Mailath, Oesterr. Gesch., V., 83.)Adam Smithcompares gold and silver circulation to a highway which, indeed, produces nothing directly. Paper money is an advance similar to that which would be produced by the construction of a machine adapted to the carriage of persons and goods through the air, and which permit the highways hitherto used to be turned into meadows, arable land etc.Ad. Smithvery strongly emphasizes the insecurity of these“Dædalian wings”as compared with the“solid ground of gold and silver,”especially in the transitory misfortune produced by war. (W. of N., II, p. 78, Bas.)David Humesays of all paper media of exchange, that they share all the harmfulness of an increase of specie money, enhancement of the price of commodities, aggravation of the obstacles to exportation; but that they do not share in the useful properties of specie money. (Discourses, On Money and on the Balance of Trade.) The youngerMirabeaukept Necker from pursuing his plan to issue paper money with the words:du papier monnaie c'est la peste circulante!Inconsistent as Napoleon was in his bank policy (compareHorn, Bankfreiheit, 304), he always rejected paper money. As in 1805 he wrote to the minister of justice:je ne veut pas de papier monnaie: so, in opposition to the minister of the interior, he in 1810 compared it to the plague:le plus grandfléau des nations. (Acad. des Sciences m. et p., 1864, II, 212.)Sismondi, too, compares paper money to the paper cannons of the Chinese, which render a cheap service until the hour of danger comes. (N. Principles, II, 107.) Of the banks he says:les avantages aussi-legers les dangers aussi graves. (Eludes, II. 421).Cancrin, Œkonomie der menschl. Gesellschaft, 1845, 152 ff., says he thinks that possibly it might have been well never to have established banks, but that yet the craving for the new is preponderately good, it brings inventions and improvements with it. EvenTookeconsiders the insecurity of paper money a disadvantage which more than counterbalances its cheapness. (Considerations on the State of the Currency, 1829, 85.) On the doubts ofJeffersonandGallatin, seeWolowski, Enquête, 170, seq.Webstercalled paper money“the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow.”Tout papier monnaie par lui même est un mensonage.(M. Chevalier, Cours, III, 428.)M. Niebuhrcalls banks a poison which should be used with moderation. (Bankrevolution und Bankreform, 1846, 37.) Compare the writers named in §2.947.Avec la liberté un peuple n'a jamais de mauvaises monnaies(F. Lenormant): entirely so, providedlibertébe translated“true and insured freedom.”948.Law's giddy projects under the regents of Orleans and the assignats of the first republic; Austria, Russia and the United States; the Danish absolute monarchy, and Sweden, both under Charles XII., and its oligarchical times. The history of Rhode Island paper money is peculiarly scandalous. All debts had to be paid within two years, or to be held invalid, and juries were dispensed with in such cases. (Ebeling, Gesch. und Erdbeschreib. von N. America, II, 173 ff.)949.Ad. Müllercompares“cosmopolitan”metallic money to a universal language: paper money ties one to the country, as people do not like to travel in foreign parts when they understand only their native language. As paper money compels subjects to take an interest in the state, a state like Austria would act very foolishly if it should begin its reorganization by enhancing its depreciated values (Valuta). (Elemente der Staatskunst, 180, III, 171; II, 339 ff.) Even in 1830, he found fault with the Austrian loan for the payment of the paper money. (Briefwechsel mit Gentz, 321 seq.) He lauded paper money because he claimed it led a country back to the barter And service-economy of the middle ages. (Verm. Schriften, I, 59 ff.) Similarly,Gentz, in his later writings. CompareRoscher, Gesch., der N. Œk., in Deutschland, II, 762.950.Who, for instance, would lay by a paper dollar in the savings bank for his godchild? In this respect, too, oriental countries have preserved much of the medieval. Concerning the aversion of the Egyptians of our day for all paper money, seeStephan, Ægypten, 250 seq. This is all the more surprising since during several months after the harvest, there are from 4,000,000 to 8,000,000 piasters in specie sent every day from Alexandria by post to private individuals in the provinces. In addition to this there is the immense difference in the French, English and Austrian coins circulating in the country, and which have very different rates in the different provinces. It is still worse in Arabia. (v. Maltzan, Reise, I, 27.)951.Comparev. Schlozer, Anfangsgründe, I, 140 ff.M. Niebuhr(Rau's Archiv. N.F. II, 125) finds paper money best adapted to countries without any exchange-trade, but which at the same time require a species of money easily computed and easy of transportation (Russia); countries whose national economy has an extraordinarily rapid growth (the United States); and in unusually solid countries (Scotland).952.List, Nat. System der politischen Œk., I, 394. A private individual of small means who should go on his travels without money would be subject to all sorts of annoyances; a king or a Rothschild, just as soon as he was recognized as such, would find credit everywhere. Thus, English businessmen have outstanding claims in all parts of the world, which might without any great difficulty be called in in the precious metals. The more the division of labor is developed, the better may the condition of a nation's whole economy be seen reflected in the course of its banking system and its exportation and importation.

Footnotes1.The author's preface to the twelfth edition is confined to pointing out the improvements etc., made in the eleventh. There is no new preface to the thirteenth edition of the original, which appeared in 1877.—Translator.2.“We shall never thoroughly understand the reason of customary law unless we also have a knowledge of that which is not customary. The one is connected and bound to the other. We have no slaves; why vex ourselves with questions about slaves?—Words worthy of a novice.”3.“I am a man; I think nothing foreign to me that pertains to man.”4.“That excellent and glorious philosophy.”5.Introduction to the Civilistisches Magazin.6.Dunoyer, De la Liberté du Travail.7.Cicero, De Leg., I.8.Discours Préliminaire du Code Civil.9.Cicero, De Leg., II, 4.“Legem neque hominum ingeniis excogitatam, nec scitum aliquod esse populorum, sed æternum quiddam quod universum mundum regeret, imperandi, prohibendique sapientia.”Ibid.10.Revue de Législ. et de Jurispr. (1841, XIII, p. 39.)Montesquieusays:“The relations of justice and equity are anterior to all positive laws.”11.Mr. Wolowski translated the second edition of Roscher's Principles into French, and prefixed the present essay thereto as a preface. Since Wolowski's translation appeared, the original work has gone through eleven editions, been largely increased in size, and enriched with new notes, the result of nearly twenty additional years of research and thought. The thirteenth German edition, from which the present translation is made, is larger than the first by one hundred and seventy pages.—Translator's note.12.And he adds:“Animals which yield only to an impulse or blind instinct, come together only fortuitously or periodically and in a manner destitute of all morality. But in the case of men, reason is mixed up more or less with every act of their lives. Sentiment is found side by side with desire, and right succeeds instinct. I discover a real contract in the union of the two sexes.”It would be impossible to present a more complete or eloquent refutation of the definition of the Roman jurisconsults which debases marriage to the level of the promiscuous coming together of animals, and which limits the natural law to the law common to man and beast.“Jus naturale est quod natura omnia animalia docuit; nam jus istud non humani generis proprium, sed omnium animalium quæ in terra, quæ in mare nascuntur, avium quoque commune est. Hinc descendit maris atque feminæ conjunctio, quam nos matrimonium appellamus, hinc liberorum procreatio, hinc educatio; videmus etenim cætera quoque animalia, feras etiam, istius juris peritia censeri.”D. L. I. De Just. et Jure.13.Comment. in tit. Dig., De Just. et Jure, VII, 11th Naples edition. The ingenious argument of the great jurisconsult falls to the ground under the beautiful words of Cicero:“Ut justitia, ita jus sine ratione non consistit; soli ratione utentes jure ac lege vivunt.”De Natura Deorum, II, 62.“Virtus ratione constat, brutæ ratione non utuntur, cujus sunt expertia, ergo jure non vivunt, et ut rationis, sic jures sunt expertia.”Besides, Cujas himself recognizes how faulty and incomplete was the definition he was defending:“At ne jus quidem naturale, de quo agimus, est commune omnium animalium quatenus rationale, est, sed quatenus sensible est, sensui congruit. Tullius participare hominem cum brutis eo quod sentit, sed ratione ab eo differre. Et alio loco: jus naturale esse commune omnium Quiritium, veluti ut se velint tueri: sed hoc distare hominem a bellua, quod bellua sensu moveatur, homo etiam ratione.”14.Rossi.15.Politics, I, ch. I, II.16.Ueber die Nothwendigkeit eines Allgemeinen burgerlichen Rechts fur Deutschland.17.Vom Beruf unserer Zeit für Gesetzgebung etc.18.In one of his latest productions (Ueber die sogennante historische und nicht historische Rechtsschule, Archives du Droit Civil, Heidelberg, XXI 1838) the veteran of the philosophical school, resuming a debate begun a quarter of a century before, energetically defends himself against the erroneous interpretations which it was sought to give to his thoughts.“Does it follow,”he inquires,“that because a man is desirous of reform, he must surrender the study of the past? And if there be new laws to construe, how could his evil genius deter him from the necessary knowledge of ancient laws? Is there a single jurisconsult, who, in the hope of a better future, despises the meaning and spirit of that which still exists? I do not know even one.... And when I am accused of passing by the institutions of the past with coldness and hatred in my heart, because I was one of the first to express the hope of a better future, a charge is laid at my door which is perfectly incomprehensible ... I am reproached with despising the history of law. It is a slander on me. Although I have only laughed at these reports, one man's mistake grieved me; for that man's name was Niebuhr.... When he [Niebuhr] returned from Italy to devote himself entirely to science, in his retreat at Bonn, he passed through Heidelberg, where he remained five or six days. During a great part of that time we came frequently together. He was at first a little cold; but Cicero made us friends. After a happy word let drop concerning that writer, he asked me what I thought of him. I answered laconically:‘If they were burning all the Latin authors, and I were permitted to grant a pardon to one of them, I should say, without hesitation: Spare the works of Cicero.’He joyfully exclaimed:‘I have at last found a man who judges rightly of Cicero. I share your admiration for him, and that is the reason I have given my boy the name of Marcus.’The ice was now broken, and he frankly told me that he could not understand how I could be an inveterate enemy of Roman law and of the history of law. I gave him to understand that I had simply been slandered, and I added, that, in order to live entirely with the classics, I had always refused to give legal advice, or act as a counsellor, although I might have made a fortune in that way. I told him that I owed my gayety and vigor, in great part, to my love for the classics of all ages, even those outside the domain of jurisprudence; but that I held, above all things, to the good qualities of the German nation, and that I did not hesitate to say with Facciolatus:‘Expedit omnes gentes Romanis legibus operam dare, suis vivere.’“When he heard those words of mine, he exclaimed with his usual energy and vivacity:‘Habes me consentientem, labes me consentientem.’From that moment all coldness between us was at an end, and we approached, without any embarrassment, a host of questions in one conversation in which I endeavored, as I had before, to learn from him.“Thus I receive with sincere gratitude, all the works, both useful and profound, which have appeared in our day on the history of law. It would be folly in me to deny the impetus which the study of positive law has received. New sources have been discovered. Their newness and importance have excited the zeal of many scholars who have studied them profoundly; a fact which made a review of the older sources, still by far the most important, necessary. These two circumstances soon rendered it imperative to proceed to the making of scrupulous dogmatic researches. Thus there now is a new life among jurisconsults, and a great activity, which, it is my hope, may continue long.”19.Revue de Législ. et de Jurisprudence, 1834-35.20.Rossi.21.M. de Bonald.22.M. Cousinhas brought this out in an admirable manner in his lectures on Adam Smith. Cours de Philosophie Moderne.23.Channing.24.Knies.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode, Braunschweig, 1853.25.Cours Complet d' Economie politique, II, 540, éd. Guillaumin.26.Cousin.27.We here append an extract fromHeinrich Contzen'sGeschichte, Literatur, und Bedeutung der Nationalökonomie, Cassel und Leipzig, 1876, p. 7:“Roscher ... is rightfully considered the real founder and the principal representative of the historical school. This school is continually gaining in extent, and has found, both in Germany and in France, the most distinguished disciples—men who honor Roscher as their teacher and master, the leader whose beacon light they follow. Roscher combines the richest positive learning with rare clearness and plastic beauty in the presentation of his thought. These are conceded to him on every hand; and it does not detract from him, or alter the fact that he possesses them, that, here and there, an ill-humored or maliciously snappish critic calls them in question.”It should be borne in mind here that Wolowski wrote in 1857; Contzen, like Wolowski, a politico-economical writer of mark, in 1876.—Translator's note.28.Leben, Werk und Zeitalter des Thukydides.29.Rau'sArchiv., Heidelberg. This remarkable essay has since appeared in Roscher's Ansichten der Volkswirthschalt vom geschichtlichen Standpunkte, 1861.—Translator's note.30.Grundriss zu Vorlesungen über die Staatswirthschaft nach geschichtlichen Methode.31.Berliner Zeitschrift für allgem Geschichte.32.Ueber Kornhandel und Theuerungspolitik, 3d ed., 1852.33.Untersuchungen über das Kolonialwesen.34.Umrisse zur Naturlehre der drei Staatsformen (Berliner Zeitschrift, 1847-1848).35.Ueber das Verhältniss der Nationalökonomie zum klassischen Alterthume (K. Sachs Akademie der Wissenschaft, 1849). Also to be found in Roscher's Ansichten etc.—Translator.36.Zur Geschichte der englischen Volkswirthschaftslehre im 16 und 17 Jahrh.37.Ein nationalökonom. Princep der Forstwirthschaft.38.Roscher'scomplete work he calls“A System of Political Economy.”It embraces the four parts above referred to; but each of these parts constitutes an independent work. The first part, or the Principles of Political Economy, covers the ground generally covered by English treatises on Political Economy.Besides the works above mentioned,Professor Roscherhas written Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte, 2d ed., Leipzig, 1861; Die deutche Nationalökonomik an der Grenzscheide des sechszehnten und siebenzehnten Jahrhunderts, Leipzig, 1862; Gründungsgeschichte des Zollvereins, Berlin, 1870; Betrachtungen über die geographische Lage der grossen Städte, Leipzig, 1871; Bertrachtungen über die Währungsfrage der deutschen Münzreform, Berlin, 1872; Geschichte der Nationalökonomik in Deutschland, Munich, 1874; Nationalökonomik des Ackerbaues, 8th ed., Stuttgart, 1875.—Translator's note.39.Die politische Œkonomie vom Standpunkte der geschichtlichen Methode.40.Die National Œkonomie der Gegenwart und Zukunft.41.Recherches sur les Finances de France.42.Frédéric Passy, de la Contrainte et de la Liberté.43.Poor peasantry, poor kingdom; poor kingdom, poor sovereign.44.Cours d' Econ. polit., 2e., Leçon I, p. 33.45.This would be: Propter vitiam, vitæ perdere causas.46.Cousin, loc. cit., p. 276.47.Ibid., 274.48.Frédéric Passy: De la Contrainte et de la Liberté.49.Schäffle, Deutsche Vierteljahrsschrift (1861), emphasizes this.Adam Smith, Wealth of Nations (1776), very characteristically, begins with the yearly labor of the nation;J. B. Say(Traité d'Economie Politique, 1802), withrichesses;Ricardo(Principles of Political Economy and Taxation, 1817), with the idea of value.50.The sum total of the wants (Bedarf) of the Bavarian people, for a whole year, is estimated byHermann, Staatswirthschaftliche Untersuchungen (2d ed., 1870, p. 81), at 177,000,000 florins for food (77 millions for wheat and potatoes, 69 millions for meat, 15 millions for milk etc., 16 millions for eggs, vegetables, salt and spices); 50 millions for clothing, 45 millions for shelter, 37.5 millions for fuel, 60 millions for beverages.51.The original adds:deren Gesammtheit sein Bedarf heisst; the aggregate of which is called his [man's] Requisite (Bedarf). There being no exact equivalent in English for the wordBedarfin this connection, this note is appended.—Translator.52.According toBoisguillebert(ob. 1714) Traité des Grains, I., c. 4, the wantsnécessaire,commode,délicat,superflu,magnifique, arise in successive order with increasing welfare or prosperity, and are surrendered in a reverse order, with increasing need.Tuckerdistinguishes necessaries, comforts, and conveniences of the respective conditions, elegancies and refinements, and lastly,“grand and magnificent.”(Two Sermons, 1774, 29 ff.);F. B. W. Hermann, loc. cit, 1st, ed., 1832, 68; necessary goods (Güter der Nothdurft), goods that contribute to pleasure and recuperation, to culture and splendor.53.CompareTucker, On the Naturalization Bill (1751 seq.), IV, note.54.No people without fire (Prometheus!); and it seems that broiling was the earliest mode of preparing food; then followed baking in heated cavities, and lastly came boiling in vessels. (Klemm, Allgemeine Kulturgeschichte, I, 180, 343.)55.There is an interesting attempt byFaucher, in the Vierteljahrsschrift für Volkswirthschaft und Kulturgeschichte, 1868, III, 148 ff., to determine the relative place of our various wants according to their capacity for extension or contraction.56.The qualification“true,”excludes from the circle of goods, not only all those things which might satisfy only irrational or immoral wants (compareMischler, Grundsätze der Nationalökonomie, 1856, I, 187), but also vindicates the fundamental idea of the whole system of Political Economy, as a subject of moral as well as of psychological investigation.57.EvenAristotle(Eth. nicom. V, 8), considers that all things intended to enter into commerce, should be susceptible of comparison with one another, and that the measure of this comparison iswant, which is the foundation of all association among men.58.An Arab helped pillage a caravan, and carried away, as his share of the booty, a chest of pearls. He thought it a box of rice, and gave them to his wife to cook, but finding they did not boil tender, he threw them away. (Niebuhr, Beschreibung von Arabien, 383). See a similar anecdote inAmmian. Marcell.,XXII. CompareStrabo,VIII, 381.59.As soon as the Persians renounce the superstition that the daily contemplation of a turquoise is a talisman against the "evil eye" (K. Ritter, Erdkunde, VIII, 327), that precious stone will lose much of its value. On the other hand, the amulets of antiquity, although they have long lost the quality of goods as objects of superstition, have now a real value for the archæologist.60.Since observation shows, that, as time runs on, matter tends more and more to becomegoods, the blind forms of motion in nature to become useful labor and useful sustenance, impersonal and objectless existence to be transformed into personal property and personal culture,Schäffleinclines to the belief that the whole mechanism of unconsciously governing nature is destined ultimately to aid in the realization of moral good, which alone is really valuable. Das gesellschaftliche System der menschlichen Wirthschaft, III, Auff., 1873, I, 3.61.Hermann, loc. cit, 1st ed., I, calls internal goods whatever each of us finds in himself, the free gift of nature; also that which we develop in ourselves by our own free action; and external, whatever we create or obtain, through the external world, as a means of satisfying our wants. The internal goods of one man may be external goods to another, as, for instance, when the former conveys them directly to the latter to be enjoyed, by words, demeanor, etc., or indirectly, in combination with other external goods.62.The exclusion of all else, has, indeed, been called one-sidedness and materialism. But, asSeniorsays, no one blames the writer on tactics, because he confines his attention to military subjects; nor is the objection raised, that by so doing, he is encouraging eternal war. On the other hand,J. B. Storch(1815) devoted a special division of his work to the consideration of“internal goods”(health, knowledge, morality, security, leisure,.etc.). SeeRau'stranslation of his Manual, II, 337 ff. CompareGioja, Nuovo Prospetto delle Scienze economiche, 1815 ff. VIII.63.The inclination to exchange is, according toAdam Smith, one of the most important marks which distinguish man from the brute. (Wealth of Nations, I, ch. 2). But seeBüsch, Geldumlanf (1780), I, § 29, on exchange among the lower animals.64.Observed byAristot.Polit. I, ch. 6.65.The efforts of political economists to select from among the infinite number of goods, those which should constitute the subject of their investigations, have taken two directions in recent times.Bastiathere confines himself too exclusively to commerce. The political economist should concern himself only with wants and satisfactions, where the labor, which is the connecting link between them, is undertaken by some other person for a consideration. Thus the ordinary act of respiration lies outside the circle, that of the diver, which is paid for, does not. (Harmonies économiques, 1850, 68 ff.) But even Robinson Crusoe had his own system of economy. Are the products which the farmer consumes in his own home, the work he does himself, any the less matters of economic moment than the products he sells, or the labors of his servants?Schäffleis right when he says that ordinary respiration is no economic function, because it is an unconscious necessity of nature. But his definition is too broad, inasmuch as he places the essence of the economic character of goods or of an act, in the conscious adaptation of means to human ends. (Tübinger Progr. z. 27 Sept. 1862, 9, 24 seq.) To take a walk is no economic operation, although it may be the best means to a very important end,—health. The same goods or the same act may have, frequently, according to the end proposed, an economic or non-economic character. The beauty of the human body, for instance, however systematically made use of for purposes of vanity, is not economicgoods. But it is an economic speculation, base though it be, when a man relies on his handsome figure to secure a wealthy wife, or, for purposes of gain, allows her to pose as a model to artists or to take part intableaux vivants. According toC. Menger, Grundsätze der Volkswirthschaftslehre (1871) I, 51 ff., there are no economic goods, but those the disposable supply of which is, at most, equal to the quantity that is required. But is not the largest navigable stream, even in the most thinly populated country, an economic good?66.Hegel, Rechtsphilosophie, § 67. Even the use of a corpse as manure, or for any mercantile purpose, is repugnant to our feelings,“because of the dignity of personality.”(Schäffle, National Œkonomie, 1860, 28.) In this respect, prostitution is a remnant of slavery.Schäffleis right, when he says that to repay personal services with material commodities which do not afford as much food etc., as the former have cost in expenditure of vital energy, is a slow and frequently a very cruel kind of cannibalism. (Kapitalismus und Socialismus, 1870, 18).67.Bornitz, De rerum Sufficientia in Republica procuranda, 1625, gives in this encyclopædia of political science, together with a dissertation on agriculture, commerce and manufactures, a complete survey of theministeria. Several modern writers refuse to look upon personal services, or the ability to render such services, as elements of wealth: compareKaufmann, Untersuchungen im Gebiete der politischen Œkonomie, 1830, II, Heft I. They demonstrate, however, no more than this, that that class of goods has something very peculiar. ThusMalthus, Principles of Political Economy (1820), chap. I, sect. I, objects that they cannot be inventoried or taxed; but can material goods be so completely? Can all the parts of the wealth of a nation be so inventoried and taxed?Rau, Lehrbuch der pol. Œkonomie (1826) I, § 46, remarks that the personal aptitude to perform services dies with the person, and that personal services cannot be stored up (?), etc. I appeal simply to the definition I have given above of economic goods, and which applies equally to services of every kind which can be performed for other people. Besides, those who oppose this view are unable to give a satisfactory explanation of all the phenomena of commerce. Of course, the qualification“recognized as useful”is of the utmost importance as a mark to determine what is goods. But a prima donna, or a world-renowned physician, cast naked by shipwreck on the shores of North America, is certainly, better off than a blind beggar, his fellow sufferer. CompareStorch, Handbuch II, 335 ff. and his Considérations sur la Nature du Revenu National.68.Ad. Müllercompares persons, so far as they render any kind of service, to things, and, so far as they are required to be preserved in their individuality, to persons. The children in the“status”of a country gentleman, for instance, are treated more as persons, and domestics, more like things; the land partakes of a species of personality, but not the implements of labor. (Nothwendigkeit einer theolog. Grundlage der Staatswissenschaft, 1819, 48.)69.The privilege of selling refreshments in the garden of the Palais Royal was formerly let for 38,000 francs a year.70.See the cases cited byHermann, Staatswirtsch. Untersuchungen, 6 ff. and byBernoulli, Schweiz. Archiv. für Statistik und N. Œkon. II, 55. Think of the firm of J. M. Farina! In Athens, good stands were leased at a very high rent, even where there was no investment of the lessee's capital. (Demosthenes, pro. Phorm., 948; adv. Steph. I, iiii.) There is, again, the sale of inventions, while they are still“mere ideas.”According toSchäffle, Theorie der ausschliessendnen Verhältnisse, 1857, II ff., the value in exchange of these relations depends on the extra income which is assured in fact, or in law, against diminution, by the exclusion of competition. He, therefore, recommends, instead of the word“relations,”“custom,”or“publicum.”But these words, by no means, exhaust the meaning expressed by“relation.”Thus, the good administration of public affairs, although it has no value in exchange, is one of the most valuable economic goods which a people can possess.71.The relation mentioned above of a general to an army may even have great value in exchange. Instance, the Italian condottieri in the fifteenth century!72.Relations which take from one man, as much as they afford to their possessor, are of value as components of a man's private fortune, but not of the wealth of the nation. To this class belong debts due from persons or from things, compulsory custom or good-will of every description; as for instance, the seventy-two places of theagents de changein Paris, each of which was worth more than a million of francs; or the right of navigating the Elbe as far as Magdeburg, which, about the beginning of this century, was worth in every instance about 10,000 thalers. (Krug, Abriss. der St. Œkonomie, 62.)73.Schäffle, N. Œkonomie, 10. In the German language, this same word is used to designate utility, and sometimes useful objects (so called values). A clear distinction, however, should be made between utility and value in use. Utility is a quality of things themselves, in relation, it is true, to human wants. Value in use is a quality imputed to them, the result of man's thought, or of his view of them. Thus, for instance, in a beleagured city, the stores of food do not increase in utility, but their value in use does. CompareSchäffle, System, III, I, 170.74.Genovesi, Economia civile (1869), II, I, 7.L. Say, De la Richesse individuelle et de la Richesse publique (1827), 29, estimates the value of goods according to the degree of discomfort attendant on the privation of them.75.Friedländerhas, however, made a general attempt in this direction. Theorie des Werthes (Dorpat, 1852). But saysTh. Fix(Journal des Economistes, 1844, IX, 12):“It is as impossible to establish a scale of values, as it is to find an exact mathematical and permanent measure of our wants, passions, desires, tastes and fancies.”76.CompareKnies, Geld und Credit, 1873, I, 126 ff. The very respectable attempt made byA. Samter, Sociallehre (1875), with the idea society-value (Gesellschaftswerth) covers too nearly the idea of value in exchange. Further research will here have to be made, with the idea of“impotent need,”inasmuch as, from a high ethical, national-dietetical point of view, the question is asked whether, to what extent, and how,“impotent need”may be made a potent one.77.Friedländer, loc. cit, 50. If too many copies of the very best book be published, there is a certainty that a number of them will remain little better than waste paper.78.Schäffle, System, II, aufl., 55. See also his Kapitalismus und Socialismus, 1870, 31, 35, 43.79.ThusKleinwächter(Hildebrand's Jahrbücher für N. Oek. und Statistik, 1867, II, 318), defines value in exchange=value in use + costliness. According to Schäffle, it is“a covert comparison between the cost-value and the value in use of the two kinds of goods to be exchanged.”(Kapitalismus und Socialismus, 35.)80.An intermediate dealer can, so far as he is himself concerned, attribute value in exchange to goods only to the extent that they have use for the last person who has acquired them. Hence,Storchcallsvalue in useimmediate, andvalue in exchange, mediate value. As the English are always wont to express the immediate in words of Germanic origin, and the mediate in words borrowed from the Latin,Lockecalls value in use“worth,”and value in exchange, simply“value.”(K. Marx, Das Kapital. Kritik der politischen Œkonomie, 1867, I, 2.)81.It is, of course, otherwise when, for instance, a beautiful sea view, or a desirable position as regards air and sunshine, is connected with a piece of land.82.In Ravenna a cistern had greater value in exchange than a vineyard:Martial, III, 56. In Paris, too, drinking water, which is transported only with considerable trouble, costs 1-1/3 thalers per cubic meter. We may also mention snow and ice in summer, which last sells in the capitals of southern Europe at 0.34, silber groschens per pound. According toCarey,“utility”is the measure of man's power over nature,“value,”the measure of nature's power over man. He very inaccurately adds, that both are always in an opposite direction. (Principles of Social Science, 1861, VI, ch. 9.)83.HenceAd. Müllercalls value in use, individual value, and value in exchange, social value. The Germans call the value of goods whose value in use is recognized by only one person,Affectionswerth, (affection-value) a value which influences its value in exchange only when the individual who holds it in high esteem is not himself the possessor of the goods. An instance of this latter is a piece of paper covered with notes, intelligible only to the maker of them.84.The very important difference between value in use and value in exchange was recognized oven by Aristotle.Aristot.Pol. I, 9.Hutchinson, System of Moral Philosophy (1755), II, 53 ff. The Physiocrates speak very frequently ofvaleur usuelleandvénale, on which, according toDupont, Physiocratie, CXVIII, the difference betweenbiensandrichessesis based.La valeur d'un septicr de blé, considéré comme richesse ne consiste que dans son prix.(Quesnay, éd. Daire, 300.)Turgotdistinguishes between“valeur estimative”and“échangeableorappréciative;”the former designating the relation between the amount of energy, physical and mental, which one is willing to spend in order to obtain the goods, to the sum total of his energies, physical and mental; the latter the relation between the aggregate like energy of two persons which they are willing to spend in order to procure each of the goods to be exchanged, and the sum total of their energies in general. (Valeurs et Monnaies, p. 87, seq., éd. Daire.)Ad. Smith, in his Wealth of Nations, I, ch. 4, shows that he knew the difference between value in use and value in exchange; but he afterwards drops the consideration of the former, altogether. In this respect he has had only too faithful and one-sided followers among his countrymen, so thatRicardo, Principles, ch. 28, asks what value in exchange can have in common with the capacity of commodities to serve as food or clothing. (See, however, ch. XIX seq.) Many“free traders”would have no objection to interpose, if a people should abandon the cultivation of wheat, etc., to devote themselves exclusively to the manufacture of point lace, provided the latter had a greater value in exchange. The two degrees of the idea of value have been examined with much thoroughness byHufelandin his Neue Grundlegung der Staatswirthschaftskunst (1807), I, 118 ff.;Lotz, Revision der Grundbegriffe (1811 ff.), I, 31, ff.;Storch, Handbuch, I;Rau, Lehrbuch, I, 56, ff.;Thomas, Theorie des Verkehrs, I, p. 11;Knies, Tübing. Zeitschr. 1855;Bastiat'sdeclaration (Harmonies, p. 171 ff.): that“valeur”(by which Bastiat means only value in exchange), =le raport de deux services échangés, contains a two-fold error: the ambiguity of the wordservices, which applies equally to a yielding or affording of utility, as to useful labor, and the error that the labor necessary to produce a commodity, and of which the purchaser is relieved, alone determines its value in exchange. Compareinfra§§47,107,110,115ff., andKnies, loc. cit., p. 644 ff.85.Proudhon, Système des Contradictions économiques, 1846, ch. 2.86.In France, according toCordier(Mémoire sur l'Agriculture de la Flandre Française), the wheat harvest yielded, in1817, forty-eight million hectolitres, with a value in exchange of two thousand and forty-six million francs; in1818, fifty-three million hectolitres, with a value in exchange of one thousand and four hundred and forty-two million francs; in1819, sixty-four million hectolitres, with a value in exchange of one thousand and one hundred and seventy million francs.A rise in the value in exchange of wheat, such as was witnessed in 1817, is synonymous with a decline in the value in exchange of money, and of all those goods whose money price has not risen. It is no objection to the views here advocated, that when the necessaries of life are very scarce, the want of clothing, furniture, articles of luxury etc., is not felt so keenly as at other times, and that the value in use of these commodities really falls; andvice versa.87.CompareB. Hildebrand, N. Œkonomie der Gegenwart und Zukunft, 1848, I, p. 316 ff.Knies, loc. cit.88.The greater importance attached, in our days, to value in exchange, than to value in use, is seen especially in the attitude which the buyer, who is possessed of the more current commodity (money), assumes toward the seller,—an attitude not unlike that of a patron towards his client. In the interior of Africa, the possessor of money, as such, would scarcely look down on the possessor of the means of subsistence. The South American Indians are ready to render an amount of service for a little brandy, which it would be in vain to ask them to perform for ten times its value in gold. (Ausland, Jan. 15, 1870.) The miser estimates the possibility of being able to procure for himself, for one dollar, a hundred different articles worth a dollar each, to be worth one hundred dollars.89.When the wants of a person or of a people change, it is possible for the value in use of one kind of goods, which had the greater prominence before, to take the place occupied previously by its value in exchange; andvice versa. Thus, the youth sells the plaything he used in childhood; the man, the educational apparatus of his earlier years; the old man, the implements that enabled him to acquire wealth, and which he can no longer use except with great effort. (Menger, Grundsätze, I, 220 ff.)90.Rau(Lehrbuch, I, § 61 ff.) distinguishes between the concrete or quantitative value which a certain kind of goods may have for a certain person, under certain circumstances, and the abstract or species-value which a whole class of commodities may have for men in general.ButF. J. Neumann, (Tübinger Zeitschrift, 1872, p. 288 ff.) objects, that even the abstract value of a commodity always suggests the relation of a definite number of concrete men to a definite quantity of goods; else, by the expression, value of goods, is to be understood not what it is generally meant to signify, but only the capacity to satisfy a single want.91.Storch, Ueber die Natur des Nationaleinkommens (1824, 1825), 5, defines (Vermögen) thus: a source of income, permanent in its nature, and capable of being transmitted, the possessor of which does not need to work, on its account. Hence he does not approve of the expression“the people's resources”(Volksvermögen).92.See especiallyLord Lauderdale, Inquiry into the Nature and Origin of Public Wealth, 1804, ch. 2.Storch, loc. cit.93.Moreau de Jonnès, Le Commerce au 19. Siècle (1825) I, 114 ff., says that the United States imported from abroad 9.6, France 6, and Great Britain 5.8 per cent. of their annual consumption; and exported respectively 10.4, 6.2, 9.8 per cent. of their annual production. The recent free trade tendencies, and the improvement in the international means of transportation, have certainly increased the relative importance of foreign commerce. In the kingdom of Saxony (1853),Engelestimates that 10/47 of the whole production of the country was destined for foreign countries, and that 10/47 of the consumption was imported.94.When the land of a country becomes dearer, simply on account of the increase of population, or goods, the quantity of which is susceptible of increase, because the cost of production has been increased, this cannot be considered an increase in the wealth of the people, (v. Mangoldt.)95.Neither is value in exchange a quality inherent in goods, but only a relation between them and other goods. Hence it is absurd to speak of a rise or fall of all values in exchange. If the goods A lose in capacity to be exchanged against goods B, goods B of course increase in exchange power as compared with A, andvice versa. It is necessary to guard against being misled here by the intervention of money, that is, by the custom universal among men of employing a definite kind of goods as a medium of exchange for all others. Yet there are many writers who have been thus misled. ThusGaliani, Delia Moneta (1750), II, p. 2, who regards the lasting increase of the prices of all commodities as an infallible sign of national prosperity. To the same effect is the motto of the Physiocrates:Abondance et cherté c'est opulence. In its coarsest form, inSaint Chamans, Nouv. Essai sur la Richesse des Nations (1824), 456, who would have that which is now the free gift of nature, to come to us or be produced only as the reward of toil.Verri, on the other hand, Meditazioni sull. econ. pol. (1771), ch. V, thinks that the number of buyers in a country should be as small as possible, and that of sellers as great as possible, in order that thus prices might be low; (as if every buyer was not,eo ipso, also a seller.)96.Kaufmann, Untersuchungen, I, p. 165 seq. Also,Verri, Meditazioni, XVII, 2.97.The differences characteristic of poverty, indigence, managing to live, fortune and wealth, cleverly treated byvon Justi, Staatswirthschaft, I, p. 449, seq.Rau, Lehrbuch I, § 76, seq., establishes the following gradation: privation and wretchedness, poverty, indigence,“getting on,”comfort, wealth, superfluity.L. Saycalls those who can satisfy the wants of luxury rich; well-to-do, those who can command the comforts of life; and wretched, those who cannot obtain a sufficiency of the objects of prime necessity. In France, the limits of these situations are marked by an income of respectively 60,000, 6,000 and 900 francs per family, so that a family with an income of only 300 francs per year is in a condition of wretchedness. (Traité de la Richesse, 1827, I ff., 71 ff.)98.Palmieri, Ricchezza nazionale, Introd. The greater number of the definitions of wealth are rather onesided than false.Socrates, for instance, looks only at the relation existing between means and their owner's wants. (Xenoph.Memor., IV, 2, 37, seq. Œconom. II, 2 ff.).Plato, on the other hand, as the socialists are wont to do, looks to the excess over that possessed by others. (Legg. V, 742, seq.).Xenophon'sobservations, Hiero, 4, on the nature of wealth, are many-sided and beautiful.Aristotledistinguishes between natural and artificial wealth: πλῆθος ὀργάνων οἰκονομακῶν καὶ πολιτικῶν—πλῆθος νομίσματος. (Polit, I, 3, 9, 16.) CompareCicero, Parad. VI. The dominant idea of the so-called Mercantile System is thus expressed in a Saxon pamphlet of 1530 (Müntzbelangende Antwort, etc.):“Money is the real watchword; where there is much money, there is wealth, it is clear.”CompareLuther, Werke, Irmisch edition, XXII, p. 200 seq. See some excellent remarks in opposition hereto, in the Saxon pamphlet, Gemeyne Stimmen von der Müntz, 1530.Schröder, Fürstliche Schatz-und Rentkammer, 1686, ch XXIX.“A country grows rich in proportion as it draws gold or money, either from the earth or from other countries; poor, in proportion as money leaves it. The wealth of a country must be estimated by the quantity of gold and silver in it.”See a very passionate argument against this view inBoisguillebert, Dissertation sur la Nature des Richesses, written sometime between 1697 and 1714.Berkeley, Querist (1735), Nos. 562, 542. Among Englishmen, the correct view was prevalent much earlier, especially among the founders of the American colonial empire. SeeHachluyt, Voyages (1600) III, 22 ff. 45 ff. 152 ff. 165 ff. 182 ff. 266 ff; but especially the work“Virginia's Verger”in“Purchas Pilgrims”(1625), IV, p. 809 ff. However, several Spaniards were led by hard experience to adopt a view opposed to the Midas-view (compareAristotle, Polit. I, ch. 3, 16), by which the first American explorers were carried away:Garcilasso de la Vega(1609), Comment. reales II, ch. 6;Saavedra Faxardo, Idea Principis christiani (1640) Symb. 69:potissimæ divitiæ ac opes terræ fructus sunt, nec ditiores in regnis fodinæ, quam agricultura; plus emolumenti, acclivia montis Vesuvii latera adverunt, quam Potosus mons. Contemporary with those Englishmen, was the Italian,Giov. Botero, who called attention to the fact, that France and Italy were the countries of Europe richest in gold, although they possessed no mines of the precious metal themselves: Della Ragion di Stato (1591) p. 88 ff. AlsoSully, who called agriculture and cattle-breeding the breasts of the state, the real mines and pearls of Peru. (Economies royales I, ch. 81. See however, II, p. 381).Montchrêtien, Traité d'Économie politique (1615) 81, 172 seq. According toSir D. North'sDiscourses upon Trade, 1691, wealth is synonymous with freedom from want, and the ability to procure many comforts, whileTemple(ob. 1700, Works I, 140 seq.) looks entirely at the subjective side of wealth.Pollexfen,“England and East India inconsistent in their Manufactures”(1697), considers gold and silver as the only real wealth. To this definition Davenant (ob. 1714), opposes another. Wealth, according to him, is whatever places prince or people in a condition of superabundance, peace and security. See his Works, I, p. 381 seq. He even reckons intellectual powers, alliances etc., among the national wealth. CompareW. Roscher, Zur Geschichte der englischen Volkswirthschaftslehre 1851, in the acts of the royal Saxon Academy of Sciences, vol. III.Vauban(Dime royale 1707), Daire's edition, says:“The real wealth of a people consists in an abundance of those things, the use of which is so necessary to sustain the life of man, that they cannot at all be dispensed with.”By the wealth of a peopleGaliani, Della Moneta II, c. 2, understands the aggregate of all lands, houses, movable property, money, etc. which belong to them, but, that the chief element of wealth, and the condition precedent of all others, is men themselves. Hence, the process of the impoverishment of a people in their decline, takes the following course: money first emigrates, next, population diminishes, afterwards, the houses fall in ruin, finally, the land itself becomes a waste. According toBroggia, wealth isun avanzo osia valore di tutto cio che avanza al proprio consumo e bisogno, Delle Monete, 1743, IV, 307, 314; Cust.Palmieri(ob. 1794), also says:il superfluo constituisce la richezza. (Publica Felicità.) According toTurgot, Sur la Formation et Distribution des Richesses 1771, § 90, the wealth of a nation consists in the net proceeds of landed property capitalized at the ordinary price of land, and then of the aggregate of all the movable property of the country.Büsch, Geluumlauf III, § 27, considers a certain duration of the produce or revenue as an essential element in the idea of wealth.Lauderdale, Inquiry, ch. II, distinguishes national wealth and private wealth; the former embracing all that man covets as agreeable or desirable; while it is one of the marks of the latter, that there should be no general superfluity of it on hand. Several modern English economists call wealth only that, the production of which cost human labor. Thus,Malthus, Definitions (1827) p. 234.Torrens, Production of Wealth, 1821, ch. I. WhenRossi, Cours d'Economie politique, 1835, L. 2, says:tout chose propre à satisfaire aux besoins de l'homme est richesse, he demonstrates how the frequent inaccuracy of the French language stands in the way of a close analysis. The greater number of more recent definitions are true of resources rather than of wealth.Bastiatdistinguishes betweenrichesse effectiveandrelative, the former being based onutilité, the latter onvaleur. (Harmonies, ch. 6.)99.The national wealth of Athens, at the time of the hundredth Olympiad, is estimated byBöckh(Staatshaushalt der Athen, I, p. 636, 2d ed.) to have been from thirty to forty thousand talents, besides the non-taxable property of the state. That of Great Britain is estimated at about 8,000 million pounds sterling. (Athenæum 5 March, 1853.)Wolowskiestimated that of France at, at least, 116 milliards of francs, with an annual increase of 1-½ milliards, (L'or et l'Argent, 1870. Enquête, 59.)David A. Wellsestimated that of the United States, in 1860, slaves not included, at 14,183 million dollars, or $451.20 per capita, whereas in England, the per capita wealth was about $1,000. (Hildebrand'sJahib., 1870, I, 431.) The national wealth of the kingdom of Saxony is equal to 600 million thalers immovable, and 600 million movable, property. (Engel, Statist. Zeitschr. August, 1856). That of Würtemberg=2,710 million florins, of which 700 millions represent movable goods, and 100 million, claims on foreign countries. (Statistisches Handbuch, 1863.) Of course all these estimates are very inexact.100.Ch. Dupin, Forces productives, p. 82. Seeinfra, § 230.101.CompareMeidinger, Das britische Reich in Europa, pp. 79, 238, 261.102.Davenantconsiders an increase in the number of houses, ships and stocks of goods, as the surest sign of an increase in the national wealth; and on the other hand, a high rate of interest, a low price of land, small wages, a decrease of population, and an increase of uncultivated land, as the signs of national impoverishment. (Works, I, pp. 354, seq. II, p. 283.)Sir M. Decker, Essay on the Causes of Decline of Foreign Trade (1744), 3, gives as the signs of impoverishment, the following: a wretched condition of the poor and of manufactures, a low price of wool, long credit to retail dealers, frequent cases of bankruptcy, exportation of the metals, unfavorable exchange, few new coins, many cases of unpaid rent of leased land, and high poor rates.103.Storch, Handbuch, I, 45. Compareinfra, § 187.104.On the difference between human and animal economy, seeSchön, Neue Untersuchungen der N. Œkonomie, (1835), 4.105.CompareSchäffle, System, III, Aufl. I, 2, 28.106.Knies, in his Polit. Œkonomie vom geschichtl. Standpunkte, 1853, p. 160 ff., shows, very happily, how the love of one's self,—which must, indeed, be distinguished from self-seeking—is not in conflict with the love of one's neighbor; but that, in healthy natures, it is found allied with a feeling of equity, and of the common good. See, also,F. Fuoco, Saggi economici, Pisa, 1825, Nr. 7.Schutz, Das sittliche Element in der Volswirthschaft: Tübinger Zeitschrift für Staatswissensch. 1844, p. 132, ff.107.“That they should seek the Lord if haply they might feel after him.”(Acts, 17, 27. Compare Matthew, 6:33, also I. Timothy, 5:8.)Adam Müllerin his Nothwendigkeit einer theolog. Grundlage, 49 seq., is a strong advocate of all this, but a rather narrow one. The farmer, he says, should first work for the love of God, then for the fruit, that is, for the gross product, and lastly for the net product. His work is a trust.Müllerconsiders the business relations of men, as they exist at present, as“the comfortless mutual slavery of all.”(Nothwendigkeit einer theolog. Grundlage, 49 ff.) The economist,Ch. Perin, who writes from the Catholic politico-economical standpoint, substitutes for conscience,renoncement, as the force antagonistic tointérêt, an expression inappropriate, because merely negative, although in perfect harmony with the ascetic religiousness of the middle ages. (De la Richesse dans les Sociétiés chrêtiennes, 1861, II vol., passim) CompareRoscherinGelzer'sProtestant. Monatsblättern, Jan. 1863.Puchta, Institutionen, I, f. 8, opposes to individualism—or the impulse to distinguish ourselves from others, and which, when uncontrolled, leads to egotism, pride and hate—love and right, which are controlling powers over the former.108.Even the ancients conceived Eros as a world-building principle. According toSchön'sexpression, loc. cit., which it is not difficult to misconstrue, the feeling of the common interest manifests itself, both as law and force. And, in reality, it is necessary that, in order not to permit the drowsy conscience to fall too far behind self-interest, which is always awake, it should create lasting institutions and regulations above and beyond the caprice of the individual or of the moment; for instance, in the family, marriage, education etc.109.The more private interest ceases to be momentary, and becomes life-long and even hereditary, the better does it harmonize with the feeling of the common interest.110.Perinsays (1, 93), that the conflict of interest is reconciled in the seeking for the attainment of the supreme good, that is God,“who gives himself to all in equal measure, and yet always remains the same, and out of whose fulness all may draw, and yet no one's share grows less.”But the same is true of all ideal goods, and of every form of the feeling for the common interest, the highest of which is, indeed, religiousness.111.According toKant, Anthropologie, p. 239, the desire of comfort and well-being, and the inclination to virtue, when the former is properly restrained by the latter, produce the highest degree of moral, united to the highest degree of physical, good. It is well known, that during the middle ages, in all countries except Italy and, even up to the seventeenth century, the moral sciences were under a one-sided theological influence, whose ascetic condemnation of self-interest may have been well enough during a period of violence. By virtue of a very natural reaction, and as a protest of individualism against the constraint of absolute monarchy, the materialists of the eighteenth century endeavored to discover, even in the most exalted phenomena of human society, only the expression of an enlightened self-interest. SeeMandeville'sFable of the Bees, or private Vices public Virtues (1723), but especially,Helvétius, De l'Esprit (1758).Voltairesays, that, in all the celebrated maxims ofDe Rochefoucauld(1665) there is but one truth contained,que l'amour propre est le mobile de toutes nos actions. (But see, per contra,Pufendorf, Jus Naturæ et Gentium, 1672, II, 3, 15.) This tendency was opposed, especially by the English, who could not be blind to the influence exerted in public life by the feeling for the common good.David Hume, Treatise on Human Nature (1739), III, 54, is of opinion that the interests of others are, on the whole, in the case of nearly every man stronger than even his own self interest.Hutcheson, System of Moral Philosophy (1755), speaks of the innate principle of benevolence. Man is not a perfect whole; a part belongs to his own person, part to his family, part to the nation, part even to all humanity.Burke, Inquiry into the Origin of our Ideas of the Sublime and Beautiful (1756), distinguishes two fundamental principles of action, that of self-preservation and that of society. On the former is based the sense of the sublime; on the latter, of the beautiful. According toFerguson, History of Civil Society, (1767), I, 3, 4, the“sense of union”is frequently strongest where the advantage drawn from the connection is smallest; for instance, it is weakest in highly cultured commercial countries.Adam Smith, Theory of Moral Sentiments (1768), has been as one-sided in reducing everything to“sympathy,”as he has been in his Wealth of Nations in reducing everything to“self-interest;”but not without the consciousness, that to explain the reality, it is necessary to take both into consideration (Buckle). It would, indeed, be just as preposterous to base economy on self-interest alone, as to base marriage merely on the sexual appetite. Recently,Hermann, Staatswirthschaftliche Untersuchungen, 1st ed., part 1st, discovers in self-interest, and in the feeling for the common good, the two springs of all economy. He would even base the so-called theoretic Political Economy, on the study of self-interest, its practice in that of the common good.M. Chevalier, Cours d'Economie politique, 1844, II, 412 ff., understands something very like this by the contrast between liberty and centralization. TheantagonismeandassociationofBazard, Exposition de la Doctrine de Saint Simon (1829), p. 144 ff. Closer investigation will show, however, that self-interest, which must not be confounded with egotism, and the common interest, are neither coördinate nor exhaustive opposites. Compare the beautiful contrast drawn byGoethe(Pocket edition of 1833, vol. 46, 97), between“Pietät”and“Egoisterei.”112.Paul, I. Corinth. 12, gives the most beautiful model description of a social organism. Compare, however, the fable of Menenius Agrippa inLivy, II, 32.113.Excellent beginnings of a general theory of economies in common inSchäffle, N. Œkonomie, II, Aufl., 62 ff., 331 ff.114.The French and English, with their strong political bias, use the expressions respectivelyeconomie politiqueand Political Economy. In Germany, where the terms the people (Volk) and the state (Staat) are much less nearly coextensive, the wordsVolkswirthschaftandNationalökonomieare preferred. But evenHufeland, who first gave currency to the termVolkswirthschaft(Grundlegung, I, 14), called attention to the peculiarity“that the term economy suggests that there is one who economizes and guides, an economist in chief, and that such a one is, even according to the most correct opinion, wanting in the public economy of a people.”115.According toTh. Cooper, Lectures on the Elements of Political Economy, (1726), 1, 15 ff. 117, the wealth of society is nothing but the aggregate wealth of all the individuals that compose it. Each individual looks out best for his own interests, and, hence, that nation must be the richest, in which each individual is most completely left to himself. (If this were so, savage nations would be the richest!)Coopergoes so far as to disapprove of the protection afforded to commerce on the high seas by a national navy; no naval war is worth what it costs, and merchants should protect themselves. He says, too, that the word“nation”is an invention of the grammarians, made to save the trouble of circumlocution, a nonentity!Adam Smithis, as might be expected, far removed from such absurdities. (Compare Wealth of Nations, IV, ch. 2, and the end of the fourth book.) But, even he is of opinion that men, in the study of their own advantage are led“naturally, or rather necessarily”(IV, ch. 2), to the employment which is most useful to society. But hereAdam Smithoverlooks the fact, that every individual nation strives after earthly immortality, and is, in consequence, frequently compelled to make immediate sacrifices for the sake of a distant future, a thing which can never be to the private interest of the mortal individuals who compose it. And thus,D. North, Discourses upon Trade (1691), 13 seq., says, that in commercial matters, different nations stand in precisely the same relation to the whole world, that individual cities do to the kingdom, and individual families to the city. Similarly,Boisguillebert, Factum de la France, ch. 10, 327, Daire's edition.Benjamin Franklin(ob. 1790), Political Papers, § 4. AndJ. B. Say, Traité d'Economie politique (1802) I, 15: every nation is, in relation to neighboring nations, in the situation of a province in relation to neighboring provinces. Unfortunately, such doctrine is only too palpably refuted by every war!J. Bentham'ssaying:Les intérêts individuels sont les seuls intérêts réels(Traité de Législation, I, 229).Infra§98.Among those who, in antiquity, most energetically maintained that the idea of national economy is not a merely nominal one, isPlato(De Republ., IV, 420, I, 462); more recently,Fichte(Der geschlossene Handelstaat, 1800), although, in general, the socialists attach as little importance to nationality as their most decided opponents. Adam Müller is a writer who deserves recognition for his advocacy of national economy, and of the state as a whole, paramount to individuals, and even generations. He gives war the credit of causing the scientific knowledge of the state to cast deeper roots, and of enlightening individuals in the most forcible way, that they are parts of one great whole. (Elemente der Staatskunst, 1809, I, 7, 113). He calls public economy, as a whole, the product of all products. What, he inquires, is the use of all wealth, if it does not guarantee itself? And this, it can do, only through the organization of the whole people, that is, through the nation (I, 202).Adam Smith'stheory of labor would be correct if it considered the entire national life of a people itself as one huge piece of labor. (II, 265). And so, Müller directs his polemics against Adam Smith's premise of a merely mercantile world-market. (II, 290). Similarly, the protective tariff theoreticians,Ganieh, Théorie de l'Economie politique (1822), II, 198 ff. andFr. List, Nationales System der politischen Oek. (1842), I, 240 ff.Colton, Political Economy of the United States, 1853.Sismondi, Nouveaux Principes (1819), I, 197, ridicules the opinion which resolves the public interest into merely private interests: It is A's interest to rob B; B, the weaker, is equally interested to let himself be robbed, that he may fare no worse. But the state—?!116.National wars are really no mere operations of the will of the state! Since 1800, Ireland, and, since 1858, even British India, constitute one state with England, and yet how different are the economic tendencies of these different countries of which the individual husbandman or business man must take cognizance!117.One might also deny the reality of a stream, considered as a whole, since its bed, no one calls a stream, and its watery contents change every moment. And yet, it is well known to scientific geography that every stream has its own individual character.118.This would be to be guilty of explainingignotumperignotius. And yet, there are a great many modern writers who imagine that they have said something all-sufficient, when they have told us that the state is an organism. As early a writer asHufeland(N. Grundlegung, I, 113), enters his protest against such abuses. The person who would operate with this notion, should, at least, have read the acute observations, so well calculated to dissipate preconceived opinions, made byLotze, in his Allgemeine Physiologie des körperlichen Lebens, 1-165. The organic conception of national life, the life of a whole people, where the individual organs are free and rational beings, is evidently a much more difficult one to form than that of the animal or human body.119.I first called attention, in my work on the life-work and age ofThucydides, to the fact that that great historian always accounts for causes in the following manner: A. is produced by B., and B. by A. (Roscher, Leben Work und Zeitalter des Thukydides, 199 ff.; compare especiallyThucyd., I, 2, 7, seq.) Such a circle is not a vicious one. All first class historians have thus explained historical phenomena. The one-sided deduction of A. from B., and B. from C., etc., which the so-called pragmatic writers likePolybius, for instance, is the result of overlooking all reciprocal action.Scialoja, Principii (1840), p. 60, makes a somewhat similar observation for Political Economy.120.Whether we call the unknown and inexplicable ground back of all analysis, and which our analysis cannot reach, vital force, generic form, spirit of the nation, or God's thought, is for the present a matter of scientific indifference. All the more necessary are the self-knowledge and honesty, in general, which admit the existence of this background, and which do not, by denying it, deny the connection of the whole, which is, for the most part, much more important than the analyzed parts. But I must at the same time, enter my energetic protest against the imputations of heresy made by those who do not comprehend the sacred duty of science, by never ceasing investigation, to push farther back the bounds of this inexplicable background.121.WhenHildebrand, for instance, objects to the application of the expression“natural law”to the economic actions of man, for the reason that it conflicts with human freedom and man's capacity for progress (Jahrbücher der N. Œek. und Statistik., 1863, Heft., I), I cannot agree with him. I use the expression“natural law”wherever I observe uniformity, explicable in its broader connections, and not dependent on human design. That there are such uniformities there can be no question. I need only mention the philological law of the so-called“permutation of consonants,”which individuals follow when speaking—certainly not through compulsion,—and, by means of which, the progress of the speaking aggregate is made manifest. Or, I might call attention to the well known fact, that, in populous countries marriages and crimes, which are for the most part free, are divided among the different age-classes in a proportion much more uniform, from year to year, than are deaths, which are not free. I adhere all the more firmly to the expression“natural law,”because no one takes offense at or objects to the expression,“nature of the human soul.”But to this very nature of the human soul belong the freedom and responsibility of the individual, as well as the capacity of the species for progress. CompareA. Wagner, on Law in the Apparently capricious Actions of Man (Die Gesetzmässigkeit in den scheinbar willkürlichen menschlichen Handlungen, 1864, p. 63 seq.), in which, however, he only goes so far as to show that law and freedom coexist side by side as indubitable facts, while the seeming contradiction between the two remains.Drobisch'sMoralische Statistik und die menschliche Willensfreiheit, 1867, is an important contribution to the literature of this question.122.Whately, in his fourth lecture (Lectures, 1831), shows in a very clear way, how London is supplied and provisioned by men with no object in view but their own personal interest, each of whom is possessed of but a very limited knowledge of the aggregate wants of its inhabitants, and yet they work into one another's hands, in the interests of the whole, purely instinctively, and infinitely better, perhaps, than the operations of the most skillful governmental commission, organized for the same purpose.123.Alphonsus of Castile, the king astrologer of the thirteenth century, is reported to have said, that the universe would have been much better constituted, if the Creator had asked his advice beforehand. Astronomers like Newton and Gauss have, certainly, judged otherwise.124.MacCullochremarks, that there is an essential difference between the physical and the moral and political sciences in this, that the principles of the former apply in all cases, those of the latter, only in the greater number of cases—a thought very ably developed byKnies, loc. cit.,passim. If, withNewmarch, (London Statistical Journal, 1861, p. 460 seq.), we could grant, that there is no“law,”except where it is possible to predict each individual occurrence under it, there would be no such thing even as the“laws”of the probability of life. The word“element,”also, means something very different in Political Economy from what it does in chemistry: a combination which might be broken up, but which that science leaves it to other sciences to do. The“element”of Political Economy is Man. ComparePickford, Einleitung in die politische Œk., 1860, 17.125.It is in this sense thatAristotle(Polit., I, p. 1, 9 Schn.) says: φανερὸν, ὅτι τῶν φύσει ἡ πόλις ἐστὶ, καὶ ὅτι ἄνθρωπος φύσει πολιτικὸν ζῶον. According toL. Stein, Lehrbuch der Volkswirthschaft, 1858, 33, the political economy of a people begins at the point where the overplus of individuals begins.126.CompareK. L. von Haller, Restauration der Staatswissenchaft, I, p. 446 ff.127.AsSallustcharacterizes the political apogee of the Romans:Optimis moribus et maxima concordia egit populus Romanus inter secundum atque postremum bellum Carthaginiense.SeeAugustin(Civ. Dei II, 18).Puchta(Institutionen, I, f. 83), with a great deal of good sense, distinguishes in every people their individual character from that which they share in common with all mankind. The latter exists among savage nations, only as a germ buried under the overpowering weight of that which is special to them. The period of the perfect equilibrium of both elements is coincident with that of a people's real culture. In the further course of development, the latter, more general element becomes gradually over-powerful, destroys the individual, and thus dissolves nationality.128.Thus formulated, the principles of the two great parties, evidently, no more contradict one another than their ordinary watchwords,“freedom”and“order,”are in contrast with one another. Hence all the great statesmen of the best periods of history have adopted the middle course recommended by Aristotle.129.SeeLotze, Allgemeine Pathologie, 1842.Ruete, Lehrbuch der allgemeinen Therapie, 1852. These analogies, obviously, should not be pushed too far. One of the most essential differences between the two consists in this, that in the diseases of the body politic, physicians and nurses are themselves part of the diseased organism.130.SeeAhren'svery beautiful exposition, Organische Staatslehre, 1850, I, 77. National economy (Nationalökonomie=public economy); national economics (Nationalökonomik=the science of public economy). The latter term was first proposed, in Germany, in 1849, byUhde; the former was naturalized therein 1805:v. Soden, Nationalökonomie, 1805;Jacob, Grundsätze der N. Œk., 1806. In Italy,G. Ortesused it as early as 1774, in his Dell Economia nazionale, and in England it was employed, even in 1867, byFerguson, History of Civil Society, III, p. 4. Holland. Volkshuyshoudkunde. As a rule, outside of Germany, the term political economy,économie politique, one which is somewhat calculated to mislead the student, is used. (ThusMontchrêtien sieur de Vatteville, Traité de l'Economiepolitique, 165; laterJ. J. Rousseau, Discours sur l'Economie politique, later yet the Traités d'E. p.,Maillardère,PageandJ. B. Say, 1801-1803). Political Economy (Sir J. Stewart, Inquiry into the principles of P. E., 1767); also Public Economy (Petty, several Essays, 1682, 35);Economia politicaorpubblica(the latter byVerriandBeccaria). The titleEconomia civile(Genovesi, Lezioni, d'Ec. civ. 1769), has found few adherents. It has, however, been used recently byCernuschi: Illusions des Sociétés coöperatrices (1866). The term,Economie socialehas been used all the more in France (Dunoyer, Nouveau Traité d'Ec. soc., 1830), since recommended byJ. B. Say, and employed byBuat(Des vrais Principes de l'Origine et de la Filiation du Mot Economie politique, in the Journal des Economistes, 1852.)131.Stein, Lehrbuck der V. W., prefaces his“Science of Public Economy”(pp. 329-358), by a“Science of Economy”(pp. 96-328), which, however, treats individual economies only as the elements of the national economy. A science of household or isolated individual economy could, of course, treat only of the economic relations of anchorites. Those who object that Political Economy is not a real whole will be satisfied with the definition of it given byF. I. Neumann:“The Science of the bearing of household or separate economies to one another, and to the state as a whole.”(Tüb. Zeitschr., 1872, 267.)132.In so far as these various institutions are concerned, with objects beyond the human, or supernatural, only the manner in which they are accepted, or in which they are made use of, is an expression of national life.133.Thus,J. Tuckerthinks that religion, the state and commerce, are only the parts of one same general plan: no institution, therefore, can be called appropriate, within the limits of the province of any one of these, if it be clearly in opposition to the other two, because the harmony of God's work can not be broken up. (Four Tracts and two Sermons on political and commercial Subjects, 1774, Serm. I.)134.Riedel(National Œkonomie, 1838, I, p. 178 seq.), gives a good illustration of the difference between the manner in which law and Political Economy look at the same question. The law (to avoid strife, or to settle controversies) looks upon the debtor as the owner of the capital, and lets him run all the risk; Political Economy, on the other hand, looking deeper into the nature of the contract, reaches an entirely opposite result. The mere jurist has a dangerous tendency to undervalue the reign of the laws of nature; the mere political economist, just as readily, undervalues the element of free will. (Arnold, Cultur und Recht I, 97.) In this respect, the two sciences complement each other very well.Roesler(Hildebrand'sJahrb., 1868, II, and 1869, I.) shows, and he does not exaggerate the fact, that political economists have made altogether too little use of the results of the science of law.135.Jurists will always experience the want of divesting their isolated ideas of their purely accidental character, by grouping them together in such a manner as to make them constitute a complete and independent whole. One must be possessed of profound knowledge to perceive their necessary connection from an historico-juridical point of view. Political Economy, with its characteristic accuracy and practical utility, can best take its place, at the present time. It is in the greater number of legal questions, the systematically elaborated science of“the nature of the thing.”See the able beginnings of a policy of legislation and higher history of law, based on Political Economy, byH. Dankwardt: N. Œk. und Jurisprudenz, 3 Hefte, 1857, and my preface toDankwardt'sNationalökonomisch-civilistischen Studien, 1862.136.The intellectual power of a people depends upon the vigorous and harmonious development of all seven spheres of life.137.Montecuccoli, Besondere und geheime Kriegsnachrichten (Leipzig, 1736). A very similar judgment by Cæsar inDio Cass., XLII, 49.138.Bülan, Handbuch der Staatswirthschaftslehre, 1835.139.Thusv. Justi, Staatswirthschaft 1755.Kraus, Staatswirthschaft, published by Auerswald, 1808;Schmalz, Handbuch der Staatswirthschaft, 1808. More recently,Hermann, Staatswirthschaftliche Untersuchungen, 1832. In France, the expressionéconomie de l'état, is very seldom used.Gavard, Principes del'E. d'Etat, 1796.140.Pölitz, Staatswissenschaften im Lichte unserer Zeit, II, 3. CompareLotz, Handbuch der Staatswirthschaft (2d ed., 1837), I, 10 ff.141.Our view of Political Economy holds a middle place between opposed extremes. The view expressed byWhately, Lectures on Political Economy (1831), No. 1, and covered by the proposed term“catalactics,”is by far too narrow. Similarly,Macleod, Elements of Political Economy, 1858, I, 11. A like objection may be raised to the earlier title ofPritzwitz'sbook: Die Kunst reich zu werden,—the art of growing rich. On the other hand,Dunoyer, Liberté du Travail (1845), L. IX, ch. I, goes too far altogether:“not only in what manner a nation grows rich, but according to what laws it best succeeds, in the execution of all its functions.”And soStorch, Handbuch, translated into German byRau, I, 9. Many modern writers define Political Economy simply as the theory of society; for instance,Scialoja, Principj. dell'Economia sociale, 1840.Cibrario, E. polit. del medio Evo, III, 1842.142.For the many and various definitions of the police power, seevon Berg, Handbuch des Polezeirechts, I, 1-12;Butte, Versuch der Begründung eines System der Polezei (1807), 6 ff.;Rosshirt, Ueber den Begriff der Staatspolizoi (1817), 34 ff. One of the principal difficulties is, that the practical domain of the police power is, in consequence of the successive grades of civilization through which a people passes, subject to greater modifications than any other state power. We call attention especially to the expressions“without mediation, to prevent,”and“external order,”in our definition. The church, the school, the administration of justice etc., act mediately towards the prevention of such disturbances; and there are many other institutions which offer immediate protection to order of a higher and more intellectual nature.143.See the great number of earlier definitions collected inR. von Mohl, Gesch. und Literatur der Staatswissenschaften III, pp. 637 ff. There are two principal groups of them, the one of which considers it as the science of things of political note, the other as the science of actual or past conditions.144.SeeDufau, Traité de Statistique, 1840;Moreau de Jonnès, Elements de Statistique, 1847;Knies, Die Statistik als selbstständige Wissenschaft, 1850.B. Hildebrand, in his Jahrbüchern, 1866, I etc., but especiallyQuetelet'sworks. For the contrary view, seeFallati, Einleitung in die Wissenschaft der Statistik der St., 1843;Jonak, Theorie der Statistik, 1856, andHeeren, in the Gött. Gelehrten Anzeigen, 1806, No. 84, 1807, 1302.145.So thinksv. Rümelin(Tübinger Zeitschr., 1863, 653 ff.); and he recommends in place of statistics an independent branch of learning bordering on history and geography, to be called demography. His statistics is a science auxiliary to all the experimental sciences of man, just as criticism and hermeneutics are a methodological science auxiliary to many sciences, otherwise different. It would be difficult to justify the use of the name statistics for such a science, as such a science corresponds to neither of the two meanings of the wordstatus(state—condition).146.The ancients understood by the term καμάραcamera, covered places such especially as were vaulted, also vaults of the most varied kind. CompareHerod, I, 199;Diod., II, 9;Strabo, XI, 495;Arrian, Exp.Alex., VII, 5, 55;Dio Cass. XXXVI, 32;Sallust, B. C., 55;Cicero, ad Q. fratrem III, 1;Plin., H. N. XXX, 27;Seneca, Epist., 86;Tacit.Hist. III, 47;Sueton, Nero, 34. During the middle ages, the meaning treasure-chamber (Schatzkammer) became predominant:camera est locus, in quem thesaurus recoilligitur, vel conclave, in quo pecunia reservatur(Ocham, Cap. Quid sit Scaccarium). It gradually became synonymous with finance,—from the time of Charlemagne, or at least since Louis II. (Charter of 874). SeeDucange, Glossarium, v. Camera, andMuratoriAntiquitt. Ital., I, 932 ff.147.“A husbandman must plow and manure his land if he would reap a harvest from it. He must fatten his cattle if he would slaughter them; and furnish his cows with good fodder if he would have them give good milk. In like manner, a prince should begin by assuring his subjects healthy and abundant food, if he would take anything from them.”von Schröder, Fürstl. Schatz-und Rentkammer (1686), preface, § 11.Von Horneckbefore him, Oesterreich über alles wann es nur will, p. 220, ed. of 1707, had expressed the idea that the watchful solicitude for the public economy of the country was noparergon, noappendix, to the council (Kammer), but its real basis, and that it embraced many subjects which had nothing in common with the cameralia (“Cameralien”).148.Morhof, Polyhistor (1688), III.Thomasius, 1728, Cautelæ circa præcognita Jurisprudentiæ (1710), ch. 17. (Cautelæ circa studium œconomicum.) Also, in his lectures onSeckendorff's“Teutschen Fürstenstaat.”CompareRoscher, Gesch. der N. Œk. in Deutschland, 328 ff.149.WhileDithmar(1731) distinguishes economy-police and cameralistic sciences and restricts the latter to finance and taxation;Darjes(1756) comprises under the name of cameralistic science, economy (municipal and rural), and police, as well as cameralistic subjects in the strict sense of the term, that is, the public, domain and regal rights. WhileNau(1791), in his“Ersten Linien der C.,”treats only of the branches of private economy,Schmalz, (1797) treats also of national or public economy, andRössig(1792) divides cameralistic science into the doctrine of the public demesne and regal rights (cameralistic science in the narrower sense), and the doctrine of taxation and police.150.Thus, for instance, all that concerns domestic economy, book-keeping and private financial administration.151.John Stuart Mill, Principles of Political Economy (1848), I, p. 25, draws a distinction between the physical conditions which influence the economic situation of a people, and the moral and psychological conditions; which last have their origin in social institutions or in the fundamental principles of human nature. Only the latter belong to the domain of Political Economy. According toJ. B. Say, Traité, Introd., this science embraces at once agriculture, manufactures and commerce, but only in their relation to the increase or diminution of wealth, and does not concern itself with the means employed to reach the desired end. As a rule, saysArndt(Naturgemässe Volkswirthschaft, 1851, p. 16), it takes into consideration not so much things themselves as their exchange value.Lotz(Handbuch, I, p. 6 seq.), in like manner, defines Political Economy—the science of the one activity which constitutes the basis of all industries etc.F. G. Schulze(Ueber volkswirthschaftliche Begründung der Gewerbswissenschaften, 1826), characterizes Political Economy as the science of the fundamental conditions of the well-being of a people, in so far as they lie in human nature.WhenAdam Smith(book IV, c. II) says that the government in respect to matters of economy is inferior to the first best person engaged in industrial pursuits, he is right only from a technic point of view. And whenStewart, on the other hand, vindicates for the state the office of a pater-familias (book II, ch. 13), he evidently means only in national economical matters.152.See alsoRau(Ueber die Cameralwissenschaft, Entwickelung ihres Wesens und ihrer Theile, 1825);Baumstark(Cameralistische Enclycopädie, 1835).153.Xenoph.Œconom. I, 8 ff. Cyrop. VIII; 2, 23. He saw with equal clearness the moral light and shade of wealth. (Œcon. XI. 9. Conviv. 4. Memor. I, 6. Cyrop. VIII, 3, 35 ff. Hiero 4.)154.Thomas Aquinasvalues earthly goods according to the end they are made to serve; when used for a good purpose, they have a mediately true value. Hence it was an error of the stoics to despise them under all circumstances. (Summa Theol. II, 2. Qu., 50, 3. 58, 2. 59, 3. 125, 4.)155.Whateleyconsiders the savage much beneath the materialist, instead of superior to him. The latter possesses, although he frequently abuses it, the faculty of self-control and forethought, which is entirely wanting in the former. (Lectures, No. 6.)Dunoyer, De la Liberté du Traväil, liv. IV, ch. I, 8, an apology for the moral wholesomeness of civilization, since promotive of military prowess, favorable to the development of the sciences, and even poetical.Baudrillart, Manual d'Œkonomie politique, 1857, 24. SeeFallati, Ueber die sogennannte materiellen Tendenz der Gegenwart, 1842.156.See the inscription on the tomb of Sardanapalus: ταῦτ᾽ ἔχω, ὄσσ᾽ ἔφαγον καὶ ἐφύβρισα καί μετ᾽ ἔδωτος τέδπν ἔπαθον. (Strabo, XIV, 672.)Isaiah, 122, 13, 56, 12, and the book of wisdom (2) characterizes the view of the fallen Jewish people. In Greece, the Cynic and Epicurean schools were only different phases of the same degeneration.“Thirst, for money, and nothing else, will be the ruin of Sparta!”(Cicero, De Offic, II, 22, 77.) See the magnificent description by Demosthenes, in which he shows the over-estimation of material things to be the principal cause of the decline of Athens, and in which he lays great stress on the fact, that Athens, on its decay, had a larger population, more wealth, ships, and evidences of external power, than in its golden age. (Phil., III, 120 seq.) Also Phil., IV, 144, cautions us against the Manchester criterion of national prosperity. SeePlato, De Rep., VIII. In Rome, the principleommia venalia essewas a chief element in the total decline and fall of the republic. (Sallust, Cat., 10 ff., Jug., 8 ff.) In an age when people think they can do everything with money, the ruin of all things is the last end of mercantile, financial and political speculation. (Condillac, Le Commerce et le Gouverment, 1776, II, 18.)157.Under Pericles, the Athenian treasury of the state contained at most 9,700 talents. (Thucyd.II, 13.) On the other hand, Alexander the Great had a treasure of 180,000 talents accumulated in the citadel of Ecbatana. (Strabo, XV, 731); Ptolomy II. left after him 740,000 talents. (Appian.præf. 10,Droysen, Geschichte des Hellenismus II, 44 ff.) In Nero's time there was many a freedman's daughter who owned a looking glass worth a greater sum than the senate had appropriated as a dowry to the daughter of the great Scipio. (Seneca, Quæst. Natur. I, 17. Compare Cons, ad Helviam, 12.)McCullochsays that an intelligent despotism can enrich a nation as well as freedom. (In his Discourse on the Rise, etc. of Polit. Econ., 1825, 77 seq.)158.Bacon(Sermones, 56) says that youthful states distinguish themselves specially by their warlike instincts; mature states in literature; old and decaying ones in industry and commerce.Davenantvery happily remarks, that the development of commerce among a people has an ambiguous value. It, indeed, increases wealth, but, at the same time, it may introduce luxury, covetousness and fraud, destroy virtue, do away with simplicity of manners and customs, and then it inevitably ends in internal or external slavery. (Works II, 275.) The simplicity of the patriarchal state, however, cannot last always, if for no other reason, because of the emulation of foreign nations. (1, 348, ff.) The impoverishment of even the wealthiest nation is certainly inevitable when its morality declines. It is especially true, that the public economy of a people can be prosperous only where political liberty obtains, and this, independent of the fact that wealth without freedom has no value. (II, 336 ff., 380, ff., 285.) According toFerguson, private wealth, honestly acquired, used rightly and with moderation, managed with a sense of independence, may be to those who possess it, an element of self-confidence and of liberty, provided they loosen their purse strings not through vanity or for their personal gratification, but for commendable party purposes. But in periods of decay, even a greater amount of wealth is very far from producing these results. (History of Civil Society, VI, 5.)Whately, on the contrary, maintains that only personal wealth—never national wealth—has a disastrous influence on morals. Lectures, No. 2.159.“The method of a science is of much greater importance than any individual discovery, however wonderful.”(Cuvier.)160.Thus, for instance,G. Biel(ob. 1495), the“last of the schoolmen,”gives us his doctrine of Political Economy, in a work on Dogmatic Theology, in the chapter on Penance, his starting point being the inquiry, how the economic damage caused by the sinner may be repaired.Roscher, Geschichte der Nationalökonomik in Deutchland, 1074, I, 23. The Melittotheologia, Arachnotheologia of later times! A recent attempt in this direction has been made byAd. Müller, Nothwendigkeit einer theologischen Grundage der gesammten Staatswissenschaften und der Staatswirthschaft insbesondere (1819), i.e.,“necessity of a theological basis for all political science, and especially for Political Economy.”He divides political science into two parts: the science of law, and the science of wisdom, embracing under the latter denomination, politics, Political Economy, etc. Law emanates from God, as supreme judge; the science of wisdom from God, as our Supreme Father.161.Abstraction is indulged in on a large scale, when a number of elements which are always found combined in life, are here separated and examined apart. It is precisely thus that anatomy proceeds, dissecting each member of the human frame, separating the bones, ligaments and muscles from one another, thus becoming the necessary preparatory school to physiology.162.Thus, for instance,Canard, Principes d'Economie politique (1801). AlsoKröncke, in several of his works, andCount Buquoy, in his Theorie der Nationalwirthschaft (1816), p. 333 ff.;Lang, Grundlinien einer politischen Arithmetik, Charkow, 1811, and more especiallyv. Thünen, Der isolirte Staat, vol. I (1842), vol. II, 1850. See my criticism of his method inBirnbaum'sGeorgika, 1869, 77 ff.Voa Thünen'sfirst volume is an essay towards a geometrical exposition of the science. See alsoRau, Lehrbuch I, § 154, appendix;von Mangoldt, Grundriss der Volkswirthschaftslehre (1862);Cazaux, Elements d'Economie privée et Principes mathématiques de la Théorie des Richesses (1838);F. Fuoco, Saggi economici (1827) II, 61 ff.Walras, Eléments d'Econ. politique pure (1874).Jevonshas recently endeavored to give Political Economy a mathematical basis by reducing the objects of which it treats to the calculable feelings of pleasure (+) and pain (-). The duration of a feeling is treated as an abscissa, its intensity as the ordinate of a curve, and its quantity as the area. Future feelings are reduced to present ones, by allowing for their distance, and the uncertainty of their occurrence. All this, however, is rather curious than scientifically useful.163.Herbart, Ueber die Möglichkeit und Nothwendigkeit, Mathematik auf Psychologie anzuwenden; Kleinere Schriften, II, 417.164.How detrimental it is to ignore the psychological nature of Political Economy is evident from the errors ofKarl Marx, who personifies things in a manner almost mythological. Thus, according to him, modesty should be ascribed to a coat which exchanges for a piece of linen, and purpose to the linen, etc. (Das Kapital, 1867, I, 19, 22, seq.) The greatest fault of this intelligent but not very acute man, his inability to reduce complicated phenomena to their constituent elements, is greatly increased by his way of thus looking at things.165.CompareJ. B. Say, Traité I, introd. Thus, it would be certainly possible to describe every individual's physiognomy by means of a very complicated mathematical formula, and yet there is no one who would not prefer the usual mode of taking pictures. The simple motions of the heavenly bodies, on the contrary, are always treated mathematically. (Lotze, Allgemeine Physiologie, 322 ff.)166.WhenFawcettsays that all“principles of Political Economy are describing tendencies instead of actual results”(Manual of Political Economy, 1863, p. 90), our method, the historical, would give also the theory of the latter.167.This was lost sight of by most writers during the second half of the eighteenth century, because they looked upon that equality as the really oldest condition, and its restoration the ideal to be striven for. How much of this still clings to the present free-trade school; see inRoscher, Gesch. der N. Œk. in Deutschland, 10, 17 ff.168.Thus, for instance,Ricardoexamines, almost exclusively, the actual condition of things, while the socialists confine themselves, still more exclusively, to the investigation of how things should be. It has been very usual in Germany sinceRauwrote, to draw a distinction between theoretical and practical Political Economy. There are many who think that a good manual of practical Political Economy, dropping the introduction, demonstrations etc., would be also a good code of law, of universal application.Mercier de la Rivièrehas said that he wished to propose an organization which should be necessarily productive of all the happiness which can be enjoyed on earth. (Ordre essentiel et naturel (1767), Disc. prélim.) Compare, also,Sismondi, N. Principes, I, ch. 2.169.The word method is used in an essentially different sense, when the inquiry is, whether the inductive or deductive method is followed in Political Economy.J. S. Millcalls Political Economy, and, indeed, all“sociology,”a concrete deductive science, whosea prioriconclusions, based on the laws of human nature, must be tested by experience, either by comparing them with the concrete phenomena themselves, or with their emperical laws. It, in this, resembles astronomy and physics. (System of Logic VI, ch. 9. Essays on some unsettled questions of Political E., No. 5.) According to this, an economic fact can be said to have received a scientific explanation only when its deductive and inductive explanations have met and agreed.“Only those principles which, after they have been obtained by the one, are confirmed by the other method, can be said to have a scientific basis.”(von Mangoldt, Grundriss, 8.) While I agree to this view, it seems necessary to me to mention points wherein caution is necessary: A. Even the deductive explanation of economic facts is based on observation, namely, on the self-observation of the person accounting for them, who, consciously or unconsciously, must always inquire: If I had experienced or accomplished the same fact, what should I have thought, willed and felt? The man who cannot translate himself into the souls of others, will give a wrong explanation of most economic facts. In the question, for instance, of the determination of the price of an article, the person who can look into the mind of one of the contracting parties only, will give a one-sided explanation of the facts. B. Moreover, every explanation, that is, satisfactory connection of the fact seeking explanation with other facts which are already clear, can be only provisional. The wider our horizon grows, the deeper should our solution of all questions become. A hundred years hence, should science increase in the mean time, the solutions which are satisfactory to us will be looked down upon by our posterity, as the speculations of our fathers antecedent to Adam Smith's time are looked down upon by us.170.Tanquam e vinculis sermocinantur, saysBacon(De Dignit. et Augm. Scient., III, 3), of those who have written in a not non-practical way on the laws.Hugo, also (Naturrecht, 1819, p. 9), calls attention to the resemblance of the so-called laws of nature, to the positive law in force at the time. As to political idealism, seeRoscher: De historicæ doctrinæ apud sophistas majores vestigiis (Gött. 1838, 26 ff.). The only exceptions to this rule are the eclectics, who form their own system from the blossoms of all foreign ones, a system, indeed, without root, and which therefore must soon wither.171.In this place, naturally, such an assertion can be made only as a programme to be carried out, the proof whereof is to be sought in the rest of the work. By“the people,”we do not mean the governed, to the exclusion of the governing classes, but both classes together. We attach to the expression the most extensive meaning possible. We do not limit it to the present generation, but intend it to cover all the generations from the beginning of a people's history to its end.172.The custom, which has become general, of calling all democratic movements, and them only, revolutions (thusStahl: Was ist Revolution? 1852, and many other writers of an entirely opposite tendency, especially in France), is not warranted. It is true that democratic (and imperial) revolutions are more frequent than others in our times, just as aristocratic revolutions were in the middle ages, and monarchical at the beginning of modern history. The essence of revolution, however, is in the operation of change contrary to positive law, acknowledged as such by the consciousness of the people.173.Compare, especially, the first pages ofSir J. Stewart, Principles of Polit. Economy.174.SeeColton, Public Economy of the United States, p. 28, who, indeed, unwarrantedly, refers to the whole of Political Economy, what properly belongs to its precepts.175.Je n'impose rien, je ne propose même rien: j'expose.(Ch. Dunoyer).Cherbuliez, Précis de la Science économique, 1862, p. 7 ff., has exaggerated this idea in a strangely non-practical manner. That the historical method does not differ essentially from the statistical as recently recommended, seeRoscher, Gesch. der Nat. Œk., 1035 seq.176.Storch, Handbuch, II, 222.177.Ad. Müller, an essentially mediæval mind, is guilty of this same braggadocio in an opposite direction, when he calls the“present with its political disorders simply an intermediate state,—the transmission of the natural or unconscious wisdom of the fathers, through the inquisitiveness of their children to the rational acknowledgment of that wisdom by their grandsons.”(Theorie des Geldes, 1816, pref.)178.Thus, for instance, it can not be said that a model university is better than a model public school; and yet the former is higher, because the age to which it is adapted is doubtless intellectually higher.179.Knies(Polit. Œk., 256 seq.) remarks, that it would be a great mistake, and it is the mistake of the majority, to consider what has been achieved or striven for in the present, as the absolutenon plus ultra, and thus to look upon all future generations as called upon to play the parts of apes and ruminators; a remark worthy to be taken to heart.180.I have, myself, no doubt, that up to the present time, mankind, as a whole, has, from the beginning of historical knowledge, always advanced. In individual cases, their movement has been interrupted by so many pauses, and even by so many occasional retrogressions, that great care must be taken not to infer superior excellence from mere subsequency.181.Bucklewrites of people whose knowledge is about limited to that which they see going on under their eyes, and who are called practical, only because of their ignorance; and he adds that, although they assume to despise theory, they are in fact slaves of theory, of others' theories.182.Compare this whole chapter withRoscher, Leben Werk und Zeitalter des Thukydides, 1842, pp. 25, 239-275;Roscher, Grundries zu Vorlesungen über die Staatswirthschaft nach geschichtlicher Methode, 1843, preface;RoscherGeschichte der Nat. Œk. in Deutchland (1874), 882 f., 1017 seq., and D. Vierteljahrsschrift, ff. See alsoJ. Kautz'slearned and accurate Theorie und Geschichte der N. Œkonomik, vol. I, 1858, II, 1860. I find no real contradiction between the views here expressed and those ofKautz, when he (I, pp. 313 ff.) introduces history and ethico-practical reason with their ideals as sources of Political Economy, to the end that the science may be something more than simply a picture, namely, a model of economic life. Apart from the fact that it is only the ethico-practical reason that can understand history at all, the ideals of a period constitute one of the most important elements of its history. The aspirations of an age find in them their best expression. The historical political, economist as such, is certainly not disinclined to form plans of reform, nor can it be said that he is not adapted to the performance of such a task. Only, he will scarcely recommend his reforms as absolutely better than what they are intended to supplant. He will confine himself to showing that there is a want which may, probably, be best satisfied by what he proposes. SeeSartorius, Einladungsblätter zu Vorlesungen über die Politik, 1793.183.“There is a book which youth may use to grow old, and the old to remain young—History.”(K. S. Zaccharia).184.Especially when natural science begins to be“a practical science.”(L. Stein).185.The difference between the broader and narrower sense of production, corresponds essentially with that of gross and net income (§ 145). Compare also §§ 206, 211 ff.186.Von Mangoldtdistinguishes the coming into existence of free values of the production undertaken for an economic purpose. (Grundriss, 9.)187.Gioja, Nuovo Prospetto delle Scienze economiche (1815), I, 49 ff. Besides positive production, there is a latent production, which prevents the decay of goods. It is not possible to make as exact an estimate of the latter as of the former; and much more depends in the latter case than in the former on continuity and proper extension. Hence, latent production is especially a state concern. (Knies, Telegraph als Verkehrsmittel, 1857, 232.)188.SeeSchäffle, in the Tübinger Univ. Programm, September 27, 1862, on the disastrous effect on the community of idleness. The leading of a happy life the Greeks called very appropriately, εὐπράττειν (Garve).189.We use the expression“external nature”through the whole of this work in contradistinction not only to the soul, but also to man's body, designating his entire physico-intellectual activity by the term“labor-force”(Arbeits kraft).190.By the expression“natural forces,”we designate the economically useful changes of matter, changes of place as well as of composition, which are made without man's cooperation; for instance, the gigantic machinery which supplies the greater part of mankind with water to drink, for domestic and other purposes—the evaporation of the sea, the formation of clouds, rain, springs, rivers etc. SeeBastiat, Harmonies, 277. Thus the sun's rays are indirectly the cause, not only of vegetation, but also of all wind and steam forces.191.Spite of this“freedom,”it may well happen that these gifts of nature can be utilized, in many cases, only on condition of some expenditure. The photographer can compel the sunlight to work for him only by means of a camera obscura, and the smithy the atmosphere, only by means of a bellows. But neither will ever successfully make an item, in their accounts with their customers, of the services of the sun or air.192.The most important ocean currents may be explained by two causes: the flowing of the water from the polar seas to the equator (polar current), and the revolution of the earth about its axis (equinoctial current); besides which, there are the reflex currents produced by the horizontal form of the coast-lands. Thanks to these natural ocean highways, England is nearer to almost all the important mercantile coasts of the world by 300 geographical miles than the Eastern States of the American Union. The only exception is the Atlantic coast of America north of the Equator. North Americans to pass the line, or to double one of the two great capes, are obliged first to traverse the ocean as far as the Azores. On the other hand, the western coast of South America is very widely separated from Mexico, for instance, by its ocean currents. The colonization of America by Europe, instead of by China, is a consequence of the direction of ocean currents, as is also the fact that America has now the fairest prospect of influencing the civilization of China and Japan. What an influence the warm gulf stream has on the mild climate of north-western Europe!193.While the Mississippi has no ebb or flow whatever, the influence of the ocean is felt in the Hudson, which is 60 geographical miles long, a distance of 29 miles from its mouth.194.Thus,A. Young, Travels in France I, 293 ff., has defined, with approximate accuracy, the limits within which the vine, maize and the olive grow. And sovon Cancrin, Dorpater Jahrbuch IV, 1, distinguishes the ice zone, the reindeer-moss (a lichen on which the reindeer live in winter) zone, the forest zone, the zone within the limits of which cattle are raised; that in which the culture of rye begins, that in which it becomes permanent; the wheat, fruit-tree, vine, maize, olive, sugar cane and silk-worm zones. The United States are divided into cattle-raising, wheat-raising, cotton-raising, rice-raising and sugar-raising zones. Even in Europe, beyond the 60th parallel of north latitude, wheat can scarcely be cultivated; the polar limits of rye raising extend, at most, six or seven degrees farther. Towards the north, barley extends sometimes as far as the 70th degree. Here agriculture almost ceases, and the inhabitants are compelled to confine themselves to animal substances for food. On the other hand, these three cereals are not adapted to a tropical climate, while the bread-fruit tree, for instance, does not thrive at more than 22 degrees from the Equator, nor the banana at more than 35. CompareGrisebach, Die Vegetation der Erde nach ihrer klimatischen Anordnung. II, 1871.195.Thus rye and wheat thrive in many parts of Siberia (Iakutzk) at an annual temperature of - 7.50, while in Iceland no cereals ripen at an annual temperature of + 4°. But in the former place the summer heat is + 16.2°; the winter cold, - 39.2°; in Iceland, + 12° and - 1.6°. In England, the myrtle, laurel, camelia and fuchsia stand the winter well; while the vine no where ripens. On the other hand, Astrakan and Hungary are vine growing countries, although the former is as cold in winter as North Cape, and although the cold is more intense in Hungary than in the Faroe Islands, where neither the oak nor the beech grow any longer. No good wine is produced on the western coast of France, north of 47° 20' north latitude; in Champagne, north of 49°, or in the Rheingau, north of 51°. In Norway, the average heat is greater on the coast than in the heart of the country where, however, grain ripens, while it does not on the coast; for the mildness of the winter, no matter how great, can make no compensation for the want of heat. On the other hand, the cattle on the coast can remain much longer out of doors, and the sea seldom freezes in such a way as to interfere with the fisheries.Blom, Norwegen I, 39.Boussingnault(Economie rurale considérée dans ses Rapports avec la Chimie, II) has made some interesting attempts to calculate by a mathematical process the amount of heat necessary to vegetable, during the period of vegetation. Thus, for instance, wheat requires about 12° (Réaumur) of heat during 140 days; that is, nearly 140 x 12° = 1680° Réaumur. In Venezuela, the sugar cane requires a longer time to grow in a higher and therefore cooler position than in a lower and warmer, and the length of time required is in proportion to the height.196.Hence it is that the isothermal lines are not parallel with the equator or with one another. The greater number of these have two northern and two southern summits; the former on the western coasts of Europe and America, and the latter in eastern North America, and in the interior of Asia.197.The quantity of rain which falls every year is, at St. Petersburg and Pesth, from 16 to 17 inches; at Berlin 19, Mannheim 21, Tübingen 26: in the interior of France 16-24; on the French coast 25, on the eastern coast of England 24, on the western coast 35, in Milan 36, Genoa 44, on the coast of most tropical lands 70-120. On the political-economical influences of most climates, seeGobbi, Ueber die Abhängikeit der Populationskräfte von den einfachen Grundfstoffen, 1842.198.The snow limit at Mageröe in Norway is 2,200, in Iceland 2,900, in the northern Ural 4,500, in the Alps 8,200, in the Caucasus 10,400, and Quito 14,850 feet high. Hence it is that mountainous countries which produce nothing in the north, make magnificent vineyards in warmer countries.199.In central Germany, even a second crop can be produced after the corn harvest. In Arabia, the same seed produces three harvests, because the grain which falls at the time of harvesting to the ground, germinates immediately and suffices for new seed. (Niebuhr, Beschreibung, 154.)200.Thus in the northern states of the American union, wheat yields a return of only from four to five times the amount sown; in France, 5-6 times (Lavoisier): in Chili, 12 times; in northern Mexico, 17 times; in Peru, 18 and 20 times; in southern Mexico, 25 and even 35 times; in Germany, maize seed yields at best one hundred fold, while in the torrid zone there is a return of from three hundred to four hundred fold, generally.201.Andalusian corn produces in the mill only one-half as much bran-waste as Baltic wheat produces.Bourgoing, Tableau de l'Espagne, II, 155. Baltic wheat contains 6-7 per cent, of azote, and Algerian, 20-25 Per cent. (Kabsch, Pflanzenleben der Erde, 1865.)202.In Europe the blossoming season is retarded four days for each degree of northern latitude. (Schübler.) As we advance towards the north, the difference becomes less noticeable, but more so as we go towards the south. In mountainous countries a similar difference is observable, produced by a like climatic influence. It is from about 10 to 12 days, for a height of from 500 to 600 feet. (Wolff, Naturgesetzliche Grundlagen des Ackerbaues I, p. 332 ff.) In the cantons, in which the Swiss confederation had its origin, the pasturage of the Alps lasts generally thirteen weeks, but in the higher Alps it lasts only from six to seven weeks. (Businger, C. Unterwalden., p. 52.)203.In central Italy, winter wheat may be sown in October, November or December; summer wheat, in February or March. (Sismondi, Tableau de l'Agriculture Toscane, p. 35.) In Judæa, it was possible to harvest figs ten months in the year. (Joseph, Bell. Jud., Ill, p. 10.) On the other hand, there is Jemtland, where the peasant in many places surrounds the northern portion of his cornfield with fagots, and lights them in August when the north wind blows, to protect his land from the frost; and where the expression“green years”is used to designate those in which the harvest has to be reaped before it is ripe. (Forsell, Statistik von Schweden, 24.) In the valuation made of the lands of the kingdom of Saxony, for assessment purposes, the cost of supporting a yoke of oxen in the lowest country is estimated at only three-fourths of what it is in the highest localities, because in the former, 200 work days can be calculated upon in the year, in the latter only 159. In central Russia, the greater part of the labor of agriculture, sowing and harvesting, has to be finished within the space of four months. In central Germany, they are spread over seven months. Other things being equal, seven horses and ploughmen are needed in Russia where only four are called for in central Germany, (von Haxthausen, Studien I, 174.) On the impediments put in the way of agriculture by the climate of eastern Prussia, seeMeitzen, Boden und landwirthsch. Verhältnisse des preussichen Staats, 1868, I, Abschn., 6.204.“In both hemispheres, the zone in which the temperature decreases most rapidly lies between the 40th and 50th degrees of north latitude. This circumstance must have a happy influence on the culture and industry of the nation inhabiting the neighborhood of that zone. Here is the point where the regions of the vine touch upon those of the olive. Nowhere in the world, do the products of the vegetable kingdom, and the most varied wonders of agriculture, follow with such rapidity on one another. The great variety of products enlivens the commerce and increases the industrial activity of agricultural nations.”(Humboldt.) It is true, however, that tropical countries possess, also, in their mountainous parts, thetierra fria,templadaandcaliente, superimposed the one on the other.205.The aggregate coal supply of Great Britain (1869) was 2,180 millions cwt.; of Belgium (1862), 207 millions; of France (1868) 256 millions; of Prussia (1870), 600 millions, of Austria (1870), including brown lignite coal, 158 millions; of Russia (1868), only a little over 9 millions. The great English coal field, in the counties of Durham and Northumberland, embraces 732 English square miles; that of South Wales, 1,200, with a depth of 95 feet, so that the geographical square mile contains here 679 millions of tons, each of twenty cwt. To obtain the same quantity of combustible material as was furnished to Prussia, in 1865, by its coal, it would be necessary to use up 6,331 square miles of forest, (von Dèchen, inEngel'sZeitschrift, 1867, 258.) The supply of coal is, of course, exhaustible while, for instance, turf-fields replace themselves by slow degrees. CompareGriesbach, über die Bildung des Torfs, in the Göttinger Studien, 1845, vol. I. The importance of the coal-fields of the United States, which are twenty-two times as large as those of Great Britain, in the distant future, cannot be over-estimated.206.I need only call attention to the earth-fire (Erdbrand) for the purpose of forcing the growth of garden plants in the neighborhood of Zwickau, which is said to have existed since 1505.207.Thus, in Watt's steam engines of the larger kind, an hourly consumption of ten pounds of coal is needed to produce a force equivalent to that of one horse, while in the smallest machines of only one horse power, twenty-two pounds are needed. SeePrechtl, Technolo. Encyklopädie, III, 669.208.It is easy to see that it is the most important substances needed in industry which are mentioned in this section. Many political economists have considered the principal difference between agriculture and the industries and economies of towns to lie in the contrast here referred to. Thus,A. Sena, Sulle Cause che possono far abbondare li Regni d'oro e d'argento, dove non sono miniere, 1613, I, 3. See the description of the difference between land and machines inMalthus, Principles, III, 5;Senior, Outlines, 86. But it is nothing more than a difference of gradation. Even in the most active of businesses there is a limit which the accumulation of means of production cannot pass without a relative diminution of the income. This boundary is imposed by the limited nature of those organic beings which must contribute to production either actively or passively. Thus, for instance, a manufacturing establishment or commercial business can be enlarged with advantage only so long as it is still possible for one superintendent to conduct it. And so, when cattle are furnished with very abundant and substantial food, a pound of meat costs the producer a much higher price than when they are more moderately supplied: sometimes in the ratio of 1.95:0.98.Boussingault, Economie rurale, II. Where there is absolute over-feeding, the producer must suffer loss. But, even inorganic nature imposes its own limits here; as, for instance, when ships, machines etc., on account of the insufficient strength of the materials of which they are made, cannot be constructed beyond a certain size. But all these limits are much narrower than those imposed by the quality of immovability.209.Senior, Outlines, 26, 81 ff. SeeStewart, Principles, II, ch. 11;Ortes, E. N., I, 18, II, 18 ff. This most important principle in Political Economy is thus illustrated byJohn Stuart Mill, Principles, book I, ch. 12.“The limitation to production from the properties of the soil is not like the obstacle opposed by a wall, which stands immovable in one particular spot, and offers no hindrance to motion short of stopping it entirely. We may rather compare it to a highly elastic and extendible band, which is hardly ever so violently stretched, that it could not possibly be stretched any more, yet the pressure of which is felt long before the final limit is reached, and felt more severely the nearer that limit is approached.”This is, if possible, more obvious in building than in agriculture, both as to the construction of new stories and the excavation of deeper cellars.210.Ad. Mayer, Das Düngerkapital und der Raubbau (Heidelberg, 1869), sees the only conditions of production which man cannot increase at will exclusively in the sun's rays, the employment of which also depends on the quantity of land. Thus would he explainSenior'slaw.211.See the tables of increase inCotta, Anweisung zum Waldbau, p. 228.Count Buquoy, Theorie der N. Wirthschaft, p. 54, ridicules the absurd procedure of a great many farmers, as if by forcing the ploughshare deeper into the soil, they could compel it to produce a double return, and asks: if one should dig a square foot of land to the center of the earth and manure it, who would take it off his hands? As to the effect of manure,Kuhlmann'sinvestigations have shown that 300 kilogrammes of guano produced in three years an increase perhectarein the yield, of 2,469 kilogrammes of hay; while 600 kilogrammes produced an increase of only 2,870 kilogrammes.Schübler, found that where salt had been used for manuring purposes, 40 kilogrammes produced a maximum of fertility from which point forward every increase in the amount of salt was attended by diminished returns, and finally led to complete barrenness. SeeWolff, Naturgesetzliche Grundlagen, I, 408, 412, 502. Constantly increased irrigation would convert the land into a swamp instead of indefinitely adding to its fertility. Nor can abundant sowing be of any use when it reaches such a point that the plants stand so closely together as to interfere with their proper development.212.These differences correspond with the differences in the kinds of deterioration to which land is liable from rivers, floods, lava, etc., soil-exhaustion, and the growing wild of the land.213.From a technic point of view, it would, perhaps, be practicable, in most instances, to obtain the phosphoric acid immediately from the land and transfer it to other land; but the relation of the cost to the result makes it impossible from an economical point of view.214.It most certainly is always an uncommon advantage that certain kinds of soil, rich in kali and decayed vegetable matter, yield a long series of harvests without the addition of manure, provided, always, that a short interval is allowed to the process of decay to replace the exhausted plant-food. Thus in many volcanic regions. Compare on similar districts in the Deccan:Rilter, Erdkunde, V, 714.215.According toSchübler, the absorption of water by 100 parts of earth is, in the case of quartz-sand, 25 per cent. of its weight; for clay, 70 per cent.; for calcareous earth, 85 per cent.; humus, 190 per cent.; and for 100 parts of their value, respectively, 37.9, 66.2, and 69.2 per cent. The consistency of the four kinds of earth, in a dry state, is in the proportion of 0.100, 5, 8.7; their adhesion in a moist state, to iron agricultural implements, is in that of 0.17, 1.12, 0.65, 0.40. Of 100 parts of water mixed with these kinds of earth, the evaporation in four hours, at a temperature of 18° 75' (centigrade) is 88.4, 31.3, 28 and 20.5 per cent, respectively. The diminution of volume when the moist earth dries, under the same degree of temperature, is, 0, 18.3, 5 and 20. Their relative absorption of atmospheric moisture for 48 hours is as 0, 24, 17.5 and 55; their absorption of oxygen in 30 days is respectively 1.6, 15.3, 10.8 and 2.03 per cent.; and, lastly, their heat-holding power is in the ratio of 95.6, 66.7, 61.8, 49.216.In Austria, below the Enns, only 3.8 per cent. of the soil is barren; in the Tyrol, 29 per cent.; in Dalmatia, 48.1 per cent. (Springer). In the French Pyrenees, 43 per cent. is considered incapable of cultivation; in the Alps, in Landes and Morbihan, 42 per cent.; in the departments of Nord and Somme, 1.3 per cent. (Schnitzler).Fransciniconsiders 36 per cent. of Switzerland unfit for tillage. The idea“barren”is a very vague one, and hence a comparison of different countries on this point should not be made without great caution.217.Wolff, loc. cit., 353 ff. As to the manner in which soil and climate mutually improve or injure one another, seeSchwerz, Prackt. Ackerbau I, 12.218.In this respect, also, the fundamental difference between agriculture and industry is very important, inasmuch as the products of the former, equal in value to those of the latter, require a very large supporting or bearing surface; those of industry, a very small one. IfNobbe's“water-cultivation”should ever come to assume any great practical importance, agriculture would approach to industry in this respect.219.Wolkoffhas called special attention to mereemplacement: Lectures d'Economie polítique rationelle (1861), pp. 90 seq., 157 seq.Bastiat'srather broad and enthusiastic assertion, that no mere product of nature possesses value (in contradistinction to utility), an exaggeration of his very honorable contest with the socialists (1848!), is refuted by daily experience, as when, for instance, discoveries are made accidentally of metallic veins, coal-fields etc., which immediately acquire great exchange value.220.Aristotledistinguishes between ἀπολαυστικὰ and κάρπιμα. (Rhet., I, 5.)221.Humboldt, Essai politique, súr la N. Espagne, IV, 9, in which he estimates the relation of the culture of the banana to that of wheat, in respect of mere quantity, to be as 4,000 to 30,—“probably the best gift of nature to awakening man, and the object of the most ancient cultivation.”222.It was said that in Easter Island, three days' labor sufficed for a man's maintenance through the whole year. A similar gift of nature to tropical lands is the date tree. It is turned to so many different uses that the Arabs of the coast of the Persian Gulf say that it is possible to construct a ship, rig it, supply and freight it, from date trees. Houses are built of palm wood, covered with palm leaves, furnished with palm mats, lighted with palm chips, and heated with palm coals. The whole architecture of these countries is fashioned by the date tree. Date wine is the favorite intoxicating beverage. There is a proverb current there that a good housewife can vary the preparation of the date for her guests every day in the month. Even the pulp is eaten. Each tree yields an average of 50-250 lbs. of dates; and a tree may last over 200 years. An acre may contain more than 200 trees. The labor of cultivation is very slight, although it demands more care than the banana. CompareRitter, Erdkunde, XII, 763. An acre planted with the sago-palm yields as much nourishment as 163 acres of wheat land. (Reise der Frigatte Novara, II, 113.)223.SeeD. Hume, Discourses No. I (On Commerce). While in hot countries“the sun does more work for man, it diminishes human strength itself.”(M. Wirth.) That, however, such people, to their surplus of the natural means of enjoyment and the consequent laziness and absence of care, add the bright side of a joyous disposition, is well shown byGoethe, Werke (16 mo., 1840), XXIII, 246.224.Noticed even byThucyd., I, 2. See alsoEuripides'comparison of Sparta and Messina, inStrabo, VIII, 366.225.We find, in a great many countries, that their northern portions are endowed more sparingly by nature with means of enjoyment (Genussmitteln) than southern portions, but more abundantly with means of acquisition. (Erwerbsmitteln.) Hence, the former are latest to develop; but once developed, they assume a much higher place in civilization than the latter. This is true of Italy, Spain, Portugal, France, the Netherlands, and the United States, and of North America in general, as compared with South America. Something similar may be seen in the contrast between Austria and Prussia. The latter is colder and less fertile, but far superior to the former in extent of coast, in rivers, and fossilized combustible matter.226.The rule is not without its exceptions. Thus, for instance, Borneo and New Guinea are physically very like each other, but zoölogically two different worlds; the former belonging to India and the latter to Australia.227.Even language, which is the most general and most accurate expression of the intellectual genius of a people, presents a strikingly analogous contrast in mountainous and coast countries. Thus, compare the Ionic, Latin, Low German, Danish and Portuguese, with the Doric, Oscan, High German, Swedish and Spanish.228.SeeStrabo, II, 126. seq.229.The most striking instance, illustrative of the manner in which the nature of a country influences the character of a people is afforded by the difference in the development of the Aryans in India and Persia, especially when their sojourn in the territory of the Indus before that near the Ganges is looked upon as an intermediate stage.230.French writers, especially, have exaggerated the influence of nature over man. Thus,Bodin. de Repub. (1584), V, I;Montesquieu, Esprit des Lois, XVII, 6. XVIII, 1, 18.Cabanis, Rapport du Physique et du Moral de l'Homme (1805), IX, Mémoire, Influence des Climats.Comte, also, Traité de Législation (1827), is of opinion that“the degree of civilization which a people may attain does not depend on the degree of development of which they are capable by nature, but on that which their geographical situation permits them to attain.”See, also,Herodot., III, 106;Hippocr., De Ære etc., 71;Euripid., Medea, 820 ff.;Plutarch, De Exilio, 13. The proper mean has been found byE.M. Arndt, in his Anleitung zu historischen Characterschilderungen (1810), and byRitter, and his school. See, also,K.S. Zachariæ, Idee einer volkswirthschaftlichen Geographic als Grundlage der praktischen N. Œkonomie fur jedes einzelne Volk: Vierzig Bücher v. Staate, II, 79. See, also,Turgot, Géographie politique, 1750, Œuvres (ed. Daire, II, 611 ff.);Lueder, Nationalindustrie und Staatswirthschaft, III, 1800 ff.231.Malte Brun, Précis. de la Geographie universelle, VI. pr.232.Strabo, IV, 178. On the climate of ancient Germany, seeTacit, Germ, 2.233.Fraser, Travels in Koordistan and Mesopotamia, II, 5. See, also, the description of ancient Susiana inStraboXV, 731, with that of the new one byM'Kinneir, Geogr. Memoir of Persia, 92.234.Thus,Galenus, De Usu Partium Corporis humani, L. I. The animal nearest to man mentally, the elephant, is also possessed of a member more like the human hand than any other animal. Its trunk was calledmanusby the Romans. Hence the Indians call the elephant, the animal gifted with a hand.Buffon'sview is exaggerated by Helvetius in the interests of materialism.Aristotle, (De partt. anim. IV, 10), opposes the saying of Anaxagoras: διὰ τὸ χεῖρας ἔχειν φρονιμώτατον εἶναι τῶν ζώων ἄνθρωπον. CompareBell, On the human Hand, 1836.235.As to the imperfection of the ordinary division into agricultural, industrial and commercial labor, seeJohn Stuart Mill, I, ch. 2, 9. The division of all labor into mental and physical, is not more satisfactory; for even the basest labor is not wholly physical. SeeBuckle, History of Civilization, vol. II.236.DioscoridesandGalenwere acquainted with, at most, 600 plants;Linnæus, with 8,000. About 1812, about 30,000 had been described; in 1837, about 60,000; in 1849, about 100,000.Buckle, History of Civilization etc., II, p. 359.237.Industrie extractives, according toDunoyer. When nature's spontaneous gifts are exhausted, thisoccupationreadily becomesproduction.238.Industrie voituriére, according toDunoyer;industria traslocatricein opposition totrasformatrice, according toScialoja.Ortesdistinguishes only four classes:agricoltori,artefici,dispensatoriandadministratori, orraccoglitori,manifattori, anddifensori di bene(E. N. I, 2; III, 14).A. Walker, Science of Wealth (1867), p. 34, knows only three classes: transmutation, transformation, transportation.239.This is not to be understood in the sense, that there ever was a period in which these sciences were unknown. We need only mention the position occupied by the priest and knight in the middle ages. But, looked upon as economic labor, intended only for purposes of free commerce, they have become very important only within a relatively recent period of time. Thus, for instance, there was in Lower Austria, in 1866, one lawyer or notary to every 6,569 inhabitants; in Bohemia, to every 14,860; in Galicia, to every 22,361; in the whole of Cis-Leithanian Austria, 12,259. In 1865, there was in Prussia, one to every 11,149; in Bavaria, to every 7,350; in Hanover, to every 4,946; in 1862, in Baden, one to every 4,992; in 1867, in Saxony, one to every 3,048.Hildebrand'sTagebuch, 1868, I, 234. There was in Prussia, in 1871, one doctor to every 3,230 inhabitants; in Berlin, to every 1,100; in Heldesheim, to 1,803; in Cologne, to 2,120, in Marienwerder, to 7,240; in Gumbinnen, to 10,047.Engel, Preuss. Statis. Zeitschrift, 1872, 376. The verb“to plow”is, according to comparative philologists, of more recent origin than“to weave.”(Lassen, Indische Alterth. I, 814 ff.) And yet agriculture, in the sense above indicated, undoubtedly precedes industry.240.Observed byGeiler v. Kaisersberg. CompareSchmollerin the Tübinger Zeitschr., 1860, 483. Hour wages occupy a middle place between day wages and piece wages.241.Thus the introduction of piece wages into lower Silesia has increased the daily earnings of workmen by one-third, one-half, and even more.Engel'sStastist. Zeitschr. (1868), p. 327. The investigations of the German agricultural congress on the condition of agricultural laborers in the German empire (report ofv. d. Goltz, 1875) show that in all Germany on an average, the daily earnings of a contract workman (Accordlöhner) is to the daily summer wages of a day laborer as 15:10 (1420). On the other hand,Brassey, in the construction of a railway, found that the same workmen engaged in grading, digging, etc., cost 18 pence per yard when paid by the day, and 7 pence when paid by the piece. (Work and Wages, 266.) Swiss experience is, that production became 20 per cent. cheaper under the piece wages system. (Böhmert, Beitr., 109.)242.According tov. d. Goltz'sEnquête, the earnings of workmen by the piece, compared with the wages paid workmen by the day in summer, is especially high in middle Franconia (16.5:10); in the Leipzig circle of the German empire (16.6), in the Braunschweig plain (16.8), within the jurisdiction of Hildesheim (18.1), of the Bavarian Palatinate (18.6), in Rhenish Hesse (23.2), especially low in Stettin (13.2:10), in Stralsund (12.4), in Schleswig Holstein (12), in Osnabrück, (11.7.)243.According tov. Flotow, Anleitung zur Fertigung der Ertragsanschlage, I, 80, four days of serf labor are equivalent to only three of a free day laborer. According tov. Jacob, Ueber die Arbeit Leibeigener und freier Bauern (1815), 21, two day laborers are equal to three serfs, and one farm horse is equal to two employed by serfs. It is as impossible to obtain accurate general estimates here, as in the case of slave labor. As a rule, hope is not only a more humane but a sharper spur to action. But if force is employed at all, there is no doubt that the greater it is, the more effectual it is. Wherever the right of corporal punishment has been taken from the masters, the technic value of serfdom has uniformly decreased. In the English West Indies, formerly, philanthropic masters who treated their negroes with unwonted gentleness, obtained from them, as a rule, very poor economic results. While each of the slaves expressed the greatest indignation at the idleness of the others when they had“so good a master,”they were all equally and excessively lazy. The weekly production of a plantation sank rapidly under this system from thirty-three hogsheads to twenty-three, and finally to thirteen.Math. Levis, Journal of a West India Proprietor, 1834; Edinburg Review, XLV, 410. For the same reason, the negroes in the Spanish colonies, who were treated much more gently than those owned by other European nationalities produced much worse work. See, however,Columella, De Re rust., I, 8.244.According toHowlett, The Insufficiency of the Causes to which the Increase of our Poor Rate have been ascribed (1788), piece wages had become usual“a few years ago.”Very recently the trades unions have again restricted the system of piece wages (§ 176).245.This system is inapplicable in the case of domestic servants (Gesinde) who are a part of the household, and who afford to their masters, besides their services, the advantage of having a person at their disposal always about them, and whose wages are therefore in great part their board and lodging. Still less can it apply to the case of the family physician, whose services consist not simply in writing prescriptions, but who is also the professional family friend. The same may be said of the state official, clergyman etc., from whom it is demanded that he should sacrifice his entire life to the service of the public. Against adopting piece wages in the case of state officials, it may be further urged that no case at law, no act of public life is precisely similar to any other. It cannot be applied to that of soldiers, because they are called upon for action only after a long term of peace, during all of which they must keep themselves in readiness for war. (Schäffle, N. Œk., II, 388.) It has also been the practice of courts, until recently, on account of their dignity, to pay their mechanics not by the piece, wherever that was practicable, but by a fixed salary. An able professor in a university is of use to it not only by his lectures, but by his reputation and example etc.; hence, here, a combination of piece wages and of a regular salary is preferred. As to services, the permanency of which constitutes their essential character, remuneration is also wont to be permanent or hereditary, as in the case of very many public officers, while civilization is as yet unadvanced. Later, in proportion as the progress of civilization makes itself felt, this hereditariness is wont to be confined to the sovereign. For an opposite view, seeBoxhorn, Institutt. politt. (1663), 41.246.Thus, the Chinese, who, by a ridiculous exaggeration bordering on caricature of many of our recent tendencies, may afford us a warning reflection of ourselves in our present state of civilization, rarely labor efficiently when not watched. Only by means of piece wages or the share-system can they be induced to do good work.R. M. Micking; Recollections of Manilla and the Phillippine Islands, 1851.247.Day laborers, for instance, must be watched over during the harvest, to prevent their idling away their time, and piece-workers to prevent their continuing to work in spite of wet weather, binding sheaves, for instance, which causes the sheaves to rot. In England, it is considered almost an impossibility to induce laborers to cut wheat close enough to the soil. (Sinclair, Code of Agriculture, 102.) The haste of piece-workers, in the harvest of the rape, occasions great loss, by the fall of the seed. In Russia the removing of the hide from animals is paid for by the piece, and the laborers injure a very large number of skins in their haste.Steinhaus, Russlands industrielle und commercielle Verhältnisse, 425. Piece-wages are to be entirely discountenanced in the reeling of silk. SeeBernouilli, Technologie, II, 215. A yearly salary is to be recommended in the tending of cattle, because here a certain connection (Anschluss) with individuals is desirable. In building trades, contractors in England prefer a regular salary; but they employ model workmen, the so-called“bell horses,”to whom they pay a large salary, and who keep the others on the strain by their example, and who on that account are very much hated by their colleagues.248.Adam Smith, W. of Nations, I, ch. 8.Howlett, also, l. c., thinks that piece-wages increase the earnings of workmen, but at the expense of their capacity for constant labor.Count Görtz, in his Reise, 328, relates with what fatal effect piece-work in Demarara tells on white laborers and their horses. After the February Revolution, Parisian workmen demanded the abolition of piece-wages, and obtained it in several manufactories. Revue des deux Mondes, March 15, 1848.249.In several Swiss factories, understrappers receive a salary, whilemonteurswork by groupe-contract. (Böhmert, Arbeiterverältnisse und Fabrikeinrichtungen der Schw., II, 70.) Sub-contracting, where the contract is generally made with only one person, for the most part of more than average capacity, and this latter contracts with other workmen on his own account entirely, is considered by philanthropic employers of labor as one of the worst kinds of remuneration. The more democratic system of gang-contract is much better, although even here, it is very easy for the weaker members of a good gang to overwork themselves. (Edinburg Review, October, 1873, 365.)250.Especially important in chemical factories. The expense of greasing on the Rhenish railways fell, through premiums offered as rewards for saving, from 27,000 thalers to 5,000, in spite of an increase in the amount of traffic. (v. Mangoldt, Volkswirthschaftslehre, 349.) This was, besides, the most effectual way of controlling the theft of material.251.In the cachelot fishery, the captain receives one-sixteenth, the master, one twenty-fifth, the second master, one thirty-fifth, the boatswain, one-sixtieth, each sailor, one eighty-fifth of the profit. (Humboldt, N. Espagne, IV, 10.) This system is very common in North America. SeeCareyinJ. S. Mill'sPrinciples, V, ch. 9, 7. In heathen Iceland, mariners were always paid a certain quota of the profits.Leo, inRaumer'shistorischem Taschenbuch, 1835, 524. The same was often the case in China.McCulloch, Comm. Diction. v. Canton. In England, its employment was rendered very difficult by the laws of partnership, which made each individual, except in great chartered societies, responsible for all kinds of debts contracted by the rest of the firm.J. S. Mill, B. IV, ch. 7, 5.252.The house painter Leclaire, in Paris, obtained very high results in this respect.Leclaire, Répartition des Bénéfices du Travail, 1842. He retained for his own services as contractor the sum of 6,000 francs, and paid each workman the salary he had hitherto received. What remained was, at the end of the year, equally divided among all.Leclaireassures us that he was always satisfied with the system. The paying of a proportion of the general profits to laborers is advisable only in case their ability of surveying the whole is not much inferior to that of their employers. Where a special proportion is paid, in special branches of business, it is sufficient if their supervision extends over that particular branch. But a sharing in the profits of business always supposes a corresponding supervision of the business itself, and also the keeping of accounts.253.A very good remedy against indigence among the lower classes. (Umpfenbach, National Œkonomie, 1867, 214.) But whether it will ever be possible to make the remuneration of the navvy or that of a type-setter depend on the final success of his work,qnœre.254.Tournefort, speaking of the fatalism of the Turks, says that they always and everywhere leave the world as they found it. According to their own proverb, no grass grows again where the Osman has set foot.255.The experiments made with the dynamometer in 1800 ff. show that the averageforce manuelleof an inhabitant of Van Dieman's Land is to that of an inhabitant of New Holland, of Timor, of a French marine, and of an English colonist in Australia, in the ratio of 50, 51, 58, 69, 71 kilogrammes.Péron, Voyage de Découverte aux Terres australes, 2d ed., II, 417. It was found more recently in the American army, that the average lifting-power of white soldiers was 314 to 343 -lbs.; of white marines, 307; students, 308; negroes, 323; mulattos, 348; and Indians, 419.Gould, Investigations in the Military and Anthropolog. Statistics of American Soldiers, 1869, 458, seq. According to English manufacturers, an English laborer accomplishes almost as much again as a French one(?), and the latter in turn more than an Irishman. An English contractor, who had worked in French manufactories, expressed his opinion concerning the French to this effect:“It cannot be called work they do; it is only looking at it and wishing it done.”Senior, Outlines, 149. Thus, for instance, a good English spinner with a machine of 800 spindles could produce 66 lbs. of yarn, No. 40, while a Frenchman could produce only 48 lbs. (M. Mohl, Reise durch Frankreich, 535; compareDingler, Polyt. Journal, I, 63 seq.) That the Americans also are inferior to the English in strength and dexterity is attested by the AmericanHewitt. SeeBrentano, Arbeitergilden, II, 231. A Berlin wood-sawyer accomplished as much in ten days as a West Prussian from Labiau in twenty-seven days.J. G. Hoffmann.English farmers on the Hellespont prefer to pay Greek laborers £10 per year“besides their keep,”rather than £3 to Turkish laborers. (Lord Carlisle, Diary in Turkish and Greek Waters, 1854, p. 77 seq.) In Paulo-pinang, the Malayan agricultural laborer receives $2-½ per month, the Malabar, $4, the Chinese, $6; for which compensation they work respectively 26, 28 and 30 days.Ritter, Erdkunde, v, 54.256.Little light can be thrown on this subject by a comparison of different countries. Thus, in France, there are 614 persons in every 1,000 examined fit for military service; in Bavaria, 705; in Denmark, 523; in Austria, 498; in Prussia, 284; in Saxony, 259; in England, where the conscription is from among the lowest classes, 665; and in Württemberg, 490. (Wappäus, Allg. Bevölkerungsstatistik, II, 71, 140.)Massy, Remarks on the Examination of Recruits, 1854. (Memminger, Würt. Jahrb., 1843, 103.) The comparison of different parts of the same state is much more instructive. Thus, in Saxony, cities afford only 197, and the flat country only 265 per 1,000 (Sächs. statist. Ztschr., 1856, No. 4 ff.); and in France there are among those of illegitimate birth a very large number unfit for military service. (Journ. des Econ., 1850, XXV, 69.) According to the Austrian Annual of military statistics, there were in 1870, on an average, throughout the entire monarchy, 211 per 1,000 of those liable to enter the ranks of the military, fit for service; in the Innsbruck command, 325; in Lemberg, 179.257.M. Chevalier, Cours, I, 115.Adam Smith, B. I, ch. 8, noticed the great industry of well paid workmen. Among the uneducated, labor must almost necessarily be repulsive in proportion as it is illy remunerated.258.ThusA. Youngremarked that wages in Ireland are wretchedly low, while labor is far from being cheap. In his“Evidence in Respect to the Occupation of Land in Ireland,”II, 135, he says that a Scotch day laborer at 1s. per day is cheaper than an Irish day laborer at ½s. According toMcCulloch,“Statis. Account of the British Empire,”I, 666, industrial labor in Germany and France is dearer than in England, because in the former countries there are,ceteris paribus, twice as many laborers employed in most manufactures. SeeSenior, Lectures on Wages, 1830, 11, and the reports of the committees of parliament,passimon French manufactures (1825). The same has been experienced in the agricultural history of Schleswig-Holstein. SeeHanssen, Archiv. der Politisch. Œk. IV, 421.La main d'œuvre est chère en Russie dès qu'il s'agit d'une certaine capacité et d'un certain degré d'instruction professionelle, tandis que celle de l'ouvrier ordinaire n'est nulle part aussi bas.(Tégoborsky.)259.Thus evenColumella, R. R. I, 9.J. S. Mill, Principles, I, ch. 7, 5.260.Thus, for instance, the Lex Visigoth., VIII, 4, 16, graduates the fine to be paid by the murderer according to the age of his victim. It increases up to the 20th year in the case of males, and diminishes after the 50th. In the case of females, the maximum is attained between the ages of 15 and 40. Similarly evenMoses, Book III, 27.261.As to what concerns the two sexes, theforce rénaleof adult males is twice that of females in the human species. The difference between them in youth is not so great. The forcemanuelleof the two sexes at the age of 30 is as 9:5. (Quételet, Sur l'Homme II, p. 73 ff.) The numerical ratio of one sex to the other varies but little among those nations which have attained a certain degree of civilization. Seeinfra, § 245.262.It is of great importance to calculate here the number of days in the year in which the laborer is compelled to be idle on account of sickness.Fenger, (Quid faciant ætas annique tempus ad frequentiam et diuturnitatem morborum, Hafniæ 1840), finds the following result:Between 15 and 19 years, 7.2 days. Between 35 and 39 years, 7.8 days.Between 20 and 24 years, 10.3 days. Between 40 and 44 years, 8.3 days.Between 25 and 29 years, 9.5 days. Between 45 and 49 years, 11.6 days.Between 30 and 34 years, 7.6 days. Between 50 and 59 years, 14.1 days.According toVillermé, in the Annales d'Hygiène, II,At 60 years, 16 days. At 67 years, 42 days.At 65 years, 31 days. At 70 years, 75 days.The latter table is the result of a comparison made of the tables of seventy Scotch mutual aid societies. CompareDigler, Polyt. Journal, XXIV, 168.263.Tacit., Germ., 14.Leo, inRaumer'sTaschenbuch, 1835, 418.Maxime sua esse credebant, quæ: ex hostibus cepissent.(GajusIV, 16.) Roman auctionsub hasta! Similar views obtained among the Thracians. SeeHerodot., V, 6. In Sparta, even in the time of Agesilaus, economic labor was considered unworthy of a free man, (Plutarch, Ages, 26); while the Athenians, from the time of Solon, punished idleness, and from that of Pericles“knew no other festival but attending to their business.”Thucyd., I. 70. For some happy observations on this subject, seeRiehl, Die deutsche Arbeit, 1861.264.CompareErasmusColloq. (ed.Stallb.), 21 ff., 213 ff., 392 ff.265.Templelearned from the Dutch of his own age that the time of industrious men is the greatest home commodity of a country. (Works I, 129.)“A trader's time is his bread.”(Sir M. Decker, Essay on the Decline etc., 1744, 24.)Walpole, in his Testament politique II, 385, speaks of the inferiority of the Roman Church in this respect. I would allude to the medieaval prohibition“to sell time”as one of the chief grounds of the prohibition of usury. (SeeRoscher, Gesch. der N. Œk. in Deutschland, 7.)Economia di tempo equivale a prolungamento di esistenza.(Soialeja.)266.Douville, Voyage au Congo I, 239. Seev. Haxthausen, Studien, II, 439;W. Jacob, Production and Consumption of the precious Metals, II, 209. The division of the day into hours dates from the time of the sun dials of Alexandria. It was not known in Rome until after the year of the city 491. (Mommsen, Römische Geschichte, I. 301.)267.Pinckard, Notes on the West Indies, 1806, II, 107. In Spain it looks as if no one in the streets was in a hurry. What a contrast between thesans soucigait of persons at bathing places and the resorts of pilgrims and the precipitate haste in commercial centres!268.Meyendorff, Voyage à Boukhara, 246.269.The history of this idea affords a remarkable example of the confusion produced by the employment of scientific terminology in daily life. Until within a short time every possible meaning of the wordcapitalwas to be found in the dictionary of the French Academy, its scientific politico-economical meaning alone excepted. During the middle ages, the Latincapitalewas used to signify both loaned money and cattle. (Ducange, s.v.) When culture was at its highest in Greece,Demosthenesentertained very good ideas of the nature of capital which he sometimes calls ἀφορμὴ, sometimes ἔρανος, the meaning of which he extends also to the incorporeal capital of a good reputation. (Adv. Mid., 574; pro Phorm, 947.) The same may be said of the Roman in conception ofpeculium. SeeHildebrand'sJahrbb., 1866, I. 338. On the beginnings of the present idea of capital among the later schoolmen, seeFunck, Tübinger Ztschr., 1869, 149. The diary ofLucas Rems, 1491-1541 (ed.Greiff, 1861), calls commercial capital, in most instances, the chief good (Hauptgut) p. 37; alsoCavedal. The words money and capital, interest and the price of money are now confounded in daily life, as they were formerly by most writers. In the 17th century,ChildandLockemay be mentioned as instances.Hobbeshad some faint notion of the productive power of capital. SeeRoscher, Zur Geschichte der englischen Volkswirthschaftslehre, 49, 60, 102. Thus, also, in the 18th century,Law, Sur l'Usage des Monnaies, 697; Trade and money (1705) 117;Mélon, Essai politique sur le Commerce, 1734, ch. 22;Galiani, Della Moneta, IV, 1, 3;Blackstone, Commentaries, 1764, II, 456;Genovesi, Economia civile, II, 2, 18, 13;Stewart, Principles, IV, 1, ch. IV;Verri, Meditazioni, XIV;Büsch, Geldumlauf, V. 14;A. Young, Political Arithmetics (1774), 1, ch. 7.Hume, on the other hand, Discourses (1752), No. 4 (on interest), shows, that the rate of interest is dependent, not asLockesupposed, on the abundance or scarcity of money, but on the state of profit and on the relation between the demand and supply of capital. Similarly,J. Massie, An Essay on the governing Causes of the Rate of Interest (1750).Quesnay, Dialogue sur le Commerce, 173 (ed. Daire), shows that he had a very clear conception of the operation, and of the principal component parts of capital.Turgot, Sur la Formation et la Distribution des Richesses, § 14, 54-79, came very near the truth, and yet missed it. He recognized the necessity of advances which, as a rule, are the result of saving, in every case of production. He also distinguishes in the product of the soil, besides theproduit netand thesubsistance du laboureur, theprofitof the latter. He likewise points out a great number of differences between the“price of money”considered in its relation to trade, and in its relation to loans. He explains the interest on capital, asSchröder, in his Schatz-und Rentkammer, 231, andBenjamin Franklin, in his Inquiry into the Nature of a Paper Currency (1729) had done before, by the fact that the owner of capital can purchase a piece of land with his capital, and thus draw an income without working. Money, he said, was indeed not productive, but neither was any other thing that could be loaned or leased, with the exception of land and cattle.Adam Smithdeserves the greatest credit for his analysis of the idea of capital, although he opposes“capital”to what the Germans call capital-in-use, the“stock for immediate consumption.”WhenCanard, Principes d'Economie politique (1801) andJ. B. Say, Cours pratique, 1828, I, 285, included man's power of labor in capital, they took a retrograde step.“Labour is Capital, primary and fundamental.”Colton, 275. Every grown-up individual, saysMcCulloch, Principles, 1825, II, ch. 2, may be looked upon as a machine which has cost several years of continued care and a considerable sum for its construction. It is only another side of this same perversity, whenMcCullochseeks to force the results produced by animals and machines into the definition of labor.Schlozer, Anfangsgründe (1805), I, 21, goes so far as to call the soul, raw material, which receives productive power from the labor of the teacher! For a calculation of the money value of man in the different ages of life, see Statis. Journ. XVI, 43 ff. See, on the other hand,Malthus, Definitions, ch. 7; andRossi, in the Journal des Economistes, VI, 113. Nor does the view ofGanilh, Systèmes d'Economie politique (1809), I, 243; ofAd. Müller, Concordia, 93 ff., 211; ofHermann,“Staatswirth”Untersuchungen, No. 3; ofDunoyer, Liberté du Travail, L. VI; ofBastiat,Careyand others, who include pieces of land in themselves under the head of capital, seem to be better founded.Hermanndefines capital the durable basis of every utility possessed of value in exchange.Schäfflereckons land as nature offers it to us, amongfreegoods. From the moment that labor and capital are spent upon it, it becomes immovable capital, but he concedes that it still preserves many essential points which distinguish it from other capital. (N. Œk. Theorie der ausschliessenden Absatzverhältnisse, 1867, 65 ff., 89 ff.) These differences appear to me to be still more important than that which land and capital have in common; especially as the historic development of their relations proceeds for the most part in opposite directions. Thus, for instance, as civilization advances, land is wont to become dearer and capital cheaper. How difficult would it be to introduce clearness into the ideas ofintensiveandextensiveagriculture, if land were accounted capital! And it is not only always theoretically, but also very often, in practice, possible to separate the value of a given piece of land from the most durable capital-improvements (Kapitalmeliorationen) made on it. It is only necessary to call to mind the area of buildings.270.Marxmakes a very arbitrary assertion when he says that only the capital operating in trade, and even only that operating in trade where money is used as the instrument of exchange, can properly be called capital; and that, therefore, the modern biography of capital dates only from the 16th century, (Das Kapital I, 106 ff.)271.See, on the other hand,Wolkoff, Lectures d'Economie politique rationelle, 167.272.Hermann(II ed., 238 ff.) distinguishes especiallypreparatory contrivancesauxiliary to labor, such as stationary structures etc., vessels, tools, machines and instruments for measuring etc.273.Thus, for instance, the plow and the gun are machines, the spade and the blow-pipe are tools. A hammer may be considered as a hard, insensible fist; the bellows as a pair of very strong and durable lungs. Tongs take the place of fingers, just as a spoon does of the empty hand, and the knife the place of the teeth. A great number of machines, on the other hand, may be compared to a complete workman. Thus, the action of the mill which grinds grain has very little resemblance to the blowing of the wind or the running of the water, whereas the rising and falling of the pestle in the small mortar for throwing grenades corresponds to the motion of the arm. (Rau, Lehrbuch I, § 125.) The infinite number of functions of which our members are capable is related to their inability to attain alone the greater number of their ends. Hence animals which require no tools can undertake to achieve very few things.“Man is a tool-making animal.”(B. Franklin.)274.This is seen most clearly in the history of the grinding of corn. In the time of Moses, and even of Homer, there were only hand-mills, and originally only mortars. Later, mills set in motion by horse-power were employed. Shortly after Cicero's time, mills driven by water-power came into use.Brunck, Analecta, II, 119, Ep. 39. Mills built on pontoons do not date farther back than the time of Belisarius. Wind-mills have been known since the ninth century; Dutch wind-mills, only since the middle of the 16th century. SeeBeckman, Beiträge zur Geschichte der Erfindungen II, I ff.275.ComparePlato, Polit., 280.276.Thus,Ganilh, Théorie de l'Economie politique I, 133, calls the knowledge, talents and probity of merchants, as well as their reputation, valuable parts of their capital in trade. See, also,Möser, Patriot. Ph. II, 26. See some happy observations on the intellectual capital of nations, as consisting of“known and unknown preparatory labor through their history,”inLotze, Mikrokosomos II, 353 seq.277.CompareDietzel, System der Staatsanleihen (1856), 71 ff. And, earlier yet,Ad. Müllerhad looked upon taxes not in the light of an insurance premium, but as“the interest of the invisible and yet absolutely necessary intellectual capital of the nation.”(Elemente, III, 75.) Of course, the State is much more than a species of capital; just as a Gothic cathedral is something more than a piece of masonry, but does not on that account cease to be a piece of masonry.278.J. B. Say, Traité d'Economie Politique I, ch. 10. Only think of what is known in physiology as the change or transformation of matter (Stoffwechsel!).279.Productive capital has been rendered into German by the wordErwerbstamm, by the author of“Staatswirthschaft nach Naturgesetzen,”1819.Malthus, Definitions, ch. 10, andRau, Lehrbuch, I, § 51, call productive capital alone, capital. According toM. Chevalier, goods lose their quality of capital as soon as they come into the hands of a consumer.Schäffle, N. Œk., II, aufl., 59, calls capital in useGenussvermögen(resources intended for enjoyment) and productive capital,Kapitalvermögen(capital-resources). On the other hand,J. B. Say, Traité, I, 13;McCulloch, Principles, II, 2, 3,Hermann, Staatswirthschaft. Untersuchungen, p. 60 ff., andv. Mangoldt, Volkswirthschaftslehre, 122, divide capital into capital in use and productive capital, according as it provides the possessor with that which he may turn to account directly or indirectly by becoming the owner of goods through its means.Aristotledistinguishes between ὄργανα and κτήματα, the former relating to ποίησις; for instance, a shuttle; the latter to πράξις, as, for instance, bedding and articles of dress. (Polit., I, 2, 5.)280.Thus, for instance, class A embraces parks and forests; B, theaters, churches, manufactories, arsenals, granaries, public walks and roads. Walks can, besides, be used for the cultivation of fruit, and roads for pleasure trips.281.Translated“capital de consommation”by Wolowski, p. 96 of his Roscher's Principles.—Translator's note.282.Dead, or better, dormant capital is such productive capital as, for the time being, remains unused, and which, therefore, does not yield even personal enjoyment. The sum total of this kind of capital is very much diminished by the agency of savings banks. Loaned capital which has been employed unproductively evidently constitutes no longer a part of the wealth of a people. Seeinfra, § 189.283.Wolkoffis so far right, when in his Lectures, p. 142, he calls the return of capital in use notrevenu, butdéstruction graduelle.Schäffleis right, too, and entirely so, when he says that only such an increase of the property, intended for enjoyment simply, is anti-economic, as does not make the personal capacities of labor (Arbeitsvermögen) as much more productive than they would otherwise be. N. Œk., II, aufl., 224.284.Humboldt, N. Espange, II, ch. 17;v. Schlözer, Anfangsgründe, II, 109. Ausland, 140, No. 313. On the extraordinary wealth of even Russian peasant women in pearls, seev. Haxthausen, Studien, 87, 309.285.Townsend, Journey in Spain, I, 115, 310. In the patriarchal age of the Jews, there was a relatively very large quantity of ornamental objects in gold and silver:Michælis, De Pretiis Rerum apud Hebræos, in the Comm. Soc. Götting., III, 151 ff., 160. Conservative Sparta, in the middle age of its history, was certainly not rich, and yet it had more gold and silver than any other Grecian state:Plato, Alcib., I, 123. According toSt. John, The Hellenes, III, 142, the ancients had relatively much more of the precious metals in the form of objects for ornament than the moderns. The Romans, with their usual good sense, did not make use of silver as an article of luxury until they had attained great wealth. SeeCato, R. R., ch. 23, andSeneca, De Vita beata, ch. 21. Then the Carthaginian ambassadors railed at their hosts because they found the same pieces of table silver in all the houses to which they were invited. The younger Scipio, even, did not possess more relatively than 32 pounds of silver ware.Mommsen, Römische Geschichte, II, 383. The relatively great importance of the stores for domestic use, nevertheless, runs through the whole of Roman history. The titlede penu legato, in the Pandects (Digest, XXIII, 9), points to this, during the reign of the emperors, and in earlier times, the derivation ofpenatesfrompenu. SeeRodbertus, inHildebrand'sJahrbuch, 1870, I, 365. Immense importance of the ring in the old north countries:Weinhold, Altnord. Leben, 184 ff. The age of chivalry was very rich in silver plate, cups, basins, etc.Büsching, Ritterzeit und Ritterwesen, II, 137.Anderson, Origin of Commerce, a. 1386.Lord Burleigh, in the age of queen Elizabeth, left after him between fourteen and fifteen thousand pounds sterling in silver ware; that is almost as much as the rest of his whole estate; and, it would seem, that for a man of his rank, even this was not considered a great deal.Collins'Life of B., 44. According toGiustiniani, cardinal Wolsey owned articles of silver to the value of 1,500,000 ducats, and the greater number of the lords of the time were equally well provided with them.286.The Bedouins are fond of decorating their wives and children with all the jewels that they possess, both on holidays and other days, so that they sometimes have four or six bracelets on each arm and fifteen ear-rings in each ear.Burckhardt, Bemerkungen, 188.Wellsted(Roederer's translation), I, 224. In Asia Minor, girls wear their whole dowry in the shape of personal ornaments.Belgiojoso, Revue des deux Mondes, Feb. 1, 1855. In East India even the most wretched towns have their silver workers. The emirs of Scinde, with an annual income of £300,000, had a treasure worth £20,000,000, nearly £7,000,000 of which were in jewels.Ritter, Erdkunde VII, p. 185. On the upper Ganges more jewels and other ornaments are worn than on the lower, where the wealthy prefer to spend their capital on landed estates.Ritter, VI, 1143.287.The first beginnings of this division are to be found inQuesnay(Analyse du Tableau économique, 1758), in which he develops the difference betweenavances primitivesandavances annuelles. See alsoAdam Smith, W. of N., II, ch. 1, who, however, reduces the difference between them mainly to the relations of possession, and hence includes grain and seed in fixed capital.Hermann, Staatsw. Untersuch., 269 ff.;Ricardo, Principles, ch. 1, sec. 2;Schmitt-henner, Staatswissenschaften, I, 387, divides capital into I,infungible, that is, 1, fixed in the strict sense of the word; 2, transportation-capital; II,fungible, 1, transformable capital; a, material (raw material, auxiliary material etc.), b, formed products; 2, circulating capital; a, wares; b, money.A. Walker, S. of W., 57, calls circulating capital that which may be easily transferred from one branch of production to another; fixed, that which can be used with advantage only for the purpose for which it was originally intended.288.Old wood-work is burned; old iron utensils sold; also houses when pulled down.Emminghaus, Allg. Gewerbelehre, 1868, 175.289.If the Mongols, for instance, should despoil China of all its moveable property with the exception of its buried money, its immovable property would become productive only from the time that that money would be used to secure other moveable articles. In any case, the production would be proportioned only to the borrowed seed, cattle, etc. (Sismondi, Richesses commerciale, 1803, I, p. 61.)290.That the Athenians left everything in the lurch to oppose Xerxes, much more readily than under Pericles, even, the flat country of Attica.Büchsenschütz(Besitz und Erwerb im griech. Alterthum, 589) explains by the fact that in the interval between the two periods, fixed capital increased largely. In rude ages under the appellation of a community or nation was understood a number of men; and the state, while its members remained, was accounted entire. With polished and mercantile states, the case is sometimes reverted. The nation is a territory cultivated and improved by its owners; destroy the possession even while the master remains, the state is undone.Ferguson, Hist. of civil Society, V, 4;v. Mangoldt, Volkswirthschaftslehre, 159. Fixed capital is not so sure of being completely used up as circulating. On this point seeSchäffle, N. Œk., 53.291.If the aggregate productive activity of man be designated by the word labor (just as everything produced on a piece of land is inaccurately called its product), then all capital may be considered as the unconsumed result of labor. The recent socialistic theory that considers capital as the wages which have been earned but not paid, is a gross misconception of this truth. This is the origin only of the capital of oppressors and deceivers, and of theirs only in part. Seeinfra, § 189.292.“While we are clothed in our winter garments, the spring stuffs are already in the shops of retail dealers; the light material of next summer's wear is already manufacturing, and the wool for our next winter's clothing spun.”Think of the study in advance which the physician must have gone through, whom we summon to us at a moment's notice!Menger, Grundsätze, I, § 33. seq.293.Thus in dangerous callings, as for instance, among soldiers and sailors, there is very little saving. The same may be said of times of plague. SeeJ. Rae, New Principles on the Subject of Political Economy, 1834.294.That we keep our property under lock and key, while it was customary in Plato's time to seal it up, is in itself a great advance. SeeBecker, Charicles, I, 202 seq. Earlier yet, artificial knots were used.Homer, Odyss. VII, 443.295.CompareHearne, Reise, nach Prinzwalesfort, 43, 58, 119.Barrow von Sprengel, 282.Humboldt, Relation historique, II, 245. Ausland, 1844, No. 359; 1845, No. 84.Stein-Wappüus, Handbuch der Geographie, I, 310. For proof that the clergy by preaching self denial contributed largely to the creation of capital in the earlier part of medieval history, seeGuórard, Polyptiques d'Irminon Préf., 13.296.On the inevitableness of slavery, where capital is needed, and no one cares to save, seede Metz Noblet, Phénomènes économiques, I, 306.297.The origination of capital by“social connexions”(gesellschaftliche Zusammenhänge)Lassalle(Bastiat-Schultze, 92, 98) exaggerates into the absurdity that no capital was ever saved. This is in part related to his confounding land with capital (103 seq.). On the other hand,P. L.(v. Lilienfeld), Gedanken über die Staatswissenschaft der Zukunft (1873), distinguishes between the external and internal creation of capital in human society; the latter based on the condition of every organic being, by virtue of which the present is generated by the past, and generates the future. The intercellular substance of plants, the honey-comb of bees, and the blood in the animal body, correspond to the capital of a nation.298.Hermann, St. Untersuchungen, 289 ff.;List, System der politischen Œkonomie, I, 325 ff. Thus, for instance, capitalization among a race of hunters may be continued longest by the creation of herds; that of a race of shepherds by the building of houses, and by land-improvements; that of an agricultural people by the establishment of trades, artificial roads, etc. As to how, in general the accumulation of goods to any great extent, supposes exchange, and as to how, first of all, with exchange through the existence of a superabundance wealth may originate, seeHermann, loc. cit., II, Aufl., 25 ff.299.The annual increase of the capital of France during the later years of Louis Philippe's reign, was estimated at from 200 to 300 million of francs; during the best years of Napoleon III's reign, at 600 million. Journal des Econ., Nov., 1861, 170. The capital of the British empire, judging from the statistics of the income tax, increased from 1843 to 1853, in Great Britain alone, at least £42,000,000 yearly; from 1854 to 1860, in the whole empire, at least £114,000,000; and in 1863 alone by £130,000,000. London Statis. Journal, 1864, 118 ff. A war carried on on English soil would doubtless be more destructive of capital than one waged in Russia; but Russia would recover from one like that of 1854-55 with much greater difficulty because of the small tendency of its people to amass capital. In countries in which the middle classes preponderate, the influence of the amassing of capital on foreign politics is one that favors peace. In despotic or democratic countries, it may as readily favor war.300.The“absolute formation”of capital above described is, of course, the only one in the general economy of mankind. In the economy of individuals, we frequently meet with another which is only“relative,”as when the increase of one's resources is attended by as great or even greater decrease of another's. This is the case, for instance, where privileges or monopolies are granted. The same phenomenon is found also in the intercourse of economies of different nations.Supra, §64.301.ThusCicero, De Off., II, 3, 4. Nature may indeed produce mere value in use without the coöperation of labor, in the narrow sense of the word; as, for instance, a forest which protects a district from avalanches etc. But“everything which has been transformed into goods tends constantly to return to its natural state, and to withdraw itself from the life of goods.”Stein, Lehrbuch.302.CompareList, System der Polit. Œkon. But see also the very fine discussion ofJ. S. Mill, Principles, IV, ch. VI, 2, on the dreariness of nature, when taken exclusive possession of by man;“with every rood of land brought into cultivation which is capable of growing food for human beings; every flowery waste or natural pasture plowed up; all quadrupeds or birds which are not domesticated for man's use, exterminated as his rivals for food; every hedgerow or superfluous tree rooted out, and scarcely a place left where a wild shrub or flower could grow, without being eradicated as a weed, in the name of improved agriculture.”303.In Paris, in 1820, the necessary tools of a rag-gatherer cost 6-¼ francs.Garnier, Elements d'Econ.-polit., 43.304.It is not to be overlooked that all labor expended for a distant end also falls under the head of capital. SeeDroz, Economie politique, 1829, I, 6.305.For a good exposition as to how England has need of more agricultural products, the East Indies of more capital, and the West Indies of more labor, seeFawcett, Manual of P. E., 110.306.It is a very significant fact, that, at present, in certain European countries, in Germany for instance, the laborer is called ataker, and the capitalist agiverof work. The expressions employed byCanard,SayandHermann, teach a similar lesson.307.Schäffle, Kapitalismus und Socialismus, 124 seq.308.It is evident, that, absolutely considered, the predominating factor of an earlier period may continue to increase during the following: and, as a rule, it does continue to increase.309.I need cite only the instance of the slaves, who called out the hours, thus performing the functions of a clock:Martial, VIII. 67;Juvenal, X. 216;Petron.26; of the turning of water wheels, in Egypt and Babylon, by human hands.Strabo, XVI. 738, XVII., 807. Among the ancients, it required one shepherd, and shepherd boys besides, to take care of twenty sheep. (Geopon.XVIII, 1.) In highly cultivated regions, the number ran up to fifty. (Demosth., adv. Euerg. et Mnes., 1155.) It seldom passed eighty (Varro, De re rust., II. 10, 10. 2, 20), or one hundred (Cato, R.R. c. 10); while, recently, five men are sufficient to take care of eighteen hundred sheep. SeeRoscher'sdiscourse on the relation of Political Economy to classical antiquity, in the reports of the Royal Saxon Science Association, May, 1849. AlsoD. Hume, Discourses, No. 10.310.The productive power of each of the factors of production has been over-estimated by some schools. AfterGratian(c. i, C. XIII. qu. i), had clearly recognized the necessary coöperation of the three elements, there was in the one-sidedness with which the Reformers emphasized God's blessing as the only source of wealth, a great over-estimation of the factor nature. The Mercantile System over-estimated the factor capital, in one of its most obvious component parts, money. In later times again:“La terre est la source ou la matière d'où l'on tire la ichesse; le travail de l'homme est la forme qui la produit. Tous les hommes d'un état subsistent et s'enrichissent aux dépens des propriétaires des terres.”(Cantillon, Sur la Nature du Commerce, 1755, I. 33, 55.)La terre est l'unique source des richesses.(Quesnay, Maximes générales de Gouvernement, 1758, ch. 3.) In another place, indeed, the same writer says:les revenus sont le produit des terres et des hommes (Grains, p. 276, Daire), andMirabeaufrequently laid stress on the necessary coöperation of labor and capital. (Landwirthschaftsphilosophie, translation byWichmann,I, 5.)Turgot, Sur la Formation et Distribution des Richesses, § 7. For an excellent refutation of this“Physiocratic”one-sidedness, which, if all men are endowed by nature with equal rights, leads to socialism, seeCanard, Principes, 6. According toGioja, N. Prospetto, I. 35, the part played by labor, in the production ofParmesancheese, is a thousand times as great as that played by the soil; and in the production of a Dutch tulip, a hundred thousand times as great. The English are wont, similarly, to over-estimate the relative power of labor. (Ponocratie, afterAncillon, Essais philosophiques, 1817, II. 327.)“Commerce and trade first spring from the labour of men.”(North, Discourses upon Trade, 112.) Thus,Locke(1690), Of Civil Government, II, 5, 40 ff., is of opinion, that, at least 9/10 of the value of the products of the soil, useful to man, are to be ascribed to labor, and, in the case of most, even 99/100. And so,Berkeley(1735), Querist, No. 38 seq. This view is advocated in its boldest form,—a thing unusual in the case of the independent disciples of a great master—byMcCulloch, Principles, II, ch. i, that it is to labor, and to labor alone, that man owes everything that possesses any value in exchange. Similarly,J. Mill, Elements (1824), III, 2. The consequences which socialism might draw from these premises are self-evident.Karl Marx'swhole system, for instance, rests, without any attempt at demonstration, on the assumption that the Ricardo school is right. Much more moderate views are met with earlier. Thus,Hobbes, De Cive, XIII, 14, andLeviath., 24 (1642 and 1651), callslabor et parsimonianecessary sources of wealth;proventus terræ et aquæuseful ones; andPetty, On Taxes (1679), 47, says:“Labour is the father and active principle of wealth, as lands are the mother. Land and labour together are the sources of all wealth; without a competency of lands there would be no subsistence, and but a very poor one without labour.”Harris, Upon Money and Coins, 1757, P.I.Adam Smith, also, in spite of the well known passage at the beginning of his work, very frequently lays stress on“the annual produce of land and labour.”(See the passages collected inLeser, Begriff des Reichthums bei A.S., 97.) According toLeibniz, regionis potentia consistit in terra, rebus, hominibus. (ed. Dutens, IV. 2, 531.)Ricardo'sschool is wont to bring capital under the head of labor, as saved-up labor. This is about as correct as to say, that all that a grown man does, his parents had done. (Umpfenbach, Nat. Œk., 64.) There is only one way in which labor, and even then the expression is not exactly correct, can be looked upon as the only factor in production; and that is to presuppose the forces of nature as matters of course (als sich von selbst verstehend), and to call the aggregate use made of them by the human mind, labor. Or we might say with oldEpicharmos, that the gods sell all goods for labor. (Xenoph., Memor. II. 1.) Moreover, even in purely intellectual productions, in poetical productions for instance, nature, labor and experience, the culture inherited from former ages (a kind of intellectual capital) uniformly coöperate. But how almost completely valueless in literature are all entirely pure (empty!) productions of the fancy!311.Before the predominance of the Mercantile System,Montchrétienvery cleverly called all trades:parcelles et fragments de cette sagesse divine que Dieu nous communique par le moyen de la raisen. By means of the three estates;labourers, artisans, merchands, tout état est nourri; par eux tout profit se fait. L'utilité règle les rangs des arts. (Traité, 12, 45, 66.) The teaching ofP. Gregorius Tolosanos(ob. 1597) on the different classes of society and the different callings of men, is still more in keeping with the present doctrine of production; only, in the moralizing tone of the time, he speaks rather of their dignity than of their influence in creating wealth: De Rep. I, 195. See, also, the earlier views ofFranc. Patricius(ob. 1494), De Rep. I, 4, 7, 8.312.CompareA. Serra, Breve Trattato delle Cause che possono far abbondare i Regni d'Oro d'Argento, 1613.Th. Mun, England's Treasure by foreign Trade, 1664.Ch. King, British Merchant or Commerce Preserved, 1721. But, particularly,A.C. Leib, Von Verbesserung Land und Leuten etc. (1708), who, from the point of view of the Mercantile System, draws a very clear distinction between the productive and unproductive classes. See, also,infra, §116. First thoroughly refuted byW. Petty, Political Anatomy of Ireland, 67, 82. Quantulumcunque concerning Money (1682).D. North, Discourses upon trade (1691). SeeRoscher'sGeschichte der englischen Volkswirthschaftslehre, 77, 88, 138. And later, especially,Ad. Smith, W. of N. IV., ch. 1 ff.Adam Smith'sdoctrine of productive and unproductive labor is to be found already, in this period, inPetty, Several Essays, 127 ff. Political Anatomy, 185 ff; also, in the anonymous work, A Discourse of Trade, Coyn and Paper Credit, London (1697), 44, 159.313.Quesnay, Dialogue sur les Travaux des Artisans, 210 ff.; 289 éd. Daire;Turgot, Sur la Formation etc., § 8;Dupont, Correspondence avec J.B. Say, 400, éd. Daire.B. Franklin, Letter to Dr. Evans (1768), and Positions Concerning National Wealth (1769), Works ed. Sparks, VII and II. Similarly evenAristotle, Oec., I, 2, says, that commerce, wage-labor and war win from men, with or without their will; but that only agriculture obtains booty from nature. And soCicerosays of merchants:nihil proficiunt, nisi admodum mentiantur. De Off., I, 42. The same view seems to have prevailed during the middle ages. SeeThom. Aquin., De Rebus publicis, II, 3, 5 seq.Lutherentertained a like notion (Vom Kaufhandel und Wucher, 1524). He prefers agriculture to the trades. See the Irmischer edition of his works, XXII, 284; XXXVI, 172; LXI, 352.Calvinconsidered commerce both useful and honorable; so thatex ipsius mercatoris diligentia atque industria, its profit may be greater than that of agriculture. (Opp. ed. Amstelod, 1664, IX, 223.)Asgill, Several Assertions proved in order to create another Species of Money than Gold (1691):“what we call commodities is nothing but land severed from the soil; man deals in nothing but earth.”ConcerningCantillon, compare § 47, note 4. How violent an innovation the Physiocratic theory was in its time may be inferred from whatZinckewrites in the Leipzig Sammlungen, X, 551 ff. (1753), p. 20, XIII, 861.314.Quesnay, l. c., 189, does not ignore that many workmen earn more than the cost of their necessary subsistence; but he claimed that this was a result of a natural or legal monopoly of the same. The dearer labor was, the more productive it seemed. Per contra, seeDohmon the Physiocratic system, in the Deutsch. Museum, 1778, II, 313 ff.315.Gournay(compareTurgot, Eloge de G., in Guillaumin's edition, I, 266, 271 ff.), as well asRaynal, Histoire des Indes, vol. X, Livre 19, spite of the similarity of their and Quesnay's views, acknowledged on this account, the productiveness of industry. For some remarkable examples illustrative of how it may increase the value in exchange of raw material, see the anonymous work, Paying Old Debts without New Taxes, London, 1723. See alsoAlgarotti(ob. 1794), 318, inCustodi, Economisti classici italiani, Parte moderna, I. Thus a cwt. of coarse cast iron is converted, in a Berlin manufactory, into 88,440 shirt buttons worth 6-⅔ silver groschens each. Hence the value is raised from 1-2 thalers to 19,653 thalers. The increase of the value in use by industrial labor is self-evident.316.Quesnay, Dialogue sur le Commerce.317.Recognized very early byAd. Contzen, Politicorum, Lib. VIII, C. 10 (1629).318.This did not escape the notice of Frederick II.Von Raumer, Hohenstaufen, III, 535.319.Condillacacknowledges the productive power both of industry and of commerce; and that the service rendered by the state is at least economically indispensable. (Le Commerce et le Gouvernment, 1776, I, 6, 7, 10.)Beccaria, Economia pubblica (1769 ff.), IV, 4, 24.Boisguillebert(ob. 1714), Sur la Nature des Richesses, illustrated the utility of commerce by the picture of a number of men bound to pillars, one hundred steps apart, one with a superabundance of food but naked, a second with a superabundance of fuel, a third with a superabundance of clothing etc.; all of whom perish, because unable to exchange their respective surpluses with one another. According toLotz, Revision, I, 217,“buying dear,”apart from real fraud, means only a decrease of possible gain.320.Verri, Meditazioni, XXIV, instead of calling the merchant productive, calls him a mediator between producers and consumers. It would be just as reasonable to call the shoemaker a mediator between the production and consumption of leather; or the cloth merchant, who cuts the material from the piece, an assistant preparatory to the tailor. The labor of commerce is especially like that of the fisherman or the turf digger, because they produce only in so far as they transfer goods from inaccessible to accessible places. See, however,Rau, Lehrbuch, I, § 103. See the demonstration of the productive power of commerce in general, as well as of what is, by way of preference, called industry, inAd. Smith, W. of N., IV, ch. 9. A much more fundamental refutation of the Physiocratic Principle is to be found inJacob, N. Œk., 204 ff.321.In 1843, about 55,000 tons of ice were shipped from Boston. Less than 25 cents per ton was paid for the ice in the first instance. When packed on board ship, it was worth $2.55 per ton. The ultimate sale brought $3,575,000. Ausland, 1844, No. 278. The ancients were acquainted with a similar production of ice, the value in exchange of which might be almost entirely reduced to the labor of commerce. SeeXenoph., Memor., II, I, 30; Athen. III 97: Proverbs of Solomon, 25, 13.322.W. of N., ch. 3. See, however,Garnier'sFrench translation of Ad. Smith, Préf. p. IX and V, note 20. Similarly,Malthus, Principles, ch. 1, Lect. 21. Definitions, ch. 7, 10.323.Baconhad already said of the nobility, clergy and literateurs:sorti reipublicæ nihil addunt(Serm., 15, 29); in opposition to which,Hobbesjustly remarks, that even human labor may, like other things, be exchanged against goods of all sorts. (Leviathan, 24.) In the work, Discourse of Trade, Coyn and Credit, p. 44 ff., and p. 156, the absolute necessity of“head-work”as well as bodily labor, is conceded; but it is insisted that physicians, clergymen and jurists can never enrich a country, and that a relatively large number of them would even conduce to national poverty. (SeeRoscher, Geschichte der englischen Volkswirthschaftslehre, 138.)David Humeconsiders merchants as productive, but says that a doctor or lawyer can grow rich only at the expense of some one else. (Discourses, No. 4, On Interest.)Fergusonvery cleverly compares such a valuation of national wealth to that of a miser. Hist. of Civil Society, VI, I.324.SimilarlyLauderdale, Inquiry, 355;Lotz, Handbuch der Staätswirthschaft, I, § 39, andRau, Lehrbuch I, § 195, concede only indirect productiveness to commerce. It may be shown, in a great many instances, that such productiveness exists side by side with direct productiveness, on account of the thousand ways in which all economic threads are interwoven with one another. ThusPaleyremarks in his work on the Principles of Morals and Politics, that a tobacco manufacturer even may contribute indirectly to the cultivation of grain; an actor, to industry etc.325.ThusSismondi, Nouveaux Principes, II, ch. 1, and, earlier,MengottiColbertismo, 317. (Cust.) See, on the other hand,Hermann, Staatsw. Untersuchungen, 34 ff. EvenJ.B. Saydoes no manner of justice, in this respect, to personal services. He speaksof produits qui ne s'attachent à rien qui s'évanouissent à mésure qu'ils naissent, qu'il est impossible d'accumuler, qui n'ajoutent rein à la richesse nationale. Compare Catéchisme (3d ed.) 52 ff., 174 ff. On the other handDunoyer, Libertê du Travail, L.V., remarks that here labor and its result are made to change places; the former like all labor is very perishable, the latter as lasting as in the case of other kinds of labor. In the one case the utility is fixed in things, in the other in persons.Ad. Müller, Elemente der Staatskunst passim, calls special attention to how the kinds of labor, called unproductive byAdam Smith, preserve the state, and in that way, all individual exchangeable goods. Similarly,Storch, Handbuch, I, 347;Steinlein, Handbuch, I, 460.Lauderdale(443), however, is correct when he says, that the continued duration of the product of labor depends, usually, more on the caprice of consumers than on the nature of the labor.326.Garniercalls attention to the fact, that there is a great quantity of material products, such as laces, perfumes etc., that can scarcely be ever used in further production, and, generally speaking, one's resources for the most part are not kept in lasting goods, but are preserved by the change of technic forms in production.Hermann, I, Aufl., 115.327.WhenSchön, Nat. Œkonomie, 33, ridicules the idea of the productiveness of personal services, by citing the instance of prostitution carried on as a trade, he forgets that many material goods also may conduce to the moral damage of the purchaser of them. It is said that there are in France 3,500 retailers and colporteurs of immoral writings and pictures, who sell yearly nine million numbers or pieces, at a cost of six million francs! (Moniteur, 9 Avril, 1853.)328.CompareSchäffle, Theorie der ausschliessenden Absatzverhältnise, 1867, 135. seq.329.Many of the socialists take a retrograde step in this respect, in as much as they consider only manual labor productive.Fourier'sschool particularly, declaim passionately against the unproductiveness of commerce and of most personal services. CompareV. Considérant, Destinée sociale, 1851, I, 44.330.Besides the above, seeGioja, N. Prospetto, I, 246 ff.;Scialoja, 42;J. B. Say, Traité, I, ch. 2;Hufeland, N. Grundlegung, I, 42, 54;Gr. Soden, Nat. Œkonomie, I, 142 ff.Hermann, St. Untersuchungen, 20 ff., distinguishes three politico-economical points of view; that of the producer, that of the consumer, and that of the whole nation's economy. The producer calls his labor productive, in case he receives back his outlay of capital with the rate of profit usual in the trade of the country. To this point of view, therefore, every service which is paid for, according to wish, seems productive. On the other hand, the consumer ascribes productiveness to all those kinds of labor the achievements of which he may use, and which he can obtain at a convenient price. Whenever, therefore, he pays for a service voluntarily, he acknowledges its productiveness. Lastly, from a national-economical point of view, all labor is considered productive which increases the quantity of goods exposed for sale in the market; and this, personal services do. The technic productiveness, which depends on the execution of the technic ideas floating before the mind of the workman, must be distinguished from this economic productiveness. It is possible that, technically labor may be very productive, and yet cause economic loss; for instance, the fine arts and the so-called master pieces of the trades! SeeSeneca, De Benef., II, 33.H.(33) furnishes a very good refutation of the doctrine that a great deal depends on whether the labor has been paid from capital or from income.Eiselen, Volkswirthschaft (1843), 27 ff., remarks, that the laborer, for instance, who grows corn, must besides look after his health and the preservation of his house; this is a part of his necessary aggregate labor. Why, then, should it be called unproductive when such secondary labor is performed by particular persons? Otherwise the farmer would have no time whatever for his principal business! Edinburgh Review, 1804, IV, 343 ff.;Wakefield, An Essay upon Political Economy, 1804, who is concerned mainly with the theory of the productiveness of labor.L. Lauderdalesays, that when the nation's wealth is estimated according to its value in use, all useful labor is productive; and that when estimated according to its value in exchange, all labor that is paid is productive. (Inquiry, ch. 3.)Stein(Lehrbuch, 68; Tüb. Zeitschr., 1868, 230) conditions the notion of productiveness by the presence of a superfluity of values. But, it may be asked, does a family, which does no more than support itself, labor unproductively? (Compare, however, §30.)J. S. Milltook a surprisingly retrograde step in the doctrine on this point, in his Principles, I, ch. 3. Compare his Essays on some unsettled Questions of Political Economy, No. 3. A still more surprising exaggeration inde AugustinisInstituzzioni di Economia sociale (Napoli 1837), who goes so far as to call a person guilty of arson a productive person because he has produced for himself“the pleasure of destruction”! More recently,von Mangoldtdistinguishes between economic labor and the labor of culture: the latter is incorporated into the man himself, the former one employed on the external world, in order to transform it in a way corresponding to human wants. Viewed from the stand-point of Political Economy, the latter only is productive. (Volkswirthschaftslehre, 1865, 26 ff.)331.We might, indeed, compare original production, that which preceded all other, to eating; the trades, to digestion; commerce, to the movements of the several members of the body; personal services to inspiration, and yet all are equally necessary to the life of the body! Thus,Gamilhcompares agriculture to the root of a tree of which the service rendered by the state is the top. The growth of the latter contributes, as well as that of the former, to the nutrition of the whole, and is far removed from exhausting the tree. Théorie de l' E.P., II, 46 ff.“Natural production”would, indeed, accomplish very little without the legal protection guaranteed by the state, or without the tools furnished by industry etc. But it is, besides, in most instances, a distortion of the truth to speak of productive and unproductive men or classes of men. These expressions are proper only when applied to individual kinds of labor. SeeMurhard, Ideen über Nat. Œk., 88 ff. Persons seriously ill are temporarily unproductive, and children who die early, are unproductive for their whole life.332.Not, however, in the case in which the loser estimates the pleasure of the play higher than the loss.333.J. B. Say, Traité, I. ch. 1.334.v. Cancrin, Œkonomie der menschlichen Gesellschaften, 1845, 10, speaks, in this case, of privative production. Among the Socialists,Bazard'sexpressionl'exploitation de l'homme par l'homme, has found loud echo; instead of which onlyl'exploitation du globe par l'hommeshould be allowed to obtain. (Exposition de la Doctrine de St. Simon, 24.) Butvon Schröderhad already warned the world of“imagined food”which led only to idleness. (F. Schatz- und Rentkammer, 191, 363.)335.Therefore, there should not be too many nor too highly salaried offices. SeeStorch, Nationaleinkommen, 33 ff.336.Seev. Mangoldt, Volkswirthschaftslehre, 29 ff.337.Remained, and notbecome, poor, as is generally supposed; for the enormous wealth of Spain, under Ferdinand and Isabella, as well as during the early period of Charles V. is only afable convenue. Charles V. said: France has a superabundance of everything, and Spain is in want of everything. See also the embassy report ofNavagero(1526), Viaggio fatto in Spagna e in Francia (Venet., 1563), andRanke, Fürsten und Volker, I, 393 ff.338.The prize was won byArreta de Monteseguro. The author of the history of Portuguese Asia, translated byStevens, is of opinion (III, ch. 6), that commerce is not a proper subject for serious history to treat.339.There is a very fine description of this spirit inClenard, Epist. I. ad Latomum (1535 ff.) CompareJuvellanos, inLaborde, Itinéraire déscriptif, IV, 176.Townsend, Journey through Spain, II, 207, 117.Buckle, History of Civilization, II, ch. I. The census of 1788 gave the number of priests and monks, soldiers, mariners, nobles, lawyers, tax-gatherers, authors, students and domestics, at 1,221,000, in a total of 3,800,000 men; from which number there was a multitude of beggars, vagrants etc. to be deducted.Laborde, Itinéraire, II, 32 ff. The seventeen universities and the numberless small Latin schools, with their gratuitous instruction, and their many scholarships, misled a disproportionately large number to engage in study. At the beginning of this century, there were at least 200,000 priests, nuns (Geistliche), etc., in a population of from three to three and a half millions only. (Ebeling, Erdbeschreibung von Portugal, 66.)Seniorshows that the poverty of the Osman is caused by too many state employees, tax-farmers and retail merchants. (Journal kept in Turkey and Greece, 1857-58.) Thus, also,J. Tucker, Four Tracts, 1774, 18, contrasts men engaged in industry with rich idlers, whose increase, possibly by immigration, would make the people a nation of“gentlemen and ladies, footmen, grooms, laundresses etc.”Schmitthener, N. Œk., 656, calls a condition such as that of Spain,“national-economical phthisis.”340.Tucker, Progress of the U.S., 137. The following data also will serve for a comparison: In Belgium, in 1856, it was estimated that, leaving personssans professionout of consideration, 45.6 per cent. were agriculturists, 37.2 industrials, 6.7 in commerce, 2.8 in the liberal professions, 1.5force publique, 2.1propriétaires, rentiers, pensionnés, 3.7domesticité. In Prussia, in 1871, of the entire male population, 28.6 per cent. were engaged in agriculture, forest-culture, hunting and fishing: 32.3 per cent. in mining, industry, building, and in founderies: 8.56 in trade and commerce; 20.3 in personal services and handiwork not belonging to any of the groups above mentioned; 2.3 in the army and navy; 3.7 in other callings; 2.7 were renters, pensioners, and persons who lived by selling or renting houses, reserving lodgings for themselves therein, and persons who gave no account of their calling. (Preuss. statisc. Zeitschr., 1875, 32. ff.) It is, however, surprising thatEngel'sAmtl. Jahrbuch, III, 1867, gives only 48 per cent. as belonging to the first category, and 25 to the second. In the kingdom of Saxony in 1861, 25.1 per cent. of the population were agriculturists and foresters; 56.1 were engaged in industry; 7.7 in trade and commerce; 6.8 in art, science, the service of the state and of private persons; while 4.1 per cent were without any particular calling, or returned none. Bavaria, in 1852, had 67.9 per cent. of its population engaged in agriculture; 22.7 in the trades and in manufactures; 5.5 per cent., persons living on the interest of their money, and by performing the higher class of personal services; 1.9 in the army; and 2 per cent. of listed poor. InHermann, Beiträge zur Statistik des Königreichs Bayern. In France, according to the official reports, there were:Agriculteurs61.46 per cent. in 1851, 51.49 per cent. in 1866;Industriels et commerçants25.95 per cent. in 1851, 32.78 per cent. in 1866;Professions libérales9.73 per cent. in 1851, 9.48 per cent. in 1866.To which it must be added, that, in 1851, there were 2.86sans profession ou dont les professions n'ont pu être constatées; and that, in 1866, on the other hand, there were 2.87 per cent. inprofessions se rattachant à l'agriculture, industrie et commerce. (Legoyt.)In England and Wales, leaving the domestic class out of consideration (women without an independent means of employment, school children, servant girls etc.), and also the“indefinite class,”there were, in 1861, 25.3 per cent. of the population engaged in agricultural pursuits; 60.7 in industrial; 7.8 in commercial; and 6.06 in professional pursuits. In Italy, omitting housewives, children and infirm persons, there were, in 1862, 57.4 per cent. of the population engaged in agriculture; 22.9 in industrial pursuits; 4 in commerce; and 3.9 per cent. in the army and in the liberal professions. (Annali univ. di Statistica, Febbr., 1866.) On Holland, in the middle of the 17th century, seeJ. de Wit, Mémoires, 34 seq.341.Csaplovics, Gemälde von Ungarn II, 1.Torrens, The Budget: On commercial and colonial Policy, 106 ff.342.Precisely as there are more people ruined by spirituous liquors than by bread. Time thieving is also more frequent among servants. There is scarcely anything in agriculture analogous to the lazzaroni who wait all day to help a gondola to land, to unload a coach, etc. There is more in the chase, in the fisheries, or in the cattle raising.343.CompareBastiat, Harmonies économiques, ch. 17. HenceSismondiaccounts it one of the chief merits of the constitutional state, that in it, thepopulation gardiennedoes not regulate its own remuneration. (N.P., I, 144.)Saint Simon, indeed, says that the French members of theChambre, in his time, drew a revenue from the state, three times as large as from their own resources, and were, therefore, deeply interested in increasing the budget. (Vues sur la Propriété et la Législation, 1818.) I would call attention also to the national over-estimation and over-crowding of learned callings from which Germany suffered, even as far back as the time of Louis XIV. (v. Schröder, Fürstl. Schatz-und Rentkammer, 302 ff.); to the disproportionate number of keepers of public houses, which is related to the system of popular assemblies, and is a regular attendant upon Democracy (Bronner, Der C. Aargau, I, 451.) Taxation-legislation may here become a good means of popular education.344.This was recognized very early byGregor. Tolsan, l.c.Ad. Müller, Elemente, II, 255.Storch, Handbuch, II, 229 ff. (Schleiermacher, Christ. Sitte, 668.)A. Smith,W. of N., II, ch. 5, ascribed greater productiveness to agricultural than to industrial labor; in the former case, not only human labor was put in operation, but the forces of nature were compelled to coöperate with them. Similarly,Malthus, Additions (1817) to the Essay on the Principle of Population, B. III, ch. 8-12. Principles of P. E., 217 ff. Both thus explain the rent of land, and so far as products, which have only value in exchange are concerned, they are right. Hence it is all the more surprising thatCarey, the zealous advocate of a protective tariff and opponent of rent, comes back in this to Adam Smith. Principles of Social Science, 1858, II, 35, and passim. Compare alsoJ. B. Say, Traité, II, ch. 8;Sismondi, N. P., II, ch. 5. For the best refutation of this view, seeRicardo, Principles, ch. 2, 3. Does not all labor put the force of nature in operation?Ad opera nihil aliud potest homo, quam ut corpora naturalia admoveat, reliqua natura intus transigit.(Bacon.) Similarly,Verri, Meditazioni, III, 1. An expression escapes evenRicardohimself (ch. 7), to the effect, that capitalists are the producing class.345.Relying on very superficial statistics of England and France,Ganilhadvocates a theory of the productive forces of the several branches of economy the very reverse ofAdam Smith's. He places foreign trade first; then follow wholesale trade, industry and agriculture. (Théorie, I, 240 seq.)346.Ausland, 1846, No. 54. Expressions still used in Europe, such asSpindelmagen(spindle-relation),Kunkellehen(apron-string-hold) etc., for instance, suggest this most ancient and purely family division of labor. The lower classes of the population, even in the most civilized countries, are wont to preserve some of the peculiar customs of very primitive times. Hence it is that among proletarians, the division of labor between males and females is still very small. The employments usual at different stages of life among men, and the costumes worn by them are much more uniform than among the higher classes. SeeRiehl, Die Familie, 1855, passim.347.AsDankwardtshows, thejus civileof the earliest Roman time is based on the condition of isolated labor, the laterjus gentium, on the division of labor. N. Œk. und Jurisprudenz, 1857, Heft. I.348.Saxo Gramm., Hist. Dan. V, 101.Turner, Hist. of the A. Saxons B. VII, ch. 11. Nibel., 351 ff. There is a French proverb:du temps que la reine Berthe filait. Queen Bertha was a mythic daughter of Charlemagne. It may be that the character meant is the old German spinning goddess Berchta. Concerning the daughter of Otto the Great, seeDithmar, Merseb. II.Homer, Od. V, 31 ff.; X, 106; XXIII, 189 ff.Herodot., VIII, 137.Livy, I. 57.349.Eden, State of the Poor I, 558 ff. In the interior of Peru, the priest is also usually a shop-keeper (Pöppig, Reise, II, 365); in Canada, as in many of the villages of the Alps which are not often visited, a hotel keeper. In countries with an unadvanced civilization, the little division of labor that exists is also very awkwardly regulated. Thus in Russia, weak children are very frequently put to work on farms, while powerful men are found in the city offering all kinds of eatables and the pictures of saints for sale. (Storch, Gemälde des russischen Reichs II, 364.v. Haxthausen, Studien I, 335.)350.Babbage, Economy of Machinery, 1833, 201.L. Faucher, Angleterre II, Ch.“la Ville des Serruriers.”The industrial statistics of Paris, furnished byH. Sayin 1847 and 1848, show that in that city alone there are 325 different branches of industry, 17 of which are concerned with the production of food; 21 with building; 32 with the manufacture of furniture; 21 with that of clothing; 36 with that of thread and tissues; 7 with skins and leathers; 14 with vehicles, saddlery, and military equipment; 33 with chemicals and pottery; 33 with working in metal, glass etc.; 35 in that of the precious metals and jewels; 27 with printing, engraving and paper; 15 with that of wooden-ware and wicker-ware; 34 witharticles de Paris. Journal des Economistes, Janv., 1853, 107. According to the industrial almanac of Birmingham, there are in that city manufacturers of buttons in gold, silver, metal, mother-of-pearl etc.; manufacturers of hammers, ink-stands, coffin-nails, dog-collars, tooth-picks, stirrups, fish-hooks, spurs, pack-needles etc.351.And so with the subdivisions. Flannel is manufactured almost exclusively in Halifax, woolen blankets between Leeds and Huddersfield etc.352.The same division of labor was developed among the Dutch in the 17th century, and excited then the wonder of the English. SeeSir W. Temple,Observations upon the U. Provinces, 1672, ch. 3. Works, I, 128, 143. In 1615,Montchrêtienheld up the Flemish as a model to the French, in this respect.353.On the bees, seeVirgil, Georg.IV, 158.354.The principle of the division of labor was known to the ancients:Xenophon, Cyri Discipl., VIII, 2, 5.Plato, de Rep., II, 369, III, 394, IV, 443;Isocrat., Busir., 8.Aristot., Polit., II, 8, 8. Among the more modern writers, compareThomas Aquin., De Reg. pr., I, 1, II, 3.Luther(Works by Walch, I, 388), in his Commentary on Genesis, 3, 19.Petty, Several Essays, 1682, p. 113. Considerations upon the East India Trade, London, 1701.Roscher, Geschichte der englischen Volkswirthschaftslehre, 118.Mandeville, The Fable of the Bees, enlarged edition of 1723, p. 411.Berkeley, Querist, 1735, No. 415, 430, 520 ff., 586:“What is everybody's business is nobody's.”Harris, on Money and Coins (1757), I, 16.J. J. Rousseau, Emile (1762), L. III.Turgot, Sur la Formation et la Distribution des Richesses, § 3, p. 50, 62, 66.Diderot, Encyclopédie de l'Art, s. v. Art.J. Tucker, Four Tracts (1774), p. 25 ff.Boccaria, Economia pubblica, I, 1, 9. But the author to whom we owe most on this score is undoubtedlyAdam Smith. To him we are indebted almost entirely for our knowledge of the natural laws developed in §59seq.355.According toAdam Smith, a nailer can make 2,300 nails (Rausays 3,000 shoemaker's tacks in the Odenwalde) per day; a smith who is only occasionally employed in the manufacture, from 800 to 1,000; and smiths who never made nails before, from 200 to 300. A clever filer makes 200 strokes in a minute; a skilled comb-maker can make in a day from 60 to 70 combs of such fineness that there are from 40 to 48 teeth to the inch in them; eight Liege brick-makers, working together, produce 4,800 bricks per day; children employed in a needle manufactory, in making the eyes of needles, grow so skillful at it that they can make a small hole in the finest hair and draw another hair through it.Rau, Lehrbuch I, § 115. The old proverb,“practice makes perfect,”is followed even by thieves in their great division of labor. SeeThiele, Die jüdischen Gauner I, 87.Fregier, Des Classes Dangéreuses.356.Children, with their thinner fingers, can point twice as many needles in the same time as a grown person.357.The manufacture of English needles demands, on the part of workmen, degrees of skill so different that their pay varies from 6 pence to 20 shillings per day. If the most skillful workman were to manufacture whole needles alone, he would partly be obliged to be satisfied with one-fortieth of what he might otherwise receive.Babbage, loc. cit.358.In the case of machines and in the chemical branches of industry, the labor increases in a much smaller ratio than the material used in production.359.In opposition to monopolies, and to practical constraint which has its source in ignorance etc.360.HenceTorrenscalls foreign trade the“territorial division of labour.”(Essay on the Production of Wealth (1821), 155 ff.)361.SeeBastiat, Harmonies, ch. 1, for a very beautiful exposition of the doctrine that each man receives much more from society than he accomplishes on his part, for it.362.The working together of a great number of persons is often carried on to the detriment of agriculture, for each then waits for all the others to work, throws all the blame on them etc. (Columella, I, 9.) As many a housekeeper must have observed, two seamstresses or ironers accomplish, in a day, less than one, in two days. Of course, this rule does not apply in the case of work which cannot be performed by one man, under any circumstances, or the magnitude of which would easily discourage him, and in which mutual aid is easily obtained; as in the raising of heavy loads, the construction of roads, dikes etc.363.Ad. Smith, B., II, Introd.Hufeland, Neue Grundlegung, I, 215. In many instances, a division of labor, of course, favors the saving of capital. If every workman needed all the tools necessary to the work in which he participates, three-fourths of them would have to lie idle at present.J. Rae, New Principles on the Subject of Political Economy, 164.364.This necessity is observable, although in a peculiar form, even where what has been called the“despotic organization of labor”prevails, instead of freedom.365.In the highlands of Scotland, in Adam Smith's time, there were no smiths who manufactured nails only; for the reason that no smith had a market for more than 1,000 nails a year, that is not for so many as might be manufactured in a single day.366.It is of course very different when there is question of a foreign market, even if it be only indirectly. Thus, for instance, there are in the Hartz mountains, persons who are simply post-makers, trough-makers, chess-wood-makers, block-hewers, shingle-makers etc.367.Too much should not be inferred from the existence among the Egyptians of physicians, specialists for the several members of the body.Herodot., II, 84. Something analogous is to be found even among barbarous nations; but it is accounted for entirely by the superstition of the people. SeeKlemm, Kulturgeschichte, I, 266.368.In the whole of Hesse, there were under Philip the Magnanimous, only two apothecaries, one at Cassel and one at Marburg.Rommel, Gesch. v. Hessen, IV, p. 419, note. And there were no bakers among the Romans before the time of the war with Perseus. All the bread needed by the family was baked by the wife or by female domestics.Plin., H. N. XVIII, 28. The common oven in new towns marks the period of transition. Even yet, in the central part of France, there are localities where each family bakes its own bread for a whole month in advance; and, in the Alpine departments for even a year in advance.M. Chevalier, Cours II, 366.369.It is obvious from the foregoing that, in decaying nations, in which the market contracts and capital decreases, the division of labor also must grow less.370.According toArago, a horse uses the same amount of force to draw 20 cwt. along an ordinary road that he does to draw 200 over a railroad track, or 1,200 on a canal. He could carry scarcely 2 or 3 on his back! Moniteur, 1838, No. 116. It is, however, certain that the introduction of our railroads has somewhat detracted from the advantages of coasts.371.CompareHumboldt, Essai politique sur l'Ile de Cuba, II, 205.372.Strabo, II, 121 ff. In Europe, there is one mile of coast to every 31 square miles in the interior; in North America, to 56; in South America, 91; in Asia, 100; in Africa, 142. (Humboldt.)373.If the original connection of the Caspian sea and the sea of Aral with the Frozen Ocean were still in existence, it is probable that an Asiatic Scandinavia would have been formed in consequence.374.What is true of the sea in this respect may be claimed, also, though in a less degree, for the streams that carry the civilizing fruits of the coasts far into the interior. Nearly all large cities not situated on the harbors of coasts derive their importance from rivers; especially when they have been built on spots adapted by nature to the transhipment of merchandise. That Venice finally eclipsed Genoa is to be ascribed, in greatest part, to its control of an important stream, the Po. The economic importance of Holland, of Hamburg and Bremen will, in the long run, bear the same relation to one another as the geographical importance of the valleys of the Rhine, Elbe and Weser. As nothing is more disastrous to a nation than the loss of its coast (we need only cite the efforts of the Lybian kings and, later, of Philip of Macedon to conquer the Greek colonies on their coasts; and in more recent times, of Russia before Peter the Great, or of the Zollverein without the shores of the German sea), so, also, the economic and political influence of a stream increases as one approaches its mouth. Hence the justification of the great interest taken by Germany and Austria in the question of the Danubian principalities. The United States recognized this fact when they purchased Louisiana for 80,000,000 francs.Bignon, Hist. de France III, 111 seq. Readers of history are familiar with the important part played by the three Asiatic Mesopotamias: that between the Euphrates and the Tigris; that between the Ganges and the Brahmapootra; that between the Hoang-Ho and the Yang-tse-Kiang, to which finally the Punjab might be added. This relation is recognized by popular consciousness, in the case of the Ganges, by the belief in the sacredness of the stream. No river has had so much influence on civilization as the Nile: its periodical risings have made the labor of agriculture extraordinarily easy; their extent and regularity favored the progress of astronomy; the flooding over of the land led to geodesy; the hydraulic labors necessitated by the rising of the waters produced a school of architecture to which the river furnished an excellent means of transportation for the enormous masses to be moved.K. Ritter, Erdkunde, I, p. 880 seq; VI, p. 1,168 seq. In this matter, also, America and Europe have the advantage over Asia and Africa. While the Danube is, in places, scarcely three German miles from the Rhine—which, however, flows in an almost opposite direction—in Asia, the eastern streams are separated from the western, and the northern from the southern, by a strip of land difficult to be traveled, and about 300 German miles in extent. Besides, the principal streams of northern Asia have their exit into the Frozen Ocean, a fact which diminishes their importance greatly. The source of the Missouri is only about one mile distant from the Columbia river, although the two flow towards opposite seas.375.The law governing the march of civilization from the mountain to the plain and to coast lands was observed even byStrabo, XIII, 592, and partly byPlato, De Leg., 677 ff.376.Thus, for instance, that all the customers of a shoemaker together form a shoe-association etc.Dunoyer, Liberté du Travail, L. IV, ch. 10.377.Storch, Handbuch, III, 188 ff. The Dutch traveler,Usselinx, speaks in a similar way of the imitativeness and many-sidedness of the Swedes (Argonautica Gustavica, 20). Chilian servants (peones) are a good combination of the cook, the muleteer, builder, courier etc. Once they have passed over a road, they never forget it. A knife stands them in stead of most tools, and pieces of leather in stead of nails.Pöppig, Reise, I, 171 ff.378.von Haxthausen, Studien, I, 63, 113. In 1827, a Russian hatter got 12 rubles for a hat, a German one 35 (Schön, N. Œkonomie, 78).379.See the report of a large manufacturer inKohl, England und Wales, p. 332 seq.380.Raynal, Histoire des Indes (1780), L. XV. And soRousseau, Discours sur l'Inegalité (1754), who also declaims against all kinds of capital; were there no ladders, men would climb better; and throw a stone better if they had no slings. There is certainly a misunderstood truth in this saying. It is assuredly very salutary, in the actual state of society, in which every one's business is transacted for him by some one else, that a time should occasionally come when no one can take our place, and a man can only call upon himself. And herein lies the immense value which just war, when not much prolonged, but which is brought to a happy termination, sometimes has upon the life of a people.381.The American savages are, on an average, weaker than the whites. In a fist-fight the Kentuckians and Virginians showed themselves far superior to the Indians. SeeLawrence, Lectures, 403,supra, §40.382.For a very unprejudiced estimate of the dark and bright sides of the divisionof labor, even before Adam Smith's time, seeFerguson, History of of Civil Society (1767), IV, I, V, 3 ff. AlsoGarve, Versuche, III, 41.Adam Smithwas not blind to the dark side of the divisionoflabor, which, in part, he would remove by popular instruction at the expense of the state, and by a species of compulsory education. W. of N., V, ch. 1, 3, art. 2. One of the chief peculiarities ofJ. Möser'sPolitical Economy is his great opposition to all highly developed division of labor. Patr. Ph., I, 2, 21, III, 32, 34.383.von Ledebur, Reise in Altai, I, 384. The working together of wife and child, introduced recently by manufacturers, cannot be considered as a higher grade of the division of labor, but only as a very unfavorable change in the kind of it; inasmuch as it were better to employ the women in their domestic avocations and to leave children to their studies and their sports. Among the higher classes, it should be made the part of female education, to counterbalance, in the family, the effects of the ever increasing division of labor among the male portion, by the development of that which is universally human—art, sociability, house-keeping etc.384.Schleiermacher, Christliche Sitte, 465 ff., 676 ff., 154 ff. From a similar feeling, although much exaggerated, the Greeks of the classic age proper considered all callings followed for gain dishonorable, not excepting even those of the physician and of the teacher.Plato, de Rep., I, 347 ff.Aristot., Rhet., I, 9, 27: μηδεμίαν ἐργάζεσθαι βὰναυσον τέχνην, ἐλευθέρον γάρ τὸ μὴ πρὸς ἄλλον ζην.385.As, for instance, the superintendent of a manufactory must have a better general training, but can get along with less of a special, than his workmen.386.Thucydidessays of the contemporaries of Pericles:“The same men devote themselves, among us, in part to domestic and political business; in part, others who busy themselves with agriculture and industry have no mean knowledge of the affairs of state. We call those who take no part in the former not people loving their ease, but useless men.”(II, 40.) During the succeeding period, Athens was destroyed mainly by the ever increasing division of labor between citizens and soldiers. For,“to separate the arts which form the citizen and the statesman, the arts of policy and war, is an attempt to dismember the human character, and to destroy those very arts we mean to improve.”(Ferguson.) We know fromValerius Maximus, that the Roman soldiers from the time of Marius had, doubtless, a better technic training than their ancestors who who defeated Hannibal; but was it in a military or political sense that they were thus better trained? The beautiful definition of Cato intimates something of the same nature; the good orator wasvir bonus dicendi peritus. (Quintilian, XII, I.) And soGarve, Versuche, IV, 51 ff., expects from the political elevation of citizenship, of those possessed of the right of citizens, not only usefulness in a particular direction but the development of the whole man, a thing hitherto expected only of the nobility.387.As one's peculiar calling does not take up all his life, we must draw a clear distinction between the one-sidedness of labor and the one-sidedness of life, (von Mangoldt, Volkswirthschaftslehre, 227.) Only the last is to be avoided at all hazards; and we find it in the middle ages, with its limited divisions of labor, perhaps more frequently than where civilization has attained a higher stage. During the middle ages, it was not unusual to make feelings which every one should cultivate at times, if only temporarily, the lasting calling of some. Thus one prayed his whole life long, or was engaged in contemplation, and relieved others of the necessity of performing these duties. The consequence was, that the latter sank as deeply in worldliness and want of the interior spirit as the former were plunged in idleness and hypocrisy. But, on the other hand, when, in our day, the printer relieves the writer of a portion of the labor which might be his, the personal development of neither suffers.388.L'uomo è un' tal potenza, che unita all' altra non fa un eguale alla somma, ma al quadrato della somma.(Genovesi.) As to how the action of every individual man is a species of division and union of different kinds of labor, seeStein, Lehrbuch, 24.389.CompareAd. Müller, Elemente der Staatskunst, III, 1809.Fr. List, System der polit. Œkonomie, 222 ff., 409 ff.Wakefield, in his edition of Adam Smith, distinguishes two degrees of coöperation, simple and complex. In the case of simple labor, the same sort of work is performed at the same time and place by several individuals, as, for instance, by a lot of hod-carriers in building. In the other case, there are different kinds of work performed at different times and places, but all intended for the one greater end. Agriculture affords room for the first especially, and it is known also to a great number of animal species.390.Flemish weavers in England, French refugees in Protestant countries; German miners in Spain, Scandinavia, Hungary and America.391.This, so very largely developed in Egypt and India, where the principle of caste obtains, is very little developed in the despotisms of Asia. The great princes, in the latter countries, build largely from vanity only. Hence their successors seldom complete their works, and scarcely repair them. Nowhere else are there so many half completed and yet decaying buildings.Klemm, Kulturgeschichte, VIII, 86.Riedel, N. Œkonomie I, 259, very correctly remarks that such kinds of coöperation as contribute most to the propagation of skill, both in commerce and manual labor, have less real division of labor, and vice versa.392.CompareLeplay, La Réforme sociale en France (1864).393.Concerning association in general, seeM. Chevalier, Cours, III, Leçon, 24, 25. On this subject so much talked of in our day, see, more in detail, concerning its application to agriculture, my work, Nationalökonomik des Ackerbaues, 4, § 39, 47 ff.; 68, 133 ff.; on its application to industry, especially where there is question of the relation of handiwork and manufactures to large factories; seeRoscher, Ansichten der Volkswirthschaft, II, Aufl., 1861, Abhandlung, IV, V.394.Adam Smithremarked that the laws of the division of labor obtain also in intellectual works; and indeed, among all nations in a very low grade of civilization, the germs of all art and science are found connected with theology; and later, the germs of all poetry and history with the epic. The expression:non defuit homini, sed scientiæ, quod nescivit Salmasius, is a clear proof of the insignificance of the science of the time. Think of the increase during the last hundred years of the branches of study in our German universities. There are now thirty-four regular professors in the Leipzig philosophical faculty, where then there were only nine. But here also the principle proves true, that an excessive division of labor, where the broader connection and the deeper foundation of all sciences disappear from the consciousness, undermines intellectual health and freedom. And the injury here is greater and more irreparable than in the domain of mere physical labor. SeeHufeland, N. Grundlegung, I, 207 ff. If we have just become Alexandrians, we have, however, no Aristotle to hope for.Jurisprudentia est divinarum atque humanarum rerum notitia, justi atque injusti scientia(Ulpian). It is remarkable that nations who possess no real national literature of their own, when they once get beyond the bounds of utter barbarism, learn foreign languages etc., most easily.395.The socialistic utopia ofCh. Fourier(Théorie des quatre Mouvements, 1808. Théorie de l'Unité universelle, 1822. Le nouveau Monde industriel et sociétaire, 1829) are based upon the following fundamental ideas. A. The present civilization is that of a topsy-turvy world, especially in so far as it ascribes a“moral”(a word always used by him in an ironical sense) self-government to man. In Fourier's world, on the other hand, every man is supposed, at all times, to give free rein to everypassion; and the play of these gratifications constitutes theharmonie, in which the poorest find more enjoyment than do kings at the present time. (See § 207 of this work.) B. The main thing to further this is a radical reform in the division and cooperation of labor as they exist at present. Instead of the present villages and cities, we should have only phalansteries, each with 2,000 inhabitants, and situated in the center of the land cultivated by them. Instead of the present nations and states, we should have a universal confederate republic, hierarchically graded, with French as the universal language. According to the demands of thepassion papillonne, each one should carry on the most different kinds of business side by side, and each one of them at most two hours per day; i.e., every one should be a dilettante, no one a master, and everything should be done as badly as possible.Proudhon, Contradictions économiques, ch. 3, objects to this, that a workman must, in some way, be held responsible for his work.Fourierhimself calculates that, in hisharmonieall pleasures are productive labor; and that by this constant change, one might be satisfied with from 4-½ to 5-½ hours of sleep, and that even children 2-½ years old might take part in the work. Thus, there would be a great rivalry between apple-growers and pear-growers, so great“that more intrigues in attack and defense [passion cabaliste] would arise there than in all the cabinets of Europe,”in the settling of which the growers of quinces would act as intermediaries. There are, in addition to all this, wonderful aids; a fructifying crown of light rises over the north pole; oranges bloom in Siberia; the sea becomes as delicious as lemonade; dangerous animals die, and in their stead anti-lions and anti-whales come into being, animals useful to man, which draw his ships for him during calms. These ideas are by no means retracted inFourier'slater works, See Nouveau Monde (Oeuvres) IV, 447. The propositions ofRobert Owen, A new View of Society (1812), have much similarity with those of Fourier. They differ only in the absence of the French barrack-like character of the phalanxes, and the fantastic character of the presentation of the doctrine. He would have all the land divided into districts of 1,000 acres each; each district to have a four-cornered town with 1,000 inhabitants, following a system of production and consumption in common, but not with full equality; carrying on both agriculture and other business. A principal feature here is an entirely new system of education. The author says that man has hitherto been the slave of an execrable trinity: positive religion, personal property and indissoluble wedlock. (Declaration of mental independence.)396.CompareTacitus, Histor., II, 44.397.SeeIselin, Geschichte der Menschheit (1764), III, 7.Bazard, Exposition de la Doctrine de Saint Simon, 1831, 153. Among negro nations deprivation of freedom is one of the most usual punishments for crime; but the criminal has the option of substituting his wife or child for himself.L.A. de Oliveira Mendez, in the Memor. econom. of the Royal Academy of Lisbon, vol. IV, I, 1812. As to slavery on account of crime among the Germans, seeGrimm,D. Rechtsalterth., 328 seq.398.Loss at play was a frequent cause of slavery among the ancient Germans.Tacit., Germ., 24. For the principal causes of slavery among the Israelites, see the books of Moses, II, 22, 3; III, 25, 39; IV, 21, 26 seq.; among the Indians, Laws of Menu, VIII, 415. The first serfs of Russia were prisoners of war and their children. The laws of Jaroslaws recognize, besides, the following causes: insolvency, contracting marriage with a slave, the illegal breach of a contract for service, flight, unconditional contract for service.Karamsin, Russ. Gesch., II, 37.399.At least seed and the means of subsistence until harvest time.400.Cases of voluntary slavery to escape famine.Papencordt, Geschichte der Vandalen, 186;Victor, Chron., V, 17; Tur., VII, 45; Lex Bajuv, VI, 3; L. Fris, XI, I. According to the Edictum Pistense (a., 864), c., 34, one could free himself again by paying back the purchase money and 20 per cent. in addition. It frequently happened that people spontaneously accepted the condition of a vassal in order to enjoy the protection of a powerful personage. SeeStüve, Lasten des Grundeigenthums, p. 74. In 1812, a young Himalayan offered himself to the traveler Moorcroft as a slave in order to obtain food during the famine.K. Ritter, Erdkunde, III, p. 999. The same fact occurred, but in greater proportions under Joseph in Egypt.Moses, I, 47, 18 seq.401.Cæsar, B.G., VI, 13.402.Solonwas the first to prohibit this commerce in Athens.Kindlinger, in his Geschichte der deutschen Hörigkeit, p. 621, speaks of a child promised as a slave before its birth, by its parents, as a species of farm-rent. (See the Edictum Pistense, inBaluz, II, 192.) In Chili, the poorest country people who were not entirely white, sold their children in the towns, where they grew up with the families of their masters, and were then kept as servants in a state of semi-serfdom. There is, it is true, no law governing this condition of things. (Pöppig, Reise, I, 201 ff.)403.Ritter, XIII, 727. For instance, men in South America used for the purpose of riding.M. Chevalier, Cours, I, 251;Lœwenstern, Le Mexique, Souvenirs d'un Voyageur (1843); andStephens, Travels in Yucatan (1841), show how, even yet, in Central America, although the Indians are legally free, yet, by their senseless way of running into debt, a number of legal relations, amounting virtually toglebæ adscriptio, arise. But compare, however,Humboldt, Neuspanien, IV, 263. This condition of things has been produced in Peru, also, by the payment of one or two years' wages in advance. (Pöppig, Reise, II, 225.)404.ThusForbonnais, Eléments du Commerce (1854) I, 364, says of trade with savages:il fait naître dans ces nations le goût du superflu et des commodités, qui multiplie le, échanges et leur donne le goût du travail.405.In very uncivilized nations, among whom serfdom is not known, we generally find the slavery of woman and the temporary bondage of the son-in-law in order to secure the daughter in marriage. This is still the case among the Laplanders.Klemm, Kulturgeschichte III, p. 54. Slavery was unknown among the Greeks in the very earliest times.Herod., VI, 263.F. A. Wolf, Darstell. der Afterthumswissenschaft, III, doubts whether any great advance in the higher development of the mind would have been possible without slavery.406.In Russia, where free peasants and serfs lived side by side, it has been remarked that the latter were never so rich and never so poor as the former. (Kohl, Reise durch Russland II, 8, 300.) The Livonian peasants have become poorer since their emancipation. (Cancrin, Œkonomie der menschlichen Gesellschaften, 41). Many of the serfs refused to accept emancipation. (Büsch, Geldumlauf, Einleitung, § 6.) And soMartius, Reise in Brasilien II, 552 ff., assures us that the negro slaves in Brazil are as a rule a very merry set. He is also of the opinion that they are better clothed, lodged, fed and employed than in their own country. For the remarkable official defense of North American slavery directed byCalhoun, to Lord Aberdeen, see the Allg. Zeitung, 1844, No. 145. In this document, we find a comparison instituted between the free negroes of the north and the slaves of the south. In the north, there was one deaf-mute, a case of blindness and of insanity in every 96; in the south, in every 672; a pauper, invalid and prisoner in every 6 at the north, in every 54 at the south. In Maine, 1/12th of the negroes were afflicted by disease; in Florida, 1/1105th(?). The fact that the slave population of the United States increased, between 1840 and 1860, from 2,873,698 to 4,441,830, while the free negro population of Jamaica, between 1833 and 1843, underwent a frightful decrease, is to the same purport. However, too much must not be inferred from all this, as the negroes in America are very far from being the children of the soil.407.The servants in the Odyssey who cared for hogs and cattle etc. were certainly in a better condition in many respects than the peasants of Attica, who were free, but buried in debt until the time of Solon. Concerning the mildness of the treatment of slaves in very early Roman times, seePlutarch, Coriol., 24, andCato, I, 3, 20 ff.;Cato, de Re rust, 5, 56 ff.;Macrob., Stat. I, 10 ff. On the state of the serfs among the Germans, seeGrimm, Deutsche Rechtsalterthümer, p. 339 ff.; among the ancient Scandinavians etc.,Dahlman, Geschichte von Dänemark, I, 163. SeeTacit., Germ., 25.408.Compare Landnamabok, I, 6.409.The opinions of the ancients for and against slavery are found inArist.Polit. I, 2. See especially the beautiful passages inPhilemon:Meineke, Comicorum jr., 364, 410.Aristotleeven thinks that there are cases in which master and slave might be brought together by a mutual want, each of the other. The former wants hands to execute the work of his brain; the latter a guiding brain for his hands. Where the degree of dependence corresponds exactly to the difference of ability,Aristotle, leaving its abuses out of the question, declares slavery to be just. See, also, Eth. Nicom., VIII, 11. Similarly the PythagoreanBrysoninStobœus, Florid. LXXXV, 15. ButAristotlewould hold up emancipation to all slaves as a reward they might have in prospect. Polit VII, 9, 9; Œcon. I, 5. It is characteristic of the many testaments of philosophers, found inDiogenes Laertius, that they contain declarations giving slaves their freedom. The Essenes and Therapeutics condemned slavery under all circumstances.Philo., Opp. II, pp. 458, 482, Opp. I. SeeSeneca, De Benef. III, 20. Thejus naturaleof the age of the Cæsars recognized the freedom and equality of man. Digest, XII, 664., L. 17, 32. The New Testament does not reject it absolutely, but would sanctify it as well as all other relations in life. Compare Luke, 17, 7; Eph. 6 5 ff.; Coloss. 3, 22; Tit. 2, 9. More especially, I Timothy, VI, 1 ff. It was not until the ninth century that the opinion that slavery was anti-Christian because men were all made in the image of God, arose.Planck, Geschichte der kirchlichen Gesellschaftsverfassung, II, 350. Sachsenspiegel, III, 42. A writer as recent asPufendorfexplains slavery as arising from a free contract;faciam, ut des.Jus naturæ (1672) VI, 3. More recentlyLinguet, Théorie des Lois civiles (1767), V, ch. 30, andHugo, Naturrecht, § 186 ff. have endeavored to prove that slaves are in a condition preferable to that of poor free men. And soMöserPatriot Phantasien, II,. p. 154, seq. Those who withThaerseparate the element of production,“labor”from that of“intelligence,”justify slavery on the same principle that Aristotle did, without knowing it. Per contra, seeF. G. Schultze, N. Œkonomie (1856), 418.410.Turgot, Sur la Formation etc., § 21. The universal empire of the Romans demonstrated this. Then it was, for instance, that during the wars of Lucullus, a slave cost only four drachmas. (Appian., Bell. Mithr., 78.)Sardi venales: on account of the glutting of the market with Sardinian slaves, made through the victory of Tib. Gracchus, 177, before Christ. Many of the lesser wars of the Romans can be looked upon only as slave-hunts. But the great wars also were followed by uprisings of slaves on account of the many new slaves which they made. Thus 198 in Latium, 196 in Etruria. (Bücher, Aufstände der unfreien Arbeiter von, 143-129, v. Chr., 1874.) During the relatively peaceful periods which preceded many of the Roman revolutions, pirates delivered over great masses of slaves. It frequently happened that several thousand slaves were led to Delos and sold in a single day. (Strabo, XIV, 668.) As emancipation was a measure which people could not make up their minds to adopt, these pirates satisfied a“want”for a time, and this partly explains the otherwise incomprehensible forbearance of the state towards them.411.Gregor. Turon., III, 15.412.Grimm, D. Rechtsalterthümer, 323. It is a strange fact that prisoners of war were in several remarkable instances sold as slaves in Italy during the fifteenth century. (Sismondi, Hist. des Républiques italiennes, IX, p. 312 seq.; XI, p. 138 seq.) And even in the sixteenth century, the pope allowed those of states opposed to him to be treated in this way.Sismondi, supra, XI, 251; XIII, 485.Raynold, Ann. eccl. 1506, § 25 ff.413.This graduation of slave, serf and workman, has been carried out especially bySaint Simon, Oeuvres, 328 ff. EvenProudhonadmits that the condition of the lower classes is better now than formerly. (Contradictions économiques, ch. X, 2.) CompareM. Chevalier, Cours, I. Leçons 1 and 2, where he shows that our productive power has increased during the last four or five centuries in the production of iron in the proportion of 1 to from 25 to 30; in the preparation of flour since the time of Homer in the proportion of 1:144; in the production of cotton during the last 70 years in the proportion of 1:320.Aristotlepredicted, long ago, that“when the shuttle would move of itself, and plectra of themselves strike the lyre, we should need no more slaves.”Polit., 2, 5. Every step of true progress brings us nearer the fulfillment of the prophecy.414.The North American planters employed coarse tools rather than fine ones, mules rather than horses, because their slaves took so little care of them.415.It can never obtain as much labor from the slave, as the fear of losing his situation and of not being able to obtain another, will from the free workman. (Hume.)Marlo, Weltœkonomie, 1848, I, 2, 38, grants this to be true only where all the forces of nature are appropriated by occupation, and the number of workmen is greater than the want of workmen.416.Even in Brazil, only free men are, as a rule, employed as sugar refiners, distillers, teamsters etc. (Koster, Travels in Brazil, 1816, 362.)Storch, Russland unter Alexander I, Heft, 23, p. 255, cites the opinion of an eminent Russian manufacturer, that it would first be necessary to liberate the serf factory-hands. Masters have generally given up employing their own serfs in manufactures, allowed them to seek work for themselves, and only required them to pay them a species of tax. When this plan was adopted, it was found that they worked much better, (v. Haxthausen, Studien I, 61, 116.) It was a consequence of slavery that, in antiquity, the very wealthy purchased so little:omnia domi nascuntur! (Petron., 38.)417.ThusHomer, Od. XVII, 322, in whose time even there were day laborers, θῆτες or ἔριθοι. (Od. IV, 644; X, 85; XI, 490; XIV, 102.Hesiod, Opera, 602.) AndVarro, De Re rust. I, 17, advises that difficult labor should be performed rather by day laborers.Coli rura ab ergastulis pessimum est et quidquid agitur a desperantibus.Plin., H. N. XVIII, 7.Omne genus agri tolerabilius sub liberis colonis, quam sub villicis.(Columetta, De Re rust I, 7.) It has been estimated, that, in the West Indies, a negro slave performed only one-third of the work performed by an Englishman in his own country. (B. Edwards, History of the British West Indies, II, 131.) During the one afternoon, in every week, in which the negroes were allowed to work on their own account, they accomplished as much as on other entire days. Edinburgh R. IV, 842. CompareBentham, Traité de Législation I, 319.Ch. Comte, Traité de Législation, 1827, Livre V.;Cairnes, The Slave-Power, its Character, Career and probable Designs, 1862;Olmsted, Journeys and Explorations in the Cotton Kingdom, 1861.418.While the older tyrants had prohibited idleness, Draco and Solon even under pain of degradation (see places inBüchsenschütz, Besitz und Erwerb, 260).Socratescalled the ἅργια the sister of Freedom (Aelian, V.H.X, 14), and the σκολή the most beautiful of all professions.419.B. Franklin, Observations concerning the Peopling of New Countries etc., 1751.420.Monument erected toBernstorffby his peasants, 8, 15. TheZàmoiskiestates yielded, 17 years after emancipation, three times as much as they did when serfdom prevailed.Coxe, Travels in Poland, I, 22. The transformation of the serfs into hereditary farmers costCount Bernstorff100,000 thalers; but the revenue derived from his lands increased in consequence, in twenty-four years, from 3,000 to 27,000 thalers. An English mower can mow a field two and three times as great as a Russian mower in a given time. If the former receives daily wages equivalent to seventy pounds of wheat, and the latter to only twelve, the Englishman's labor is still the cheaper; for he turns out 100 pounds of hay while the latter turns out only eight.Jacob, 43 seq. But the hiring out of serfs in the large cities of Russia yielded less to their masters than in the interior.Storch, Handbuch, II, 286.421.Tucker, Progress of the United States, 1843, pp. 111 ff. We need not call attention to the inaccuracy of these figures, nor remark how little serviceable for our present purpose an average obtained from the density of population in different parts of Russia, where such densities are themselves so very different, would be.422.The Spartans seemed to have counted on an adult free man for twice as much coarse food as a bondsman. (Thucyd., VI, 16.)423.Stewart, Principles, I, 7, in accordance with historical data, says, that the peasantry in our days work for other people, because they have wants which can be satisfied only in this way; because“they are slaves of their own wants.”The unquestionable superiority of free to slave labor, in point of economy, has been dwelt upon especially byTurgot, Sur la Formation et la Distribution, § 28, and byAdam Smith, Wealth of Nations, I, 8, III, 2. But seeJ. B. Say, Traité, I, ch. 19, andStorch, Handbuch, II, 184. WhenHume, Discourses, No. 11, Populousness of ancient Nations, demonstrates the greater cost of slavery from the fact that the master of slaves must either breed or buy them, he forgets that in the case of free workmen he is obliged to provide also for the support of the workman's children. Only, the slaveholder has, indeed, to advance the whole at once.424.Humboldt, Cuba, I, 177.Ashworth, Tour in the U.S. Cuba and Canada, 1861. The slaves in Louisiana were so overworked that they lived, on an average, scarcely seven years. Edinburg Rev., LXXXIII, 73. Even the Stoics were not agreed, whether it was right, in case of shipwreck, to sacrifice a cheap slave in order to save a valuable horse. (Cicero, de Off. III, 23.) Whether the self-interest of masters is an inducement to the mild treatment of their slaves depends on the price for which fresh slaves may be obtained. This is a strong reason why a high degree of civilization, where there are not counteracting influences, must make slavery less endurable. The more valuable slaves are, the worse is their condition. In the unfertile Bahamas, the price was £21; in Demarara, £86. In the former place they were required to do little work and were well fed and well clothed. Hence their numbers have increased there, while in Demarara they have decreased. (Edinburgh Rev., XLVI, 496, 180.)425.Proverb:quot servi totidem hostes.(Macrob., Sat. I, 11, 13.)426.Jefferson, Notes on Virginia, 212. The chastity of both parties especially suffers. Thelenoof ancient comedy was a slave trader! Compare L. 27, Digest, V, 3. In the English negro colonies, it was not unusual for the guests of the planters, even in the best families, on retiring, to ask the accompanying servant for a girl, with as little concern as they would in England for a light. (Negro Slavery, or a Creed of ... that state of Society as it exists in the United States and in the Colonies of the West Indies, London, 1823, 53.)427.Even the law of Upland forbade the sale of Christians. The children of a slave and of a free person were born free. Emancipation was considered a Christian act, to be performed for“the salvation of one's soul.”Voluntary slavery was prohibited in 1266, and Magnus Erichson forbade slavery generally from the year 1335. SeeGeijer, Geschichte von Schweden, pp. 157, 185, 273.Estrup, inFalcksN. Staatsburg Magazin, 1837, 179, ff.428.L. Alam, 137, 1. L. Fris., 17, 5. Decree of 960 concerning the abolition of the trade in Christian slaves between Germany, Italy and the Byzantine Empire.Tafel und Thomas, Urkunden der Staats-und Handelsgeschichte von Venedig, I, 18 ff.429.Tacit. Germ. 25. In the Legg. Walliæ 206 (Wolton) we read:“Hero eadem potestas in servum suum ac in jumentum.”430.The council of London in 1102 forbade men to be sold like beasts. (Concil., ed. Venet. 1730, XII, 1100, No. 27.)Guérard, Polyptiques d'Irminon, Prolegg., 220, describes a pedagogical model emancipation by the Church of its own serfs. On the whole, the church contributed more towards the emancipation of the serfs of others than of its own. See ch. 39, C. XII, qu. 2; c. 3,4; De Rebus eccl.431.In Flanders since the end of the twelfth century.Warnkönig, Flandrische Staats und Rechtsgeschichte (I, 244).432.In what relates to Germany, compareSugenheim, Geschichte der Aufhebung der Leibeigenschaft in Europa, 1861, p. 350 ff. The destruction of the old manorial system (Hofwesen) in the fifteenth and sixteenth centuries, was often unfavorable to bondmen and favorable to serfs.Maurer, Gesch. der Frohnhöfe, II, 92. In Poland, where all were originally equal land-owners, many sank gradually through poverty to the condition of the so-calledkinetes, who, although personally free, were not very far removed from slaves. Beginning with the thirteenth century, a great number of immunities, after the model of those accorded in Germany, were granted, by means of which they lost, for the most part, their direct subjection to the emperor and the empire alone. This was soon followed as a consequence by their personal oppression. (Röpell, Geschichte von Polen, I, p. 308 seq., and p. 570 seq.) In Bohemia, the old form of serfdom had so far disappeared in the fourteenth century, that it might be said it was known only to history. But during the reign of the weak king, Ladislaus II, a new species of serfdom came into vogue, the result of the preponderance of the aristocratic element.Palacky, Gesch. von Böhmen, II, p. 33 seq.; III, 31 seq. Aristocratic Denmark, before the peasant war of 1255-1258, subjected the free peasantry who had been leaseholders for a term of years to unlimited socage duty. Waldemar III, reduced to the same kind of service the land-owning peasantry, which especially from the date of Margaret's reign, developed into a species ofglebæ adscriptio. From the sixteenth century, when the royal power almost disappeared, these public privileges were abandoned to the nobility to such an extent that, in 1650, there were scarcely 5,000 free peasants.Dahlmann, III, p. 73 seq. However the severity oftraeldommade way in the fourteenth century for thevornedskap(modified bondage), a milder species of vassalage. SeeKolderup Rosenvinge, Grundriss der dänischen Rechtsgeschichte, § 94.433.The French expressionmainmortecomes originally from the deprivation of the right of inheritance. In Beaumanoir's time, 1283, it was customary, after a number of serfs had lived together for a year and a day, for their chattels movable to become the common property of the community. (Warnkönig, Französische Rechtsgeschichte, II, 157.)434.In France, Louis X. made it a fiscal speculation to sell serfs their liberty in whole districts, even against their will. His edict, Ordonnances, I, 583, recognizes that all men are by nature free, and that France is not without reason called the land of the Franks etc. Even in 1298, Philip IV. had exchanged the serfdom to the crown of several provinces for a land duty. The last ruler of Dauphiny gave all the serfs of the crown their liberty gratis, in 1394. (Sugenheim, p. 130.) When the so-calledcoutumeswere written, there were only nine provincees in which by local law serfdom was permitted. The defeat of thejacquerieinjured the cause of emancipation in France in the same way that the suppression of the war of the peasants did in Germany. About 1779,mainmortewas abolished in all lands of the crown, and its proof made almost impossible in all others. (Warnkönig, II, 151 seq.) Yet it is said that there were 150,000serfs de corpsin France in 1789. (Cassagnac, Causes de la Revolution, III, 11.) Koloman, who died in 1114, forbade the slave trade in Hungary, and labored to raise all Christian slaves toconditionarii(renters). But the right of migration was abolished in 1351. King Sigismund, and still more, Matthias Corvinus, restored it, after the suppression of the war of the peasants, but in 1514 it was again lost until 1586. Further progress was arrested until the Urbarium of Maria Theresa.435.In Italy, Frederick II. liberated all the serfs of the crown. (Constitutt. Regni Sicil., 164.) A model instance of emancipation at Bologna in 1256. The serfs of the state were simply set at liberty; the freedom of those of private persons was purchased with the money of the state, and a small corn-tithe laid on the emancipated as a compensation for the expense incurred in their behalf. In the future, there was not to be a bondman on Bologna territory. The motives which led to this measure are a strange admixture of Christianity and Democracy. (Muzzi, Annali di Bologna, 1840, I, 479.) Italy, at the end of the fourteenth century, was entirely free from Christian serfdom. (Muratori, Antt. Ital., I, 798.) In the canton of Berne, Switzerland, slavery was gradually abolished, the process commencing about the beginning of the fifteenth century. It continued, however, in the case of ordinary masters until 1798.Sugenheim, p. 530 seq. In England, Alfred the Great's efforts towards the gradual abolition of slavery (Wilkins, Leges, 29) remained without result. The steps taken by William I, towards a much narrower end, however, seem to have been more successful. (Leges Will. Conq., 225, 229;Turner, Hist. of England, I, 135.) From the time of the Norman conquest, prisoners of war ceased to recruit the ranks of slavery. Under Henry III and Edward I, socage tenants became more and more frequent; but, before long, their duties became less onerous, and might be discharged by others hired for the purpose, instead of by themselves. The first remarkable vestige of a class working for wages is met with in the law of 1351, which may be considered an effort made by the nobility to oppose the tendencies in favor of emancipation, which were a consequence of the development of cities. (Eden, State of the Poor, I, 7, 12, 30, 41,)Infra, § 175. Although the peasant war under Wat Tyler and Straw, who wished to abolish servitude at a blow, failed of its object, we find that there were a great many instances of emancipation by individuals in the fourteenth and fifteenth centuries when death or sickness overtook them, in which they declared the moral unfitness of slavery. (Wycliffe:“When Adam dalve and Eve span, who was then the gentleman?”) Elizabeth liberated the last serfs of the crown. Compare 12 Charles II, ch. 24, 1660. Emancipation in the lowlands of Scotland was completed in 1574. (Tytler, Hist. of Scotland, II, 260.)436.Modern Emancipation Laws: in Prussia, 1719, 1807, 1819; Lausitz; 1820, Westphalia; in Austria, 1781 (Bohemia and Moravia), 1782 (other German countries and Galicia); 1785 (Hungaria); Schleswig-Holstein, 1804, after many of the landed gentry had voluntarily emancipated their own serfs; in Bavaria, in 1808; in the kingdom of Westphalia, in 1808; in Hessen-Darmstadt, in 1811; in Württemberg, in 1817; in Baden, in 1783, 1820 in newly acquired countries; in Mecklenburg, in 1820; in the kingdom of Saxony, in 1832; in Hanover, in 1833. The law of 1702, abolishing serfdom in Denmark, was evaded until 1788, and in part, even until 1800 by theSchollband(clod-bond) introduced in its stead. The only Christian people in Europe, who, until recently, kept serfs, was the Russian. The serfs of Russia, in 1834, numbered 22,000,000, i.e., about 40 per cent. of the entire population. In the meantime, the law of February 19, 1861, passed after four years of preparation, fixed the date of emancipation at the beginning of the year 1863. Slavery has been abolished in the United States since January 1, 1863; first of all in all portions of the country engaged in rebellion.437.There is a very interesting discussion in the Journ. des Economistes for June 1863, of the question whether the owners of serfs are entitled to compensation on their emancipation, byLaboulaye,Wolowski,Lavergne,Garnier,Simonand others. In the United States it would have required $2,000,000,000 to fully compensate the slave-holders for depriving them of their slaves. (Quart. R., Jan., 1874, 142.) Compare my view,Roscher, Nationalökonomi des Ackerbaues, § 124.438.Leave a new-born child to its“natural freedom”for twenty-four hours, and it will in all probability be dead at the end of the time!439.Compare Edinburgh Review, LXXXIII, 64 ff., April, 1851, 333.Klein'sAnnalen XXV, 70, ff. Even in the fifth book of Moses, 15, 13, ff., we see that experience had taken into consideration that a freed serf without capital or landed property might very readily be in a worse condition than he was before. In the United States, the anticipation that the emancipated negroes might diminish in numbers has not been realized. The census of 1870 showed a negro population of 4,880,000, nearly ten per cent. more than in 1860. The increase of the number of churches, schools and savings banks also bears testimony to the prosperity of the negro. (R. Somers, The Southern States since the War, 1871.)440.J. S. Mill, Principles, 10, ch. 7.441.As to the Jews, seeEwald, Geschichte von Israel, I 2, p. 198. In general, seeH. Wallon, Hist, de l'Esclavage dans l'Antiquité, II, 1847.442.Thucyd.IV, 27;Xenoph.De Re. rep. Art. I, 10 ff.,Aristoph.Nubes, 6;Antiph.De Caede Herod, 727. In the“Frogs”of Aristophanes, the relation between the slave Xanthias and his master is eloquent testimony to the good treatment he received. Slaves enjoyed great freedom of speech. (Demosth.Phil. III, iii.) Concerning masters accused of cruelty, seeDemosth.Mid. 529, 7. Athen. VI, 266. The slave who had been ill-treated might seek refuge in a temple, after which his master was compelled to sell him. (Schol. Aristoph.Equitt. 1309.Plutarch, Thes. 36.)443.Slaves might purchase their own freedom with theirpeculium. See Petit. Legg., Art. II, 179. There were many who lived entirely on their own account, paying a certain duty or tax to their masters, and who were well able to make savings.R. F. Hermann, Privatalterthümer, § 13, 9, 58, 11 ff. See the instance inPlato, De Rep. VI, 495, where a slave who had grown wealthy asks the daughter of his former master in marriage. Moreover, there was a general indisposition to hold Greeks as slaves. (Philostr.Apoll. VIII, 7, 12.) The case cited inDemosth. adv. Nicostr. 1249 ff., is all the stronger on this account.444.Under Cleomenes, many purchased their freedom with their own means.Plutarch, Cleom. 23. At an earlier period, men like Lysandros, Gylippos, Kallikratidos had belonged to a class composed of the children of slaves brought up as citizens.445.Cicero, pro Muræna, IX, 22.446.Think of the subterraneanergastula, the fettered door-keepers and the gladiatorial exhibitions.447.Even from the time ofPlautus, theservi honestioreswere wont to keepvicarios, or subordinate slaves.Plaut.Asin. I, 4,SenecaDe Tranq. Anim. 8. CompareCicero, Parad. V, 2. Of the slaves of the state, the public scribes were sometimes found in excellent circumstances.448.The peculium was fully developed in the time of Plautus and Terence. CompareTerent., Phorm. I, 1. It was customary to promise slaves their freedom as soon as they had acquired a certainpeculium. (Dionys. Hal., Antt. Rom., IV, 24.Tac., Ann., XIV, 42.) Humane masters permitted their slaves to dispose freely of theirpeculiumby will. (Plin., Ep., VIII, 16.) There were many of the Romans who gave their slaves a fixed salary, from which they could make savings. (Senec., Epist., 80, 7.) Shepherds raised some sheep for themselves alone. (Plaut., Asin., III, 1, 36;Varro, R. R., I, 17, 7.) Premiums were offered for certain products (Athen., VI, 274 d), and there were cases even in which businesses were farmed out to slaves. (Corp. Inscr. Gr., No. 4,713 f.) Theservi publicihad the right to dispose of the half of what they owned, by will. (Ulpian, XX, 16.) Contracts of loan were sometimes made between master and slave. (Plut., Cato, I, 21, L., 49, § 2, Digest, XV, 1.)449.CompareTacit., Ann., XIII, 26 seq. During the time from 356 to 211 A.C., it seems that there were, on an average, 1,380 slaves emancipated yearly. (Dureau de la Malle, Economie polit. des Romains, I, 290 ff.)450.Concerning the highly educated slaves of Atticus, of the like of whom the Greeks had formerly few examples, seeDrumann, Geschichte Roms., V, 66. The high prices, 100,000, and even 200,000 sesterces, paid for slaves, suppose a very high degree of education. (Martial, I, 59; III, 62; XI, 70;Seneca, Ep., 27.) But evenCicerowas ashamed of his affliction over the death of an exceptionally clever slave. (Ad. Att., I, 12.)451.At an earlier period, even the censor had punished cruel masters. But most of what was done to prevent the arbitrary condemnation to death of slaves, their castration etc., and to give them rights against their masters for libidinous acts towards them, for cruelty and insufficient support, or the furnishing them with bad food, was done after the time of Hadrian. (CompareSeneca, de Benef., III, 22; de Ira, III, 40,Sueton., Claud, 25, Dom., 7;Spartian., Hadr., 18;Gaius, I, 53; L., 1, § 2, Digest, I, 6; L., 1, § 8, D., I, 12; L., 1, § 2, D., XLVII, 8; L., 1; Cod., IX, 14; Contra, seeDio Cass, I, V, 17.) However, thevitæ necisque potestasexisted in the time of Justinian. (Zimmern, Geschichte des röm., Privatrechts, I, 2, 661 ff.)452.Salvian, De Gubern. Dei, V, 8.Theod., Cad. V, 4.Eumenis, Paneg Coast. 8, 9.Trebell, Poll. Claud., 9.Justin.Cad., XI, 26, 47. Comparev. Savigny, Ueber den romischen Colonat. Berliner Akad., 1822-23.453.The figures given inAthen., VI, 103, concerning the number of bondmen in Greece are almost incredible. For Attica alone, the estimates vary between 110,000 (Letronne, in the Mem. de I'Académie des Inscr., 1822, 192, ff.) and 400,000 (Athen.1. c.), while the free men are estimated at from 130,000 to 150,000. In Rome, during the time from the expulsion of the kings until the destruction of Carthage, the number of the slaves remained about the same. (Blair, State of Slavery among the Romans, 1833, 10, 15.) On the other hand,Dureau de la Malleis of opinion, that in 576 B.C., the number of slaves was to the number of free men as 1 to 25, and in 225 B.C. (including the metics), as 22 to 27. (Economie polit. des Romains I 270 ff., 296.) CompareCato, de Re. rust. I, 3, IV, X, 1 XI; 1, XVII, XVIII, 1. In Germany, the number of bondmen, from the eighth to the tenth century, was estimated to be at least as great as that of free men. (Grimm, D. Rechtsaltherthümer, 334.) Among the Anglo Saxons, before the Norman conquest, it was much higher, even three-fourths of the entire population. (Turner, Hist. of the A. S., VIII, 9.) Compare on the subject of this whole chapter my paper in the Archiv. der polit Œkonomie, N. F., IV, 30 ff.454.Klöntrupp, Abhandlung der Lehre vom Zwangsdienste, 1801. Frequently, the lord had only a right of preference in case the children of the tenant desired to abandon the parental roof and take service elsewhere.455.InAdam Smith'stime, in England, the presumption was that a servant had been hired for a year. (I, 2, 15 ed., Bas.) Frederick the Great's ordinance of 1769, on this subject, forbade any one to enter into service for a shorter time than this (II, § 1 ff.), while the Saxon ordinance of 1835, on the same matter, allowed engagements by the month, in cities.Darjes, Erste Gründe der Cameralwissenschaften, 2d ed. (1768), p. 432, demands that servants should always hire themselves for at least four or five years, and that their masters should have, during the whole of this time, the right to enforce the contract. In North America, however, service by the month has become customary and general, and no notice of the dissolution of the contract is, as a rule, required. (Deutsche Vierteljahrsschrift, 1853, II, 191.) In Switzerland, contracts for service by the week are frequently made even by country servants. (Böhmert, Arbeiterverhh., II, 157.)456.In the south of England, farm hands were used to change service only at Michaelmas. The choice of such a date made farmers very dependent on them, as it fell in harvest time. (Marshall, Rural Economy of the Southern Countries, II, 233.) A similar complaint in Cleves. (Schwerz, Rheinischwestphälische Landw., 21 ff.) In Jülich, a half year's notice was required, during which time the servant who had received it, performed his work with disgust, and stirred up his fellow servants against their master. (Schwerz, II, 87.)457.The families of day laborers, to whom the owner of the land gives the use of a house, small garden, a cow etc., constitute such a transition; and also, workmen who are fed. In Brandenburg, in 1644, only married persons or widowers with children were permitted to work as day laborers. (Mylius, C. C. March., V, 1, 3, 11.)458.Wakefield, Swing Unmasked, or the Causes of rural Incendiarism, 1831.459.By means of the former, the number of independent small householders was much increased in the country. Masters feel indisposed to hire young men liable to be subjected to military duty, because they may be called away at the moment their services are most needed. The returning soldier, as a rule, feels above doing menial service. (Schwerz, passim, I, 191 ff., 236.) On this account, servants' wages in Cleves rose much higher than those of day laborers. (194.) In Belgium, a farm hand cost, on an average, 400 francs a year; a day laborer, counting 300 working days to the year, only 339 francs. (Horn, Statist. Gemälde, 175.) In the Palatinate, day laborers who receive nothing but their wages cost their masters less than those who receive only their food; and servants are the dearest of all. (Hanssen,Archiv der Politischen Œkonomie, N. F. X, 243.) If servants were relatively more poorly paid in 1813 than day laborers (Lotz, Revision, III, 147), it was because of the at least temporary retrogression of civilization which every great war causes.460.Engel, Preuss. Statist. Jahrb., II, 261. Services which contribute to personal convenience are naturally committed much less frequently to independent day laborers than those which aid in production proper. Hence it is, that, as civilization advances, house-servants, especially of the female sex, constitute an ever-increasing portion of the total number of servants. In Prussia, in 1816, the number of servants who ministered to personal comfort was only 4.19 per cent. of the total number of servants engaged in industry; of female servants, it was 13.4 per cent. In 1861, on the other hand, the percentages were 8.4 and 37.2. In Great Britain, of the total number of servants over 20 years of age, only 2 per cent. were engaged in personal services. In 1841, they were 3-½ per cent. (Meidinger.) In France, in 1851, 2.5 per cent. of the whole population were indomesticité. (Stat. off.)461.In England, now more especially, out of farm-hand day laborers: Edinburgh Rev., April, 1862.462.A chief element in the earlier“organization of labor.”So, also, in the Magdeburg Gesindeordnung (service-regulation) of 1789.463.SaxonLandesordnungenof 1482 and 1543. Cod. August. I, 3, 23. TheGesindeordnung(service regulation) of Frederick the Great, threatened with the house of correction the receivers, and under certain circumstances also the givers of wages higher than the fixed rate of wages; but as a“matter of course,”the payment of wages less than this was permitted. (V, § 7) Great care was taken that wages greater than the law allowed should not be evaded by the payment ofarrhaor payment in produce. The same law forbade the deprivation of the servant of his right to determine the service by making of loans to him on long time (II, § 7.) Evenv. Berg, Handbuch des deutschen Polizeirechts, calls it a duty of the public authorities charged with the protection of property and of the public security, to see to it that there be no lack of good servants, and that the public (as if those who sell their services were not a part of it) should not be made the victims of exorbitant demands in the matter of servants' wages.Jung, more humane, demands that the authorities shall protect, especially, the weaker party. (Grundlehre der Staatswirthschaft, 1792, 700.) In Prussian legislation, the Silesian rescript of March 13, 1809, is the beginning of the new order of things. (Rabe, Samml. preuss. Gesetze, X, 59 ff.) TheObertribunal, or high court, decided, in 1874, that the bringing back of absconding servants by the police, which the law concerning servants of 1810 provided for, should not be allowed to occur any more.464.Ordinance of the elector of Saxony of 1766, prohibiting the inhabitants of cities to take an apprentice from among the peasantry, unless he had served at least four years as a farm hand, beginning with his fourteenth year. Similarly, in Prussia in 1781.465.In Berlin, even before the“populationistischen”period:Fidicin, Histor. diplom. Beiträge zur Gesch. der Stadt Berlin, I, 101. (From the year 1397.)466.I Peter, 2, 18 ff.; I Timoth., 6, 12; Ephes., 6, 5; Philem., 15 ff.467.In the German colonies of Mennonites in Russia, every youth serves a few years in the family of some other peasant. This is considered a sort of school. Wages are of course very large, and the treatment very mild.v. Haxthausen, Studien, II, 185. Southwestern Germany where small landed proprietors are many, something very analogous to this continues. (v. d. Goltz, loc. cit., 452.)468.For a masterly exposition of the doctrine that the right of prescription or limitation is related to the politico-economical necessity of property, seeJohn Stuart Mill, Principles, 3, II, ch. 2, sec. 2.469.Locke, On Civil Government, II, §25-51; and soL. Mendelssohn, Jerusalem (1783), 32;Thiers, Du Droit de la Propriété (1849).470.Modern writers, in their attempt to find a philosophical basis for the right of property, have taken two principal directions, the first a juridical, the second a political one. The axiom,res nullius cedit primo occupanti(compare L. 3, Digest, XLI, 1), explains only the smallest part of the relations of property, and that only because of a very fortuitous circumstance. According toHobbes(Leviathan, 24), property has its origin in the recognition of it by the power of the state, by theautorité publique, thegouvernement(Bossuet, Politique tirée de l'Ecriture, Sainte, L. 3, 4), or asMontesquieu(Esprit des Lois XXVI., 15) more mildly expresses it, in the laws. The application of this principle would, on account of the extreme changeableness of the laws of every state, lead to most extreme insecurity, and to a steady oscillation from one Utopia to another, from one revolution to another, if it were not, at the same time, recognized that each one had a just title to the acquisitions he had made, not because the law, for the time being existing, acknowledged the right, but because they were the product of his labor and saving. The theory which bases the right of property on contract cannot be objected to with as much reason. Thus,Hugo Grotius, Jus Belli et Pacis, II, 2, who even justifies the occupation of things without an owner, on the supposition of the existence of an implied contract. It is very characteristic of the English, that in their political language, the words“liberty”and“property”are so frequently found in each other's company. In one of his classic speeches made by Fox in 1784, he gives a definition of liberty which begins with the words,“It consists in the safe and sacred possession of a man's property”etc. The recent doctrine, not unfrequently to be met with, that every man has a right to an amount of property corresponding to his wants, may be used to sanction all kinds of socialistic inferences. An entirely bewildered and bewildering description is to be found inProudhon'sQu'est ce que la Propriété, 1848, as the precursor of whichBrissot'sRecherches philosophiques sur le Droit de Propriété et le Vol, may be considered. In medieval times, there are always a multitude of other titles to property besides production and saving. The title which is held in highest esteem for the time being is always because of this very extreme vis-a-vis of all other titles, strengthened and made general.471.The word socialism brought into use byL. Reybaudis as ambiguous as the word communism is simple and intelligible. But most socialists agree that actual“society”(which is indeed to be distinguished from the state) is, together with its foundations, the existing relations of property and the family, entirely wrong. A radical reconstruction, they say, is needed to remove forever the chief evil of this system, viz.: the glaring difference between the rich and the poor, the educated and the uneducated. The difference between the doctrines of the socialists and of Political Economy does not, by any means, consist in this, that the former concerns itself more with the welfare of the lower classes, or even that it gives wider scope to economy in common. But socialism is, indeed, a living or housekeeping in common (Gemeinwirthschaft), which goes far beyond the feeling for the common interest (Gemeinsinn). Such economy in common is always opposed to freedom, and, at its first introduction, contrary to law. It can guarantee no compensation to those who have suffered from violence or force, because it leads to a thoughtless and wasteful exhaustion of the nation's resources, inasmuch as it weakens the incentive to industry and frugality. Political Economy, on the other hand, recommends anexpropriationwhen the incentives to industry and frugality are thereby strengthened; and the increased resources thus obtained serve it, as full compensation to those whose property has beenexpropriated.472.SeeRoscher, Betrachtungen über Socialismus und Communismus, Berliner Zeitschrift für Geschichtwissenschaft, 1845, III, 422 ff.473.Vivre en travaillant ou mourir en combattant—the device on the flags of the mutinous silk-weavers at Lyons, in 1832.474.We are so assured byVauban(Dime Royale, 34 seq), of the later years of the reign of Louis XIV, that nearly 1/10 of the French people begged, that 5/10 could give no alms, because they were themselves on the very brink of indigence; 3/10 werefort malaisés, embarassés de dettes et de procès; scarcely one per cent. could be said to befort à leur aise. How much better off is the present Parisian workman! And yet, at that time, there was not the least spread of communistic doctrines. It is indeed seldom that completely down-trodden men react against their wretchedness with great energy.475.“If mycapricebe the source of law, then myenjoymentmay be the source of the division of the nation's resources.”Stahl, Rechtsphilosophie, II, 2, 72.476.That the socialism ofPlato, De Repub., V, was no mere fancy, is proved by the polemic whichAristophanesdirects against it in his Ecclesiazuses. See alsoAristot., Polit., II, 2, Schn. In the contemporary practice of the Greeks, with the increasing democratization of the state, it became more and more usual for it to bear the expense of the outlay for the means of subsistence of the great crowd. (SeePlutarch, Cimo, 10.) Every act of public life was paid for. Citizens were paid for attending popular meetings three oboli per day, while the pay of the soldiers was six, and that of the sailors three. (Thucyd., III, 17; VII, 27; VIII, 45.) The pay of the commonest day laborer was from three to four oboli per day.Aristophan., Eccl., 310, andPollux, VII, 29. The number of magistrates was very large, in order that as many as possible might participate in this species of remuneration. Thus, in Athens, when it had only about 20,000 inhabitants, there were 6,000 judges. In addition to all this, there were numberless feasts, plays, banquets etc., which were offered to the people gratis. The wealthy who were compelled to meet all the expense thus incurred, lived in such a state of terror of the populace, that they considered their own impoverishment as a species of deliverance. (Xenoph., Conviv., 4, andLysias, pro Bonis.)Isocratescalled it much more dangerous to be rich than to commit a crime, since in the latter case one might obtain a pardon or a mild punishment. (De Permut., p. 160.) (Lysias, De Invalido, de sacra Olea, seq.) There is little difference between this state of things and a semi-community of goods. Only that, indeed, the great mass of the slaves were excluded from enjoying them. The contrast which somewhat later distinguished the Cynics from the Cyreno-Epicureans affords a striking analogy to that which, in our own times, exists between the pure socialists and the worshipers of mammon after the fashion of Doctor Ure. Concerning the Utopia ofIambulos, seeDiodor., II, 55 ff.477.Our sources of information concerning the division of the Roman republic into a moneyed oligarchy, and the proletariat are very numerous. Compareinfra, § 205. The speeches of the Gracchi (e.g.Plut., T. Gracchus, 9), and still more the violent discourses of Catiline's conspiracy (Sallust, Cat., 20, 23, 37-39), remind us very forcibly of the shibboleths of modern socialism. We very frequently meet with the expression of a longing desire to return to the most uncivilized and hoary past, when there was no money and no wealth—an aspiration which lies at the very foundation of communism. ThusVirgil, Geo., I, 125, ff.,Tibull.I, 3, 35, ff.Propert.II, 13, III, 5, 11;Seneca, Epist., 90;Senec., Oct. II,Hippol., II, 2;Plin., H. N. XXXII, 3. On the other hand, the practice of supporting the populace at the expense of great candidates or of the state, was developed to a very great extent. The masses lived very largely by the sale of their right of suffrage to the highest bidder. At the election of consuls in the year 54, 500,000 thalers were offered to the century called on to vote first. (Cicero, ad Quintum II, 15; ad. A.H. IV, 15.) EvenCatohad a part in such bribery. (Sueton., Caes., 19.) In the social reform of the younger Gracchus, besides the limitation of large land-ownership, the principal points were the following: the sale of wheat under the market price, but only to the inhabitants of Rome itself; the construction of great highways in Italy; colonization at the expense of the state, and the increase of soldiers' pay. (Ritsch, Gracchen, 392 ff.) The socialistic plans of Rullus went much further. Were his agrarian laws put in execution, he would have confiscated very nearly the entire country in the interest of the poor, and of their demagogues! (Cicero, De Lege agrar.) Rome twice experienced a social revolution of the most frightful character, one by which a great portion of all private goods fell into the hands of the propertyless (soldiers), who knew nothing of how to turn it to account or to invest it—under Sulla, and then under the later Triumviri. (CompareAppian, Bell, civil., V, 5, 22.) Complaints concerning the latter, inHorat., Epist., I, 2, 49;Virgil, Buc., IX, 28;Tibull.I, 1, 19, IV, 1, 182;Propert., IV, 1, 129. The elder Gracchus had promised compensation to the last possessors.Tabulæ novæof Cinna, Catiline, Cælius, Dolebella. Clodius introduced the distribution of wheat, which according to Cicero pro Sext., 25, ate up almost one-fifth of the public revenues. About 320,000 persons were, in this way, supported for a long period of time (Sueton., Caes, 41,Dio C., XLIII, 21; L. LV, 10), but only in such a manner as to keep them from starvation. (Sallust, 268 ed. Bip.) To all this was soon added distributions of salt, meal and oil, also free baths, numberless public plays, colossal banqueting, payment of one year's rent etc.Panem et circenses!(Juvenal, X, 80 seq.) The mere distribution of money under Augustus, in which from 200,000 to 320,000 men participated, cost each time from 2,500,000 to 6,000,000 thalers. (Monum Ancyr., 372 Wolf.) Extraordinary assistance was, by way of preference, accorded to colonies of the poor. (Sueton., Caes, 42.) Concerning this entire policy, seePlin., Paneg., 26 ff. Even in Constantinople, at the time of its foundation, large distributions of bread were made at the expense of Egypt, although there could scarcely be any real pauperism in that new and flourishing city. (Theod., Cod., XIII, 4, XIV 16;Socrat., II, 13.) I can only allude to the plan proposed by the emperor Gallien by the neo-platonist Plotin, to found a city in which the ideas of Plato's republic should be carried out. (Porphyr., V, Plotin., 8.)478.During the two centuries of which the Reformation constituted the middle point, the transition from the peasant system of agriculture to the large farming system of modern times bore very heavily on the inferior classes. Such, too, was the operation of the fall in price of the precious metals. (§140.) The suppression of the many monasteries caused an increase in the wretchedness of the poor; and the numerous poor-laws enacted in England, Spain etc., were not sufficient to supply a remedy. The feeling of the people during this period of tribulation found expression in the War of the Peasants, in the sect of Anabaptists, in the many reformations and counter-reformations, in the revolt of the Netherlands, in the conflicts for the crown in France and England etc. In Italy, the contrast existing between the moneyed oligarchy and the proletariat had been developed several centuries, but from the middle of the sixteenth century, it had become much more oppressive by reason of the universal impoverishment of the country. For an account of the pantheistic“Brethren and Sisters of the Free Spirit,”with their community of goods and of women, seeUllmann, Reformatoren vor der Reformation, II, 18 ff. They were very numerous from the thirteenth to the fifteenth century in Italy and France, as well as in Germany, and lead us to the Adamites in the Hussite war. (Aschbach, Geschichte K. Sigismunds, III, 109.) Earlier yet, we have the sect of the Giovannali, who had their property and women in common, and who, in 1355, had won the third of Corsica, but who were afterwards suppressed by Genoa and the Church. (Lebret, Geschichte von Italien, VI, 208 ff.) The coarse socialist,John Balle, bears about the same relation to Wycliffe, that Münzer and Bockholt did to Luther. (Walsingham, Hist. Angliæ inCamden, Scriptt., 275.) Hans Böheim of Würzburg, 1476, seems to be the direct precursor of Münzer. (Ullmann, I, 421 ff.) It was almost as usual in Luther's time, as in 1848, or in our day, to hear of the deep demoralization of trade—theFuggereiof the Germany of the time—and of the universal system of fraud that prevailed. See the citations inHagen, Deutschland's Verhältnisse im Reform-Zeitalter, II, 313 ff. Münzer's fundamental principle:Omnia simul communia!Sebastian Frank, Chronica, Zeytbuch und Geschychtbibel etc., 1551, fol. VI, 16, 27, 116, 194, 414, 433. John Bockholt's life presents us with a striking contrast. While they were bringing his perfumed women, sparkling with jewels, to his rose-covered bed, hung with curtains of gold cloth, on which he was reclining, his subjects were a prey to the horrors of famine, to such an extent that they were compelled to salt the bodies of children who had died of starvation. How frightful the end of this communistic benefactor of mankind! Libertine community of goods and women. (Calvin, Instructio adv. Libertinos, cap. 21.) English communists in the age of the reformation. (J. Story, Comment. on the Constitution of the U.S., I, 36.) Even under Cromwell, there were many Englishmen who believed that farmers were no longer obliged to pay rent to land-owners. On the sect of Levellers, seeWalker, History of the Independency, II, 152. Even inErasmus, we find some sympathy with communism. (Enchirid. milit. Christ, 80.)Contra, seeMelanchthon, Prolegg. in Cic. de Off., Corp. Reform, XVI, 549 ff. The most remarkable systematic works of this period areThomas More's, Utopia, 1516, andCampanella'sCivitas, solis, 1620.Thomas Morebluntly says that all existing governments are in fact only permanent conspiracies of the rich to further their own interests under the mask of the common good, and to despoil labor. The abolition of money, which should be continued in use only to carry on foreign war, would, he contends, remove all misery. There was no really private property in his Utopia. There should be a rigid superintendence of all work by the public authorities, whose duty it should be to see to it, that no one should abandon agricultural pursuits. All should eat at a common table and dress after the same fashion. Internal commerce should give way to a mutual exchange of gifts under the supervision of the state.Campanella, besides a community of goods, recommends continually varying occupation, to last not more than four hours daily; education in common, especially by means of pictures, popular encyclopedias etc., all under the supreme guidance of a despotism to be composed of the wise, some secular and some spiritual, operating through the confessional. Socialists nearly always succeed better in the critical part of their works than in the positive. CompareR. Mohl, Geschichte und Literatur der Staatswissenschaften, § 1, 165 ff.479.Considering the aversion exhibited against private property byJ. J. Rousseau, and the unlimited power which he accords to the majority for the time being in the state (Contrat Social, 1761, II, ch. 4), it cannot be denied that his freedom and equality contain, to say the least, germs of communism by no means insignificant. But, he would, in the present state of civil society, have a feeling of respect for the rights of property implanted in the mind of the child very early, and even before the feeling of liberty is developed. (Emile, 1762, Livre II.) About the same timeMorellypublished his Basiliade ou Naufrage des Iles flottantes, 1753, a political romance in the interest of communism. See the same author's Code de la Nature, 1755.Mably, in his two works, Doutes proposés aux Economistes, 1768, and La Législation ou Principes des Lois, 1776, recommended the abolition of all inequality and a real community of goods. The introduction of property seems to him,une faute qu'il était presque impossible de faire. EvenBeccariacalls property a dreadful but perhaps a necessary right which has left to the unfortunate nothing but a naked existence. (Dei Delitti e delle Pene, 1765, cap. 22.) The French Reign of Terror came pretty near carrying these ideas into effect. We need only refer to the abolition of the census, the payments made to the workingmen who attended the section meetings, two francs per diem, the enormous extension of confiscation, requisitions and forced loans, the revolution effected in the fortunes of individuals by the system of issuing assignats, the maximum affixed to the price of all the necessaries of life, the abolition of indirect taxes, and of what remained of the economic institutions handed down from the middle ages. According toSt. Just:l'opulence est une infamie; il ne faut ni riches ni pauvres. The Cahier des Pauvres demands, first of all, that salaries“should no longer be estimated in accordance with the murderous principles of unbridled luxury.”See Forster's letter dated November 15, 1793. (Sämmtl. Schriften, IX, 125.) On the conspiracy of Baboeuf, who was executed in 1796, and who wanted to see the completest equality and community of labor, of enjoyment and education, the abolition of large cities etc., seeBuonarotti, La Conjuration de B., 1821. This book contributed powerfully towards the revival of communistic ideas after the July revolution. Among modern communists who are to be distinguished from the more ancient, especially by the industrial coloring given to their theories,Cabet, Voyage en Icarie, 1840, II, holds a very prominent place. He declares the abolition of religion, of the family and of the state, to be open questions, and desires to bring the practice of a community of goods to a successful issue only through the peaceful channel of conviction.CompareReybaud, Etudes sur les Réformateurs contemporains ou Socialistes modernes, 1840.L. Stein, Der Socialismus und Communismus des heutigen Frankreich. See, also, the learned history of socialistic systems inMarlo'sWeltökonomie, I, 2, 435 ff.; and in what concerns the most recent time,R. Meyer, Der Emancipationskampf des vierten Standes, II, 1874, seq.; a book which, in spite of its many defects, both doctrinal and journalistic, is as rich in thought, and in the knowledge of the subject it treats of, as it is permeated by a love of truth regardless of consequences. Among the opponents of socialism and communism,Malthus, On Population, B. III, ch. 3, andB. Hildebrand, Die Nationalökonomie der Gegenwart und Zukunft, vol. I, 1848, hold a very distinguished place.J. S. Mill, Principles, II, ch. 1, 3, calls attention to the fact that hitherto the principle of free property has never been consistently carried out. The first social arrangement of modern society was almost everywhere the result of conquest and violence, large traces of which yet remain. Things have always been made property which ought not to be property. Governments have endeavored to intensify the darkness of the dark side of property, and favored the concentration instead of the diffusion of wealth etc. Hence, no one can claim that the social wrongs, so-called, had their origin in property as such.Schäffle, Kapitalismus und Socialismus, 1870, has made a very note-worthy effort to recognize whatever of truth there is in socialism, and to combat its errors.480.Saint Simon'sreproach to the liberals, that their fundamental principle was:ôte-toi de là, que je m'y mette, is well known.481.CompareMalthus, Additions to the Essay on Population, 1817, IV, ch. 7.482.Thetravailleurs égalitaireswished to murder not only the king, the court, and the ministry, but also the Liberals and all owners of property.483.As soon, indeed, as this true love disappears in the married state, the community of goods even there degenerates only too easily into a spoliation of the better party by the worse.484.The community of goods of the first Christians at Jerusalem, so frequently cited and extolled (James, I, 1), was only a community of use, not of ownership (Acts IV, 32), and, throughout, a voluntary act of love, not a duty (V. 4), least of all, arightwhich the poorer might assert. Spite of all this, that community of goods produced a chronic state of poverty in the church of Jerusalem. Hence, Paul had collections taken up for them on all sides, without, however, anywhere establishing a similar institution. (Romans, 15, 26; I. Corinth., 16, 1.) CompareMosheim, De vera Natura Communionis Bonorum in Ecclesia Hierosol., in his Dissertatt. ad Histor. Eccles. pertinentes, II, 1 ff. As to whetherBarnabas(Epist., 19) desired to say anything more, compare Epist. ad Diognetum, 5. For a real recommendation of a community of goods, on economic grounds, seeJoh. Chrysostom., in Acta Apost., Hom. XI. AlsoClemens Rom.c. 2 C. 12, qu. 1. Community of goods among the Essenes:Philo.Opp. II. 457 ff.Joseph. Bell, Jud., II. 8.Bellermann, Geschichtliche Nachrichten über die Essener. (1821.) In many monasteries, there has been and is a species of community of goods. There was once a singular contest on this subject, carried on between the Minorites and the Pope, in the time of Louis of Bavaria. The Minorites claimed that property was a thing, so much to be condemned, that even food, at the moment of eating it, did not belong to the person using it. The Pope taught on the other hand, that even Christ and the Apostles possessed property, part personal and part in common. (Raynaldi, Ann. eccl., XV, 241, 285 ff.) Community of goods of the Homiliates, later of the Brothers of Common Life, after the manner of the monks, but of a much higher kind. (Ullmann, Reformatoren v.d. Reform, II, 62 ff.) The first settlers of New Haven, Connecticut, held their property in common. Land was divided among families in proportion to the number of persons in them, and of the number of cattle they had brought with them; and all sales and purchases were made on account of the whole community. And so in Massachusetts during the first seven years of the colony's existence. (Ebeling, Geschichte und Erdbeschreib. der Vereinigten Staaten, II, 391, I, 557.)Herrnhutcommunity of goods in Pennsylvania, from 1742 to 1762, but which was done away with when the number of colonists became too great. (Ebeling, IV, 717.) Community of goods of the Shakers and Lutheran Rappers. (Buckingham, Eastern States, II, 214, 427.Prinz Neuwied, Reise in Nord Amerika, I, 136, ff.) Russian sects with community of goods. (v. Haxthausen, I, 366, 407.)Harless, christliche Ethik § 501, distinguishes very well between the“anti-christian”and“pseudo christian”stand point, from which it is sought to establish the doctrine of a community of goods. The Christian view of this subject (compare Ephes., 4, 28, I; Thess., 4, 11, II, 3, 12; Matth., 6, 24; Pet. 4, 10; Matth., 26, 7-11) is accused of hypocrisy by many socialists. It is very easy, they say, when one is himself in comfortable circumstances, to represent to the poor that their poverty is a school for heaven, and to preach a contempt for riches etc. They entirely forget, that the first promulgation of the Gospel was made at a time when the worst kind of pauperism prevailed; and that even the Master Himself, and the greater number of His Apostles belonged to the lowest stratum of society.Luke, 9, 58. Many of the Fathers of the Church, however, in their exhortations to benevolence, used language in which modern Socialists have found a rich mine which they have sedulously worked. (CompareVillegardelle, Histoire des Idées sociales, 1846, 61 ff.)485.EvenAristotlesays that what is common to many is a matter of little concern to any one. (Polit., II, 1.)Bastiatremarks:“We compete to-day to see who works most and best. Under another regime, we should emulate one another to see who should work least and worst.”(Harmonies Econ., ch. VIII.) When the first settlers of Virginia, in 1611, gave up the system of common labor and of joint-stock companies, as much work was performed in a day as formerly in a week, or as much by three workmen as formerly by thirty. (Purchas, Pilgrims, iv, 1866.Bancroft, History of the United States, I, 161.) Even in New England, therefore among men both steady and accustomed to labor, who for conscience sake had sacrificed so much, a community of goods was accompanied uninterruptedly by famine. A change for the better took place, for the first time in 1623 with the introduction of the institution of private property which was followed in 1624 by the right of inheritance. (Bancroft, I, 340.) The military colonies of Algeria, also, in which husbandry in common was carried on, begged, at the end of a year, that the system should be abandoned, for the reason that it was good for nothing but to generate idlers; and yet, these colonists were all powerful men of about the same age, and accustomed to order and service in common. They were, moreover, assisted by the nation with pay and food. CompareBugeaud'saccount: Revue des deux Mondes, June 1, 1848.“The French associations (after 1848), whose object was labor in common, have nearly all died out.”M. Chevalierin the Journal des Débats, Feb. 3, 1851. In the United States, sixteen phalansteries of Fourierites, founded between 1840 and 1846, had all collapsed in 1855. (D. Vierteljahrsschrift, October, 1855, 205 ff.)486.Even in New Harmony, the members considered the task which they had to perform to obtain food, clothing and shelter, as villeinage in the worst sense of the term. (H. Bernhard v. Weimar, Nordamerikan. Reise, V, 134 ff.; 151, 310, ff.) It is very inconsistent in socialists to continue the proprietorship and heirship of the state. To be consistent they should give both these rights only to mankind as a whole. CompareKiraly, Ueber Socialismus und Comm., 1868, 35.487.It would not be entirely fair to take a partisan view of theateliers nationauxof 1848, and claim them as a practical refutation of socialistic utopias, since no serious experiment was made with them. CompareE. Thomas, Histoire des Ateliers nationaux considérés sous le double Point de Vue politique et social, 1848.488.Socialists generally overlook the fact, that the greater number of enjoyments from which the poorer classes are excluded, by the right of property, would not exist at all were it not for that very right. (Spittler, Politik, 356 ff.) This remark may also be made ofHugo'singenious objections. (Naturrecht, § 208 ff.) One of the most effective pieces of socialistic declamation is that the lower classes have a much shorter average of life than the upper. Hence the institution of private property is charged with being a species of spoliation of the poor of so many years of life, and the entire“present society”condemned on that account. Here again it is not borne in mind, that a few centuries ago the general average of life was probably still smaller; and that it was precisely the growth and development of“present society”that lengthened the days of the poorer classes even, although it may have lengthened those of the rich in a still greater proportion. See § 246.489.But a community of goods would not, by a great deal, accomplish as much as is generally supposed. In Prussia, for instance, in 1867, only about three per cent. of the entire number of families in the community had a yearly income of 1,000 thalers; only nine per cent. had 500 thalers or more, and only 6,465 returned an income of more than 4,000 thalers, while only 590 returned one of 16,000 thalers. (Preuss. statist. Ztschr, 1868, 83.Held, Die Einkommensteuer, 197 ff) How little, therefore, could the poor here gain by the spoliation of the rich! Besides, the purely personal consumption of the rich is, after all, not so great; and if all luxury were abandoned, an innumerable number of men would lose their gains. (CompareAd. Smith, Wealth of Nations, I, ch. 11, 2.) It would be to kill the hen that had hitherto laid the golden egg in order to divide its flesh a little more equally.490.Babeufdeclared all arts and sciences to be evils. He would have no one learn anything but Reading, Writing, Arithmetic, and a little of the Geography of France; and have the strictest censorship enforced to keep every one within these limits. Compare the able criticism ofProudhon, Contradictions, ch. 12.491.According toUmpfenbach, Nationalökonomie, 201, where a community of goods obtains, there can be but the alternative, viz.: whether each person or each family shall receive just the same amount. (The former would be more in harmony with principle, but what an over-population would be the consequence!) Precisely so, too, if each person were to come and take his own portion (anarchy!), or if it were parcelled out to each by a board of distributors (despotism!).492.This expression came into vogue, principally, throughL. Blanc, Organization du Travail (1841), the leading ideas in which work are the following: The suppression of competition by the establishment of state industries; equality of remuneration for labor; equality and legislative determination of the rate of interest; the choice of superintendents by the workmen. With many modern socialists, the shibboleth is not so muchlibertéassolidarité. Besides,Fichte'sNaturrecht (1796), and his geschlossener Handelsstaat, are, without doubt, among the most remarkable works favoring an“organization of labor.”They aim at the destruction of the present social system, which, at most, needs only to be reformed and rejuvenated; and to galvanize the dead body into a new and different life (Medea's magic cauldron!). CompareCorvaja, Bancocrazia o il gran Libro sociale, 1840.493.Cabet's Icarian colony in America numbered 298 adults and only 107 children. Yet spite of this condition, so favorable to production, it did but a very sorry business. Its government was very similar to that of a house of correction or a penitentiary. Even in religious matters, spite of all pretended toleration, those members who did not agree with Cabet were described in the official weekly paper asdes infames ou des aveugles. (D. Vierteljahrsschrift, 1855, October, 205 ff.)494.An eastern sage says, that land possesses the ideal of legal security through which a beautiful woman, decked with pearls, might travel without danger. What would such a sage say of a European country, in which even orphan children have their property not only preserved to them, but find it increased from having been placed at interest, as soon as they reach their majority? (Barrow.)495.“The equality of communism is the worst species of inequality, because it guarantees to one for two hours of poor labor as much as it does to an other for four hours of good work.”(Bastiat, Harmonies économiques, ch. 8.)496.Proudhon, Qu'est-ce que la Propriété, 283, says, very justly, that“a community of goods is the spoliation of the strong by the weak.”497.Called a negative community of goods, byZacchariä, Vierzig Bücher vom Staate, IV, 146, in contradistinction to the positive and universal community of gain, as desired by the communists.498.Community of goods and of women among the Ichthyophages on the Red Sea, who lived in caves, went naked for the most part, plundered all shipwrecked people, and never reached an advanced age.Diodor., III, 15 ff.Peripl., Maris Erythr., 12. Concerning the Scythians, seeStrabo, VII, 300; the Spaniards,Plutarch, Marius, 6; the Rhetians,Dio Cass.LIV, 22; the Triballi,Isocr., Panath., § 237; the Kilici,Sext., Empir. Pyrrh. Hypot. III, 24. Community of goods among the Caribs who performed all their work in common, and had, at least in the case of males, a common table and common stores with supplies. (Petr. Martyr, Dec. VII, 1.Rochefort, II, c. 16.B. Edwards, History of the West Indies, I, 43 ff.) Among the Kuskowimers of Russian America, all the able-bodied men of the tribe live together. (v. Wrangell, Nachrichten, 129.) Among the inhabitants of the Aleutian islands, at least in times of scarcity of food, the produce of the fisheries is divided according to their need. (V. Wrangell, 185.) The organization of labor is rigidly enforced among the Otomacs, on the banks of the Orinoco, and they are, nevertheless, more civilized than their neighbors. (Depons, Voyage, I, 295.) A community of goods must, however, be considered an advance, in the case of an isolated people; and it is an error to look upon it as the most primitive condition, as does, for instance,Ambrosius, De off. Minist. I, 28, andFrederick II, in the preface to his general code. (Allgemein. Gesetzbuche, 1231.) The hospitality of the inhabitants of the Friendly Islands borders on a community of goods. (Mariner, Freundschaftsinseln, 75, 81.Klemm, Kulturgeschichte, IV, 398.) Concerning the beginnings of property among the Esquimaux, SeeKlemm, II, 294.499.Οὐκ ἄδοξον ἧν παρὰ τοῖς παλαιοῖς ληστεύειν, ἀλλ᾽ ἔνδξον. (Didym., ad Odyss. II, 73, IX, 252.)500.In Mexico, the Spaniards found land ownership among the most distinguished of the natives, but only a species of possession in common and common store houses among the peasantry. (Robertson, History of America, § VII.) Hence, the agriculture of the country was so unimportant that the little army of theconquistadoresfrequently produced a famine by their marches.501.The Tcherkesses considered robbery honorable provided the robber was not caughtin flagrante. CompareKoch, Reise in den kaukasischen Isthmus, I, 370 ff.Bell, Journal of a Residence in Circassia, I, 181, II, 201. The organized robber bands of ancient Egypt, when it was so highly civilized (Diodor., I, 80) may, on the other hand, be accounted for by similar conditions actually existing in the large cities of our own day.502.What a frightful organization of labor we find in Sparta, combined with a community of goods! Let us recall the exposing of children authorized by law, the mode of education which must have cost the life of all whose constitution was weak, thecryptia, the stern hierarchy of age etc.Plut., Inst. Lac. 2, appreciates the bad taste of the black broth at its true value. The Cretan community of goods was based chiefly on the unnatural relation created by the authorities known as paiderastia; and which was a very efficient means to prevent over-population. (Plat., De Legg, I, 636.Arist., Polit. II, 8.)503.Remarkable reasons therefor inCæsar, Bell. Gall., VI, 22.504.There are, especially in Russia, a multitude of such institutions among the inhabitants of the country still. SeeRoscher, Nationalökonomik des Ackerbaues, § 71 ff.505.In the Corpus Juris Canonici, that crown of medieval theology, politics and jurisprudence, the ideal of a community of goods occupies a place almost as prominent as in the works of modern socialists. The only difference is, that in the former the opposition to private property arises from a one-sided religiousness and contempt of the world, while, in the latter, it arises generally from irreligiousness and over-estimation of worldly goods.506.This does not include the cost of the schools, churches and benevolent institutions.507.According toLassalle, System der erworbenen Rechte, 1861, § 259, history shows that law, as civilization advances, curtails more and more the proprietary sphere of private individuals, inasmuch as it tends more and more to place a greater number of objects outside the circle of individual ownership.508.Saint Simonism is a warning example of this tendency. Saint Simon never lost an opportunity to give vent to his utter contempt for the liberals, and for constitutional government—ce bátard du régime féodal et du régime industriel; and to counsel the crown, after the example of Louis XI. to place itself at the head of the working class, and in opposition to the middle class. (Oeuvres deSaint Simon, éd. 1841, 44, 148, 209.)Bazard, Exposition, 76, demanded that all antagonism between the temporal and spiritual powers, all opposition for the sake of freedom,méfiance organiséeof parliaments, and all competition, should cease. Even education he would have bestowed according tocapacité, which he would have determined by thechefs légitimes de la société(280). To the criminal court should be referred all cases ofdelicts, that is, all inopportune acts, even in the scientific and artistic departments. They should be tried after the manner of the“courts of trade;”that is, in a summary way, without appeal, and by experts (317 ff). All the relations of property should be determined by thedécision arbitrale des chefs d'industrie(326).Bazardeverywhere insists that the reign of genius and of self-sacrifice on the one hand, and on the other of confidence and obedience, is the only true policy (330). Saint Simonism was nearly related to Bonapartism.509.Schäffle, Nat. Œk., III, Aufl., I, 61.510.If we remove in thought, all injurious elements from a community of goods, and add to it all the incentives and restraints necessary to be added, we shall have a state of things entirely similar to that in a nation whose public and private affairs are carried on in accordance with the principles of a healthy system of Political Economy as understood to-day. (Edinburgh Review, January, 1851.)511.How true freedom is accompanied by whatBastiatcalls“true Saint Simonism and true communism,”seeinfra, § 210.512.The experiments of a community of goods, which have proved successful in practice, were all based on the more or less complete celibacy of the members of the societies. CompareHermann, Staatsw. Unters., II, Aufl., 45.513.ThusProudhon(Contradictions, ch. 5) says that the many socialists, who would construct their societies after the type of the family, as themolscule organique, are all wrong. The family has a“monarchical, patriarchal”character. In it, the principle of authority is formed and preserved. On it, ancient and feudal society was based; and“precisely against this old patriarchal constitution, modern democracy protests and revolts.”Fouriercalls marriage,un groupe essentiellement faux: faux par le nombre borné à deux, par l'absence de liberté et par les dissidences du goṅt, qui éclatent dès le premier jour. (Nouveau Monde, 57.)514.On the Indians of North America, seeSchoolraft, Information respecting the Indian Tribes of the United States, II, 194; on the South Americand'Orbigny, Voyage, IV, 220, and passim, on the South Sea Islanders, the Novara-Reise, II, 418; on the ancient Albanians,Strabo, XI, 503.515.The hereditary transmission of property to posterity has an obvious tendency to make a man a good citizen. It ranges his passions on the side of duty, and induces him to make himself profit the common good, and it assures him that his reward shall not die with himself, but that it shall be handed down to those to whom he is joined by the dearest and most tender feelings. (SeeBlackstone'sCommentaries, II, 11.) Without the right of inheritance, credit is scarcely possible, since with the death of the debtor the only stay of the creditor would cease.516.Testamentary freedom (which obtained in places there about the beginning of the eighteenth century) prevails completely in England at present, contrary to the principle of the Roman law requiring an obligatory portion (la légitime) to be left to the heirs, which is still binding in France, but in a very much developed form. The consequence is that last testaments are as frequent in England as they are rare in France. There were, in Paris, in 1825, 7,649 judicial, and only 1,081 testamentary partitions of property. (Monnier.) In Great Britain, in 1838, the number of testamentary alienations of property taxed stood to those in which there was no will, in the proportion of 8:3; and the values of the alienated property as 10:1. (Porter.) Among a people noted for their high moral tone, testamentary freedom is a powerful means of strengthening paternal authority on the one hand, and of keeping alive, in the minds of parents, on the other, a sense of responsibility for the future of their children. CompareHelferich, Tübinger Zeitschr., 1854, 143, ff.517.Polyb., XX, 6. Hence it was, that all (?) the wealth of Thebes, when it was destroyed by Alexander the Great, was only 440 talents. (Athen., IV, 148.)Drumann, Gesch. Roms. etc., VI, 333 ff.Cicero, Phil., II, 16.Hoeck, Röm. Gesch., I, 2, 118.Sueton., Octav., 66. An especially scandalous instance inPetron., 140. For a masterly theory of legacy-hunting, seeHorat., Sat., II, 5. CompareLucian, Dialogues of the Dead, 5-9.Petroniusspeaks of aturba hæredipetarum. (124.)518.Even the revolutionary shibboleth,paternité, really means nothing more than the equal right of inheritance of all, i.e., the abolition of the right of inheritance! (R. Meyer.) The strongest attack, from a scientific point of view, made on the right of inheritance in more recent times, comes from Saint Simonism. The founder himself, after a life rich in experience but poor in action, spent in the search of much but in the finding of little, succeeded only in arraying the industrial and proprietary classes against each other, in declaring the poorest class to be the most important of all, and in basing the newreligion of loveon the emancipation of labor. His disciples went further. In order to abolish all the privileges of birth,Bazard, Exposition de la Doctrine de Saint Simon, 1831, p. 172, ff., taught that it was not enough to distribute public employments according to merit, and in the interest of the people generally, but that the distribution of property should be made in accordance with the same principle. The inequality of ownership should correspond with the inequality of merit. Every one may, during his life, keep what he had acquired himself, but give it to the state at death. Thus would a reconciliation be effected between the general interest and private interest; and the public revenue, supplied in this way, might easily be employed in place of the revenue raised by such taxation as weighs most heavily on the inferior classes.F. Huet, also, Le Regne social du Christianisme, 1853, III, 5, would have all private property, after the death of the owner, fallégalement à tous les jeunes travailleurs. The practical consequences of this system may now be seen in Turkey. There, the principal military fiefs are held in this way. Hence it is, that the Turkish owner of such a fief builds as little as possible. When one of his walls threatens to fall, it is kept standing by means of props. If it falls in fact, the only consequence is that there are fewer rooms in the house, and the owner settles beside the ruins. (Denon, I, p. 193.) In the Butan, there exists a species of practical Saint Simonism.Robinson, Descriptive Account of Assan, 1841.519.It was chiefly fear of the consequences of the declamations of the socialists and their declamation against“monopoly”that inducedBastiatto reduce all the value of landed property to that of the capital employed in its manuring, improvement etc. (Harmonies, ch. 9.) We may, however, unreservedly grant him that, as a rule, until the time of its original possession by man, land had novaleurwhatever (278).520.Kantthinks the very contrary: Metaph. Anfangsgründe der Rechtslehre, (Werke, IX, 72 ff).Contra,Grotius, J. B. et P., II, 2.Graswinkel, in his Schriften für die Freiheit des Meeres, 1652 ff., inLaspeyres, Geschichte der niederländischen N. Œk., 12.Hufeland, Neue Grundlegung, I, 307.521.“A district of Tartary of ten square miles, in which several hordes pasture their flocks, may contain between 400 and 500 shepherds, who find employment in this mode of production.”In Brie, in France, on the same area, 50,000 peasants who own no land, live and draw their sole income from their labors in the fields (J. B. Say).522.Schubert, Reise durch Frankreich und Italien, I, 188.523.“Without labor, the earth bestows nothing on man but a stopping place. Hence, the reasons for private property do not extend so far as to prove that the great land and water highways should not be reserved as common property, and as a home to every man.”(Zachariä, vom Staate, VII, 43.)524.This is the practice in Taway.Ritter, Erdkunde, V, 130. And so in ancient Germany.J. Grimm, Rechtsalterthümer, 92. Right of the“dead fire”in Spain and Portugal during the middle ages.S. Rosa de Viterbo: Elucidario das Palavras etc., I, 470. In many parts of Persia, the land belongs to anyone who has provided it with water by canals or wells. (Fraser, Journey in Chorasan, ch. 7.) Especially after the Mongolian devastation about the beginning of the fourteenth century, it was decreed that land which had remained uncultivated for a long time should belong to the person who made it productive. (d'Ohsson, Hist. des Mongols, IV, 418.) Similarly, in the time of the ancient Persians (Polyb., X, 28, 3), the harvest for the first five years belonged to the person who first irrigated the land. On the upper Euphrates, likewise, the land is very often neither sold nor leased. Anyone who will till it and pay one-tenth of the produce to the bey may have it for nothing. (Ritter, X, 669; compare VIII, 468; IX, 900.) So, too, among the Fulah and Mandingo negroes, and even among the Tscherkessans. (Klemm, Kulturgeschichte, III, 337 ff.) As the latest stages of development so often present instances of a reversion to the earliest, we find that Theodosius and Valentinian decreed that theagri desertishould, after two years' cultivation, belong to the possessor. L. 8, Cod. Just., XI, 58.525.Thus anyone may burn his own coat or throw it in the water; but no one may set fire to his own house or drown his land by the destruction of a dam. Even the non-user of a large area, in a thickly populated region, would scarcely be permitted. The taking of property by the state, at the present day in times of peace, is confined almost exclusively to land.526.ThusP. v. Arnim, in a work entitled“Ideen zu einer vollständigen landwirthschaftlichen,”Buchführung, 1805, a treatise on“agricultural book-keeping,”considers the farmer as a state official who should cultivate whatever he believed in conscience, or what the state declared to be, most necessary. He suggests that the state should subject all new purchasers of land to an examination to ascertain whether they are rich and noble enough to act in this way.527.Thus, for instance,Herbert Spencer, Social Statics, 1851, 114 ff., and to some extentSpinoza, Tract. polit., VI, 2. There are now in England several Land-Tenure-Reform-Associations, some of which would“expropriate”all land and vest the title in the state. The programme of the others embraces not only opposition to the right of primogeniture, to familyfidei commissaand the assertion of the right of freedom of trade in land, and of a more democratic use of common lands, but also the appropriation by the state of the increase in the rent of land which is caused by no labor of the landlord, but solely by the increase of population and of the wealth of the community or of the nation.Newmarch, on the other hand, very correctly remarks, that since it is impossible to draw a line of demarkation showing the increase of the value of land growing out of the increase of population etc., the owner of land in making improvements would never know whether he made them for himself or for the state. (Statist. Journal, 1871, 488 ff.) CompareWolkoff, Sur la Rente foncière, 1854, andH. H. Gossen, Entwickelung der Gesetze des menschlichen Verkehrs (1854).528.In Congo and on the gold coast of Guinea the land, in whole villages, is tilled in common and the harvest distributed among the families per capita. Wherever absolutism reigns, the prince is also the owner of all the land. (Klemm, III, 337.) In China, where the original tenure in common of the land by all was broken through in the third century before Christ, all the land of the country now belongs, strictly speaking, to the state; and the possessor of land who permits it to go untilled is punished. (Plath.in the phil.-hist. Sitzungsberichten der Münchener Akad., 1873, 793 ff.) In Corea, private property in land is unknown; arable land is divided by the state according to the number in a family. (Ritter, IV, 633.) The example, on the largest scale, of a country without private property in land is the British East Indies. Compare the paper byCh. Campbell, in the Essays published by the Cobden Club; System of Land Tenure in various Countries, 1870.529.The legal and economic difference between property in land and property in capital is well defined byJ. S. Mill, Principles, II, ch. 2, 6.“The reasons which form the justification, in an economical point of view, of property in land, are only valid in so far as the proprietor of the land is its improver. In no sound theory of private property was it ever contemplated that the proprietor of land should be merely a sinecurist quartered on it.”He here alludes specially to Ireland. The Fourierist,Considérant, distinguishes accurately between the capital produced by labor and saving, and the increase of the value of land caused by capital and labor, and its original value. Only the first two elements can justly be made property. But as, for prudential reasons, it is necessary to grant individuals the right of private property in land, those who are not such proprietors must, as a compensation for the common property which they have lost, be guaranteed the right to labor. (Théorie du Droit de Propriété et du Droit au Travail.) In England, the opinion that the compulsory support of the poor was introduced in compensation to them for the establishment of private property in land has met with considerable favor.Bishop Woodward, On the Expediency of a Regular Plan for the Maintenance of the Poor in Ireland, 1775. CompareEden, State of the Poor, I, 413. However, the poor rates, in a country like England, are much more than an equivalent of what its soil could produce without the assistance of capital.530.The principal classical work on this subject isNebenius, Der öffentliche Credit, 1820, 2d ed., 1829. Previously,Salmasius, De Modo Usurarum, 1639; and evenDemosthenes, adv. Dionysiod, 1283. Compare furtherSchäffle, in the Deutsch. Vierteljahrsschrift, No. 106, II, 289 ff.531.Compulsory loans by the state, for instance, occupy an intermediate position between taxes and credit-operations, properly so called.532.Besides loans proper, all payments in advance, or delays made in the payments of earnest-money, all leases and lettings, whichCourcelle-Seneuilcallsun médiocre degré de crédit, insurances and even all contracts for wages where the payment is delayed for a long period of time, are species of credit. For a nice distinction between leasing (Pacht) and letting (Miethe), seeKnies, Tübinger Ztschr., 1860, 180 ff., and the Freiburger Univ. Programm., 9. September, 1862.D. Wakefield, Essay upon Political Economy, 1804, 35, distinguishes between“loan-credit”which is given to a poor man in the hope of his paying it by means of his labor, and“exchange-credit,”or credit between property owners.Cieszkowski'sdefinition:le crédit c'est la métamorphose des capitaux stables et engagés en capitaux circulants et dégagés. (Du Crédit et de la Circulation, 2d ed., 1847.) According toKnies, Tübinger Ztschr., 1859, 568, every credit-operation is an exchange or sale of services, one of which is to be performed in the present, and the counter-service of the other party in the future. According toMacleod, it is“a sale of debts.”533.Personal credit, of course, preponderates in commerce. Hence it is, that in mercantile life, information concerning the personal status, reputation etc. of his colleagues, plays so important a part with the merchant. This information was made more accessible in England by the Lloyd institution. On similar North American institutions, seeTellkampf, Beiträge, I, 51. Credit given on security is a modification, sometimes of personal and sometimes of real credit. Compare,infra, the theory on bankers, brokers etc.534.In despotisms, credit is almost entirely personal.MontesquieuEsprit des Lois, L.V., 15. In New York, saysM. Chevalier, a merchant with resources worth 200,000 francs, can do a business of from 1,000,000 to 1,500,000 francs. In Paris, under similar circumstances, the same man would find it difficult to be credited to the extent of 500,000 francs. In Holland, two hundred years ago, a person who hypothecated his property was obliged to pay a higher rate of interest than in business (Becher, Polit. Discurs, 1763, 699), while the stationary period, one hundred years ago, made personal credit extremely difficult. In Zurich, it was encouraged by the prohibition of loaning money out of the country. (Büsch, Geldumlauf, III, 40.)535.Schäffle, Nat. Œk., II, Aufl., 112.536.Schäffle, according to the purpose which it is intended to subserve, divides credit into production-credit (investment of loans in immoveable property and in moveable property engaged in industrial operations), consumption-credit and clearing-credit, or loans made to pay respited purchase and earnest money, inheritances etc. (Kapitalismus und Socialismus, 552.)537.Pinto, Traité de la Circulation et du Crédit, 1771, considers loans bearing interest as new portions of the resources of a country (p. 161), and that government loans not made in excess of its powers areune alchymie réalisée dont souvent eux mêmes qui l' opèrent n' entendent pas tout le mystère, (p. 338.) Similarly and earlier,v. Schröder, F. Schatz-und Rentkammer, 238 ff;Mélon, Essai politique sur le Commerce, 1734, ch. 6; next,Hamilton, Report to the House of Representatives on the subject of Manufactures, Dec. 5, 1791;Von Struensee, Abhandlungen, 1800, I, 259. See infra, § 210. More recently,St. Chamans, Nouvel Essai sur la Richesses des Nations, 1824, 83 ff. To some extent, evenDietzel, System der Staatsanleihen, 1855, 200. This is a dangerous error, since to every credit there is a set-off in the nature of a debit of an equal amount; and the evidences of debt are nothing but claims on the future revenue of the state. This was fully recognized byCantillon, 291 ff. One of the principal advocates of that view among writers on Political Economy is the vivacious, acute and practically not unskillful, but sophistically superficialMacleod. (Elements of Political Economy, 1858, ch. 3, Dictionary, 1862, v. Credit.) The creditor's assignable right of demand, he considers immaterial capital. While bills of lading, warehouse receipts, dock yard receipts etc., only represent goods, the bank note is new goods. Even metallic money has only a credit-value, inasmuch as it can be used only to effect exchanges. To the - of the creditor may correspond a + of the debtor; but the latter is negative only in the sense that we speak of negative electricity, a negative thermometrical degree. When an estate is leased, the owner has, in his demand for rent, a vendibleplus; but the lessee no correspondingminus. (Not so. To the same extent that the proprietor has his future payments on the lease discounted, the present sale-value of his estate is diminished; or if it is not sold, the last party obtaining the discount has made his available capital as much less by the advance as that of the lessor has been increased.) The“discounting of the future,”that is, the apparent capitalization of hopes, so much in vogue at the present time, may be a great spur to production as it may also be to baseless extravagance.538.Many theoreticians ascribe a direct creation of new capital to credit, in so far as the capacity of the evidences of debt to circulate as a medium of exchange effects a real saving, and permits the former very costly and intrinsically valuable instruments of exchange to be used in some other way. (§123.) CompareRicardo, Proposals for a secure and economical Currency (1817).J. S. Mill, Principles, II, 174 and 36.McCulloch, Commercial Dictionary, art. Credit. And so it was in the first four editions of this book of mine. But here, too, there is, immediately, only a transfer of already existing capital. The person, for instance, who accepts a bank note for payment, loans a part of his capital to the bank; and the advantage to the whole community of such credit-operations consists chiefly in this: that so large a quantity of cash-capital which lay idle in banks etc., may be used more productively.539.WhenRoeslersays that credit is capital, the product of saving, and very serviceable in further production (Grands., 300), he confounds credit itself with the foundations of credit, which are, indeed, in large part material or moral capital.540.Compare Discourse on Trade, Coyn and Paper-Credit, London, 1697, 72 ff.541.CompareBuron, Guerre au Crédit, 1868.Schäffle, Tüb. Ztsch., 1869, 296 ff. With a thorough understanding of its politico-economical bearing,O. Michaelis, (Berliner V. Jahrsschr. 1863, IV, 121,) says: The capital-value of my credit is not equal to the nominal value of my evidences of indebtedness [notes etc.], but to the capitalized amount of the extra surplus which I have obtained in my business by means of credit, after deduction is made of the costs and of the risk-premium.542.We shall, in the books to follow this, inquire with great care, what are the means best calculated to remedy this dangerous tendency. We need only remark here, that it is to be found in a judicious association of small capitalists, and also in the capitalization, so to speak, of personal qualities. A well organized society of work-men, without capital, may indeed obtain credit, as for instance, the Schultze-Delitsch societies, the Russianartel-schnicks(market-aid societies) etc. prove. (Frühauf, Die russ. Artels inFaucher'sVierteljahrsschrift, 1868, I, 106 ff.) We may also mention the greater credit accorded to a land-owner the moment he becomes a member of a land-loan association as compared with what he could obtain before he had joined it. The popular belief of the ancient Egyptians afforded them a very great instrument of credit in the pledging of the remains of their ancestors. (Herodot., II, 136.)543.B. Hildebrandis of opinion that the Political Economy of the future may be characterized as credit-economy, in the same way as the Economy of the present may be called money-economy, and that of the past as barter-economy of barter. (National Œkonomie der Gegenwart und Zukunft, I, 276 ff.)Hildebrand'sview is correct in so far as that, with every advance in civilization, credit comes to have absolutely and relatively an ever increasing importance, although in the middle ages, especially under feudal forms (Lehensformen), there were numberless operations in credit. Otherwise, however,Hildebrand'sthree kinds of economy are, by no means, coördinated. While barter and purchase through the instrumentality of money, in every instance, entirely exclude each other, it is impossible to imagine a credit-transaction of which the promise of a barter-performance or of a money-performance does not constitute the base. During a“money-economical (geldwirthschaftlichen) period”[i.e., one during which money is the medium of exchange, and not notes; and when barter does not obtain.—Translator.] the service rendered by money as a medium of exchange may, for the most part, be supplanted by credit. Money, as a measure of value, still remains the substratum of credit itself. (SeeKniesin the Tübinger Ztschr., 1860, 154 ff.; and in the Freiburger Programm, 9 Sept., 1862, 19.) Earlier yet,A. Wagner, Beitr. zur Lehre von den Banken, 1857 ff. Among the most practical propositions of Saint Simonism is that of asystème genéral des banques, intended to administer all the goods of the nation, and to loan them to individuals engaged, in production. (Bazard, 205 ff.)544.It is destructive of credit to allow the debtor to await several decrees or judgments before his liability is established; to allow him, on easy terms, delays, reversals of judgment, the costs of the case etc. The term within which a creditor might bring in his claim before the meeting of creditors in the Amsterdam Boedel-chamber was formerly thirty-three and a third years. (Büsch, Darst. der Handlung, Zusatz, 82.) In the presidency of Bengal there were, in 1819, 81,000 cases in arrears, and in 1829, 140,000. Westminister Review, XIX, 142.545.And yetMelonis of opinion that the state should favor the debtor as much as possible. (Essai politique sur le Commerce, ch. 12, 18.) This was the view entertained on this subject by the older practitioners. In Bengal, thedhura, a species of“judgment of God,”in which the party who could hold out longest against hunger was declared the victor, was the only means to compel a debtor to pay his debt. As a consequence, the Bengal peasant could not borrow money at less than 60 per cent. per annum. Edinburgh Review, XXII, 67. On the damages attending the credit-laws and credit-courts of Russia, by which all foreign goods are rendered exceedingly dear, seev. Sternberg, Bemerkungen über R., 100 ff. In a country in which a great many powerful personages are above the laws, an incorporated loaning bank may be an indispensable necessity. (Storch, Handbuch, II, p. 23 ff.) In Naples, even as recently as 1804, no debtor could be arrested during the last six months of the queen's pregnancy. At a previous period, one might fail in business there and escape all punishment by exposing the hindermost part of himself in a nude state publicly before a column of theVicaria. (Rehfues, Gemälde von Neapel, I, p. 203 seq., 222.) In Schwytz, the rate of interest is so high, because the law allows the debtor to pay his creditor, whether the latter will or not, in articles of household furniture, clothes etc., estimated at a very high value. (Hermann, Staatsw. Untersuchungen, 202.) It has now become quite usual in the United States, on account of the many delays granted to the debtor by“democratic”laws introduced there, instead of mere mortgage, to give full warranty deeds when capital is loaned. By this means, the creditor is in danger, when misfortune overtakes him, to see himself compelled to let his property go at one-fourth of its value.546.See the Heliast oath inDemosth., adv. Timocr., 746. The Roman system of credits in the time of Polybius was much better than the Carthaginian.Polyb., VI, 56, XXXII, 13.547.Sachsenspiegel, III, 39.J. Grimm, Deutsche Rechtsalterthümer, 612 ff.Dahlmann, Dänische Gesch., II, 245, 339.Hermann, Russ. Gesch., III, 357. On slavery for debt among the Malays, see Ausland, 1845, No. 157.548.Beaujour, Tableau du Commere en Grèce, II, 176.549.C. 2 X. De Pignor. An appropriate provision in a priestly government.Diodor., I, 79.550.Staying in a place by the debtor until the creditor is satisfied, and other degrading stipulations, which, however, were prohibited by the police regulations of the Empire in 1548, art. 17.551.Marten'sUrsprung des Wechselrechts, 1797. Statuta Mediol., 1480, fol. 238 ff. The municipal law of Florence unconditionally imprisoned the father or grandfather for the debt of the son, when the latter engaged in industrial pursuits with their consent. (Stat. Flor., I, 201.) In Bologna, the brothers of a bankrupt who had constituted one household with him were held responsible for his debts. (Statuti dell' Università de Mercantati della Città di B., 1550, fol. 110.) The law of Geneva excluded from all positions of honor the son who had left his father's debts unpaid.Montesquieu, E. des Lois, XX, 16. The consequence was, that among the higher classes not a creditor lost anything for centuries. (K. L. v. Haller, Restauration der Staatswissenschaften, VI, 519.) Compare the“Nurenberger Reformation”of 1479, fol. 61 and 68 of the edition of 1564.552.Compare the R. P. O. of 1548, art. 22. And so, by the Code de Commerce, III, 4, I, even the simple bankrupt in contradistinction to the fraudulent bankrupt is punished, and every person unable to pay his debts is declared asimplebankrupt, who, among other things, has made excessive household expenses, or lost considerable sums by play etc. CompareSully, Mémoires, Livre XXVI, who declares it to be his most wholesome law, that fraudulent bankrupts should, like thieves, be punished with death, and that all their fraudulent assignments, gifts, etc., should be declared void. Further, Ordonn. de Louis XIV., sur les Failletes, art. 11;J. de Wit, Mémoires, 77 ff;v. den Heuvel, Sur le Commerce de la Hollande, 110 ff. Frederick William I., in 1715, threatened with the galleys all light-headed bankrupts, and, in 1723, all those who, knowing their insolvent condition, should effect further loans.Mylius, Corp. Const. March. II, 2, 31, 40. For China, seeDavis, The Chinese, I, 247 ff.Gr. Soden, Nat. Oek., III, 231, demands that, in case of doubt, the guilt of the bankrupt should always be presumed.553.In England only one-tenth of the number of bankrupts are considered innocent.Elliot, Credit the Life of Commerce, 1845, 50 ff.554.Thecontrainte par corpsof debtors was abolished in France in 1792, but restored in 1797. EvenTurgotremarked that since slavery had ceased there was no further fear (?) that the poor would be oppressed by imprisonment for debt. (Sur le Prêt d' argent, § 31.) According toDroz, the question is not one of weighing“freedom”against“miserable money,”but the deprivation of a few of that freedom and the non-fulfillment of obligations entered into, that is against the destruction of public confidence.555.A similar development among the Greeks:A. Rigorous slavery for debt, which Kypselos moderated at Corinth. (Pausan., V. 17, 2), and Solon abolished in Athens. (Plutarch, Sol., 15.Demosth., de fals. Legat., 412.)B. The reckless creation of debts as seen in Aristophanes; while outside of Athens slavery for debt lasted yet a long time. (Hermann, Griech. Privatalterth., § 57, 20.) In the time of Demosthenes, the merchant in arrears in the payment of his debts was cast into prison, and the bottomry-debtor who deprived his creditor of his security might be punished with death, (Demosth.adv. Pharm., 922, 958), and this although thecessio honorumwas introduced.Hermann, § 70, 3. CompareXenoph., Vectigg., 3,Demosth.adv. Apat., 892; adv. Lacrit., and adv. Dionys. In Corinth, the state superintended expenses made by parties. This was part of its credit-policy. (Athænæus, VI, 227.) For a remarkable Rhodian law relating to debts, seeSext.Emp., Hypot. I, 149.In Rome:A. The chief characteristic of the ancient law in this matter was the eventual sale of the person of the debtor on the getting of the loan (nexum); the power of the creditor to put theaddictusto death or to sell him in foreign parts; finally, thein partes secanto, in the concourse of creditors. Without these rigorous provisions, the borrower might easily have evaded his debts, by the emancipation of his son and turning over his property to him. (Niebuhr, Rom. Gesch., II, 770 ff;Savignyin the Abb. der Berliner Acad., 1833.Zimmern, Gesch. des röm. Privatrechts, III, 131 ff.)B. Later, we find nothing of the execution of the debtor, or of the sale of his person; but he might be compelled to do slave labor for his creditor without any protection against ill-treatment. Slavery for debt was restricted by the Lex Poetelia. (Niebuhr, III, p. 178;Mommsen, III, 494.) The Prætorian law introduced the custom of putting the creditor in possession of the goods of the debtor, with power of sale, which proceeding rendered the debtor infamous. See several passages inWalter., Röm Rechtsgesch, 763 ff;Tertull., Apol., 4; Tab. Herac. I, 115 ff. Later, Cæsar's Lex Julia permitted the honest debtor to escape imprisonment by the assignment of his goods.C. The moneyed oligarchy which prevailed in Rome caused the adoption of exceedingly severe measures against delinquent debtors. (Plut., Lucull., 20.Cic., ad. Att. V. 21, VI.), although its members themselves incurred debts in the most reckless manner. Cæsar, in the year A.C. 62, excluding his active (activen), owed debts to the amount of 25,000,000 sesterces; M. Antonius, in the year 24, 6,000,000; in the year 38, 40,000,000; Curio, 60,000,000; Milon, 70,000,000. (Mommsen, Römische Geschichte, III, 486.) CompareGellius, XX, 1, XV, 14.556.Whenever a new shop-keeper, who sells goods on monthly credits, settles in a district, the number of poor persons invariably increases. (McCulloch, Commercial Dictionary.) The ruinous credit given by the Jews to the Westphalian peasants begins with an account for the goods which they have succeeded in pressing upon them, after five or six years have elapsed. The Jew seldom sues accounts at law; but he besieges the debtor and discovers where his last head of cattle and his last little supply of provisions are to be found. As he is willing to accept everything that has any value, sometimes in payment of arrears, and sometimes in payment for some new piece of trash, he is sure to obtain his dues in the end, but not until his victim, who is sunk deeper and deeper in the abyss of debt by every“accommodation,”is entirely ruined. (Schmerz, Rheinish-Westphäl. L.W., 396 ff.)557.In the lower and middle stages of civilization, we find a multitude of laws by which minors, students etc., but especially land-owners are limited to a minimum of credit, which, however, varies very much with the person, and is subjected to a number of embarrassing forms, the consent of a third person, for instance etc. (Compare Bayerische L.O. von 1553, fol. 83.) Such laws, however, give as much room to the play of dishonesty as they take away from that of want of reflection.558.On the municipal regulations (Städteordnungen) of the 14th and 15th centuries, which compelled Jewish creditors especially to have their evidences of indebtedness redeemed within from every two to five years, seeStobbe, Juden im Mittelalter, 129. Compare further the Würtemberg L. O. of 1515, Statut. Ferrar, ed. 1650, lib. II, rub. 37, 289. According to the other provisions of the laws in North America, some book accounts were required to be sued on within six and others within seventeen years. (Ebeling, Gerchichte und Erdberschreibung der v. Staaten, II, 247, 298.) The Prussian law of March 31, 1838, provides a period of limitation of three years for all ordinary commercial debts. A similar law was passed in the Kingdom of Saxony, in 1846. In London, there has been found a great number of hatters, tailors, boot and shoe dealers etc., whose books showed credits of more than £4,000, most of them not to exceed over £10. How much of all this must be lost entirely, and how that loss must increase the sums paid for boots, shoes and hats by the prompt payer! (McCulloch, v. Credit.) We find, even in Athens, that the period of limitation was shortened in the interest of credit, and that in the case of minors, it did not exceed five years. (Demosth.adv. Nausim., 989.) Security for a debtor not over one year. (Demosth., adv. Apatur., 901.) The prohibition of Zaleukos to issue any evidences of debt whatever goes much farther. (Zenob., Proverb. V, 4.)559.Compare the report of the Dresden Handelskammer, 1864, 11.560.A. Mayer, inFaucher'sVierteljahrsschrift, 1865, IV, 65.561.We learn from the debates in the English parliament of February 9, 1827, that, in two years and a half, there were, in London and its environs, 70,000 cases of imprisonment for debt, the costs of which were from £150,000 to £200,000. In 1831, there were in one debtors' prison 1,120 prisoners, who owed on an average £2 3s. 2d. (McCulloch, l. c.) There was, in 1792, a case of a woman who, for a debt of £19, remained in prison 45 years, and others like it. (SeeArchenholtz, Annalen, IX, 87 ff; X, 169 ff, XIII, 125.) In England in 1844, arrest for sums less than £19 was prohibited.Johnsonhad already proposed a similar provision. (Idler, 1758, Nos. 22 and 38.) Imprisonment for debt was abolished in France, England and Austria in 1867; in the North German Confederation, on the 29th of May, 1868, but arrest for security's sake was retained.Sismondifinds fault with nearly all laws in the premises, because they attack the person of the debtor rather than his personal property, and his personal, rather than his immovable, property. He would have all this just the contrary of what it is. The first interferes with the very source of wealth, the productive power of labor; the second causes goods to be sold much below their value. Neither of these evils attends the last. (N. Principes, I, 250.)562.A law of the North German Confederation allows the pledging of future wages, only in the case of public officers, and those holding permanent places in the service of private parties, whose salaries are over 400 thalers per annum. The original draft had excepted only the things necessary to workmen and those directly depending on them; while the law as passed makes the prohibition general. This was undoubtedly done for the convenience of employers as well as of courts; as for instance in the circuit of Dortmund, there were, in one year, 10,000 cases in which wages were garnisheed. (Annalen des N.D. Bundes und Zollvereins, 1869, 1071 ff.) But the recklessness of those workmen whose wages are below the average, might have been just as well guarded against without dragging those whose wages are above the average down to their level, if a distinction had been made between production-credit and consumption-credit, and the latter had been limited by providing that no suit should be instituted for supplies made to public houses, taverns etc.563.In the second book ofMoses, 22, 25 ff., and the fifth, 24, 6. A very old Norman law provides that in actions for debt, execution should not issue against effects of the debtor which are indispensably necessary to him to maintain his position, such as the horses of a count or the armor of a knight. (Dialog. de Scaccario.) Magna Charta extended this provision so as to include the agricultural implements and cattle of the peasantry. The moment these laws, in consequence of a false principle of humanity, except anything but what is absolutely necessary, they injure credit. Thus, for instance, in Brazil, a law of 1758, providing that nothing immediately employed in or directly necessary to the production of sugar should be seized on execution, caused great injury to the production of sugar. (Koster, Travels in B., 1816, 356 ff.)564.§ 2, Cod. De Prec. Imper. Off., I, 19. The diets of the Empire had granted such letters in the fourteenth century. (Wachsmuth, Europ. Sittengesch., IV, 690.) They were granted, as a rule, only with the previous knowledge of the Emperor, by the police ordinances of the Empire of 1548, art. 22.565.So in Austria, Saxony, Brunswick, the electorates of Hesse and Baden. In Prussia, they could be granted only after a juridical decree to that effect; and an appeal to a superior court was allowed to reverse or affirm it. CompareMittermaierin the Archiv. für civilist. Praxis, XVI, and alsoP. de la Court, Aanwysing der politike Gronden en Maximen van Holland etc., 1669, I, ch. 25. Nürnberg obtained as a privilege, in 1495, that nomoratoriumshould be valid as against its citizens. (Roth, Geschichte des Nürnb. Handels, I, 86.)566.Compare the discussions in the French National Assembly, in the month of August, 1848. It is much less disadvantageous in times of great commotion, when all business is brought to a stand still, to extend the time in which bills of exchange etc. are payable. Such a measure prevents a number of bankruptcies which the real balance of debts due to one and owing by him does not render necessary.567.In the persecution of the Jews in the middle ages, the so-calledBrief-todten(letter-killing), or the destruction of titles, was very common. In 1188, the French government released all crusaders from the payment of interest on their debts, and granted them an extension of three years' time to pay off the principal. (Sismondi, Hist. des Français, VI, 82.) Similar compulsory measures were provided against the Jews and usurers in 1223 (Ibid, VI, 539 ff.); and in 1299 (Ordonnances, I, 1331), on the formal request of the nobility. (Ordonnances, II, 59.) Again, in 1594, there was a release of one-third of the interest on all national and private debts. (Sismondi, XXI, 318.) The generalmoratoriumof the Milanese for a term of eight years, introduced in 1251, after their war with France, was of an essentially different character. (Sismondi, Geschichte der italienischen Republiken, III, 155.) The same is true of the generalindultgranted by Philip II. in Belgium. (Boxhorn, Disquisitt. politicæ, 241 ff.)568.The abolition or release of debts, so frequent in ancient revolutionary times, reminds us, in many ways, of the crises precipitated in modern times by paper money and produced by the state. The ancestors of Alcibiades and Hipponikos laid the foundation of an immense fortune, in Solon's time, by purchasing land in large quantities with money borrowed from several citizens, a short time before the abolition of debts. (Plutarch, Sol., 15.)569.Enormous consumption of wax in the churches of the middle ages. In the cathedral of Wittenberg alone, a short time before the Reformation, more than 35,000 pounds of wax candles etc. were burned yearly. At the same time, honey was generally used instead of sugar. How much more important, therefore, at that time must bee-culture have been, considered from the point of view of circulation as compared with what it is to-day. And so in Catholic countries, a difference in the external manifestation of religion causes the relative importance of the consumption of fish to increase and decrease. In 1803 there was little demand in France for ivory crucifixes, rosaries etc. In 1844, the demand for them and forprie-Dieufor the bed-room etc. was increased. (Mohl, Gewerbwissenschafliche Reise, 101.) To engage successfully in the sale of sugar in Persia, it is necessary to know that in that country it is liked only in little hat-shaped lumps, which are used only as semi-voluntary gifts; and that, in such case, custom fixes the number of lumps. (Steinhaus, Russlands commercielle etc. Verhh., 151.) In the Levant, workmen prefer bars of iron which are small and of varied form because they find it difficult to manipulate the large ones. The English bear this in mind much better than the Russians. (Steinhaus.) A merchant sending wood to Southern France must be acquainted with the form of the staves used in the manufacture of barrels there. CompareBüsch, Geldumlauf, VI, 2, 2.570.The circulation of goods compared to the circulation of the blood: byMirabeau, Philosophie Rurale, ch. 3.Turgot, Sur la Formation etc. § 69.Canard., Principes, ch. 6.571.Eiselen, Volkswirthschaftslehre, 98 ff. If in ancient times commerce played a much less important part than it does among the moderns, it was, asMontesquieusays, because the whole commercial world was then more uniform in climate and the character of its products than it is now. (Esprit des Lois, XXI, 4.)572.Of the successive steps, sheaves, corn, flour, bread,—flour has the greatest capacity for circulation. And, indeed, the last operation of labor on a great many goods, because of their consequent more narrowly specialized utility, is accompanied by a decrease in their capacity for circulation. As an illustration, we may mention ready-made clothing as compared with cloth. The capacity for circulation of a commodity is very much advanced when the demand is wont to increase with the supply, as is the case with gold and silver, but not with learned books, optical instruments etc. Many commodities have but little circulating capacity, because no one desires to purchase them but at first hand. SeeMenger, Grundsätze, I, 245 ff.573.Knies., Die Eisenbahnen und ihre Wirkungen, 1853, 79.574.CompareSchmitthenner, I, who calls attention and with reason to the importance of loans on chattel mortgages. ButBerkeley, Querist, No. 265, remarks that a squire with a yearly income of £1000 can,“upon an emergency,”do less good or evil than a merchant with £20,000 ready money.575.A very important difference between Russia and England.576.Storch, Handbuch, I, 273 ff. There is also a useless circulation which is not calculated to promote the division of labor, but to employ idle time or idle capital, as in the case of games of hazard, speculation in stocks, wheat etc. Even impoverishing consumption may produce rapidity of circulation, as in Germany during the war years 1812 and 1813. (F. G. Schulze, N. Œkonomie, 1856, 667.) Relying on this fact,Hume(1752) on Public Credit, Discourses, No. 8, argues in favor of the old opinion, that all circulation is wholesome and to be encouraged.Boisguillebert, Traité des Grains, I, 6, went so far as to laud war because it accelerated the circulation of wealth. On the necessity of acirculation sans repos, see ibid., II, 10. In a similar wayLaw, Trade and Money, 1705, andDutos, Réflexions Politiques sur le Commerce, over-valued the circulation of wealth as such. Concerning the Mercantile System, see § 116.Darjes, Erste Gründe der Cameralwissenschaft, 1768, 531. And evenBüsch, Geldumlauf, I, 29, 32 ff., III, 96, who in other places nearly always overlooks real production and sees only the circulation of money caused thereby. Thus he calls the poor when they are helped in money, and spend it, useful members of society! (IV, 32, 39. Similarly,v. Struensee, Abhandlungen, 1800, I, 282 ff., 400 ff.)577.As, for instance, happened in France in 1577, when all commerce, and in 1585 all industry, were declared to bede droit domanial. Louis XIV. was of opinion that the king was absolute master of all private property of priests and people. (Mémoires histor. de Louis XIV., II, 121.) CompareDuclos, Mémoires, I, 14 ff.578.Compare Theod. Cod., V, 9, 1; Just. Cod., X, 19, 8; XI, 47, 21, 23; XI, 50, 51, 52, 55, 58. How full the really classic period of the Roman jurists was of the idea of freedom of competition, we see inPaullus: L. 22, § 3, Dig. XIX, 2. The provisions concerninglœsio enormisappear first in the time of Diocletian. (Just. Cod., IV, 44, 2.)579.Benjamin Franklinsays that the freer the form of government is, the more the people show themselves in their true aspect. Ancient Rome, with the early development of its rational disposition, soon learned to favor freedom of commercial intercourse. CompareMommsen, Römische Geschichte, I, passim. This was, certainly, an element of its greatness, but also of the proletarian evils developed in it an early date, and which were weighed down only by the absolute growth of the state and the development of its economic interests during centuries.580.Nor must it be forgotten that competition raises prices as well as lowers them. The expressions higher price and lower price denote only different sides of the same relation.M. Chevalieris of opinion that our present breathless competition is characteristic only of a period of transition prolific in new inventions, a competition soon to be followed by peace. (Cours, II, 450 ff.)581.Ἀγαθὴ ἔρις: Hesiod., Opp., 10 ff.582.“Whoever speaks of competition suppresses the existence of a common aim,”saysProudhon, although he adds, afterBileam'sway, that to cure the evils of competition by competition, is as absurd as to lead men to liberty by liberty, or to cultivate the mind by cultivation of the mind.583.CompareBastiat, Harmonies économiques, ch. 10.584.If all classes were protected against competition, no class would derive any advantage from it, since a“universal privilege”is an absurdity. If only certain classes or individuals are protected, it is done at the cost of all others.585.The question should not be formulated thus:“Caprice or rule?”but“Rule of morals, or rule of law?”Schmolleragainstv. TreitschkeinHildebrand'sJahrbb.586.Concerning the arguments by which the commercial restrictions of the middle ages were defended, see below. They were, for the most part, well founded for the age in which they were advanced. A judicious education will often be compelled to provide limitations, but always with the intention, by this means, of making possible a really greater independence. Thus the current of commerce may be too weak in a poor and thinly settled country in order that supply and demand should always and everywhere meet and be satisfied. Under such circumstances, their artificial concentration at certain points is among the most efficient means of promoting the economy of the whole people. The policy of freedom of commerce was recommended even in the seventeenth century byJ. Child, byNorthandDavenant. W. Roscher, Zur Geschichte der englisch. Volkswirthschaftslehre, 65 ff., 85 ff., 113 ff., 142 ff. And earlier yet, in Holland, bySalmasius, De Usurus, 1638, 583 andde la Court. Compare Tübinger Ztschr., 330 ff. ThusBoisguillebertsays:Il n'y avait qu'à laisser faire la nature et la libertê, qui est le commissionaire de cette même nature. (Factum de la France, 1707, ch. 5.) See, also, Dissertation sur la Nature des Richesses, ch. VI; Détail de la France, 1697, II, ch. 13; Tr. des Grains, II, 8. For the most part dictated by a reaction against Colbertism.See further,Mélon, Essai Politique sur le Commerce, 1734, ch. 2.M. Decker, Essay on the Causes of the Decline of Foreign Trade, 1744, 31 ff, 106 ff.J. Tucker, Essay on the advantages and disadvantages which respectively attend France and Great Britain with regard to Trade, 1750.Forbonnais, Elémens du Commerce, 1754, I, 63.Genovesi, c. I, 17, 3, is of opinion that at least in case of doubt, commerce stood more in need of freedom than of protection.Verri, in his Meditazioni, goes still farther. The Physiocrates, with theirlaissez allerandlaissez fairerecommend competition as the best means to increase the net income of a people. According toDupont, 147 ff, éd. Daire, the province of legislation is confined to declaring the laws of nature. His motto is:liberté and propriété.Adam Smithasks that the state should do only three things: insure protection against foreign states, the administration of justice at home, the establishment and maintenance of certain institutions of advantage to the whole community, but which private interest could not establish for want of means to cover the expenses attending them. (Wealth of Nations, V, ch. I, 2.) Hence he demands (III, ch. 2) the abolition of all kinds offidei commissa, of royalty in mines (I, ch. 11, 2), of all corporate and exclusive privileges, of all protective duties etc. (IV, ch. I ff), but especially of the colonial policy hitherto in vogue. (IV, ch. 8.)The attacks of the Socialists on freedom of competition were begun byFichte, Geschlossener Handelsstaat, 126, in which it is called a robber-system or system of spoliation. He would have the state have more solicitude for human industry than if men were so many swallows. See further,Sismondi, N. Principes, passim, who everywhere demands the protection of the government for the weaker.Fourier, N. Monde industriel, 396, who thinks thatle monopole généralis always apreservatif contre le commerce.Bastiat, Harmonies économiques, ch. 10, has a very valuable refutation of these follies. Recently,Rodbertus, Hildebrand's Jahrbücher, 1865, II, 272, is of opinion that“social individualism”has ever had in history the task of dissolving decaying societies, as, for instance, under the Cæsars.587.Whoever would sell to others must purchase of them. (Child., Discourse of Trade, 358.) SimilarlyTemple, Works III, 19, andBecher, Polit. Discurs, 1547. This view seems to have become the national one first in Holland. Compare alsoQuesnay, 71 andMirabeau, Philosophie rurale, 1763, ch. 2.588.We often hear it said:“nothing sells because there is no money.”But the real cause here is, in most instances, not a want of money, but a want of other goods which might serve as a counter-value. In bad times, for instance, there is many a weaver who would consider himself fortunate, even if he could get no money for his cloth, to obtain instead, meat, bread, wood, raw material etc. If money only were wanting, that might easily be as favorable a symptom in commerce, as when there are not enough shops, steamers etc., to carry on the business of the country. CompareNorth., Discourses upon Trade, 1691, 11 seq., but especiallyJ. B. Say'scelebrated theory of Markets, traité I, ch. XV.589.SeeHumboldt'sobservations as to how, in Spanish America, agriculture in the vicinity of the mines increases and decreases with the wealth of the latter. (N. Espagne, III, 11 ff.) See alsoHarrington(ob. 1677), On the Prerogative of a Popular Government, I, ch. 11;Cantillon, Nature du Commerce, 16. And soStein., Lehrbuch, 122 seq., points out how great enterprises produce especially for the consumption of the small householder without capital, and how, therefore, the flourishing condition of the one determines that of the other.590.Those indeed who live by the spoliation of others, as robbers, deceivers etc. are interested in the economic prosperity of the latter only so long as their spoliation of them is not endangered. Only to this extent can it be claimed withFr. Listthat the nobility of the Middle Ages, in obeying the selfish calculation which led to the oppression of the peasantry, engaged in as bad a speculation as a manufacturer of our day would who should feed his steam-engine with nothing but saw-dust or scraps of old paper. The cities of the middle ages had a much more undoubted economic interest in the emancipation of the peasantry as a class than the nobles or the clergy.591.Such exceptions there certainly are, even if it were not true“that the most godly cannot rest in peace unless he is acceptable to his ungodly neighbor.”Nations that furnish the same products as we do may, indeed,“spoil our market,”just as at home the selfish shoemaker may desire the prosperity of all wearers of shoes, that is of all other industries, but not that of all other producers of shoes. The view that long prevailed, that one man's gain was always some other man's loss (Th. Morus, Utopia 79, ed. Colon. 1555;Baco., Sermones fideles, cap. 15;quid-quid alicubi adiicitur, alibi detrahitur;M. Montaigne, EssaisI, 21:les prouficit de l'un est le dommage de l'autre) prevailed much longer in international affairs where observation is much more difficult than in national affairs; although even here,P. de la Court, Maximes politiques, 1658, contrasts the economic interest of Holland with that of the rest of the Netherlands and prefers it to theirs. EvenVoltairesays:“The desire of the greatness of the Fatherland includes the desire of evil to our neighbor. Evidently no country can gain except what another loses.”(Dict. philosophique, v. Patrie.) Compare, however, thepeut-êtrein his Histoire de la Russie, I, 1, on the occasion of the English-Russian treaty of commerce. Similarly,Galiani, Della Moneta, I, 1, IV, 1;Verri, Opuscoli, 335, and recentlyv. Cancrinwho says that“in every-day life, property is acquired only at some other person's expense.”(Weltreichthum, 1821, 119. Oekonomie der menschl. Gesellschaft, 1845, 23.) The cosmopolitan view (Xenoph., Cyrop., III, 2, 17. Hier., 10) which prevails in Adam Smith's school was introduced byHume, Essays, 1752, On the Jealousy of Trade.Quesnay, Encyclopédie, v. Grains, 294, ed. Daire;A. Smith, Theory of moral Sentiments, 1759, p. 6, sec. 2, ch. 2.Pinto, Lettre sur la Jalousie de Commerce, 1771, andJ. Tucker, Four Tracts on commercial and political Subjects, 1776, 34 ff and 42 ff.“The system of states exercises no influence whatever on the world's commerce.”(Lotz, Handbuch I, 11.) More recently,R. Cobden, in his Russia, Edinb., 1836, among others argued, that the conquest of Turkey by the Russians would be useful to England, because then more (?) English products would probably be sold there. Russia would become no stronger thereby, as conquests always injure the conqueror more than they benefit him. The idea of European equilibrium is therefore a chimera, because no state can be prevented from having an internal growth, as great as may be. Thus, in the summer of 1853, we heard the London Times sometimes preach that every cannon-shot fired by the English at the Russians might kill an English debtor or an English customer. The Venetians entertained a similar view at the beginning of the fifteenth century. CompareM. SanudoinMuratori, Scriptores, XXII, 950 ff. See above, §12.Moreover, Malthus had recognized that there were natural rivalries between nations which produced exceptions to Tucker's laws. (Principles, Preface.) SimilarlyGarve, in Cicero's Pflichten (1783), III, 146 ff.592.B. Franklin, Works, vol. III, 49.Sismondiclaims for all civilized nations the right of interfering with the governments of other nations with whom they have or might have commercial relations, and of insisting that they shall have a good government under which commerce may freely develop. (N. P. VII, ch. 4.)593.As for instance when theami des hommessays that he felt towards an Englishman or a German as he did towards a Frenchman with whom he was not acquainted.Mirabeau, Philosophie rurale, ch. 6.594.Thus, for instance, the Stoic, Zeno:Plutarch.De Alex, fort, 1, 6.595.Compare evenLauderdale, Inquiry, 274 ff.596.How well, for instance, the English sustained Napoleon's continental blockade, the evils produced by which were intensified by several bad harvests. Its worst time did not, indeed, coincide with that of the struggle with the United States. The ancient Athenians, during their contest with Philip of Macedon, considered the question of the supplies from the Bosphorus etc. as one of life and death. But this can be looked upon only as a cogent proof of the small development which their commercial talents had received at the time. How easily might they not, according to our ideas, have obtained corn from Sicily or Egypt.597.According to the acute analysis of language made byF. J. Neumann, Tübinger Ztschr., 1872, 317 ff., the word“price”has reference to an actual purchase or sale, while the expression“value in exchange,”generally called simply value, is based upon a valuation, or intimates in a general way that an object possesses value; value in exchange is, so to speak, the average of several price-determinations. Price, according toSchäffle, is the external consequence of value in exchange, a means of representing the latter. (N. Œk., III, Aufl., I, 218.) Only through the difference between value in exchange (universal possibility) and price (special reality) is thelaesio enormisof the jurists possible. (Schmitthenner, Staatswissenschen, I, 416.)598.By market price,prix courant, is meant the money-price of commodities, determined by competition.599.A problem very similar to that of the motion of bodies in space.600.Lotz, Handbuch, 50 ff., calls those commodities costly which are obtained only at a high cost of production, and dear, those whose price is above the cost of production.601.CompareCanard, Principes d'Economie politique, ch. 3. Almost simultaneously,H. Thornton, 1802, Paper-Credit of Great Britain.602.SeeJackson'sAccount of Morocco, 284, for cases in which, in the Sahara, when the burning winds of the desert had dried up the water in the leathern bottles of the caravan, a drink of water cost from $10 to $500.603.The North American aborigines very frequently consent, in their exchanges, to take any offer made to them by their equals, however insufficient it may be, because they fear revenge.Schoolcraft, Information etc., II, 178. As to the effects of cunning, the Tungusi, when they get a glass of brandy from the Russians, grow almost idiotic, and give away their goods at mock-prices in drink. (v. Wrangell, Nachrichten, I, 233.) In the higher stages of civilization, on the other hand, very distinguished people are, by no means, privileged because of their position, in the struggle for prices. In modern times, claims (reclamen) have taken the place of greater physical or political power. CompareE. Hermann, Leitfaden der Wirthschaftslehre 1870, 91 ff.604.ThusGalianisays, that before one of the two parties has expressed his want to buy or to sell, the pans of the scales are in equilibrium. The first that speaks breathes on one of them, and it drops. (Dialogue sur le Commerce des Bleds, 1770, No. 6.) This has been verified in a striking manner in California, where the most valuable commodities were often purchased at auction at the lowest prices, while when purchased from merchants and even the most wretched shopkeepers, they were sold enormously dear. (Gerstäcker, in the Allg. Zeitg., May, 1850.) Thus there were harvested in France, in 1817, 48,000,000 hectolitres of wheat, valued at 2,046,000,000 francs, in 1820, 44,500,000 hectolitres valued at 895,000,000 francs. (Cordier.) This vast difference in price existed, because in 1817, the whole world was still trembling under the impression made by the failure of the crops in 1816, while in 1820, the feeling of comfort and security caused by the rich year 1819, still prevailed. Low prices at forced sales under decree etc. See below, § 5. That travelers are so frequently taken advantage of in effecting changes of money is explainable partly by their urgent wants, which are well known to the opposite party, and partly by their supposed ignorance in the matter. And so, at auction sales, out-bidding one another has something very seductive in it for ignorant or hot-headed purchasers.605.It was considered immoral by his contemporaries, when William the Conqueror introduced the custom of farm-letting to the highest bidder. (A. Thierry, Conquête de l'Angleterre, II, 116, éd. Bruxelles.) It is repugnant to poetic and delicate minds to think that everything has a price exactly fixed. (§ 2.) I need only refer to the picture of Helen which Zeuxis exhibited for money, which act of his was characterized, by his cotemporaries, as a species of prostitution.Val. Mac, III, 7.Ælian, V, 4, IV, 12.Socratesjudgment on the payment of the sophists.Xenoph., Memor., I, 6, 13.606.Competition has only a negative influence on prices, inasmuch as it modifies the extreme operation of the other grounds of their determination.Thornton, Paper Credit.Lotz, Revision, 1811, I, 74 ff, 241 ff.607.The expression,“intensity of demand,”inMalthus, Principles, ch. 2, sec. 2. As early a writer asSir J. Stewartcalls attention to the difference between large and high and small and low demand. A high demand will always raise the price, as when, for instance, two wealthy virtuosi compete at an auction.Paucorum furore pretiosa, as Seneca says. An English penny of the time of Henry VII, once sold, on such an occasion, for £600. In 1868, at the Lafitte auction, seven bottles of wine sold to Rothschild at 235 francs a piece after theMaison doréehad offered 233. (N. freie Presse, Dec. 17, 1868.) A great demand has frequently no result but to increase the supply, and the price rises only in so far as the demand is too sudden to permit a parallel growth of the supply. (Principles, Book II, ch. 2, 10.) The present price of tea could not remain unaffected, if ten different private merchants, competing one with another, or the agent of a privileged commercial society, should send orders to China for an equal quantity of tea. (Verri, Meditazioni, IV, 8 ff.)608.Immense weight laid on theæqualitas permutationis(afterAristot., Eth. Nicom., V. 7,) in the ethics and economics of the scholastic middle ages, and in the time of the Reformation. CompareMelancthon, in Corp. Ref., XVI, 495 ff, XXII, 230.609.A very barbarous theory of price inXenoph., De Vectigg., 4. The ancients made little progress in this respect, although there are not wanting ingenious observations on certain phenomena of prices. (SeeAristot., (?) Oecon. II;Cicero, De Off. III, 12 ff.)Mariana, De Rege et Regis Institutione, 1598, III, explains price as the relation of value to quantity. According toLocke, the price of a thing is determined by the relation between“quantity”and“vent”: the increase or diminution of its useful qualities influences it only so far as it alters that relation. (Considerations on the Consequences of the Lowering of Interest etc, 1691, Works II, 20 ff.)Law, on the contrary, says that the“vent”can never be greater than the“quantity,”but that the“demand”may be. Wherefore, he proposes the formula: quantity in proportion to the demand. (Trade and Commerce considered, 1705, ch. 1.) In chap. 6,Lawdistinguishes three elements in price: quality, quantity and demand. The expression“quantity”is, certainly, very unsatisfactory. How many examples does notTooke(Thoughts and Details, on the high and low Prices of the last thirty Years, 1823, part IV) give to illustrate how, when the supply was smallest, prices were lowest andvice versa! It was so almost always after the market was over-filled, when a great many speculators had lost and no one dared to purchase anew.Montanari(ob. 1687) furnishes us with an excellent theory of prices. (Della Moneta, 64 ff., Custodi.) And a still better one,Sam. Pufendorf, Jus Naturæ et Gentium, 1672, V. 1, who must be considered the best authority on the laws of prices beforeStewart.Boisguillebert, Traité des Grains, II, 1, 10.Galiani, Della Moneta, I, 2, knows only the factorsutilità, andrarità, although in his exposition of the latter, he discusses many points which would be called the cost of production in our time. The wisdom of Providence has granted us the most useful things in the greatest abundance to make them cheap.Stewart, Principles II, 2, 4, rendered a great service to the theory of prices, tracing back supply to the cost of production, demand to want and ability to pay; and his deserves to be called the immediate predecessor ofHermann'sremarkable theory. (Hermann, Staatsw. Untersuchungen, 66 ff.) For a peculiar theory of prices, seePaganini, Saggio sopra il giusto Pregio delle Cose, 189 ff.Neri, Osservazioni, 1751, 127.Gust. Menger, Grundsätze, I, 179 ff., has made an interesting attempt to explain the formation of prices in its simplest shape, in the supposition of a monopoly in the seller, and by then going over to the subsequent modifications introduced by the competition of many sellers.610.“Instead of separating, in the same matter, the points of view of the buyer and seller, we may distinguish the consideration of the thing to be acquired and the thing to be given by one and the same person.”(Rau.) The possessor of the more current commodity appears especially as demanding, that of the less current as offering or supplying, (v. Mangoldt.)611.This is for free goods=0, for monopolized goods=1/0.612.The obvious fact that every price supposes a comparison of two commodities, and that every buyer is, at the same time, a seller, has been overlooked by only too many writers. And henceDutot'sopinion, that, as all men buy and few only sell, the state, in case of doubt, should favor the buyer. (Réflexions sur le Commerce et les Finances, 1738, 962, éd. Daire.) And so the often-mooted question whether universal dearness or cheapness is more useful: the latter advocated, for instance, byHerbert, Police générale des Grains, 1755;Verri, Meditazioni, V; the former byBoisguillebert, Traité des Grains, I, 7, II, 9; and by the Physiocrates. (Quesnay, Maximes générales, Nr. 18 ff., I, Problème Économique; also byA. Young, Polit. Arithmetics, ch. 8.) The laity in Political Economy understand by dearness only the general cheapness of the medium of circulation or exchange, andvice versa.613.Thus, even a poor man in Naples sometimes requires a glass of ice-water. The introduction of the extensive use of snow into Sicily improved the condition of the public health. (Rehfues, Gemälde von Neapel, I, 37 ff.) On the other hand, furs, in the far north, are articles of prime necessity. Newspapers in a free country satisfy a want much more urgent than in countries which are not free. And so,Seniorsays that shoes are“necessaries”to all Englishmen, since without them, their health would suffer. To the lower classes of Scotland they are“luxuries.”Custom permits them to go barefoot without hardship or degradation. For the middle classes of the same country, they are“decencies.”Shoes are worn there, not to protect the feet but one's civil position. In Turkey, tobacco is a decency and wine a luxury. The reverse is the case in England. (Outlines, 36 ff.)614.As to the relativity of the opposites of“temperance”and“excess,”every person should attend to the following points: a, not to exceed one's income; b, to provide for one's self and one's family; c, to lay by something for a rainy day; d, to place one's self in a position to care for the poor; e, to indulge in no pleasure injurious to body or mind; f, to give no bad example. (Tucker, Two Sermons, 29 ff.)Menger, Grundsätze, I, 92 ff., endeavors to compare the value in use of different commodities from the point of view, that the means of gratification of a less urgent want, when the more urgent wants of the present are satisfied completely, should be preferred to the means of over-gratifying the latter.615.Thus the price of many dark articles of apparel rises in a moment of unexpected universal mourning. A very remarkable case in Paris, at the death of Henry II. (Montanari, Delia Moneta, 85, Custodi.) On the other hand, a change of fashion may greatly depress the price of many commodities. Such a change may take place even in the case of precious stones; as, for instance, now in London, a perfect emerald is most highly prized. (King, Precious Stones and Metals, 1871.) The rise of many drugs in times of cholera, and of leeches, for example, in Paris, 600 per cent. Rise of the price of powder, horses etc. at the outbreak of a war, and of the price of iron caused by extensive railroad building. In Circassia, a good shirt of mail was formerly worth from 10 to 200 oxen: but since it was discovered not to be a protection against cannon balls, its price fell 50 per cent. (Bell, Journal of a Residence in Circassia, I, 403.)616.On“connected”(connexen) goods, the use of one of which supposes the use of the other, as, for instance, sugar and coffee, wood and stone used in the construction of buildings, seeSchäffle, Nat.-Oek, II. Aufl., 179.617.Observed byNecker, Sur la Législation et le Commerce des Grains, 1776. CompareRoscher, Ueber Kornhandel und Theuerungspolitik, 1853, 1 ff. In Athens, for instance, themedimnosof wheat cost ordinarily five drachmas, but during the siege by Sulla it rose to 1000 drachmas. (Demosth.adv. Phorm., 918.Plutarch, Sulla, 13.) Compare II. Kings, 6, 25, 7, 1. In Paris during the siege by Henry IV. it rose to 5000 per cent. of the ordinary price. (Lauderdale, Inquiry, 60 ff.) During the siege of Breisach, in 1638, a mouse was finally worth 1 florin, the quarter of a dog, 7 florins, a quarter of wheat, 80 thalers. (Röse, Leben H. Bernhards, M., 11, 269.) CompareStrabo, V, 248 seq.618.Wheat is still more indispensable than meat. Hence, in the ten principal markets of Prussia, the price of rye rose much more from 1811 to 1860 than the price of beef; the former between 0.32 and 1.03 silver groschens and the latter between 2.32 and 4.94 silver groschens. (Annalen der preussischen Landwirthschaft, 1869, No. 9.) And so in the Rhine district, the wine harvests have undergone much greater changes in price than the prices of must, although the years differed very largely in the quality of the yield. Thus the crop of 1830 was only 225, that of 1868, 10,845 pieces, and yet the minimum price between 1831 and 1865 was only from 3 to 58 flr. per ome. (Engel, Preuss. Statist., Ztschr., 1871, 168 ff.)619.In England, the price of wheat has not unfrequently risen from 100 to 200 per cent. when the harvest was from one-sixth to one-third under the average, and when a supply from abroad had modified even this condition of things. (Tooke, History of Prices, I, 10 ff.)Tookeis of opinion that in a country with poor-laws like those of England, a deficit of one-third in the wheat crop, if there were no stores remaining and no importation from abroad, would cause the price of wheat to rise, 500, 600, and even 1000 per cent (p. 15.)620.SeeDavenant, Political and Commercial Works, London, 1771, II, 224. Tooke was somewhat acquainted with Davenant. According to this law, a deficit in the harvest of 10 per cent. would raise the price of corn 30 per cent.; one of 20 per cent. would raise the price of corn 80 per cent.; one of 30 per cent. would raise the price of corn 160 per cent.; one of 40 per cent. would raise the price of corn 280 per cent.; one of 50 per cent. would raise the price of corn 450 per cent.621.In England, it is 38.8 per cent. of the supply that comes to the market. (Quart. Review, XXXVI, 425.) In Belgium 40, and in Saxony at least 50 per cent. (Engel, Jahrb. der Statistik etc. von Sachsen, I, 276.) In Germany, the farmers consume on an average two-thirds themselves. (v. Viebahn, Zoll.-v-Statist., II, 958.) With thisPlato, De Legg., VIII, agrees remarkably well.622.On the difference in this respect between England, Germany and northwestern Norway, seeHermann, p. 71.623.Hence it not unfrequently happens that grain grows dear not from any real want of it, but because it is generally supposed that such want exists. For an explanation of why it is that wheat and similar commodities have an almost invariable price, when the average is taken of a long series of years, seeinfra§129.624.Case in Naples in which after a poor harvest the price of corn remained very low, because the oil-harvest had also failed, and the poor could earn nothing in that industry in which they were largely employed, andvice versa. (Galliani, Della Moneta, II, 2.) ThusAdam Smith, Wealth of Nations, I, ch. 7, distinguishes between“effectual”and“absolute”demand. SimilarlyJ. Steuart, Principles I, ch. 18. Care should be taken to distinguish in this respect between desire and demand.625.Thus, in the famine in Ireland in 1821, during which potatoes rose to fabulous prices, but wheat scarcely at all, and had therefore to be exported.626.InTooke, History of Prices (2d edition of the Thoughts and Details etc.), we meet repeatedly with the assertion that when the price of wheat rises, the price of colonial products and manufactured articles sinks, andvice versa. Thus, in England, the price of the evidences of national debt increases from two to three per cent. in fruitful years above what it is after a bad harvest. (Lauderdale, Inquiry, 93.) The British nation paid for the cotton it needed for their own consumption in 1845 over £19,500,000; in 1847 only £9,500,000. (Banfield, Organization of Industry, 162.)627.HenceJ. B. Sayhas said that the disposable wealth of a people is like a pyramid, with the scale of prices of the various commodities inscribed on its side. The higher a commodity is in this scale of prices, the smaller is the corresponding section of the pyramid. CompareSir W. Temple, Essay on the Origin and Nature of Government, Works I, 23 ff.628.This fact, in connection with the preceding, explains the well known puzzle, why the remnant of a piece of goods is comparatively cheaper than the whole piece, while a small share in the public debt is dearer than a large one. (Lauderdale, ch. 1.)629.Rhode Island was, it is said, bought from the Indians in 1638 for a pair of spectacles. (B. Franklin, Political ... Pieces, 1707.) According toChalmers, it was bought for 50 threads of coral, 12 hatchets and 12 overcoats. (Political Annals of the U. States.) CompareEbeling, II, 108. Holland cloths and opium were exchanged for a long time at Sumatra for gold dust worth ten times their value. (Saalfeld, Geschichte des holl. Kolonialwesens, I, 260.) The Hudson Bay Company realized, it is said, at the beginning of this century, in trading with the Indians, a profit of 2000 per cent. (Anderson, Origin of Commerce, a. 1751.) When Altai was discovered, the natives gave as many sable-skins for a Russian kettle or boiler as could be crammed into it. With 10 rubles in iron it was an easy easy matter to gain 500-660 rubles.Storch, Gemälde des russ., R., II, 16;K. Ritter, Erdkunde, II, 557. Similar cases among the Germans:Tacit., Germ., 5.630.A seller not actually engaged in the business of selling for a livelihood, and who has not purchased or produced with the intention of selling, is apt to consider instead of this the market price, towards the determination of which those actually engaged in trade have coöperated. Somewhat inaccurately, the amount of the cost of production is called byAdam SmithandRicardo,“natural price,”byJ. B. Say,prix naturel, alsoprix originaire, because the commodity at its first entrance into the world cost so much.SismondiandStorchcall itprix nécessaire, andLotz, Kostenpreis. P. Cantillon, Nature de Commerce, 33 ff., understands by theprix intrinsiqueof a commodity, the amount of land and labor, taking the quality of both also into consideration, necessary to its production.631.The cheapest cotton thread is numbered from 60 to 80. The coarser is dearer on account of the quantity of raw material in it, and the finer because of the greater amount of labor in it. (Babbage.) For similar reasons, the Venetian chains cost perbraccio, No. 0, the finest, 60 francs; No. 1, 40 francs; Nos. 2 and 3, 20 francs; No. 24, coarsest, 60 francs. (Rau.)632.If a person engaged in production has himself furnished certain of the elements of production; if, for instance, he has worked with his own hands, employed his own capital etc., he is wont to charge as much for these as they would be worth, if he hired himself out or loaned his capital.633.The greater number of political economists consider the cost of production only from the standpoint of the individual engaged in production. ThusDarjes, Erste Gründe, 218 seq.;Ad. Smith, Wealth of Nations, I, ch. 6.J. B. Saycalls even production an exchange in which the productive services of natural forces, of labor and of capital are parted with in order to obtain products. The estimate put upon the value of these services is the cost of production. For some interesting examples as to how the cost of production, in this sense, is calculated, seeHermann, I ed., 136 ff.634.Jacobtranslated bySay, 1807, II, 450.Hufeland, N. Grundelgung, I, 309.635.CompareL. Lauderdale, Inquiry, 124, against the Physiocrates. (Riedel, Nat.-Oekonomie, 1838, I, 68.) A country which possesses advantages over other countries, in respect to the cost of production of a commodity, can offer it in the market cheapest. Where, for instance, with the employment of the same amount of capital, a specially large quantity of wheat can be produced, whether it be because of the unusual fertility of the soil, or because of theextensivenessof agriculture (farming over a large area), wheat will, the demand being the same, be specially cheap, whatever the proportion of the three branches of income may have been. If relatively a great number of workmen have been employed in its cultivation, each will receive smaller wages, andvice versa.636.Copper and steel engraving affords an example of the different kinds of wear of fixed capital, and the influence it may have on prices.Canard, Principes, ch. IV, considers that one of the most important elements in the cost of production is the length of time that capital must“stagnate”for the sake of production.637.On this risk depends, for instance, the high price of vanilla (Humboldt, N. Espagne, IV, 10,), sparkling wines and articles of fashion.638.Mangoldt, Lehre vom Unternehmergewinn, 1855, 81 ff. Comparev. Thünen, Der isolirte Staat, II, 1, 80 ff.639.Wool and mutton, brandy and fattened cattle, calves and milk, honey and wax, gas and coke, hens and eggs etc.640.Adam Smithhimself remarked that all artificial lowering of the price of skins or wool must necessarily raise the price of the meat, andvice versa. (Wealth of Nations, I, ch. 11, 3.) For a very elaborate theory on this subject, seeJ. S. Mill, Principles, III, ch. 16, § 1. Thus Australian wool did not rise as much in price as the production of gold there might have led us to suppose, for the reason that mutton rose to an exceedingly high price.641.It is an important and correct remark ofCarey's, that the price of a commodity depends much more on the cost of producing its like than on its own cost of production, which already belongs to the past.642.CompareJ. S. Mill, III, ch. 3, § 1. A much too high price, caused by speculation, or a much too low one, by depreciation, is regularly followed by an ebb or flow just as much too great. (Tooke, History of Prices, III, 55.) AndLaw, Trade and Money, 41, remarks that the price of a commodity always tends to coincide with the“first cost.”This factAdam Smithexpresses by saying that the cost of production is the center about which the market price always gravitates. (I, ch. 7.) But here there is still the error lurking, that the producer's profit is a part of the cost of production. CompareMalthus, Definitions, ch. 6.643.The English view, one very characteristic of the people, is that the equilibrium of prices depends on this, that all commodities should have a value equal to that of the labor they have cost. (CompareAristot., Eth. Nicom., V, 5.) The same doctrine is to be found in its germinal state inHobbes, Leviathan, 24, 1651, andRice Vaughan, Discourse of Coin and Coinage, 1675. More exhaustively inPetty, Treatise of Taxes and Contributions, 1679, 24, 31, 67. (CompareLocke, Civil government, II, § 40 ff.;B. Franklin, Inquiry into the Nature and Necessity of a paper Currency, 1729; Works, ed. Sparks, vol. II.)Adam Smithadmits this to be true only of the first beginnings of society, before the origin of property in land and in capital. (Wealth of Nations, I, ch. 5.) Most largely developed inRicardo, Principles, ch. I, 4, 30.Marx, Zur Kritik der polit. Œkonomie, 1859, 6, endeavors to improve on this by calling all values in exchange“a determinate quantity of thickly curdled working-time,”meaning by work an averagedqualitätslose, social work of production.Per contra, compareHufeland, N. Grundlegung, I, 134, 156 ff.; andMalthus, Principles, ch. 2, secs. 2, 3, who claims very earnestly that price is not determined by the cost of production, but by the relation existing between demand and supply, the cost of production influencing it only to the extent that it influences this relation. He calls attention to the poor-rates by which the cost of production of labor is raised, but its wages decreased; also to the case of bank notes etc. (Tooke, History of Prices, V, 49 ff;J. S. Mill, Principles, III, ch. 16, 2.) For a very marked case of reaction against Adam Smith and Ricardo, seeMacleod, Elements, ch. 2, who, however, is much too one-sided in considering only the amount necessary to the purchaser, and his means. EvenCondillachad said:une chose n'a pas une valeur, parcequ'elle coûte, mais elle coûte (du travail ou de l'argent), parcequ'elle a une valeur. (Commerce et Gouvernement, 16.)Ricardo'sdoctrine is more tenable than appears at first blush. We need only to interline his theory of rent, admit that capital is accumulated labor, subtract all objects constituting a natural monopoly, and not forget that the intrinsic value of labor is one of the causes of the difference of price of different sorts of labor.Ricardodoes justice to value in use evenen passant. A strange effort byMcCullochto make labor the cause of the non-use of capital. (Principles, III, ch. 6, 2.)McCullochhas not unfrequently exaggerated the half-truths of his doctrines to such an extent as to produce unwittingly areductio ad absurdum. According toTorrens, before any separation of capitalists from workmen, price depends entirely on the work done, and afterwards on the capital expended, inasmuch as wages, rent etc. are covered by the capital of the person who engages in the enterprise. (Production of Wealth, ch. 1.)644.Ce que l' on appelle chereté, c'est l' unique remède à la chereté.(Dupont de Nemours.) Tenders of division in common, in England, increase and decrease according to the higher or lower price of corn during the preceding year. (Tooke, Thoughts and Details, III, 105 ff.) The cotton famine after 1861 increased the price of flax-yarn in a short time fifty per cent., although the raw material of flax did not rise in price, but only because care was not taken to increase the number of flax-spinners. (Ausland, I, 1865.) However, there were in 1864, 490,000 flax-machine spindles in course of erection. (Report of the Chemnitz Chamber of Commerce, 1864, 101.)645.By the discovery, for instance, of new natural forces, the invention of machines, improved division of labor, improved roads etc. In France, in consequence of technic improvement, a quintal of saltpeter fell from 100 to 9 francs. See a similar instance inChaptal, De l' Industrie française, II, 64, 70, 434.646.Hermann, Staatsw. Untersuchungen, 212.647.The highest but unattainable ideal of such progress would consist in this, that all products should be obtained without cost. If this ideal were attainable, every one would be infinitely rich and all wealth would be free, like the air and the sunshine. (CompareJ. B. Say, Traité, II, 2.) The complete victory of mankind over nature would consist in that all men should be free and all the forces of nature the slaves of man. (Smitthenner.)Careyintimates something similar when he says that, with the advance of civilization the tendency is for men to become more and more valuable and commodities to have less of“value.”648.We might here speak of an aristocratic and democratic principle of the determination of prices. The greater utility of the latter is advocated in the Discourse of Trade, Coyn and Credit, London, 1697.Baconhas a good word to say for the maxim:“Light gains make heavy purses; for light gains come thick, whereas great come now and then.”Similarly,GurnayinCliquot de Blervache, Considérations sur le Commerce etc., 1758, 48, 54. As to how Morrison, the celebrated merchant, became rich by adhering to the principles:“to sell cheap as well as to buy cheap,”and“always tell the truth,”seeChadwick, in the Statistical Journal, 1862, 503. Compare the related opinion ofAdam Smith'scontinuator in an ethical direction,Garve, zu Cicero's Pflichten, III, 100. The contrary principle, the cunning of the Judæans, according toStrabo, XVII, 800, was followed by the Dutch East India Company, when it, in 1652, caused the greater number of the vegetable roots on the Moluccas to be destroyed.Saalfeld, Geschichte des holländischen Kolonialwesens, I, 272. Also, when great quantities of roots were destroyed by burning in the East Indies. (HuysersBeschryving der Oostindischen Etablissmenten, 1789, 22.) For a clever argument against such practice, seede la Court, Anwysing der heilsame Gronden, 1663. The principle similar to that of the patent, mentioned in the text, works at the same time democratically and aristocratically, both words understood in their best sense.649.This is true, first of all, in those industries which are intimately connected with one another, or of those which are carried on with scarcely any fixed capital; also in lower stages of civilization, where the lights and shades caused by a highly developed division of labor are not very intense. On the numerous difficulties overlooked by Ricardo in every other case, seeSismondi, N. P., II, ch. 2. The workman thereby loses his former skill, that is his principal capital, and can certainly not wait until he has acquired other and different skill.650.When a lowering of prices is expected, demand is less than consumption:“postponed demand;”whereas, an expectation that the price will rise, produces“anticipated demand.”Tooke, History of Prices, II, 155.651.Thus, for instance, if the workmen were exposed to starvation, or were likely to take their departure; if great stores of raw material were in danger of spoiling; if fixed capital of great value were engaged in one industry and could not be easily transferred to another. The first and third causes are frequently met with in mining, and give rise to the mode of carrying on the operation known asZubusgruben, that is, a species of working mines upon shares. In England, after the spring of 1862, cotton yarn was not so much dearer than raw cotton, that the loss caused by the decline could be made up. (Ausland, 24 Sept., 1862.)652.Besides, in the time immediately following, the price lowered by too great a supply, may produce a species of desperation among producers, which would lead them, in the hope of covering their losses, to increase the supply still more, until many of them were ruined. Generally, when a time of high prices is followed by a time of low prices, we find an interval during which sellers endeavor to defend themselves against the decline, and during which, as a consequence, scarcely any business is transacted, while high prices are nominally continued. And sovice versa.Tooke, History of Prices, II, 62.653.Thus, for instance, when the change of fashion brought about the disuse of long periwigs in every-day life, their price did not cease to fall until they had entirely disappeared. But, if a person wishes to have one made to-day for a masquerade, for the stage, etc., he would pay as much for it as its former price. On the other hand, the price of whalebone has never been again as high as it was in the time when hooped petticoats were worn.654.The great plague in the time of Edward III. caused during the first year, on account of the decreased consumption, an extraordinary cheapness of provisions. In the following year, however, they became alarmingly dear, because there were few producers, especially among the humble classes. A quarter of wheat cost in 1348, 4s. 2d.; in 1349, 5s. 5d.; in 1350, 8s. 3d.; in 1351, 10s. 2d.; while in 1346 and 1347, its average price was 6s. 8-7/8d.Rogers, History of Agriculture and Prices, I, 232.655.As for instance when new taxes or excises are imposed. Generally when the cost of production has largely increased, purchasers do not wait until a decrease of competition among sellers compels them to exact higher prices, but meet them half way, especially when many greatly desire the commodity, and the increase of the cost is only small. (Rau, Handbuch, I, § 163.)656.Under this rule fall, according to §33, most products of industry properly so called.“If we lose a market for a year, we generally lose it for all time,”said an experienced manufacturer before the parliamentary hand-loom weavers' committee, 1840-42. Of course the cost of transportation as far as the market must be estimated as part of the cost of production. In consequence of this, as well as of the difference of taxation duties etc., the superiority of one producer to another may be more than overcome. In the case of colonial commodities, which go into the interior of a country from different sea-ports, the territory supplied from each port is determined for the most part by these data. Thus, in Switzerland, for instance, we find the districts supplied by Havre, Genoa and Rotterdam; in Austria, the districts supplied by Hamburg and Triest contiguous, but the boundary line subject to many changes. (Rau, Lehrbuch, I, § 164.) It must be understood that we do not here speak of abnormal expenses made by producers individually, whether in consequence of want of skill or because of accident.657.This is true especially of agricultural production, in which, as a rule, beside the most fertile and most advantageously situated land, the worse must be used. WhatWhatelycalls“surplus-profit”appears here in the form of rent, whereas, in other cases, it takes the shape of unusually high wages, or profit on capital. This is very beautifully and systematically developed bySchäffle, N. Œk., II; Aufl., 192 ff. According toSenior, Outlines, 15, the price-relation of two commodities to each other depends not on the quantities of them which come to market, but on the relative power of the difficulties which stand in the way of an increase in these quantities. If the same producers can pursue the cheaper mode of production which does not suffice to supply the market, as well as the dearer, we have, generally, a price which is the mean between the two costs of production. The same is true in the case of“smuggled”goods which ought to have paid duty. (Hermann, loc. cit., 83, seq.)658.To this section belong the secrets of production which may be taken advantage of eitherad libitumor within certain limits. In agriculture, advantages of production can seldom remain secret. Compare, however, the case mentioned inGarnier'stranslation ofAdam Smith, V, 119, and that of the orchards which yielded £1,000 yearly for every 32 acres, and which were a result of the recent introduction of the culture of the cherry in Kent, in the reign of Henry VIII. (Anderson, Origin of Commerce, a, 1540.) There is therefore, a certain odium attached by agricultural producers to keeping secret a means of agricultural improvement.659.CompareBoisguillebert, Traité des Grains, II, ch. 2.John Stuart Millspeaks of an equation: the price of a commodity in a given market is always high enough to produce a demand corresponding to the present supply, or to an expected supply. The price of such commodities only which may not be increased to any desirable extent depends on supply and demand. In the case of all others, on the other hand, demand and supply depend on the price, and this on the cost of production. Supply and demand always tend to an equilibrium which is never really attained where the price is high enough to cover the cost of production (?). (Principles, III, ch. 2, § 4; ch. 3, § 2.)Schäffle'stheory of prices is topped by the proposition that all competing sellers and all competing buyers, after an economic fashion, do not wish to sell below individual cost-value, nor to rise above individual value in use, in purchasing. Hence, in a throng of competition of supply the costliest productions step out of the field of competition in a descending cost-value series; and in a throng of competition of demand, the most wearied cravings in an ascending value-in-use series; until the quantities offered in supply and asked for cover each other without loss, and have placed each other in quantitative equilibrium. (N. Œk. Aufl., I, 188 ff.; compare 173, 185.) It is, however, to say the least, an instance of baseless solicitude, whenWade, History of the middle and working Classes, 214, says that one unemployed workman might depress the aggregate wages of labor, almostad infinitum.660.Hufeland, N. Grundlegung, I, 78;Ricardo, Principles, ch. 31.661.Dunoyer, Liberté du Travail, VIII, ch. 4;Rau, Lehrbuch, I, § 158.662.For a good classification of monopolies, seeSenior, Outlines, 103 ff.Menger, Grundsätze, I, 195, shows that no monopolist can arbitrarily determine the extent of the market for his monopoly-product when the price is fixed, nor when the extent of the market is known, the height of the price. Moreover, the price may remain longer above than under the cost of production, for the reason that it is easier to abandon a business than to begin one, and that the fear of loss is more frequently an incentive to action than the hope of gain. Hence the price of corn, when everything else is very dear, is more apt to vary from the average price, than in times when everything is very cheap. For instance, the Munich prices from 1750 to 1800 show that its highest price was 147 per cent. above, and its lowest 47 per cent. below the average of twenty years. (Rau, Lehrbuch, § 162, 182.)663.Chance plays a great part here. Thus, Murillo's Conception which Marshal Soult had offered several times for 150,000 francs, but in vain, was sold in May, 1852, for 586,000 francs. Paul Potter's young bull at the Hague, which cost 625 florins in 1748, was valued before the middle of the nineteenth century at 200,000 florins. (Dethmar.)664.The purchaser resolves to do so because it would, in all probability, cost him more to go to India or Brazil in search of precious stones. Besides after the working of the Brazilian mines in 1728, and again after the French Revolution, the price of diamonds fell greatly; in the one case, from an increase of the supply, in the other from a decrease of the demand. (Ritter, VI, 355, 365.)665.Thus, the Champagne and Johannisberg grapes, when transplanted to the Crimea, lost most of their native taste. On China's practical monopoly of tea culture, and Ceylon's, especially in its southwestern part, of cinnamon, at least so far as the peculiar aroma is concerned, compareRitter, Erdkunde, VI, 123 ff. The small deer of Angora no sooner leave the little district of Asia Minor to which they belong, than they are in danger of degenerating. (Revue des deux Mondes, May 15, 1850.) Indian birds-nests cost no more than 11 per cent. to gather, dry etc., of the market price. (Crawfurd, East India Archipelago, III, 432 ff.;Hogendorp, Sur l'Ile de Java, 201.)666.Poor material for fuel, poor day-laborer work—dwellings, medical attendance. (Menger, Grundsätze, I, 116.)667.Thus sea fish, oysters etc. were formerly much cheaper during the summer than during the winter, at Ostend and Scheveningen, because during winter they could be sent to a distance. At Billingsgate market, in the mackerel season, fish cost per hundred 48 to 50 shillings at 5 o'clock in the morning, 36 shillings at 10 o'clock, and 24 shillings in the afternoon. (H. Schulze, Nat-Œkonomische Bilder aus England, 1853, 241.) In the Rhine country, the price of fruit does not vary so much as in Saxony, because it is customary there to employ the surplus in the manufacture of cider, of preserves etc., thus making it transportable and durable. Frequently, after a very abundant crop of grapes or olives, under-prices prevail, sometimes on account of a want of vessels, cellar-room etc.; they must, therefore, be sold rapidly.668.CompareAdam Smith, Wealth of Nations, I, ch. 7.;Tooke, History of Prices, I, 97. Furs vary very much in price, sometimes 300 per cent. in a year, because, in the case of this entirely natural product, every thing depends on the stores of them, on the temperature etc. (McCulloch, Commerc. Dict., s.v.) On the other hand, the price of coffee usually varies only after periods of a number of years, because new plantations produce only after a lapse of years. (Ibid.) Pigs vary much more than cattle in price, because the former may be made ready for the slaughter house in one-third of the time required for the latter. (Thaer, Rationelle Landwirthschaft, IV, 374.)669.Thus the rent of farms, where a numerous proletarian population will live exclusively from agriculture, depends on scarcely anything but the number of people and the extent of the land. (J. S. Mill, Principles, III, ch. 2.) In retail trade, where personal want comes in question, prices are much more subject to be modified by small circumstances, than in wholesale trade, where both parties are only intent on“doing business.”(J. S. Mill, III, ch. 1, § 5.Tooke, II, 72 f.)670.Hucksters, butchers, dealers in corn, inn-keepers etc. A remarkable case where Parisian dealers in hare-skins attempted to ruin the new fashion in silk hats by distributing a great number of them among the rabble, at mock-prices. (Hermann, 1st ed., 91.) The author witnessed a similar but unsuccessful attempt in Berlin in 1838-39, by the tailors against the so-called Macintosh coat. On the conspiracy of the English dealers in second-hand goods against auctions, see Athæneum, Dec. 5, 1863. It is one ofMcCulloch'scharacteristic exaggerations, that he says that conspiracies to raise the price of a commodity by artificial means, are broken just as soon as they begin to obtain their object by the interest of the individual members to profit by the advanced prices. (Edition ofAdam Smith, Edinb., 1863, p. 59.)671.J. S. Mill, Principles, II, ch. 4.672.Monopolies universally prohibited: L. un. C. De Monopol. (IV, 59.) Police-order of the Empire, 1548, tit. 18.673.Privileges which the purchaser voluntarily accords to the seller are wont to be useful to both parties. (Hermann, loc. cit. 155, 158.)674.Besides, guilds, castes, corporations etc. may, when the vent diminishes, produce under-prices as readily as they may monopoly-prices when the vent is very good. (SeeAdam Smith, Wealth of Nations, I, ch. 7.)675.Thus, for instance, the traveler who wanted to cross a stream, would find himself delivered over to the tender mercies of the ferry-man, without protection of any kind against his demands. But repeated impositions in the matter of prices would have for effect to bring a point into disrepute as a place of crossing, and would induce the public to seek another. Similarly in the case of hackney-coachmen and carriers in large cities, and in that of innkeepers, at hotels and postal termini etc.676.Fixed prices by governmental authority were soonest attempted after bad harvests, but, indeed, with a strange ignorance of the natural grounds of the increase in price of bread-stuffs. Thus in the time of Charlemagne. (Capitul. a, 805;Baluz, I, 423.) Similarly in the case of other articles of universal necessity, when oppressively but necessarily dear. (See § 175.) During the last centuries of the middle ages, with their multitude of actual monopolies, and at the beginning of the modern era, fixed prices became more and more general. The earliest instance in the history of England of a fixed price for bread was in 1202 (v. Raumer, Hohenstaufen, V, 372), and in 1266, 51 Henry III. The earliest in Prussia was in 1393. (Voigt, Geschichte von Preussen, II, 659.) Many instances of fixed prices in the Rhine provinces of Austria in 1530. InMylius, Corp. Const. March, V, 2, 587 ff., we find an ordinance of 1653 fixing prices in Berlin, and including 72 industries. There is a very complicated system of fixed prices in the police ordinance of the electorate of Saxony of 1612, and in the decree concerning the coin of 1822. As to how, in Saxony in 1578, an attempt was made to ascertain the cost of the production of shoes by shoemakers, seeJoh. Falke, Gesch. des Kurf. August in volkswirthschaft. Beziehung, 1868, 252. There was an enormous extension of governmental fixing of prices under Philip II.; one of the principal causes why Castile was so far behind Aragon economically. (Townsend, Journey through Spain, II, 221.) Sometimes these measures were adopted to prevent distress-prices; as in Hochheim, in favor of the vintners. (Becher, Polit. Discurs, II, 1652.) The predilection especially of German authorities for the fixing of prices by governmental power, in the sixteenth and seventeenth centuries is very remarkable. ThusLuther, vom Kaufhandel und Wucher, 1524;Calvin, Leben Calvins, byHenry, II, Beilage, 3, 23;Bornitz, De Rerum Sufficientia, 1625, 246;Seckendorff, Teutscher Fürstenstaat, 5th ed., 1776, 210;Becher, II, 1823 ff.;Horneck, Oesterrich über Alles, wenn es will, 1684, 123;Leibniz ed. Dutens, VI, I, 250;Thomasius, Göttl. Rechtsgelahrtheit, 1709, 209; evenFrederickthe Great,Mylius, N. Corp. Const. March, I, 190. Similarly,Mariana, De Rege et Regis Institutione, III, c. 9. Compare, however, III, c. 8, andBacon, Serm., 15; Historia Henrici, 1037, 1040. On the other hand,Child, 1690, andNorth, 1691, reprove all such measures.Roscher, Zur Geschichte der englischen Volkswirthschaftslehre, 65, 90 f. Earlier yet,Salmasius, who would allow the freefori ratioto govern. (De Usuris, 1638, 583.) For a very rigorous price-tariff in the old Indian laws, by which,inter alia, the price of provisions was to be fixed anew every fourteen days, seeMenu, Laws, VIII, ch. 401 ff.677.Where trade is free, thefilet de boeuf, for instance, is worth four times as much as the flesh of the ox's neck or throat; but prices fixed by a government can scarcely take cognizance of the difference. How easily might not a fixed price for beer, for instance, be evaded by diluting that beverage with water, or fixed prices for inn-keepers by dealing out portions smaller in quantity or of an inferior quality. Moreover, as early a writer asDe la Court, Polit. Discoursen, 1662, c. 4, remarks that the establishment of fixed prices by governmental authority raises the average price of all commodities rather than lowers it, for the reason that the few who are sellers by trade can do more to influence the authorities than the many buyers, whose interests are divided among numberless different commodities.678.Schäffle, Nat.-Œkonomie, II, 384 f.679.Banfield, Organization of Industry, 120.“Where the economic life of a people is still undeveloped, and the production of one enterprise is not from the first based on the estimated consumption of another, the circulation of goods brings with it great profits and great losses; whereas, profits and losses grow smaller, but at the same time more uniform and regular, in proportion as the circulation of goods increases in rapidity and regularity.”(Stein, Lehrbuch, 212.)680.In Belgium, during the last forty years, the price of wheat has become more constant every year, while the price of rye has become more variable; for the reason that rye has gradually ceased to be an article of popular consumption, and therefore to be an important article in trade, and is consumed almost entirely and directly by its producers. (Horn, Statist. Gemälde von B., 1853, 185.)Rodbertusrightly conjectures that the price of wheat was much more variable in ancient times than it is with us. (Hildebrand'sJahrb., 1870, I, 36.) That it was so may be inferred from the surprisingly large family supplies which were laid in, as appears from Digest, XXXIII, De Penu legato.681.In Würtemberg even officials etc. buy their own wine almost always directly from the vintner. This causes prices there to be exceedingly variable, frequently from hour to hour. (v. Reden, Statist. Zeitschrift, Nov. 1847, 1008.) How greatly the mere presence of a regular market has contributed to make prices more constant, may be seen in the suburbs of Hamburg, where fish offered for sale on the street are sold in the evening for one-third of the price asked for them in the morning. Besides, purchases made with a view to speculation may increase the variations of price, if the speculation is unskillfully conducted, especially when a low rate of interest, and of the profit of the person engaged in it, has produced a blind race among the speculators. Here the price of a commodity rises, not from any natural cause, but because it once rose before, andvice versa. (Senior, Outlines, 17 ff.;Hermann, 90 ff.)682.That fixed prices suppose that men are engaged in the production of the commodity in question, as their calling in life, seeGarve, Zu Cicero's Pflichten, III, 64 ff. Chess-like commerce of colporteurs, and in caravans etc. Concerning the dreadful higgling of the Bedouins, seeWellsted, Reise in Arabien,Rödiger'stranslation, I, 147; and the still worse bantering in Cashmere, where the merchant, in the first place, always denies that he possesses the desired commodity, then begins to search for it, in order to discover what value the purchaser puts upon it etc. (K. Ritter, Erdkunde, III, 475.) On the practices in Indian fairs, seeTh. Skinner, Excursion in India, 1832, I, ch. 6; on the bazaars in Asia,Andree, Globus XII, 7, 211.Herbersteinsays of the Russians in the sixteenth century:mercantur fallacissime et dolosissime nec paucis verbis ... mercatores nonnunquam non uno tantum aut altera mense suspensos detinent, verum ad extremam desperationem perducere solent. Hence the great variations in prices and commodities. (Rerum Moscov. Commentt., ed. Starczewski, 39 f.) Similarly also, in 1674, according toKilburger: Büsching's Magazin, III, 249. But, on the contrary, it is said of the Plescovers, educated by intercourse with the Hanse;tanta integritas ... in contractibus, ut uno tantum verbo res ipsas indicarent omni verbositate in fraudem emptoris omissa. (Herberstein, 52.) In the England of the present day, the custom of marking each piece of goods with its price is very general. Concerning the rapidity and the paucity of words with which prices are settled in that country, where business men do not even salute their customers, nor customers the business man, seeC. G. Simon, Observations recueillies en Angleterre, 1835, I, 129 f. The Athenian laws (?), that fixed prices should be asked, and that sellers should not sit down that that they might sell more rapidly, points to something similar. (Athen., VI, 226 f.Plato, De Legg., XI, 916 f.) Athenian law prohibiting mendacity in the markets. (SeeDemosth., Lept., 459.)683.Thus the German book-trade has fixed prices. Many merchants never make an offer to their educated customers who are wont to do so with peasants etc.; because they are aware that the latter purchase only after they have compelled the seller to come down greatly from his first proposed price. Among the Quakers it has been a rule from the beginning, never to ask more for their wares than they were determined to accept. (Hume, History of England, ch. 62.)684.Sir William Temple, Observations upon the Netherlands, Works I, 134, compares honor in trade to discipline in an army. Similarly,Law, Trade and Money, 209 f.Ferguson, History of Civil Society, III, 4. Where the seller is not obliged to make known the existence of certain defects in his wares to the purchaser before sale, there is always scope for fraud. Compare Digest De Edict. aedilit., XXI, I. On the meaning of the German legal maxims:Hand muss Hand wahren, andEin Wort, ein Mann, seeEisenhart, Deutsches Recht in Sprüchwörtern, 311 f., 319 f. It is a principle in matters of business, that the person who through malice or carelessness recommends a man of whose probity there is already some doubt, should bear the damage caused by his recommendation. (Martens, Grundriss des Handelsrechtes, 24 ff.) Many attempts at dishonesty are prevented by laws which in important contracts, especially in sales of land etc., require the presence of witnesses, and this particularly in the lower stages of civilization. (MeierandSchömann, Attischer Process, 522; Roman, Emancipatio;Grimm, Deutsche Rechtsalterthümer, 608 f.), or even a public proclamation before the assembled community, at least written documents invested with all legal formalities as practiced among civilized peoples. On Greek laws of this nature, see especially,Theophrast., inStobaeus, Sermon., XLIV, 22. Very remarkable in Sparta.Schol. Aristophan., Aves, 1284.685.CompareLotz, Revision, I, 255 ff. In England the price of wheat scarcely ever varied more than from 1 to 2. In Ireland the price of potatoes varied from 1 to 6. (McCulloch, Comm. Dict., v. Potatoes.) CompareEngel, Jahrbuch für Sachsen, I, 491 ff. The custom of asking enormous prices with the expectation of being beaten down, is usual in Italy and carried to a frightful extent, and related to the bad custom prevalent there of begging a little after-payment to every little gratuity or drink-money which has been received.686.Storch, Handbuch, I, 311.J. B. Say, Traité I, ch. 16. As to how commerce, when fully developed, is wont to be more moral than when only half developed, seeGarve, loc. cit., and Versuche IV, 149 ff. How fortunate for the public economy of nations that the prices of corn especially have been growing more steady all the time since the middle ages. SeeRoscher, Ueber Kornhandel, 56, 61.687.Trade by barter was very general in several states of the American Union about the close of the eighteenth century. In Vermont, for instance, it was usual for a doctor to exchange his medicines against a horse, and for the printer to buy corn, butter etc. with a newspaper. (Ebeling, Geschichte und Erdbeschreibung, II, 537.) In Maryland, the Assembly fixed by law the relative proportions at which tobacco, pork, corn and wheat should be exchanged the one against the other. (Ebeling, V, 435 ff.Douglas, Summary of the British Settlements in N. America, 1670, V, 2, 359.) Even as late as 1815, children were wont to run the streets of Corrientes, crying:“Salt for candles, tobacco for bread etc.”It was commerce with England that first led to trade by money in the United States. (Robertson, Letters on South America, 1843, I, 52.) Similarly in Rhokand until the end of the eighteenth century, where the cities, as a consequence, presented the appearance of a fair the whole year round. In the beginning of this century, the khan introduced the use of copper money made from Persian cannons; and much later yet, there were scarcely a million rubles in money to a million men. (Ritter, Erdkunde, VII, 753.)Basil Hallfound the uncivilized inhabitants of the Loo-Choo Islands ignorant of the use of money. (Voyage of Discovery, 1818.) Concerning trade by barter in the Homeric age, see the Iliad, VII, 472 ff. A supposed law of Lycurgus prohibited the use of money in purchases, and allowed barter only. (Justin., III, 2.) According toPausan., III, 12, only barter existed in India (?) in his time.688.The person who has been used to paying for four pounds of meat with twenty pounds of bread, and is asked to give twenty pounds of bread in exchange for some other article, must of course have some unit of measure in his mind to serve as a means of comparison between the value of that article and that of four pounds of meat. In Denmark, during the rule of the aristocracy, there were fixed prices sanctioned by the tradition of long usage, in accordance with which the prices of all commodities were estimated in relation to a ton of barley or rye—a natural consequence, apparently, of the want of a common measure to govern in the greater number of transactions.Bergsoe, Archiv der Polit. Œk., IV, 314;Graugan'sIcelandic Code contains a remarkable fixed price of this nature in the supplement to theKaupa-Balkror Commercial Code, I, p. 500. Similarly among the ancient Persians.Reynier, Economie publique des Perses, 308.689.That is, (200x(200-1))/2. CompareRauinStorch, Handbuch, III, 253. The“at least”has reference to the fact, that in barter, the many different kinds of most commodities has to be borne in mind. (Knies, Geld und Credit, I, 218.)690.This transportation of values supposes an equality of values of the money in two places, while the transportation of goods supposes different values of the same kind of goods in both places. (Knies, Geld und Credit, I, 218.)691.While the wordspecunia,danaro,dinero, andargent, are all derived from unessential qualities, the German word for money,Geld, corresponds with the essential quality of money, since it denotes that which is of value everywhere (gilt). On the other hand,nummusand νόμισμα from νόμος, (Bœckh.Metrolog. Unters., 310.),moneta(the English, money), are from the temple of Juno Moneta, in which the Roman coins were for a long time stamped. In old German, the word for money,Geld, means everything that is paid by any one. (Grimm, D. Rechtsalterth., 382.) The present meaning of the word is to be met with in a very old document of 1327. (Arnold, z. Geschichte des Eigenthums in den deutschen Städten, 89.)692.The wrong definitions of money may be divided into two classes: those which convey the idea that it is more than a commodity, and those which imply that it is less.This was a point which was contested even among the Greeks. There were many who claimed that wealth consisted exclusively in the possession of much money; as we find, for instance, in the pseudo-Platonic dialogue Eryxias; while others insisted that money was something purely imaginary (λῆρος), and the creation, exclusively, of human laws. (Aristot., Polit., I, 3, 16, Schn.) Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (Plato, De Rep., II, 371.)Anacharsiscompares money to counters. (Plutarch, De Profectt in Virtute.)Aristotle, himself, subscribed to the second opinion, although he saw clearly, that only useful and current things (χρείαν εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3, 14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.)Xenophonascribed properties to money which no other commodity possessed; especially when he said that it could never be too plentiful, and that its price could never fall. (De Vectt. Ath., 4.) The finest ancient explanation of the nature of money is that of the jurisconsultPaullus, L. I.; Digest, XVIII, 1; and it well deserves the long commentary devoted to it byP. Neri, Osservazioni etc., inCustodi, P.A., VI, 324, ff.Among the moderns,Melancthon., Corp. Ref., XVI, 498, andSeb. Frank, Chronik., 760, consider money as a mere symbol. On the other hand, the over-estimation in which the precious metals were held by the adherents of the Mercantile System was owing, without doubt, to their very superior utility as money; for we very frequently find that the adherents of that school insist that the precious metals must circulate. (See §9and § 210.)v. Schröder, Fürstl. Schatz- und Rentkammer, III f., considers new copper coins as an increase of the national wealth, but not other copper which is merely a commercial commodity. He frequently calls money, thependulum commercii, and expresses ideas concerning it as enthusiastic as they are obscure (p. 86.)Horneck, in his Oesterreich über Alles wenn es will, 1864, calls gold and silver“our best blood, the very marrow of our strength,”and“the two most indispensable universal instruments of human activity and existence.”(p. 188.)Th. Mun, England's Treasure by forraign Trade, 1664, (ch. 2) considers cash-money and resources as synonymous in every way. Only, he says (ch. 4) that it is sometimes advisable to allow one's money to remain in foreign countries, and to use bills of exchange, banks etc., at home, as a substitute.F. Gee, Trade and Commerce of Gr. Britain, edition of 1738, laments the“stiff-necked folly of those who think money a commodity like any other.”It is one of the most common demands of the adherents of the Mercantile System that the home mines of gold and silver should be worked at no matter what sacrifice, since the money employed in working them continues to remain in the country and the newly coined precious metal is clear gain. CompareSchröder, loc. cit. 109 ff., 181.Horneck, loc. cit. 173.Broggia, Della Monete, 1743, cap. 33;v. Fusti, Staatswirthschaft, 1755, I, 246:Forbonnais, Finances de France, 1758, I, 148.Ulloa, Noticias Americanas, 1772, ch. 12. We seldom meet with the correct view on this subject in the seventeenth century.Sully, of whom Henry IV. said that he never found anything to be possessed of beauty which cost double its real value, had it at times. (Economies royales, LXXIII.) So hadv. Seckendorff, Teutscher Fürstenstaat, 1655, 5th edition.It is in accordance with the usual course of human development that the exaggerations of the Mercantile System led to a reaction characterized by an exaggeration in the opposite direction. EvenDavanzati, Sulle Monete, 1588, traces the value of money back to human convention and refuses to find it in nature. A natural calf, he thinks, ispiù nobilethan a golden one; although he elsewhere expresses his admiration of the precious metals, calls themcagioni seconde della vita beata, and lauds them because they procure ustutt'essi beni(20, 21, Cust.)Montanari(ob., 1687) demonstrates from the use of leather money etc., that the authority of the state is the only power which gives money its character as money. (Della Moneta, 35.)Davenant(ob., 1714) carries his inclination to call money“the servant of trade, measure of trade,”so far as to compare it to a ticket or counter. (Works, I, 355, 444.) Strongly asLaw, himself, opposes the convention theory (Trade and Money, ch. I; Sur l' Usage des Monnaies, 1720, p. 1.), his discipleDutot, in his Réflexions polit. sur le Commerce et les Finances, 1738, 905, éd. Daire, contrasts not only paper money but also gold and silver as representative wealth, with real wealth.Berkeley, Querist, 1735, teaches that the real notion of money is not that of a“commodity, standard, measure, pledge, but [No. 23] ticket or counter, entitling to power and fitted to record and transfer such power.”(441, 475.) Even if the names,livre, shilling etc., remain, and the metal is dropped, every article may still as well as before be counted and sold, industry promoted and the course of commerce preserved. (p. 440.) According toMontesquieu, Esprit des Lois, XXI, 22, gold and silver are arichesse de fiction ou de signe. Compare Lettres persanes, II, 18.Benjamin Franklinalso maintains that the value of gold, for instance, is principally a credit-value. Remarks relative to the American Paper-Money, 1765, Works, II, Sparks' edition.Forbonnais, Finances de France, I, 86 f., calls money, simply a means to put commodities, which alone have value originally, in circulation. Hence it is, in itself, a matter of indifference whether, for a given quantity of coin, a person gives one thaler, or ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a distinction betweenrichesses naturelles(raw material),artificielles(manufactured products), andrichessesde convention (money.)von Schlözer, Aufangsgründe, 1805, 100, 138, calls money something imagined; andTh. Smith, Essay on the Theory of Money and Exchange, 1807, asserts, that true money is only an ideal measure of value, of which coins in turn are only the representatives. Compare, however, Edinb. Review, Oct., 1808.Oppenheim, Die Natur des Geldes, 1855, grants that in the beginnings of trade, money possessed the character of a commodity; but says that as soon as the services of circulation of the money-commodity prevailed over its services in consumption, it lost all its importance for the latter purpose, and that all relations dependent thereon ceased. At present, he claims money is only the representative of commodities, but no commodity itself. See, on the other hand,Roscher'scritical analysis in the Literarisches Centralblatt, 1855, December.The true doctrine was advocated in a classic form byNicolaus Oresmius(ob. 1382). See his Tractatus de Origine et Jure nec non et Mutationibus Monetarum, newly edited byWolowski: Paris, 1864. SeeRoscher'sessay in the Comptes rendus of the Académie des Sciences morales et politiques, vol. 62, 435 ff. Based on the latter we haveGabr. Biel(ob. 1495), De Monetarum Potestate simul et Utilitate, 1542, andG. Agricola, De Re metallica, 1556, I, 4 ff. This true doctrine was acclimated earliest in England and Holland, and before the mercantile system invaded them. CompareHobbes, Leviathan, 24, in which theconcoctio bonorumis described by means of money, and the full and clear chapter 12 ofSalmasius, De Usuris (1638), who, among other things, shows how Midas, who turned everything into bread, died of thirst.Pettyshows very clearly that national wealth does not consist exclusively nor mainly in money. Every country, he says, needs a certain quantity of money to carry on trade. It would be a waste to increase the former, the latter remaining the same. But the precious metals, by reason of their durability and universally recognized value, possess the character of wealth in a higher degree than other commodities.On the whole, the use of money in a nation is like the use of fat in the individual. (Quantulumcunque concerning Money, 1682.) CompareRoscher, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.DavanzatiandHobbeshad compared it to the blood, as has recentlySchmitthenner, Staatswissenschaften, 1839, I, 459.Northcalls money a commodity of which there may be an excess as well as a want. (Discourse on Trade, preface and postscript.) CompareLocke, Considerations on the Lowering of Interest, 1691, Works II, 13 ff., 19.Galiani, 1750, Della Moneta, IV, holds a very happy middle place between the alchymists and the philosophic contemners of gold. See, further,Quesnay, éd. Daire, 64, 75 ff.Turgot, Sur la Formation des Richesses, § 30 ff, had many clear views on this subject.Verri, Meditazioni, 1771, II, 1, calls money the universally current commodity. The expressions, measure of value, pledge, representative of all commodities might be true also of all other wares. It cannot, however, be denied that most modern political economists have not borne sufficiently in mind the peculiarities which distinguish money from all other commodities, as is apparent from the doctrine of the balance of trade prevalent in Hume's and Adam Smith's time. To this extent, therefore, the semi-mercantilistic reaction instituted byGanilh, Théorie de l'Economie politique, 2822, II, 380 ff., 426;St. Chamans, N. Essai sur la Richesse des Nations, 1824, ch. 3; andColton, Public Economy for the United States, 1849, 203 ff., who bring into relief the difference between“money as the subject”and“money as the instrument of trade,”was not wholly unfounded.Ad. Müllerexaggerates a correct thought, and causes it to degenerate into a species of mystic pleasantry, when he calls every individual in the state and every commodity that possesses value, in exchange or a social character, money.The highest object of the state is to develop this money-character more and more. (Elemente der Staatskunst, II, 194, 199.) The statesman, he says, should be money. (III, 206.) A very valuable monograph on this subject isM. Chevalier'sDe la Monnaie, 1850, constituting the third volume of his Cours d'Economie polititique.Knies, Geld und Credit, I, 1873, is here most thorough and acute, especially in keeping separate, by well defined lines of demarcation, the five different functions of money: measure of value (by proper division into parts: price-measure), instrument of exchange, means of transportation of values, and means of storing up and preserving values.693.Kniesshows how the making of money legal tender by the state, although of only secondary importance, is by no means an irrelevant matter, since persons must then have it, even if they do not want it for purposes of use or exchange, to discharge their liabilities thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)In all these cases, barter-economy (Naturalwirthschaft) meets with greater and greater difficulties as civilization advances. How, for instance, could 50 days annually of socage-service or labor be redeemed by the achievement at one time of 1,000 days of socage-service or labor? The rich man requires money principally as a means of payment, the poor man as a medium of exchange. The requirement or need of a people of media of payment is much more susceptible of extension or contraction, than that of media of exchange, made especially so by the intervention of claim-rights instead of money.(Knies, loc. cit, 200 ff.)Ravit, Beitr. z. Lehre vom Gelde, emphasizes this feature of money altogether too much after the manner of a jurist. But he is entirely right in adopting the exclusion of therei vindicatioagainst the honest possessor as necessary to the completion of the idea of money.694.Sismondi, N.P., I, 131, very rightly remarks that this has made practice as much easier as it has theory more difficult.695.Law, Trade and Money, 19. Hence, before the invention of money, scarcely anything but the things most indispensable to existence were produced. Were there no money, there would be very few scholars, artists etc.; for the classes who produce most of the things indispensable to existence make but few demands for them.Büsch, Geldumlauf, I, 11 ff., 36, II, 54.696.Turgot, Formation et Distribution, § 48 ff. Commodities which perish rapidly could be produced by persons devoting themselves to their production as a business only after the invention of small coin. (Lueder, N. Œk., 1820, 283.)697.CompareKnies, Geld und Credit, I, 219.698.CompareSchmitthenner, loc. cit., I, 457. One of the principal advantages of money consists in this, that every producer can discover what there is an over-supply or under-supply of in the nation, by means of the relation of the price in money of his products to the cost of producing them, estimated in money, (v. Thünen, Isolirte Staat, II, 2, 235.)699.Hence it is that so many socialists attack money.Th. Moreassures us that with the simple abolition of money, vice and misery would, for the most part, disappear of themselves. Hence in his Utopia, criminals are bound in golden chains and the chamber-pots are made of gold and silver in order to make these metals contemptible. (Ed. 1555, ff., 197 ff.) Similar views among the over-cultured Romans. (Compare §§79, 204.)Auri sacra fames.Virgil, Æneid, III, 56.Pliny, too, would recall the days of trade by barter. (H. N., XXXIII, 3.) Even inBoisguillebert, Factum de la France, ch. 4, we find, together with many correct views on the nature of money, passionate declamation against it because of its darker side.Argent criminel. (Détail de la France, 7. Dissertation sur la Nature des Richesses etc.) More recently this darker side has been dwelt upon byF. Möser, Patriot. Phant., I, 28;Ortes, Economia nazionale, II, 17, and the would-be restorer of the middle ages,Ad. Müller. While the latter writer lauds the feudal system as a“sublime fusion of person and thing”(Elemente I, 221), the present system of wages, because it is a system of compensation, he blames, and prefers the feudal for the opposite reason (?).“The onlymeritwhich the state recognizes in our day is oneof service.”(III, 259.)Kosegarten, Geschichtliche systematische, Uebersicht der N. Oek., 1856, 146 ff., is no friend to the economic system to which money gives a distinctive character.Per contra, compareBastiat, Maudit Argent, 1849.700.Mirabeau, Philosophie rurale, 1763, ch. 2, adds as the third great invention thetableau économiqueof the Physiocrates. For a comparison of money and language, seeHamann, Werke, II, 135 ff., 509.Hehn, Kulturpflanzen und Hausthiere, finds it characteristic of the race, that wine, writing with letters, and money, all owe their origin to the monotheistic stem of the Semitic people.701.Where every man becomes a merchant, and the society itself a commercial society.Ad. Smith, Wealth of Nations, I, ch. 4.702.Just as descriptive is the German wordbillig(equitable) for cheap. Here it is plain that language takes sides with the possessor of money!703.The contrast between barter-economy and money-economy is of great and fundamental importance. It repeats itself with so much regularity in the history of every highly developed nation, that political economists gifted with perception for the historical, could not possibly overlook it. Thus,Aristotle, for instance, establishes with the utmost care and accuracy the difference between οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and artificial economy, corresponding to the difference between value in use and value in exchange. (Polit., I, 3, Schn.) SimilarlyD. Hume, who allows a period of luxury, culture, industry, of trade and manufactures, of freedom and circulation of money, to be preceded by one in which the feeling of wants is not awakened, in which coarseness and idleness prevail, one in which agriculture is alone pursued, and monetary economy and freedom decline, and trade by barter obtains. (Discourses, passim, especially On Interest and on Money.) A similar contrast we find frequently, and as one of his fundamental thoughts, inJ. Steuart.As to how the transition from barter-economy to monetary-economy is generally effected, seeF. G. Hoffmann, Lehre vom Gelde, 1838, 176 ff. In the Tyrol, as late as 1820, the greater portion of purely mechanical work, such as that of the smith, the carpenter, and the washerwoman, were purely feudal duties. On the other hand, payment in money was the rule, in the beginning of the fourteenth century. (F. Beidermann, Technische Bildung in Oesterreich, 3.) Yet, for a long time after, the functions of a measure of value were performed by pieces of land, and those of an instrument of exchange by cattle and natural products. (Arnold, Gesch. des Eigenth., 207.) In France, money-economy, i.e., trade by money, had grown to importance earlier. (Nitsch., Ministerialität und Bürgerthum, im 11. und 12. Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated the rent of land in“cauldrons of victuals.”(Moryson, Itinerary, 1617, III, 155.) In ancient Italy, during the first three centuries of Rome, there was, with the exception of the Greek colonies, only trade by barter.Mommsen, Römische Gesch., I, 293, shows that the oldest ases were not money in the higher sense of the word, but belonged rather to the stage of barter-economy. On the other hand, we find in the time of the classic jurists, much as slavery had limited the sphere of action of money, the principle:pecuniæ nomine non solum numerata pecunia, sed omnes res, tam soli quam mobiles, et tam corpora quam jura continentur. (L. 222, Digest L. 16; compare 4, 5, 178.) Similarly inCicero, Top. 6. De Invent, II, 21. De Legg, II, 19, 21; III, 3. CompareDionys. Hal., N.R. IV, 15.704.Were money nothing but a measure of values in exchange, it should on that account, if on no other, have value in exchange itself, as a measure of length must necessarily have length itself. (We measure time on a clock by means of the revolution of the hands on the dial.) Again, value in exchange supposes value in use. The so-called“money of account,”such as the East Indianlac de roupies, the Portuguese reis, and the earlier Englishpoundsterling are no imaginary magnitudes, which would disappear with the figures of our system of counting (seeHufeland, N. Grundlegung, II, 33, in reply toStruensee, Abh., III, 501); but real coin-values which can not be represented by only single pieces of coin, units of value for the most part no longer recognized by the state, but which the people still retain. SeeM. Park's(Travels, 27) refutation of the fable circulated byMontesquieu, Esprit des Lois, XXII, 8, that the regular standard money of the Mandingo negroes was a mere imaginary standard.Hobbes, Leviathan, 24, exhibits a very good knowledge of this subject.705.CompareP. Neri, Osservazioni, 1751, VI, 1.Lord Liverpool, Treatise on the Coins of the Realm, 1805. The person who takes money as such must always harbor the hope of being able to dispose of it again as money. Hence, such an acceptance always supposes the existence of a certain amount of commercial confidence. The savage Goahiros, between Rio de la Hacha and Maracaibo, are too“distrustful”to take anything in trade but commodities fit for the most immediate use. (Depons, Voyage dans la Terrefirme, I, 314.) Similarly in the twelfth century, the heathen Laplanders. (Arndt, Liefl. Chronik, II, 3.) Commodities which barbarians can consume immediately are objects of the first necessity, whereas more civilized people, who are in a condition to undergo greater expense, look more to the technic qualities of money, such as divisibility, capacity for transportation and durability.v. Scheelshows in a very happy manner how, as commerce increases, money comes to be, as it were, subjected to a process resembling that of distillation: first mere increase of stores for use, next preponderating values in exchange, lastly mere orders for the same possessing no independent value.Hildebrand'sJahrbb., 1866, I, 16.706.The last circumstance continues to be one of great importance for a long period of time in the frigid zones. Thus, the beaver-skin continues still to be the unit of measure of trade in much of the territory of the Hudson Bay Company. Three martens are estimated to be equal in value to one beaver, one white fox to two beavers, one black fox or a bear to four beavers, a rifle to fifteen beavers. (Ausland, 1846, No. 21.) The Esthonian word,raha, money, means in the related language of the Laplanders, fur. (Krug, Zur Münzkunde Russlands, 1805.) Concerning skin-money in the middle age of Russia, seeNestor,Schlözer'stranslation, III, 90. The old wordkung, money, means marten. By degrees it came to pass that instead of whole skins, only two“snouts”were given or other pieces of leather about a square inch in size, which were probably stamped by the government and redeemed in whole skins at the government magazines. Hence, there is here supposed a species of assignats, and of disturbances of credit. The Mongolian conquerors would not recognize them, and they therefore became suddenly valueless. In Novgorod and Pskow, the system continued some time longer, for the reason that these places had little trade with the Mongols. In the rest of the kingdom it now became necessary to introduce silver money, and in the north to return to real squirrel and beaver skins.Karamsin, Russ. Gesch., I, 203, 385; I, 96, 191 f. Voyage de Rubruquis, inBergeron, Voyages I, 91.Herberstein, Rer. moscov. Commentt, 58 ff. Even in 1610, a Russian military chest was captured by the enemy, and in it were found 5450 silver rubles, and 7000 fur rubles. (Karamsin, XI, 183.)707.When the Danes progressed so far as to practice agriculture, they used grain instead of cattle, in quantities corresponding to the value of one cow or one sheep, for money, to the end that their idea of a unit of measure might not become obscured. (Ravit, Beiträge, 3.)708.Homeric determination of prices in oxen. Iliad, II, 449; VI, 236; XXI, 79; XXIII, 703 ff; Odyss., I, 431. Compare, however, II, VII, 473 ff. In Draco's time, money-fines were imposed in cattle (Pollux, IX, 60 ff.), and in Athens, before Solon's time, even the metal coins were, for the most part, stamped with the figure of an ox.Plutarch, Theseus, 25.Böckh., Metr. Uuntersuch., 121 ff. Among the most ancient Romans (Cicero, de Rep., II, 35) the imposition of fines in property, the coins first stamped by Servius,boum oviumque effigie(Plin., H. N., XVIII, 3,Cassiodor., Var., VII, 32), and the wordspecunia,peculium,peculatus, derived frompecus, point to something analogous. (Varro, De L. L., V, 19; De Re rust., II, 1;Cicero, De Rep., II, 9;Ovid, Fast., V, 281;Plutarch, Publicola, 11.) Old German fines in cattle, inTacitus, Germ., 12, 21; Lex Ripuar, 36, 11; Lex Saxonum, 19.Ulfilastranslates αργύριον δοῦναι (Mark, 14, 11),faihu giban. Very old German documents, of the seventh and eighth centuries, name horses as purchase-price. (Grimm, Deutsche Rechtsalterth., 586 f.) Otho the Great imposed cattle-fines. (WidukCorb., II, 6.) Similarly, in King Stephen's laws of Hungary (Wachsmuth, Europäische Sitturgesch., II), in the old Irish Brehon laws (Leland; History of Ireland, 36 ff.), as well as in the Scotch collection of laws,Regiam Majestatem, of 1330. (Honard, II, 263 f, 537.)Viva pecuniaof the Anglo-Saxons in the laws of William I. In ancient Sweden, all property was estimated infä=cattle (Geijer, Schw. Gesch., I, 100), just as now, in Icelandic,fe=property. In Berne, the Germanvieh, cattle, is used to express commodities. Among really nomadic races this is, of course, still more the case. Thus the Kirghises use horses and sheep as money, and wolf-skins and lamb-skins for small change. (Pallas, Reise durch Russland, 1771, I, 390.) Among some of the Tartar tribes, everything is stipulated for in cows. (v. Haxthausen, Studien, II, 371.) Among the Persian nomads, sheep are used as money; or when they are held in subjection in the cities, corn, straw and wool. (Ritter, Erdkunde, VIII, 386.) Oxen in use as money among the Tscherkessens. (Klemm, Kulturgeschichte, IX, 16.)W. B. Hermanndoubts, however, whether cattle were ever used as a medium of exchange. He thinks rather they were employed only as a measure of price. (Münchener Gel. Anz., 580.)709.That of vanity which presents itself among some people sooner than that of clothing.710.In Genesis, 1, 24, gold appears only as a valuable ornament. Abraham paid for his purchases in silver.711.For this reason, zinc-money is just as natural with the Malays and Chinese as iron-money with the Senegambians. (Mungo Park, Travels, 27.) And soPlutarch, Lysand., 17, may be right when he calls iron the earliest universal means of payment. In Sparta, too, where industrious efforts were made to maintain the lower stage of culture, this medium of payment was longest maintained. Compare, however,St. John, The Hellenes, III, 260 ff. The first copper coins were stamped a short time before Philip, father of Alexander the Great. (Eckhel, Doctr. Numm, I, XXX ff.) On the other hand, Italy, partly because it had mines of its own, and partly because of its intercourse with Carthage (Cyprus), had become, at a very distant period, so rich in copper that the circulation of copper, or to speak more accurately, of bronze, was naturally introduced. CompareNiebuhr, Röm. Gesch., I, 475 ff. (Aes alienum, obæratus, ærarium, æstimare.) Copper was all the more adapted to this end the more frequently it was found unmixed. It was generally used in preference to iron because of the greater facility of working it. (Hesiod., Opp., 150 f.;Lucret., V, 1285 f.) In modern nations copper money seems to have been employed only after silver money. Thus, it was not stamped in England before the time of James I. (Adam Smith, I, ch. 5), nor in Sweden before 1625. (Geijer, Schwed., Gesch., III, 56.) Money was struck from the metal of molten bells during the French Revolution!712.In Russia, between 1763 and 1788, there were 76 million rubles of gold and silver coins struck, against 54 million of copper rubles. (Hermann). On the other hand, in France, between 1727 and 1796, there were struck only 40 million francs of copper, 10 million ofbillonor base coin, and 3967 million of gold and silver.713.Michaelis, De Pretiis Rerum apud veteres Hebræos, 183.714.Strabo, VIII, 358. Hiero, tyrant of Syracuse, found it exceedingly difficult to obtain gold. When the Spartans wished to make an offering of gold at Delphi they were obliged to have recourse to Crœsus. (Herodot., I, 69;Theopomp., inAthen, VI, 231 ff.)Aristoph., Ranae, 720, calls gold“new”in contradistinction to the“old money,”that is, silver.715.Plin., H. N., XXXIII, 13. Compare, however,Dureau de la Malle, Economie polit. des Romans, I, 69, afterVarro, apud Charisium, I, 81. (Putsch.) It is certain, however, that when Italy was conquered, the Romans had introduced a circulating medium of silver, and that it was the prevailing medium; but in the time of Cæsar and Augustus, a gold circulation was the prevalent one. Yet the state treasure was deposited in gold during the period of silver circulation, because gold was, without question, better adapted to storing up and transportation.716.Muratori, Antiquitt., IV, Diss., 28.717.Henry was obliged to issue an order to the mayor and sheriffs of London, to get his gold into circulation; but he soon saw himself compelled to desist from executing his design. Edward III. was able only after a voluntary circulation of them had continued for a long time, to prohibit any one's refusing the rose-nobles. (L. Liverpool, loc. cit.)718.German., 5. Still more striking is the example cited byHerbelot, Bibliothéque Orientale (1697), 485.Rubruquis, Voyage, ch. 13. In the time of Nadir-shah, the Kurds gave, without the slightest hesitation, a pound of gold for a pound of silver or copper. (Ritter, Erdkunde, VIII, 395.)719.Recommended even byAdam Smith, ch. 5, and for Germany byF. G. Hoffmann, Drei Aufsätze über das Münzwesen, 1832. In Egypt, also, for a long time the wealthiest country of the middle ages, the circulation of gold prevailed until the twelfth century. (Macrisi, Historia Monetae Arab., cap. 3 ed.,Tychsen.) Harun Alraschid's income was estimated at about 7,500 cwt. of gold. (Ritter, Erdkunde, X, 235.) Something similar related of the Carnatic,“the land of ancient emporiums.”Ritter, Erdkunde, V, 564, afterFerishta.720.The use of thecauris(Cypræa moneta) in India this side and beyond the Ganges, in upper Asia, and in southern Africa depends on their employment for purposes of ornament, on their greater uniformity, and on the rarity of copper which would otherwise be better suited to purposes of change. In Calcutta, 1280caurisare equivalent to about half a shilling. (McCulloch.) CompareK. Ritter, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III, 233, 739; IV, 53, 420;Salin, III, 62;Botz, in the Tübinger Ztschr. Similarly among the fishing population of Northwestern America. (Stein-Wappäus, Handbuch I, 352.) Salt as money on the Chinese-Birman boundary (Marco Polo, 38), but especially in the interior of Africa, where nature does not at all produce it, but into which it is brought by caravans from the deserts, where salt is found in great quantities.M. Polo, Travels, 305, found the current price of a salt-tablet, two and a half feet long, one foot, two inches broad, and two inches thick, to be equal to the value of two pounds sterling among the Mandingos. In Abyssinia, the salt-bars are generally six inches long, three inches broad, one and a half inches thick, and they are bound with an iron ring to protect them against fracture. Sixty of them are worth one thaler. (Ausland, 1846, No. 35.) Slaves used as money:Barth, Reise, III, 338, 344. Tea-blocks in upper Asia and Siberia; and they are given by the Chinese to the Mongols as pay for troops. (Ritter, Asien, III, 252,) In Keachta, a tea-block is equal in price to one paper ruble. (Ausland, 1846, No. 20.Timkowski, Reise nach China, 143.) Date-money in the Sivah oasis. (Hornemann, Reise, 21.) Also in the Persian date-country, where, formerly, the lowest silver piece of money was coined in the form of a date (Ritter, Asien, VIII, 752, 819.)The ancient Mexicans used as money cocoa-nuts, in bags of 24,000 pieces, cotton-stuffs, small pieces of copper, and gold dust in quills. (Humboldt, N. Espagne, IV, 11.) Cocoa-beans are still used as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes weighing one pound are used. (Smyth, Journey from Lima to Para, 1836.) Among the ancient inhabitants of Rügen, linen (Helmold, I, 39); and still among the Icelanders, the so-calledVadhmâl. During the middle ages, 120 ells ofVadhmâlwere equal in value to one milch cow or six milch sheep, or two and a half ounces of silver. (LeoinRaumer'shistor. Taschenbuch, 1835, 515.) That the ancient northern mode of valuation, by theVadhmâland in cows is older than by themarkis shown byWilda, Gesch. des deutschen Strafrechts, I, 331. The cod-fish money used by the Icelanders was, on account of its great commercial importance as an article of export, an advance upon the use of theVadhmâl. Among the Caffirs, besidescauris, mats, javelins, glass corals, but particularly brass rings, are used as money. From three to four hundred of these rings are strung together, and two such strings are equal in value to one cow. (Klemm, Kulturgeschichte, III, 308, 320 f.) Ivory used as money in the neighborhood of the Portuguese colonies in Africa. (Martius, Reise, II, 670.) In Logone,Denham(1822) ff., had met with pieces of iron as a medium of circulation; but on the other hand,Barth(1849), with small strips of cotton from 2 to 3 inches in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.) In colonies, money of this nature is continued for a long time. Thus cod-fish used in Newfoundland, sugar in the English West Indies (Adam Smith, I, ch. 4), tobacco in Maryland and Virginia. (Douglas, V, 2, 389;Ebeling, V, 435 ff.) The last was related to the inspection and storage of the tobacco intended for exportation. Payment was made in orders on the stored and inspected tobacco, even as late as the end of the eighteenth century. In 1618, the forced circulation of tobacco was decreed in Virginia, and under severe penalties. (Gouge, History of Paper-Money and Banking in the United States, ch. 1.)721.When the caravans no longer touched at the oasis Agades, gold and silver money fell into disuse, and grain, stuffs etc. did service as instruments of circulation. (Barth, Reisen und Endeckungen, I, 144.)722.Ad. Müllersays very pertinently, but in a very mystical vein, that the precious metals combine in a very high degree and yet in a very simple manner, the principal qualities in which man's greatness finds expression: rarity, flexibility, uniformity, mobility, durability and beauty. (Elemente, II, 266.) In another place, he says, the highest ideal good is God, the highest material good, gold! (III, 65.) The mysticism of gold was most highly developed among the alchymists of the sixteenth and seventeenth centuries.723.Iron beds are worked only when they contain at least 18 per cent. of metal. Generally it is estimated that the furnace should yield 30 per cent. In the copper mines of Mansfield, Norway, Agordo and Venice, it goes as low as from one to three per cent. On the other hand, silver mines which yield 0.17 per cent. of metal are considered worth working. Lastly, gold is so rare that generally it can be extracted only from time to time by the ordinary mining processes. As a rule, men are content to gather it where nature has charged itself with its refining. The extreme limit of the working of gold appears, according toPlattnerandHaussmann, at Goslar, to be reached when in 5,200,000 parts of mineral earth there is one of gold. Spite of this, however, by reason of their great ductility, the precious metals have been able to penetrate even into the meanest huts in one form or another. It has been estimated that a silver leaf may be attenuated by beating to a thickness of only 0.00001 of an inch, and a gold leaf to 0.0000035 of an inch. An ounce of gold spread on a silver thread may attain a length of 13,000 English miles. (McCulloch.)724.How easily, for instance, could leather-money, such as was used by the ancient Galls (Cassiodor., Varia, II, 32,) be increased to any desired quantity, and thus its price brought down.725.Engel, at the usual tariff for land and railroad freight (10 and 5pfennigsper mile and hundredths of a mile) estimates the enhancement of the price of the following commodities, for one mile of transportation of a custom-hundred-weight (Zollcentner) at the following percentage of their average value:Gold, value 47610 GermanReichsthalerper cwt., 0.000007 by land, 0.0000035 by railroad.Silver, value 3000, 0.00111 by land, 0.00055 by railroad.Cotton, value 45, 0.074 by land, 0.037 by railroad.Tin, value 24, 0.1389 by land, 0.0694 by railroad.Lead, value 8, 0.416 by land, 0.208 by railroad.Iron, value 2.5, 1.333 by land, 0.666 by railroad.Rye, value 2, 1.666 by land, 0.833 by railroad.Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.Coal, value 0.12, 27.777 by land, 13.888 by railroad.Their great specific gravity, also, makes the precious metals easy of transportation. ThusCazeaucalculates that a given value of gold is 17,222 times as easy to transport as the same value in wheat. But as, where the weight is the same, the labor of transportation is inversely as the volume, this number must be multiplied by 26, and we therefore have 447,772 times. In the case of silver, the relation to wheat is as 1:15,554. Concerning copper, seeStorch, Handbuch 1, 488.Chevalier, Cours, III, 17 ff.726.This, at bottom, is also true, of the various kinds of copper; only, here, complete refining is impracticable on account of the relation between the cost of production and the product-price.727.On the other hand, copper, and still more zinc, tin and lead lose much of their value in the fire. Pearls may lose their entire value by fire, and diamonds more than half of it.728.Aqua-regia, a mixture of nitric and muriatic acid, dissolves gold. Chlorine and bromine attack it. It has been noticed to vaporize at a very high temperature. A gold thread vaporizes when a strong electric current is passed through it. A small ball of gold gives off a great deal of vapor if placed between two carbon points and subjected to the action of a powerful galvanic pile. (K. F. Naumann.)729.CompareHatchett, Experiments and Observations of the various Alloys, On the specific Gravity and comparative Weight of Gold, 1863. The French five-franc pieces wear away, on an average, in a year, 0.00016; the English crown, 0.00018; the half crown, about 0.00173; and the shilling, about 0.00456. (L. Liverpool, Treatise on the Coins. 204;M. Chevalier, Cours, III, 128 ff.) The wear from use of the south German gulden is 0.292 per 1,000. (Rau, in the Archiv. N.F.X, 256.) According toJacob, the average wear of coin is 2.38 per 1,000. (Historical Inquiry into the Production and Consumption of the Precious Metals, ch. 23.)730.Adam Smith, Wealth of Nations, I, ch. II, Digr.731.Solera, Sur les Valueurs, 1785, 271 ff.;Custodi. Half an ox, for instance, is worth half the value of a whole one only for a few well defined purposes. As to how much the value of the diamond varies with the size etc., seeDufrênoy, Traité de Minéralogie, II, 77 f. On the other hand, the separated parts of a piece of metal are very readily reduced to a whole.732.In the case of the ox, it is impossible to imagine a mark which might not be eluded by its losing flesh.733.The cost of coinage since 1849 has been ¾ of 1 per cent. in the case of silver, and in that of gold not quite 2 per 1,000. (M. Chevalier, Cours, III, 110.)734.Platinum possesses many of the properties necessary to an instrument of exchange in as high a degree as gold and silver,—great value in exchange, great specific gravity and great durability. On the other hand, its pliability as to form is very small, and therefore the cost of coining it would be high. The conversion of platinum coins into utensils, and of utensils into coin, which would contribute to the supply of money when needed, and to a diminution of that supply when the demand decreased, would be much more difficult on this account; and also because of the small degree of beauty possessed by that metal, which renders it little adapted to purposes of luxury. Under these circumstances, the rarity in nature of the metal is a great drawback; for the discovery of a new mine would create a great perturbation in prices. For this reason, the Russian platinum coins have been generally very much undervalued since 1828 in the commercial world, and the whole experiment was given up in 1845-46. CompareJ. Schòn, National Œkonomie, 128 ff. Aluminum, discovered by Wöhler, and which can be prepared from argillaceous earth, is capable of manipulation in a very high degree (malléable et ductile à peu près sans limite, excessivement fusible), almost as indestructible as the precious metals, but easily distinguished from silver by a fine bluish color, which has been compared to that of tin; by its small specific gravity, from 2.5 to 2.67, and its ring like that of iron. Hence it is very doubtful whether aluminum can be made to play the part of a substitute for silver, and still more so whether it can be used for coining.735.Lingot, bullion. In India, beyond the Ganges, and in China, bars are very much used. (Sycee.) In the latter country, besides these bars, there is no coinage except that of a mixture of copper and lead, for small change. (Th. Smith, An attempt to define some of the first Principles of Political Economy, 31.Timkowski, Reise nach China, III, 366.) Concerning Brazilian trade by bars, seeSpix und Martius, Reise, I, 346 f. They are stamped with the national coat of arms, the sign of the mint, the number by which registered, that of the year and of the degree of fineness. Concerning the Persian bars, thelaries, seeNoback, Handbuch der Munzverrh., III, Taf. 29.736.Concerning the utility of the precious metals for purposes of money, seePliny, A.N. XXXIII, 3;Oresmius, De Mutatione Monetarum, ch. 2;Law, Sur l' Usage des Monnaies, 683 f.Daire, where we read that before the invention of money, silver had served all kinds of useful purposes, but that now it served its most important purpose, namely the making of the best material for money on many accounts. YetLaw'sbook, Money and Trade considered (1705) is based mainly on the idea that pieces of land are much better adapted for purposes of money than the precious metals (185)!Galliani, Della Moneta, 1750, I, 3, 4, andP. Neri, Osservazioni, 1751 ff, Cust., have very correct ideas on this subject.737.North, Discourses upon Trade, 16. The capacity of money to act as a storer of wealth has been as much over-estimated by the so called Mercantile System, as its capacity to transfer wealth has been by the so called currency-school.738.Adam Smithcompares money to a large wheel, by means of which a due share of the means of subsistence and of enjoyment is distributed to each member of society. Elsewhere he compares its utility to streets and roads. (Wealth of Nations, II, ch. 2.)Hume, On Money, Pr., prefers to compare it to the oil with which the wheels of circulation are greased.Sismondicompares money to porters. (N. Principes, II, ch. 2.)“Money is to commerce what railways are to locomotion, a contrivance to diminish friction.”(J. S. Mill.) According toSchmitthenner, 455, it bears the same relation to other commodities that the written language of a people's literature does to their dialects.739.Law'sviews on money are, in part, excellent. Thus, for instance, he says that the debasement of the coin from financial necessity is as great a folly as it would be to try to enlarge a piece of goods too small for the purpose for which it was intended, by diminishing the length of the yard-stick. (Sur l'Usage des Monnaies, 697.) A country entirely isolated from all others could get along as well with one hundred pounds sterling as with a million. (Money and Trade, p. 88.) Elsewhere, he confounds money and capital to such a degree that he considers every increase of the amount of money in a country as an enrichment of the people, a means to give employment to the poor, to carry on manufactures etc. (Money and Trade, 23, 26 ff., 168.) A given quantity of money is capable of giving employment at most only to a certain number of men. (21.) A nation's power and wealth depend on the population and its stores of goods, these on commerce, and commerce in turn on the amount of money. (Pp. 110, 220.) The advice given, in 1848, to the National Assembly of France, but which it had the good sense to reject, to overflow all France with the so-calledbons hypothécaires, is akin to Law's practical propositions.M. Chevalier, Cours, III, 8, rightly ridicules the literal construction of the words:l'argent est abondant, when merchants find it easy to obtain credit, and considers it as well grounded as it would be to infer from the maxim:l'argent est le nerf de la guerre, that rifles and bullets were made of silver.740.Adam Smithwas not entirely clear, in his own mind, on this point. Thus inconsistently enough, he calls money unproductive—“dead stock,”for the reason that it leaves no material traces behind it of the goods which it has transferred from one hand to another. (II, ch. 2.) Is not the same true of trade itself? And yet Adam Smith calls trade productive. His error is doubtless a remnant of the Physiocratic doctrine, to which Smith still held. CompareQuesnay, 94, éd. Daire. EvenTwisssays that money employed as money is unproductive, but that, when employed as a commodity, it is productive. (View of the Progress of Political Economy, since the sixteenth Century, 1847.) Besides it is not a peculiarity of money alone, that, after it has served the purposes of production, it comes out of the product unaltered. The same is true of quicksilver employed in amalgamation. (Hermann, 2nd edition, 302.)741.Senior, Three Lectures on the Value of Money, 1840, is, in so far, not wrong when he says that the value in exchange of the precious metals is still ultimately determined by the want of such commodities as are luxuries. This last determines to what extent the production shall be extended by the working of the poorest mines, whereas the wants of circulation can be met as well by small as large quantities of the metals.742.The good or bad result of this production depends on many different elements which may compensate on another. In California and Australia gold is to be found in large quantities, and is easily mined; but the workmen make large demands which the nature of the country renders it difficult to meet. In the Harz mines, where the cost is scarcely covered, (Lehzen, Hannover's Staatshaushalt, 1853, I, 139), the shafts are sometimes 175-½ fathoms deep, but this is made up for in a measure by the moderate demands of the workmen and their skill in mining. Among the Mandingos, the auriferous material is so rich that ⅓ per 1,000 of the weight of the sand is washed out into pure gold in ten minutes (M. Park, Journal, 53 ff., addenda, XIX), while in Europe, where the proportion is only 1/100 per 1,000, mines are still considered worth working. But then, what workmen there are there! In Peru, the burdensome height of the mines above the level of the sea and the want of combustible material more than counterbalance many favorable advantages, while in Norway the cheapness of wood compensates for a great many disadvantages. Another thing which contributes towards the uniformity of the price of the precious metals is the circumstance that the great amount of fixed capital required in the greater number of mining enterprises, postpones for a long time the working of good mines as well as the abandonment of poor ones.743.Older writers have estimated the amount of money necessary in a country at 1/5, 1/10 (Petty), 1/15, and even 1/30 of the yearly income of a people (Adam Smith, II, ch. 2.) According toCantillon, Sur la Nature du Commerce, p. 73, it is from 1/6 to 1/10 of the annual gross production of a nation.744.Davanzati, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that all terrestrial things which serve to satisfy the wants of men are, by virtue of agreement, equal in value to all the gold, silver and copper; and that the parts comport themselves as the whole. The price of a commodity is based on this, that men find in it as much of theirbeatitudineas is afforded them by a given quantum of gold etc. Similarly,Montanari, who adds as a limitation the quantity of moneyspendibile in commercio. (Della Moneta, 45, 64, Cust.) The same opinion leadsLocketo the singular conclusion, that, as there is now in the world, ten times as much silver as there was previous to the discovery of America, each single piece of silver, separately considered, and taken in relation to such commodities as have not varied, is worth only one-tenth of what it was then.Locke, here, starts out with the gross assumption, shared even byGanilh, Théorie, II, 386 ff., that in the case of money the demand is always, relatively speaking, equally strong and just as great as the supply, or as the amount in the market. (Works, II, 23 ff.) Further,Montesquieu, Esprit des Lois, XXII, 7, 8. Per contra, however, seeMontesquieu, ibid. XXII, 5, 6, andHume, On Money and on the Balance of Commerce, Essays II, 1752.Hume knew perfectly well, that only circulating money and circulating commodities operated on price, but failed to take the rapidity of circulation into account. Similarly,Forbonnais, Eléments du Commerce, II, 212; evenCanard, Principes, ch. 6;Fichte, Geschloss. Handelstaat, 93 ff., andStein, Lehrbuch, 58. Contested byLaw, Trade and Money considered, 140, a work directed especially against the Mercantilistic essay, Britannia languens; 1680, byMélon, Essai politique sur le Commerce, ch. 22;Genovesi, Economia civile, 1764, II, 1, 15;Steuart, Principles, II, ch. 28;Verri, Meditazioni, XVII, 3 ff.;Büsch, Gedlumlauf, II, 40. The simple taking of an inventory of most private resources which possess so much greater value in other commodities than in money is enough to demonstrate the error ofDavanzati'sdoctrine. Thus, in France, in Necker's time, the cash money in the kingdom was estimated at 2,200,000,000 livres, and the average value of the wheat crop alone at 1,000,000,000.Necker, Législation et Commerce des Grains, 1776, I, 215. Recently,Michel Chevalier, estimated the amount of money in France at from 3-½ to 4 milliards, while the official estimate of its immovable property alone was over 83 milliards.745.When money becomes dearer, less of it is of course needed; and when cheaper, more, for the same purpose.746.In contradistinction to presents, acts of spoliation, but especially to barter.747.The discoverer of this truth is supposed by many to beBandini, Discorso economico, 1737, 141 f., Cust.Berkely, however, in the Querist, 1735, 477 f, writes:“A sixpence twice paid is as good as a shilling once paid.”Much earlier yet, in 1797,Boisguillebert, Détail de la France, II, 19, had the germ of this doctrine, but he confounds circulation with consumption. AndLocke, Considerations, II, 13 ff., presented it in 1691 with great clearness, although he did not always remain true to his theory. CompareQuesnay, éd. Daire, 64;Cantillon, 159 ff., 382.748.If the number of annual exchanges effected by 1 dollar = u; the total number of dollars in the store of money = m; the rapidity of circulation, that is the number of exchanges effected on an average by each dollar in a year, = s: then is u = m s, s = u/m, m = u/s.749.Since good money is so easily stored away and preserved, no one is in haste to get rid of it.St. Chamans, N. Essai sur la Richesse des Nations, 122 ff.750.Among the Kurds, all the money in their camps is used for head-ornaments for their women. (K. Ritter, Erdkunde, X, 887.)751.Thus,Sir David North, Discourse on Trade, 1691, Postscr.752.Lotz, Handbuch, 377, is of opinion that even in England £100,000 employed in trade in land can scarcely effect exchanges to the amount of £1,000,000 in a year. The same sum employed for the same purpose in London, in stocks and in the trade in commodities, will effect exchanges to the amount of £160,000,000.753.Cernuschi, Mécanique de l'Échange, 1865, 132 ff.754.ThusPetty(ob. 1687) is of opinion that England needed as much money as ½ of all its ground-rents amounted to, as the ¼ of all house-rents, and 1/52 of all the wages of labor for a year; for the reason that ground-rents are paid semi-annually, house-rents quarterly, and wages weekly. (Several Essays, 179; Political Anatomy of Ireland, 116.)Locke, on the other hand, assumes 1/50 of the wages of labor, ¼ of all the revenue of land owners, and 1/20 of the amount cash money taken in in a year by merchants. Of these amounts, there should be always, at least, one-half in ready money on hand, if commerce would not be brought to a stand-still. If leases were to be paid for on short terms, a great saving of money would be possible. (Works, II, 13 ff.)Pinto, Traité du Crédit et de la Circulation, 34, calls special attention to the case of Tournay, in which the commandant, during the siege of 1745, made 7,000 florins serve him for seven weeks to pay the garrison; by borrowing that sum anew every week from the inn-keepers etc.; which they, again, had received from the soldiers.755.If all were to commit their payments to the care of the same banker, it would be possible to do with almost no money. But even now, if 100 separate merchants were obliged to keep each 3,000 dollars in their money-chests for unforseen contingencies, a banker might accomplish the same for them with 50,000 dollars, because it is not probable that the unforseen contingencies in question would occur to all at the same time.756.In the London Clearing-House, in 1839, £954,401,600 were paid by means of the use of £66,275,600 as a circulating medium, for the most part notes of the Bank of England. (Tooke, Inquiry into the Currency Principle, 27.) From May, 1868, until May, 1869, £7,068,078,000. (Statist. Journal, 1869, 229.) The New York Clearing House, in 1867, effected payments to the amount of £5,735,031,900 (Ibid., 1867, 577), and in 1868, $30,880,000,000. (Hildebrand'sJahrb., 1869, II, 168.)757.This system began in the middle of the seventeenth century. (A Discourse of Trade Coyn and Paper Credit, 64.) As early a writer asSir J. Child, N. Discourse on Trade, 46, says, that for some time, every man who had from £50 to £100 in money, sent it to his banker, and that since that time, all the money flowed towards London and the country was deprived of it. (127 ff.) As a rule, the goldsmiths were also bankers. One such smith had at the time of the Great Fire of 1666, emitted £1,200,000 in notes. (A Discourse etc., 67.) The Bank of England, as a money center, dates from 1694. The London banks developed into intermediaries principally before the time of the French Revolution. (Thornton, Paper-Credit of Great Britain, 1802.) This remarkable institution had grown to vast dimensions even in Thornton's time, although it has been much enlarged since 1825. (Tooke, History of Prices, 152 f.) Similar conditions among almost all highly civilized peoples. Thus in Greece, compareBecker, Charicles, I, 294. Concerning a person who had 14 talents' worth of resources, 26 minæ, and therefore three per cent. in cash, see Lysias, adv. Diog., 6. In Rome, comparePolyb., XXXII, 13.Cicero, pro Font., I, 1. For Italian analogous cases, part of which may be traced back as far as the twelfth century, seeLobero, Memorie storiche della Banca de S. Georgio, 1832; or the Dutch“cassiere”Richesse de Hollande, I, 376, ff. In France an ever increasing centralization of the money-trade is to be noticed in Paris (M. Chevalier, Cours., III, 418); and now of the money-trade of Germany in Berlin.758.CompareFullarton, On the Regulation of Currencies, 1845. Among the Dutch, the custom of using all commercial commodities as much as possible, as a basis of the circulating medium, was much earlier developed. (Child, Discourse on Trade, 65, 264 f.) In Great Britain, the aggregate amount of bills of exchange put in circulation was, in 1839, £528,000,000, which sum has been increased annually at the rate of about £24,000,000. (Tooke, Inquiry into the Currency Principle, 26.) Between 1828 and 1847, there circulated at the same moment, on an average, £79,127,000 in bills of exchange in England, and in Scotland, £17,380,000 (Athenæum, 1850, No. 175), and in Great Britain and Ireland, from £180,000,000 to £200,000,000. (Tooke, History of Prices, VI, 588,) According toMacleod, the bills of exchange and promissory notes together amounted to £500,000,000; bills of exchange, bank-notes and bank-credits, to over £600,000,000. (Elements, 12, 325.)Macleodcalls the currency the sum total of all debts due by every individual in the country. (Elements, 43.)759.A case in England, in 1857, in which a house with £10,000 capital failed with liabilities amounting to £900,000. (Report of the select Committee on the Bank Act, 1858, XV.) Or where a speculator with £1,200 made purchases on credit to the amount of £80,000, and then failed with a deficit of £16,000. (Fawcett, Manual, 442 f.)760.Remarked by as early a writer asDavenant, Works, IV, 106 ff. Compare, however, II, 238.Quesnay, éd. Daire, 75 ff.Lord King, Thoughts on the Effects of the Bank Restriction, 1804, 17 ff. Exhaustively treated byChevalier, Cours., III, 397 ff. He very much laments the fact that the customs of France cause it to need from 3½ to 4 milliards of cash money, while England does a much larger trade with 1,200 millions. (I, 207 ff.) In France, it is said that the amount of money, in 1812, was 1,500,000,000 francs(?). (Peuchet, Statistique élémentaire, 473.) In Prussia, in 1805, it was 90,000,000 thalers. (Krug, Betracht. über den Nationalwohlstand des preuss. St., I, 244.) The annual amount of production in the former country was, 7,036,000,000 francs; in the latter it was estimated at 261,000,000 thalers, so that in Prussia the relation of money to national income was, as 1:2.9; in France, as 1:4.69.761.It is scarcely possible to determine exactly the amount of money in a country; for the reason that, outside of the suppositions of bankers etc., there is no authority which can be safely relied on, unless it be the reports concerning the coinage, and of the emission of paper money. The information, no less necessary, to be derived from the statistics of the importation and exportation of money, the melting down of coin by gold smelters etc., can never be exactly obtained. In England, at the end of the sixteenth century, the circulating medium was estimated at £4,000,000 (Hume, History of England, ch. 44, App.); under Charles II., at £6,000,000, when the population was 6,000,000. (Petty, Several Essays, 179.) About 1711,Davenant, New Dialogues, 11 ff., mentions £12,000,000 as the amount; andAnderson, Origin of Commerce, a., 1659, £16,000,000 in 1762. The circulation of gold, shortly before 1797, was estimated byRoseat, at least, £40,000,000; by LordLiverpool, at £30,000,000; byTooke, at only £22,500,000. (History of Prices, V, 130 ff.)Moreau de Jonnés, 1837, assumed £43,500,000 (Statistique, I, 329), andHelferich(Schwankungen der edlen Met., 1843, 147), £45,000,000.Sir Robert Peel, estimated the amount in 1845 at £59,000,000, to which was to be added an average of £28,000,000 in bank notes, after deduction made of the metallic reserve. According toJevons, the amount of British money is now £80,000,000 in gold, £14,000,000 in silver, £1,000,000 in copper; the sum total, including bullion and bank notes, after the deduction of their metallic representatives, £134,000,000. (Economist, December, 1868, July, 1869.) In France,Vauban, Dîme royale, 104 (Daire), estimated the cash money at about 500,000,000 livres, over 750,000,000 francs, with whichVoltaire, Siècle de Louis, XIV, ch. 30, agrees so far as the year 1683 is concerned. In 1730,Voltaire, assumes the amount to be 1,200,000,000 of the coins of that time.Necker, Administration des Finances, III, 66, estimated it, in 1784, at 2,200,000,000 livres;Mollien, about 1806, at 2,300,000,000. The valuations in Louis Philippe's time varied from 2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13, 1847), and 4,000,000,000. (Blanqui.) The valuations of 1870 were, according toWolowski, 4 milliards; and toBonnet, from 5 to 6 milliards. CompareWolowski, L'Or et l'Argent, 383 ff., Euquête, 42. The German Zollverein is said to have had, at the beginning of 1870 (Soetbeer) 480,000,000 or 520,000,000 thalers (Weibezahn) cash money.In Wirtemberg,Memminger, 1840, estimated the resources of the country at 1,600,000,000 guldens, of which 36,000,000 were cash; and the yearly gross income at 179,000,000 guldens; so that the money was 20 per cent. of the latter and 2¼ per cent. of the former. The annual sales = 226,000,000. Therefore the coin currency must have circulated on an average between six and seven times in a year. In the electorate of Hesse, there wereper capita4 thalers, 18 sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers, paper-money. (B. Hildebrand, Statist. Mitth., 1853, 185.) The amount of money in Naples, in 1840, was estimated at 42,000,000 ducats. (Scialoja.) It has been estimated that, in 1830, Spain possessed 1,725,000,000 francs. (Barrego von Rottenkamp, 330.)762.Montanari, Della Moneta, 52 ff.763.David Hume'svery influential essay on the balance of trade does not give expression to this error, but he certainly was the occasion of making a great many of his disciples advocate it. It is related to the error mentioned in §123.Quesnay, 101 (Daire) saw this point in a much clearer light. So didGraumann, Gesammelte Briefe vom Gelde (1762), 12 ff.; 73 ff.764.This is seen, for instance, when paper money is issued, in times when trade is thriving, and is withdrawn when this conjuncture ceases.765.Very well elaborated byFullarton, On the Regulation of Currencies, 71 ff., 139 ff. Compare, however,Becaria, Economica publica, IV, 4, 27. When England on the occasion of the removal of the bank restriction in 1821 and 1822, caused £9,520,759 and £5,356,788 to be stamped, this powerful demand scarcely affected the gold-agio in Paris. (M. Chevalier, Cours, III, 157.) And, on the other hand, the system of assignats, developed during the first French Revolution, on so large a scale, had no influence on the price of silver in the rest of Europe. (Lord King, Thoughts on the Bank Restriction, 1804.) And so,Tooke, History of Prices, I, 205, describes a very large increase of the medium of circulation, after which the prices of commodities remained unchanged, corn fell, colonial products rose in price, both as they had done before, and from causes inherent in the commodities themselves. During the first years of the bank restriction, 1799-1801, grain rose very rapidly in price, while all trans-Atlantic products sank. (Tooke, I, 232 ff.) The unusually large importation of wheat from January 1, 1846, to January 14, 1847, was paid in France by a decrease of the bank metallic reserve (encaisse) to the extent of 172,000,000 francs. (M. Chevalier, Cours, III, 470.) An experienced practitioner in England is of opinion that an increase of bank notes to the amount of about £5,000,000 would not raise prices nor increase the tendency to speculation, but only enlarge the deposits of the bankers. But, if on the other hand, £5,000,000, by any sudden contingency, were to be put into the hands of the working classes, this money would, for the most part, enter immediately into circulation; the price of commodities would, therefore, rise and continue to rise until that amount had come into closer fists, as it would after some time. (Tooke, III, 156 ff., II, 323.)766.This explains the high price of gold in Farther Asia, which was formerly separated from America, the principal source of supply of the precious metals, by a journey around the earth, the then usual course of the world's trade.The precious metals are generally higher in country places than in large cities, and in the interior than on the sea-coast. Since the public highways etc. in Germany have been so much improved, the difference in the value of money in upper and lower Germany has almost disappeared. (Rau, in the Archiv der polit. Oek., III, 338.)767.Happy beginning of this doctrine inHume, On the Balance of Trade. Further,Thornton, The Paper Credit of Great Britain, ch. 11.Adam Smith, on the other hand, claims that gold and silver, because they are costly superfluities are uniformly paid most dearly for, in the richest countries. (Wealth of Nations, I, ch. 11, 3: Digr.)768.Similarly in China, and even in Upper Egypt, the China, so to speak, of antiquity! CompareHerodot., II, 112 ff;Homer, Od., IV, 354 ff. The religion of the Egyptians prescribed to them a mode of life which was scarcely practicable in foreign parts. They were systematically inspired with a horror for everything foreign. They had a strong antipathy for salt, fish and pilots. In Egyptian mythology, Osiris represents the Nile, Typhon the desert and the sea! (Plutarch, De Iside, 32.)769.The other party, of course, makes a profit also. He is in a better condition than if he wished to produce the desired commodity in his own country.770.The first clear germ of this doctrine, which is one of the most important theoretical principles of international-trade politics, is to be found inDavid Hume, On Interest;Cantillon, Nature du Commerce, 226, 369 ff.Ricardo, Principles, ch. 7.“Gold and silver having been chosen for the general medium of circulation, they are, by the competition of commerce, distributed in such proportions amongst the different countries of the world, as to accommodate themselves to the natural traffic which would take place if no such metals existed, and the trade between countries were purely a trade of barter.”Rebenius, Oeff. Credit, I, 29 ff. Still further developed, especially byJohn Stuart Mill, Elements, 1821, III, 4, 13 f.;Torrens, The Budget, 1844.John Stuart Mill, Essays on some unsettled Principles of Political Economy, 1844, No. 1, and Principles, III, ch. 19, § 3, 5th ed.:“The opening of a new branch of export trade from England; an increase in the foreign demand for English products, either by the natural course of events or by the abrogation of duties; a check to the demand in England for foreign commodities, by the laying on of import duties in England, or of export duties elsewhere; these and all other events of similar tendency, should make the imports of England, bullion and other things taken together, no longer an equivalent for the exports; and the countries which take her exports would be obliged to offer their commodities, and bullion among the rest, on cheaper terms, in order to re-establish the equation of demand; and thus England would obtain money cheaper, and would acquire a generally higher range of prices.”Obscurely surmised byBeccaria, E.P., 3, 18, and even byGaliani, Della Moneta, II, 2.Senior'sadmirable work, Three Lectures on the Cost of Obtaining Money, 1830, follows up the thought that every country obtains indigenous and foreign products at a cost which grows smaller in the same proportion as the productiveness of its people's labor is large. This would, certainly, explain why it is that perhaps one hundred English days' work in cotton manufactures will exchange against as much silver as is produced by two hundred days' work in Mexican mines and foundries. This would not, by any means, produce a lowering of the price of the precious metals relatively to other English commodities, but the influence would be felt equally by all the products of English national industry.771.To be found in germ inCantillon, Nature du Commerce, 1755, 249 ff. 307.Büsch, Geldumlauf, 14.Kaufmann, Untersuchungen, I, 75 ff. Many of the doctrines of the so-called Mercantile System, of which I shall treat in my projected work on the Political Economy of Commerce, have given expression to this truth in an inexact and exaggerated way; but they were not entirely erroneous, as is supposed by the adherents of Hume and Smith. However,J. S. Mill, Principles II, ch. 19, § 2, does not fully admit the degree of the cheapness of money in England usually assumed. According to him it is wants of luxury (luxury-wants) become such through habit, that produce“the dearness of living in England.”772.Pettyconsiders the search for a measure which could be applied both to land and labor as one of the principal problems of Political Economy. (Political Anatomy of Ireland, 62 ff.)Sir J. Steuart, Principles, III, ch. I, took the matter very easy by considering the so-called“coin of account,”for instance,“bank-money,”as an invariable value-magnitude. CompareJacob, Grundsätze der National Œkonomie, II, 441 ff.Cazaux, Economie politique et privée, 1825, 16 ff., has a not uninteresting study on this subject; but he goes, throughout his argument, on the assumption that the rate of interest is the price of money! If the rate of interest in two countries = I and i, the prices of the same commodity = P and p, the true thing-values, V and v; then we have v: V:: i p: I P!773.Law, Trade and Money, 181. Before him, and quite correctly,Montanari, Della Moneta, I, p. 84 ff., compares the means employed of measuring one commodity by another, to the means used to estimate time in terms of space, as when it is measured by the revolutions of the hands of a clock, and again, space in terms of time.774.The solvability or capacity to pay of buyers cannot be taken into consideration here, because it is synonymous with the amount of counter-values which are to be measured.775.Adam Smith, Wealth of Nations, I, ch. 5. SimilarlyLuther, vom Kaufhandel: Werke, ed.Walch, X, 1098 f.B. Franklinconsidered the labor employed in the production of wheat as the best measure of prices. (Letter to Ld. Kames: Works, ed.Sparks, VII.) As Adam Smith, so alsoSismondi, Richesse commerciale, I, 371 f.;Kraus, Staatswirthschaft, I, 84,; v.Schlözer, Anfangsgründe, I, 41. AlsoMalthus, in the second and succeeding editions of his Principles, ch. I, 6, and Definitions, ch. 8, 9. The Measure of Value, 1823.Zachariä, Vierzig Bücher, VII, 53 f., maintains that, at least within the limits of every separate nation, the average labor-power of one man is invariable. Assuming this principle, therefore, to be true, the means of subsistence necessary to support a laborer for one work-day constitutes, indirectly, a measure of prices.Tooke, History of Prices, I, 56, says that the amount of a day's wages is always a better measure of the price of the precious metals than the price of wheat. Even in 1750,Galiani, Della Moneta, II, 2, had denied the impossibility of an entirely invariable measure of price in this world of change, but he considered man himself the least variable of measures, and in a country where slavery prevailed, slaves. He thought that themacutaof the negroes were a part of the average price of slaves. Practically, Adam Smith's proposed measure was used in the French constitution of 1791, in as much as it provided that participation in primary assemblies should depend on the participant's paying an annual tax equal to the wages of three days' work, and eligibility as anèlecteur, on the possession of an income equal in value to the wages paid for two hundred days' day-labor.Owenendeavored to base the value of the paper money in circulation in his Utopian commonwealth, not on any metal of a certain weight or stamp, but on hours of labor as the unit. (Reybaud, Réformateurs Contemporains, I, 255.)776.The wretched condition, until within a short time since, of the Irish working class, is well known; how they dwelt in mud cabins without windows, board-floors or chimneys etc., in the same apartment with their pigs; how they lived almost exclusively on potatoes, and went about in rags. These same Irish,coelum, non animum mutantes, received in North America for the coarsest kind of labor, 50 to 75 cents wages, besides wheat bread and meat three times a day, coffee and sugar twice a day, butter once, and seven or eight glasses of whisky or brandy. (M. Chevalier, Lettres sur l'Amérique du Nord, I, 159.)777.Thus in Mauritius, the immigration of the coolies has produced a decrease of negro wages, but an increase of negro industry. In the Barbadoes, the negroes are more industrious and their wages lower than in Jamaica. The wages of good workmen, as for instance during the commercial crisis in Manchester, often sink, while the wages of bad workmen rise; as, for example, in a village through which a railroad is made to pass. CompareLauderdaleInquiry, ch. 1;Sartorius, Abhandlungen, 1806, I, 16 ff.;Lotz, Revision, I, 99 ff.;M. Chevalier, Cours, III, 88 f.778.Besides the passages cited in §107, compare alsoHarris, On Money and Coins, II, 1757 f.;Jacobalso precededRicardo. See the German translation ofSay, II, 435, 507.779.The introduction of the words“the socially necessary time of labor”into the formulæ does not make the measure any more practical for political economists or for socialists.780.Cantillon, who reduces all the cost of production to land and labor, considers the“at par”between these two to be this: that the labor of the meanest slave corresponds to the quantity of land which the owner is obliged to employ for his support, and the support of the slave and of the children who are to take his place. (Nature du Commerce, 42.) The Physiocrates thought that the internal (innere) value of two commodities stood in the same relation to each other as the area of land directly or indirectly necessary to their production.Schlettwein, Grundfeste der Staaten, 1792, 230.781.The so-calledSachwerth(thing-value, real-value) ofHermann, St. Untersuchungen, 101 ff. ThusPoulett Scroperecommended a“tabular standard,”to be officially established and renewed from time to time, to serve as an anchor to those persons who wished permanently to fix their money in such a manner as to make it exchangeable for an equal value inthings. (Principles of Political Economy, 1833, 406.) Something of this kind was tried for 50 commodities, between 1833 and 1837, byPorter, Progress of the Nation, 1st ed., II, 236 ff., then for 40 commodities byJevonsin the Statistical Journal, 1865. Of course, all commodities of a given price are not equally important in this respect. Thus, for instance, a fluctuation in the price of diamonds would have no effect on the thing-value or real-value of a day's wages, but it certainly would on the thing-value of a princely income. There are some excellent remarks on this very important subject inLowe'swork, On the Actual Condition of England, chs. 8 and 9. The controversy carried on betweenJevons, A serious Fall in the Value of Gold, and its social Effects, 1863; Statist. Journal, 1865; andLaspeyres,Hildebrand'sJahrb., 1864, 81 ff.; 1871, I, 296 ff; in which the former recommends the geometric mean of the relative prices of separate commodities at different points of time, in order to calculate the average relative price: and the latter, as usual, the arithmetical mean, is very thoroughly reviewed and criticised byDrobisch, who shows that neither of these methods is sufficient, but that the quantity of every separate commodity must also be taken into account, for which he furnishes practical formulæ. (Math. phys. Berichte derK.Sächs. Gesellsch., 1871, I, 143 ff, 416 ff.) It is certain that a fixed income in money could maintain its real value or thing-value (Sachwerth) just as little if the cwt. of bread rose by as many dollars as the cwt. of pepper had fallen; as if the increasing price of bread depended on a decreasing price of pepper.782.Senior, Outlines, 187. In addition to this, we may draw from the thing-value of a day's wages a right conclusion as to the economic condition of the majority of the people; and assuming the customary division of the national wealth, also as to the degree, to which the people have subjected the forces of nature to their service.783.Ricardo, ch. 22, refuted, indeed, only the view that an increase in the wages of labor produced by the higher prices of corn, would necessarily make all goods or products of labor, correspondingly dearer.784.Compare §103. In Paris, in 1817, thesetierof wheat cost March 5, 55½ francs; April 2, 57 fr.; April 23, 60 fr.; May 14, 63 fr.; May 21, 66 fr.; May 28, 75 fr.; June 4, 82 fr.; June 11, 92 fr. (Tooke, History of Prices, II, 17.)785.Locke, 98. WhenCondillacasserts that wheat is the best measure of prices, he adds, when free trade in wheat obtains. (Commerce et Gouvernement, 1, 23.)Fichte, on the other hand, while advocating the despotic guidance of all trade by the state, would employ wheat as the fundamental measure of prices. (Geschl. Handelstaat, 47 ff.) That grain does not afford a good measure of prices in very highly cultivated nations nor in barbaric ones, seeHermann, II, Aufl., 451.786.The average price must be based on the prices of a great many years, since crops vary not only from year to year in price, but from decade to decade. SeeRoscher, Nationalökonomik des Ackerbaues, § 152, andRoscher, Kornhandel und Theuerungspolitik, 47 ff. Great wars are wont to disturb agriculture in such a manner that the price of corn is very much increased by them. Hence, it is not unfrequently possible to use the prices of grain as a species of barometer to determine the real pressure of a war upon the economic life of a people. Judging by this standard, England suffered much less from the War of the Roses in the fifteenth century, than from the civil wars in the seventeenth; and less than France from the religious wars of the sixteenth. The war year 1631-2, in which Gustavus Adolphus and the emperors had to spare the country, must have been far less oppressive for Saxony than the later Swedish campaigns.Roscher, in the Tübinger Zeitschrift, 1857, 471.787.Most countries go through these successive periods in their corn trade: in the first, exportation preponderates; in the second, there is an equilibrium; in the third, importation preponderates. (M. Chevalier, III, 74 ff.) CompareTacit., Ann., XII, 43. Omitting the two dearest and the two cheapest years, the Prussian provinces were circumstanced as follows:In The Whole Kingdom, the price of Rye, 1816 to 1837, was 40. silver groschens. The population per square mile, 2,776In Prussia, 32.2 silver groschens, and 1,827In Posen, 34.3 silver groschens, and 2,180In Brandeburg, Pomerania, 38.4 silver groschens, and 2,093In Saxony, 40.3 silver groschens, and 2,366In Silesia, 38.0 silver groschens, and 3,612In Westphalia, 47.7 silver groschens, and 3,600In Rhine Province, 49.4 silver groschens, and 5,078Rau, Lehrbuch, I, § 183. As to when it may be assumed that the price of corn has remained unchanged, seeHermann, loc. cit., 125 ff.788.Pettyrecommended the average daily food necessarily required by one man as the measure of price, estimated on the basis of the cheapest means of subsistence. (Polit. Anatomy of Ireland, 62 ff.)Thaerused as such a measure the smallest day's wages; as he supposed, expressed in rye, that is, 1/9 of the Prussianscheffel. Similarly,Malthus, in his first edition, andBuquoy, Theorie der Nationalwirthschaft, 240. But this is simply to substitute for wheat an arbitrarily determined quantity and quality of the same as a measure of prices. For practical experiments of this kind, made by the depreciation of paper money during the French Revolution, seeM. Chevalier, Cours, III, 98; and Constitution de 1795, V, 68, VI, 173.Count Soden, Nat. Œk., II, 338 f., demands that all taxes, salaries of state officials etc., should be regulated in accordance with the price of corn. This same view has been suggested recently in many German States.789.Recognized generally byLocke, Considerations 24. Further,Galliani, Della Moneta, II, 2;Adam Smith, I, ch. 5.Schäffle, N. Œk., II, Aufl., 127, maintains that a constant measure of price, such as would enable a person to stipulate for a salary for instance that would be always of the same value, is impossible. Similarly,Hildebrand'sJahrb., 1871, 315 ff.790.CompareJ. Tucker, Four Tracts on political and commercial Subjects, 28 ff., who maintains that it is a rule, almost without exception, that“operose or complicated manufactures”are cheapest in rich countries;“raw materials,”in poor ones. Thus, for instance, corn (?), garden products in the former; cattle, wool, milk, skins, flesh-meat, in the latter. Ships and movable property are cheaper in the former, whereas wood may be said to be almost the free product of nature here. See especiallyAdam Smith, Wealth of Nations, ch. 11, Digr.791.Senior, Outlines 119 f., makes the following calculation: Of the 15d. which a loaf of bread costs in England, 10d. goes to buy the wheat, the other 5d. to the miller, baker etc. If now, we suppose, that in consequence of an increased demand, and therefore of increased production under more unfavorable circumstances, the price of wheat should rise to 20d., the cost of production would possibly, because of an improved division of labor, come down to 3-¾d., and hence the price of the loaf of bread would be increased to 23-¾d. It is quite the reverse in the case of lace, because here a piece of raw material worth only 2 shillings may, by reason of the labor expended on it, become worth as much as £105. If the consumption of lace should increase so that the value of the raw material rose to 4 shillings, the simultaneous decrease of the cost of manufacture to the extent of one-quarter of the aggregate price, would leave the price of the manufactured article £78, 19s.792.When, for instance, the inhabitants of the Baltic coasts, by way of preference, kept up their relations with the Hanseatic cities, the Dutch and English, that is with the most important industrial and commercial nations in their own sphere, they in all this pursued only their own interest. As to how this intercourse between“old”and“new”countries is susceptible of the very highest development, seeTorrens, The Budget: On Commercial and Colonial Policy, 1844, and earlier,Wakefield, England and America, II, 1823.793.The clearing up of primeval forests, the cultivation of natural meadows, etc.794.In Hungary, during the sixteenth century, the choicest venison was consumed by plebeians and nobles alike.Herberstein, Rer. Moscov. Comm., 97. In Russia, even the lowest classes not unfrequently partake of roast hare and duck etc.Kohl, Reise in Russland, II, 386. Still, in St. Petersburg, wild-fowl game rose between the time of Peter the Great and Alexander I. 600 per cent. in price. (Storch, Handbuch, I, 368.) In Pittsburg, in 1807, mutton, beef and veal cost from 4 to 6 cents a pound, and game only from 3 to 4-½ cents a pound. (Melish, Travels through the United States, II, 57.) The more the game laws are enforced, the longer does the low price of game continue, especially when it is not easy for the poor to procure them. The moderns have seldom thought of raising game artificially; among the Romans, artificial raising was confined to the hare and fieldfare. (Varro, R.R., III, 12 ff.;Columella, R.R., VIII, 10.) Hence, the enormous prices paid for game, of whichPliny, H. N. X., 43, relates an example from the time of the emperors. On the other hand, Polybius assures us that, in his time, game was to be had as good as gratis in Lusitania. XXXIV, 8, 7.795.In Buenos Ayres, in the nineteenth century, beggars on horseback were to be seen. (Robertson, Letters on South America, II, 294.) In Krasnojarsk, in 1770, 1-½ rubles was the price of an ox, 1 ruble of a cow, from 2 to 3 of a horse, from O.3 to O.5 of a sheep; O.15 of a deer. (Pallas, Sibirische Reise, III, 5, II 12.) According to the Tables of Prices inSir F. M. Eden, State of the Poor, Append. I, andRogers, History of Agriculture and Prices (1866), I, 245, 361, the following prices obtained in England;(On an average.)in 1125-26, one ox, 1 shilling; one quarter of wheat, 20 shillings;in 1260-1400, one ox, 13 shillings 1-¼d; one quarter of wheat, 5 shillings 10-¾d;in 1406, one ox, 9-½ shillings; one quarter of wheat, 4-½ shillings;in 1463, one ox, 10-20 shillings; one quarter of wheat, 1-⅔-4-⅔ shillings.CompareHume, History of England, a. 1327. Under Henry VIII. veal, beef, mutton and pork were food for the poor in England, and cost on an average 1-½d per pound; while wheat cost from 7 to 8 shillings a quarter. (24 Henry VII, c. 3.Price, Observations, II, 148 f.) The same appears from the“reasonable prices”which Charles I, in 1663, had established by sworn juries viz.: that the different kinds of meat were much cheaper comparatively than corn in our days.(Rymer, Foedera, XIX, 511.Anderson, Origin of Commerce, a. 1633.) In many places in the highlands of Scotland, in the middle of the seventeenth century, one pound of oat-bread cost as much or more than one pound of the best meat. The union of Scotland with more highly civilized England soon changed the relation, so that inAdam Smith'stime, good meat, in nearly all parts of Great Britain was worth from 2 to 4 times as much as the same weight of wheat bread. (Wealth of Nations, I, ch. 11, 1.) The Thomas Hospital in London paid, on an average, for good beef per stone weight:1701-1710: 1s. 7.9d.1764-1773: 1s. 3.7d.1794-1803: 1s. 5.d.1804-1821: 1s. 10.9d.1822-1842: 1s. 1.5d.(Porter, Progress of the Nation, III, 112.) Among the most certain proofs of the high degree of economic civilization attained in upper Italy about the close of the medieval times is the fact, that the price of cattle, compared with that of wheat in the thirteenth and fourteenth centuries, varies very little from what it is to-day. (Cibrario, Economia politica del medio Evo, III, 335-383.) CompareRau, Lehrbuch I, § 185. In Athens, the cost of amedimnosof wheat was as great as that of a sheep in Solon's time. In the age of Demosthenes, it cost only half as much. (Böckh, Staatshaushalt der Athener, I, 107, 132.) It is obvious, however, that the price of meat compared with that of corn, was lowered by the great extension of the artificial cultivation of meadows; for, when the former has reached its maximum, it becomes a great spur to the promotion of the latter. Thus, in England, the price of meat, at the beginning of the sixteenth century, was on an average, higher than inAdam Smith'stime. (loc. cit.) To the same cause is to be ascribed the state of things in Prussia mentioned byv. Podewils, Wirth schaftserfahrungen, II, 15.As a common basis for such calculations, the following may be accepted. It is plain that meadows, pasturages and forage-fields must yield as much in meat, as corn-fields of the same dimensions of equal goodness, and situated as favorably, in corn. According toBlock, a Prussian acre (Morgen) of the best quality, used as a meadow, produces a hay-value equal to 1,000 pounds, a clover-value equal to 2,420; as a vegetable field, a beet or potato-value equal to 6,050-6,930 pounds,v. Lengerke'sestimate is that 110 pounds of cattle-fodder expressed in terms of hay, produces on an average 40 pounds of milk, and from 3-½ to 4 pounds of meat. This would, at most, give 36, 88 and 220-252 pounds of meat. The yield of wheat,v. Lengerkeestimates, on the best soil, and on an average, at 14 Prussianscheffels(at 80 pounds, i.e. 1,120 pounds) yearly per acre (Morgen). The three periods in the history of the prices of cattle were clearly recognized byThaer, Landw. Gewerblehre, 1815, 100.796.It is a very characteristic fact, in relation to the river fisheries, that the fable that servants formerly stipulated not to eat salmon except twice a week is to be found in so many places. Thus on the Elbe and the Rhine. CompareThaarup, Dänische Statistik, I, 112. In Scotland, about the end of the seventeenth century, the story in places ran, that it was five times a week. (Walter Scott, Old Mortality, ch. 8.) In England, fish seems to have been a tid-bit among the poorer classes in the fourteenth century. (Rogers, I, 606.) It was dearer especially during Lent. (Statist. Journ., 1861, 544 ff.) The artificial production of sea-fish seems to have been tried only by the ancient Romans. On the whole,Adam Smith'slaw that a ten-fold demand can, as a rule, be met only by a greater than ten-fold labor, applies here. (I, 370, ed. Basil.) But this relation is obscured to a certain extent, from the fact that the source of the production of sea-fish, the ocean, which may be claimed at any time by occupation, is, practically, boundless. Here, therefore, the improvements made in nautical science, and the progress of geographical knowledge, may yet for a long time compensate for the exhaustion of the nearer seas, and even more than counterbalance it.797.Among a great many nations in a low stage of civilization, agriculture consists in the burning down of the forest. In 1594, the Lauenförder forest produced 1,110 thalers' worth of food for hogs, and wood to the amount of 44 thalers. (v. Berg, Staatsforstwirthsch., 213.) The Harzgerode woods, at the ducal line of Anhalt-Bernburg, were estimated at 6,000 thalers. A hundred years later, they brought in yearly 70,000 thalers, although, in the meantime, very little progress was made in the science of cultivating them, (v. Justi, Staatswirthschaft, II, 211.) We may form a notion of the relativity of the idea of the dearness of wood from the fact that in Bavaria, for instance, in 1840, there was a great deal of complaint, that in the district of Isark the price rose from 6 to 9 florins; in the districts of Regen and the lower Maine, from 11 to 14 florins to from 15 to 18; in the Rhine district, from 20 to 26 florins per cord (Klafter). (Rau, Lehrbuch, III, § 150, a.) Besides, the price of wood in the forest rises, with an advance in civilization, much more rapidly than it does in the market; in which last, labor and capital play a greater part. (Rau, I, § 385.)798.Plan for the artificial production of pearl oysters. (Novara-Reise, I, 303.) Ostriches seem now to be ceasing to be objects of mere occupation, and to be becoming objects of breeding. (Ausland, 1869, § 13.)799.Thus Wolff's experiments made at Möckern have shown that in the case of sheep fed with hay, the wool becomes much heavier and the flesh leaner than those of sheep fed with a more concentrated food. While it is estimated in England, at the present time, that the wool of South-Down sheep is worth scarcely one-tenth what their flesh is (Jacob, On Corn Trade, 166), mutton, from the year 1260 to 1400, was, on an average, worth 17 pence; and this even at a time when prices were gradually rising; but the wool of one animal (1 lb., 7-¾ ounces), 5-¼ pence. (Rogers, I, 362, 395.) Even under Anglo-Saxon kings the fleece was worth 40 per cent. of the value of the whole sheep, (David Hume.) And soW. Macann, Two Thousand Miles Ride through the Argentine Provinces, 1853, I, 151, says that in the interior of Buenos Ayres, he purchased 8,000 sheep at 18 pence a dozen, and after a march of 200 English miles, sold the skins for sixty pence a dozen. In Goya, formerly, a live horse cost 3 pence, its skin on the coast 12 pence; and the slaughtering of the beast cost 3 pence, the removal and cleaning of the skin 3 pence; and 3 pence were paid for transportation. (Robertson.)In Ireland, in 1763, it not unfrequently happened that the skin and tallow of an ox cost as much in a commercial city as the whole ox had cost in the nearest market town. (Temple, Works III, 13.) In England, from 1260 to 1400, the average price of a whole cow was 9s. 9d.; of the hide 1s. 8d., and cows were cheapest in the first decade, i.e., 6s. 2d., and the hides dearer than they were generally afterwards, i.e., by from 1-9-¼d. (Rogers, I, 361, 451.) In Saxony, according toEngel(1853), the average price of horned cattle was about 46 thalers; of their hide, 4 thalers and 21 silver groschens. Russia exported, 1842-1847, 72,636,166 silver rubles worth of tallow, 1,832,137 silver rubles worth of horse hair, 10,811,735 worth of bristles (Borsten), 7,387,140 of uncured skins, 36,159,452 of sheep's wool, but flesh-meat only to the amount of 370,362 rubles, and entire animals to the value of 6,853,241 rubles. (P. Storch, Der Bauernstand Russlands, 289 ff.) Tallow is there ten times dearer than the same volume of wheat. (Steinhaus, Russlands industrielle und commercielle Verhältnisse, 294 ff.); while in Saxony, according toEngel(1821), a pound of wheat cost on an average 7.8pfennigs, and a pound of tallow 30p.However, Russia's recent progress in civilization has had for effect: that the exportation of tallow (1833 = 4-½ millionpuds; 1869 = 2-¼ mill.) has greatly fallen off; while that of butter and live stock has increased. (v. Lengefeld, R. im 19. Jahrh., 220 ff.)In England, during the fourteenth century, a pound of meat cost, on an average, ¼d.; of lard, from 1-½ to 2. (Rogers, I, 411.) On the other hand, from 1848 to 1856, the average January price of beef from America was 110 shillings; of tallow from St. Petersburg, 48s. 11d. per cwt. (Newmarch.) And so, in the time ofPallas, the Cossacks chased the deer of their steppes only for the sake of its skin and horns. (Pallas, Reise, III, 524.) While the Greeks got horn from Macedonia and Thrace (Herodot., VII, 156), it is a striking proof of high civilization that at Athens (?), about the time of the hundredth Olympiad, an ox-hide was worth only 3 drachmas, and the whole ox 77 drachmas. (Böckh, Staatshaushalt, I, 105 ff.)As the ox is primarily serviceable as an object of food and an instrument of labor, and the sheep on the other hand, only an instrument to produce wool, it is easy to understand why, with the further advance of civilization, the price of oxen rises comparatively much more than the price of sheep. In Athens, during the time of Solon, an ox was equal in value to five sheep. (Plutarch, Solon, 23.) So also in countries with a low civilization in the time of Polybius. (Polyb., XXXIV, 8;Gell., XI, 1.) Why the same was the case in Rome at the beginning of the Republic? (Plut., Popl., 11). In England the proportion between the price of an ox and that of a sheep was,in 927 as 6:1 (Henry.)in 1125 as 3:1in 1182 as 6.3:1in 1197 as 9:1in 1229 as 8:1 (Eden.)in 1260-1492 (av.) as 9.2:1 (Rog.)in 1497 as 10:1in 1500 as 11.6:1in 1511 as 8:1in 1528 as 10:1in 1529 as 12.8:1in 1531 as 9.4:1in 1551 as 10.6:1in 1597 as 8.2:1 (Eden.)At present the proportion may be from 10 to 20:1. In Saxony, it is as 48 thalers to 5.27. (Engel.)800.About 1793, Russia exported 10,000 rubles worth of fish, 452,000 of sturgeon bladders, 188,000 of caviar. (Storch, Russland, II, 184.) But this had undergone a great change even in 1850. At present, there are 64 per cent. of sturgeon bladders, 27 of caviar, and 7 of whole fish. (Steinhaus, Russland's industrielle und commercielle Verhältnisse, 102, 368.) Yet the Astrakan fishermen still throw the greater number of the sturgeon they catch back into the water. (Pallas, Reise im süd. Russland, I, 189;Steinhaus, 99.) Salt fish are adapted for transportation to a distance not only because they can be preserved, but also because they may be caught and prepared on the great highway of the water. Athens got from the Black Sea besides wood, tar, wool, hides, cordage, honey, wax and slaves, also salt fish. (Wolf, z. Demosth. Leptin., 252;Bockh, Staatshaush. I, 51.) The latter from Sardinia, Egypt and Spain. (Pollux, VI, 48.)801.The principal countries that produce potash are Russia and North America. It is estimated that a cwt. of potash requires, on an average, 480 cwt. of wood. (Pfeil, Grundsätze der Forstwirthsch. in Bezug. auf National-Oekon. etc., I, 128.) From 1800 to 1840, wood for fuel in Würtemberg trebled its price; for building material the price increased 1.6 times. (Deutsche Vierteljahrsschrift, 1847, No. 4, 104.)802.Whereas barbarous nations take little trouble to turn the milk from their cows to account (Roscher, Ideen z. Politik und Statistik der Ackerbausysteme, Archiv. der politische Œkonomie, neue Folge, III, 202),Reuning, in 1844, calculated that the milk from all the cows in Saxony amounts to a value of 10,000,000 thalers, their meat to over 2,000,000, and the labor performed by them in various ways to 3,000,000. In Silesia, in the last decade of the eighteenth century, a quart of milk was estimated to be worth 2pfennigs(Festschrift der deutschen Landwirthschaftsversammlung, 1869, 343), whereas as now it is sold almost everywhere for 12pfennigs. (Schmoller.) In the rather high state of civilization which Saxony had reached at the end of the sixteenth century, when game was already dear, and the prices of other meat were almost as high as in 1800, asheffelof rye was worth 44 measures (Mass.) of milk, and recently 82-⅔ measures. (Schmoller, Tübinger Ztschr., 1871. 336 ff.)803.The principal cheese-producing countries and cities are Holland, Limburg, Switzerland, Gloucester, Chester, Ayrshire etc. CompareRoscher, loc. cit., 195 ff.804.In England, in the year 1000, a cow was worth only as much as two sheep. (Anderson, Origin of Commerce, a., 979.) The best butter was worth only 1d. per pound in 1550, while pork was worth 1-1/8, veal and mutton, 1-½, and beef, 2-¼d. The price of butter was exceedingly variable in the sixteenth century. (Eden.)805.During the middle ages, pork constituted the most usual animal food even of the best classes. (Büsching, Ritterzeit und Ritterwesen, I, 164.) Immense importance attached to pork by theLex Salica. (Tit., II, XIV; Emendatt. Caroli Magni, II, 1 ff.) The archbishop of Cologne used every day 24 large and 8 medium-sized hogs, and four more on the three great festivals. The abbot of Corvey used daily five fat and one lean hog, besides two young ones. (Kindlingen, Münsterische Beitr., Urkunden, 147, 126.) In 1345, at the court of Dauphiny, there were used annually for 30 persons, 30 salt and 52 fresh hogs; whereas, in modern Paris, with 800,000 inhabitants, only 32,000 hogs are consumed yearly. (Roquefort, De la Vie privée des Fr., I, 310 f.) Compare herewith the place occupied by the swine-herds in the Odyssey in Greece's age of chivalry. In England, in the time of William I., woods were taxed according to the number of hogs they might feed. At present, there is an enormous production of hogs in Servia, which, in many places, constitutes the only source of ready money to the agricultural population.And about the end of the eighteenth century, it is said that Servia received from Austria alone 1,300,000 florins yearly for hogs. (Ranke, Serb. Revolution, 95.) In 1864, Servia's total exports amounted to 62,500,000 piasters, of which 28,162,260 were for hogs, 7,043,000 for wool, 7,662,000 for the skins of sheep and deer, 5,732,000 for cattle, 1,222,400 for tallow. (Kanitz, Serbien, 598 ff.) Great production of hogs also in the Moldau and in Wallachia, in the United States and Mexico, where, instead of butter, only lard and suet are used; also in Lombardy, the Prussian Rhine province, Belgium, the English milk-producing districts, Gloucester, Wilt, Dumfries, Galloway and the districts where agricultural proletarians abound—Ireland and Yorkshire. It is a consequence of the same law that, among the South Sea Islanders, the hog was the principal domestic animal, as it still is among the Chinese. Similarly in the whole of Asia, beyond the Ganges (Ritter, Erdkunde, IV, 938, 1101); in semi-barbarous upper Italy in the time ofPolybios(II, 15); in Gall itself, in the time of Augustus. (Strabo, IV, 192, 197.) The America of the ancient Greeks, Sicily, exported hogs, mainly, in the time of Hermippos. (Athen., I, 27.) And even among the Romans, the consumption of pork was much greater than the consumption of beef. (Marquard-Becker, Handbuch, V, 2, 39.)806.In the cities of Prussia subject to a tax for the privilege of maintaining slaughter houses, a pound of beef cost on an average, in 1846, from 2 silver groschens, 5pfennigs, to 3 s. gr. 4 pf.; pork, from 3 s. gr. 2 pf. to 4 s. gr. 4 pf. (Dieterici.) In Moscow, also, the latter is dearer at present. Before the time of Peter the Great, it was cheaper. (Storch, Handbuch I, 364.) It was a sign of high civilization, too, that in Florence, in the fifteenth century, veal cost, on an average, 2-½ soldi; mutton, 2-⅓ soldi; but pork, 4 soldi. (Pagnini, Saggio sopra il giusto Pregio delle Cose, 325 f., Cust.) It is especially the lower middle class who ask for fat meats. The very fat English sheep are taken not to London, but into the manufacturing districts. (Lauderdale, Inquiry, 322 f.) As to whether the relatively high price of pork, and the fact that in the later times of Rome, the wild boar was the most fashionable dish, compareBecker, Gallus, II, 186.807.The production of fowl is similar in this, that they are frequently fed from remains of consumption; only their production is not adapted to uncivilized countries, because it is difficult to protect them there. In Texas, it is said, it costs more to raise ten chickens than to bring up ten children. (Kennedy, Czarnkowski's translation, 1846, 115.) The independent breeding of fowl is advisable only where there are a great many rich consumers; for the reason that they are naturally a delicacy. Enormous production of pigeons in Cambridge, Huntington etc. (McCulloch, Statistical Account, I, 189.) In Paris the consumption of pork and fowl has gained somewhat since the Revolution. (M'Chevalier, Cours. I, 113.)808.According toSchuckburg, Philosophical Transactions of 1798, andKraus, Vermischte Schriften, I, tab. I, the prices of the following species of animals rose in England between 1550 and 1795: horses, 904 per cent.; oxen, 896 per cent.; sheep, 876 per cent.; cows, 2050 per cent.; hogs, 1964 per cent.; geese, 300 per cent.; butter rose from 5d. per pound to 11-½d.; beer from 1d. per gallon to 2-¾d.; agricultural day wages from ½s. to 1s. 5-¼d.; wheat 326 per cent. Compare, however, Edinburg Review, III, 246 ff. In Germany also, cows and hogs have increased much more in price than horses and sheep. (Tübinger Ztschr., 1871, 342.)Dutot, Réflexions, 946 ff., éd. Daire, says that the value of the precious metals in France decreased in value between the times of Louis XII. and Louis XV. in the ratio of 3-79/91:1. On the other hand, the prices of different commodities rise in very different degrees:Fat sheep, from 7 sous to 10 livres.Lean sheep, from 5 sous to 5 livres 10 sous.Hogs, from 10 sous to 25-35 livres.Capons, from 1 sou to 12 sous.Hens, from 1-½ sous to 6 sous.Pigeons, from 1-½ sous to 3 sous.Deer, from 1-½ sous to 15 sous.809.Thus, in Thuringia, the average price in silver of corn from the sixteenth century until the period 1848-61 increased in the ratio of from 1 to 3-4; the price of the different kinds of animals, on the other hand, from 1 to 5-10. (Knies, inHildebrand'sJahrbb., 1863, 78.) The price of the different kinds of corn as compared with one another may, however, be modified by many different circumstances. Thus the Capitulare Saxoniæ of 797, c., II, estimated the prices of rye, barley and oats to be to one another as 30:30:15; while the Magdeburg Chamber of 1804 estimated them to be as 17:14:8. In the kingdom of Saxony, in 1841-9, the average prices of wheat, rye, barley and oats stood to one another in the ratio of 144:100:75:47 (Engel); while, in the middle ages, wheat, rye and oats were as 9:6:3 (Gersdorf, Cod. Depl. Sax., II, p. XXXIV); under Prince August, corn, barley and oats were as 24:22:12. Assuming the price of rye to be equal to 100, the cost was:At Brussels, in the 16th century, wheat 126.7, barley 80, oats 50At Brussels, in the 17th century, wheat 138.8, barley 82.9, oats 51.9At Brussels, in the 18th century, wheat 147, barley 86.7, oats 55.2At Brussels, 1815-1844, wheat 156At Brussels, 1841-1850, wheat 153, barley 82.7, oats 51At Berlin, 1789-1818, wheat 135, barley 74.8, oats 54At Berlin, 1819-1832, wheat 143.5, barley 74.9, oats 52(Rau, Lehrbuch, I, § 183.) To understand this, it is necessary to bear in mind the relatively great increase of wheat bread, beer made of barley, and horses, as objects of luxury. The unusually low price of oats in North America, as compared with the price of wheat, is dependent on the facility of exporting the latter. In Florence, in the fifteenth century, the price of wheat was 22-⅔, of rye, 12, of barley, 8soldi. (Pagnini, Sopra il giusto Pregio delle Cose, 325.)810.The English so called custom-house prices (Zollhauspreise) correspond to the market prices of 1696. If these are assumed = 100, the priceOf steel and iron was, in 1826, 83, in 1831, 56Of coal was, in 1826, 47, in 1831, 45Between 1835 and 1850, Scotch iron had already become cheaper by one-half (Meidinger, 387), and coal in London by one-third (Porter).811.Rogers, History of Agriculture, I, 67.812.In England, in 1172, an ox cost 2 shillings; in 1175, green cloth cost per ell, 2-10/12 shillings; red cloth, 5-½ shillings. (Eden.) In the western states of North America, the farmer gives two pounds of coarse wool for one pound of woolen yarn; he sends 4 bushels of wheat to the miller for the flour of three bushels (Ausland, 1843, No. 68), while in Ravenna, in the thirteenth century, the miller's fee was 1/10 (von Raumer, Hohenstaufen II, 437); according to the fixed prices inFantazzi, (Monumen. Ravennet.); in Germany, during the last centuries of the middle ages, 1/8 (J. Grimm, Weisthümer, III, 8); at the end of the sixteenth century from 1/8 to 1/5 (Coler, Oeconomia, II, 3); in modern Germany, generally 1/16 of the raw material, and in the steppes of southern Russia, when the wind is still, in summer, even the half. (Mitth. der freien ökonom. Gesellsch. zu Petersburg, 1853, 85.) In Guiana, in 1806, a very ordinary saddle and bridle could not be had under 10-½ guineas. (Pinckard, Notes on the West Indies, III, 1806.)Count Görtzwas obliged to pay 2 dollars, in Demarara, for the cleansing of a rifle, and another person for the oiling of a carriage, 5 dollars. (Reise um die Welt, 1864, 327.) A lady's dress in Mobile costs four times as much as in London or Paris. (Ch. Lyell, Second Visit to the United States, II, 70.) In Athens, articles of clothing, even for the poorer classes, were never as cheap as they are in civilized countries to-day. (ComparePlutarch, De Tranquill. Anim., 10.)813.In Upper Italy, between 1261 and 1400, a lady's chemise and the making of it cost 14.77 lire; Rheims linen, 7.04; ordinary mourning cloth, O.45; black cloth from Moriana, 2.83; cloth from Mecheln, 43.83; from Ypres, 47.04; scarlet cloth, 80.44 per ell. (Cibrario, 1. 1.) On the other hand, to-day, in the Leipzig market, the difference in price of the dearest and of the cheapest cloth will scarcely surpass the ratio 18:1. EvenScaruffi, Sulle Moneta, 1679, 163, Cust, remarks that hemp-linen and similar coarse articles had increased much more in price than brocades; but he ascribes this circumstance to the disordered state of the coinage. It is much better accounted for byAdam Smith, Wealth of Nations, I, 386, ed. Basil.814.Before the plague in the fourteenth century, the cwt. of lead was worth 10-½d.; of iron, 4s. 1d. (Rogers, I. 599.) On the other hand, between 1848 and 1856, the average January price of bar-iron was £7, 11s.; of lead, over £20. (Newmarch.)815.Thus, in England, the price:Of glass was, in 1826, 387; in 1831, 369 per cent.Of leather was, in 1826, 285; in 1831, 123 per cent.Of silk goods was, in 1826, 158; in 1831, 249 per cent.of the price of the same articles in 1796. (Rau.) Of 29 chemical products of the Parisian manufacture, the wages of labor is on an average only 7.4 per cent. of the selling price; and, in some cases, only from 1 to 2 per cent. (Chabrol, Richerches Statistiques sur la Ville de Paris, 1821;Hermann, Staatsw. Untersuch., 137.) In Buschtiehrad, between 1670 and 1870, barley rose from 1 to 4.8; hops to 6.52; fire wood to 6.14; the excise to 6.54; but beer only to 2.81; although wages increased ten fold. (Inama Sternegg, Gesch. der Preise im österreich. Ausstellungsbericht von 1873, 43.)816.A silk cloak lined with fur cost in the time of Charlemagne, 400 scheffels of rye, one not so lined 200. (Hullmann, Finanzgeschichte, 212 ff.) In Florence in the fifteenth century, one pound of sugar was equal in value to 15 pounds of mutton. (Pagnini, 326.) In Turin, in the fourteenth century, 1 pound of pepper was equal in value to 28 pounds of salt. (Cibrario, III, 359, 362.) As late as the middle of the fifteenth century, the court of Duke William of Saxony paid for one pound of sugar 1 thaler and 8 groschens, while ducal fees paid to servants and workmen seldom exceeded 2 gr. Hence, even at a princely meal, often scarcely ½ a pound was consumed. (Büsching, Ritterzeit, I, 137 f.)817.Charlemagne's capitularies suppose a merchant's profits to be from 100 to 200 per cent. (a. 809, c. 34.) And even in our own day, merchants in the markets of Cabul are frequently not satisfied with a profit of from 300 to 400 per cent. (K. Ritter, Erdkunde, VII, 244), and the caravans which leave Maroc for the Soudan are wont, in exchange for commodities amounting in price to 1,000,000 piasters, to return with a supply of other commodities worth 10,000,000. (Stein-Wappäus, Handbuch, Africa, 33.) According toBüsch, Geldumlauf, II, 10, the price of East Indian products in Hamburg was some 70 per cent. higher than at home, whilePliny, H. N. IV, 26, speaks of a price one hundred times (?) as high; and its spices, at the time of Portuguese dominion, were sold at a profit of at least 600 per cent., in Europe. (Crawfurd, History, VII, 360;Ritter, Erdkunde, V, 872.)818.When Humboldt found a missionary near Cumana who paid 7 piasters for a cow, and was obliged to pay 17 piasters for blood-letting, rather unskilfully performed, he found an illustration of one of the peculiarities of colonial life—to have all the wants of higher stages of civilization but not the means of satisfying them. (Relation historique, I, 374.)819.Enormous payments made to distinguished virtuosi, actors, sophists and hetares at the time in question, also to Appelles, Aristides etc., for works of art. (Plin., XXXIV, 19, 2, XXXV, 36, 19.) The actor Aesopus (see § 233, note 6) had a fortune worth 20,000,000 sesterces, while Pompey, for instance, had 70,000,000. Roscius received from the state for every day he played, 286 thalers, and earned 43,000 a year. (Mommsen, Römische Geschichte, III, 483, 547.) CompareCicero, pro Roscio Comœdo, 10, andPlin., H. N. IX, 59, X, 72. The zither-player, Amoebaeos, received one talent for each appearance. (Athen.XIV, 623.) According toPliny, H. N. XXIX, 5, the Romanprincipesgave the most distinguished doctors yearly 250,000 sesterces, and even more as an honorarium. At the end of the eighteenth century, the greatest Parisian actors received from 4,000 to 5,000 francs per annum. Now 100,000 is considered a moderate income for one. (Journ. des Economistes, May, 1854, 279.) It is said that Frederick Hase earned $30,000 in America in ten weeks. (Leipz. Tagebb., 15 Jan., 1871.)Steuart, Principles, II, ch. 30.Adam Smithfrequently represents it as a rule, that superfluous goods like gold and silver, are dearest among the richest nations, necessary goods among the poorer, andvice versa. But the supply has much more to do with the permanent price of a commodity than the demand for it has. And the principle above mentioned applies only in so far as the supply is here an unlimited and there a limited one. Hence, the comparison of silver with painters' and sculptors' works is not an apposite one—in the case of these there is a natural monopoly, while the former, on account of its durability and capacity for transportation, may, on the contrary, be increased almost at pleasure.820.BesidesBöckh., Staatshaushalt der Athener, 1817, Book I, compareArbuthnot, Tables of ancient Coins, Weights and Measures, 2d ed., 1754,Reitmeyer, Ueber den Bergbau der Alten, 1785, and Michaelis, De Pretiis Rerum apud veteros Hebræos, in the Comment. Societ. Gottingensis, vol. III. The principal sources of information among the ancients areDiodor., V;Strabo, III, V;Plin., H. N., XXXIII.821.The money revenue of the Persian king, to the amount of 14,560 talents yearly, was transformed into bars and thus deposited in the treasury.Herodot., III, 95 f. Even the little vassal prince Pythios of Celænæ had a treasure of 2,000 talents of silver and 4,000,000 pieces of gold. (Ibid, VII, 26 f.) On the money stores of private persons, seePlin., H. N., XXXIII, 47.822.An ox was worth, in Solon's time, 5 drachmas; in 410 B.C., 51 dr.; 374 B.C., 77¼ dr.; a medimnos of wheat in Solon's time, 1 dr., about 390, 3 dr., under Alexander the Great, on an average, 5 dr. (Böckh., I, 102, f.) The usual amount of ransom paid for a prisoner of war, in Kleomenes' time, was 2 minæ (Herodot., V, 77, VI, 79); under Dionys., I, 300 m. (Aristot., Oeconom, II, 21); under Philip of Macedon, from 300 to 400 m. (Demosth., De fals. Legat., 394); under Demetrios Poliorketes, 1,000 for a free man, 5 for a slave. (Diod., XX, 84.)823.This booty for Susa alone amounted to from 40,000 to 50,000 talents; for Persepolis, to 120,000; for Pasargadæ, to 600.Curtius, V, 2, 6;Strabo, XV, 731;Justin, XI, 14;Arrian, III, 16;Diod., XVII, 66, 71;Plutarch, Alex., 36.824.Oros., VI, 19;Dio, C., LI, 21;Suet., Aug., 41. Decline of the value of money under Constantine the Great, when the precious objects of the heathen temples were coined. (Monitio ad Theod., Aug. de inbidenda Largitate,Thes., Antt. Renn., XI, 1415;Taylor, ad Warm. Sandvic, 38.)825.Compare I Kings, 10, 14, 27 ff.; I Chron., 22, 2 ff.; II Chron., 9, 15 f., 12, 10 ff. On Ophir:K. Ritter, Erdkunde, XIV, 407 f.; on the wonders of the discovery of Spain:Herodot., IV, 152.Aristot., De Mirab., 146; Diodor, V, 35 ff. On the other hand, of Greece,Athen.VI, 19 ff.826.ComparePlin., H. N., XIV, 1. Yet the value of money in the time of the Cæsars seems to have stood much higher than it is now, as is proved, for instance, by the endowments by Trajan (16 sesterces per month for boys, and 12 sesterces per month for girls), as thealimentafurnished them according to Digest XXXIV, 1, embraced their entire support. Compare the excellent essay on this subject byRodbertus, inHildebrand'sJahrbb., 1870, I.827.The conquest of the Avares seems to have temporarily produced a considerable cheapness of the precious metals. (Guérard, Polyptiques, I, 141.) Increase of the value of money in Scandinavia, during the later part of the middle ages. (Wilda, Gesch. des deutschen Strafrechts, I, 323 ff.)828.In England, from 1279 to 1509, there were coined on an average only 6,868½ pounds sterling; from 1603 to 1830, on the other hand, 819,415 pounds sterling. The average in the time of George IV., per annum, was 4,262,652 (Jacob, ch. IV.) An evidence of the uncertainty of the history of prices in the middle ages is, thatJacob, ch. 12, infers, from the price of corn, that the price of silver remained rather stationary from 1120 to 1550, whileAdam Smith, I, ch. 11, 3, infers from the same fact, a remarkable rise in the price of silver from 1350 to 1570. Concerning the latter, seeLeber, Fortune privée au moyen Age, 16 f.Tooke-Newmarch, History of Prices, VI, 391; whereasRogers, Statist. Journ., 1861, 544 ff., finds that in England, between 1300 and 1532, there was no change whatever in the price of silver. According toSoetbeer, Forschungen zur deutschen Geschichte, VI, 94, wheat and rye were, as compared with silver, worth during the Carolingian period, about one-fourth of its value, between 1750 and 1850.Hegel, Shassburger Chroniken, II, 1012, ascribes to gold over 2½ times as great a purchasing power in the 13th and 14th centuries as in the 19th century; and to silver, a purchasing power about three times as great.829.The silver ores of Peru and Mexico yield, on an average, only from 2 to 3 per 1,000 of metal; those of Potosi, at present, scarcely 1 per 1,000; those of Mexico, according toHumboldt, on an average, from 3 to 4 ounces per cwt.; so that many of the European ores are decidedly richer. While the veins of the Saxon mine, Himmelsfürst, have a breadth of only from 0.2 to 0.3 meters; the Veta-Madre of Guanaxuato, is in few parts less than 8, and it is sometimes even 50 meters broad; and the Veta-Grade of Zacatecas is from 5 to 10 meters in breadth. In Pasco there are veins of silver ore which have 114 and even 123 meters.Tschudi, Reise in Peru, K., 12;Chevalier, Cours, III, 184 ff., 241 ff. According toHumboldt, Essai sur la Nouvelle Espagne, III, p. 413, eleven times as many miners are needed at Himmelsfürst as at Valenciana to obtain the same quantity of silver.830.Thus, for instance, the celebrated ransom-money of Athahualpa (even according toGarcilaso de la Vega) amounted to only 5,000,000 thalers, while the French King John, after the battle of Poitiers, in 1356, had to pay 41,000,000 francs for his ransom. (Leber, Fortune privée au moyen Age, 121 ff.)831.CompareM. Chevalier, III, 190 ff. Discovery of the quicksilver mines of Guancavelica, 1567.832.The yield of Potosi amounted from 1545 to 1638, to 395,619,000 pesos. (Ulloa, Viage, II, I, 13.) Up to the present time, the aggregate yield there has been estimated at from 6,000 to 7,000 million francs.833.On the worse grounded assumptions of former writers, seeHumboldt, N. Espagne, IV, 237.834.There was really introduced into Spain, about 1525, not much over 2,000,000 francs annually; and after 1550, six times as much. (L. Ranke, Fürsten und Völker, I, 347 ff.) CompareHumboldt, Ueber die Schwankungen der Goldproduction, in the Vierteljahrsschrift, 1838, IV, 18.835.On the Brazilian exports of gold in the 18th century, seeSchäfer, Gesch. von portugal, V, 192 ff.836.According toHumboldt, N.E., IV, 218, the amount up to the beginning of this century was 17,000 kilogrammes of gold and 800,000 kilogrammes of silver.837.Thus, for instance, Mexico, during this period yielded, on an average, 65,000,000 francs, instead of the former amount of from 130,000,000 to 140,000,000. In Carro de Potosi, there were, in 1826, of the former 132 pool-works only 12 in operation. CompareAdams, The Actual State of the Mexican Mines, 1822.Jacobassumes that about 1830, the quantity of money in Europe and America was 1/6th less than in 1809. (Ch. 28.)838.Of this, 1,800 kilogrammes of gold from the United States.839.Fischer, Geschichte des deutschen Handels, 2d ed., II, 616 ff., 673 ff. But the Schwaz mines, in the Tyrol, are said to have produced, until 1523, 55,000 marks annually; the Freiberg silver mine, from 1542 to 1616, 16,000 marks annually. Comparevon Langen, Kurfürst Moritz, II, 56.840.The Russian gold ores, quite insignificant before the year 1814, have made very great progress since 1840. Their aggregate yield, between 1814 and 1861, not taking into account the amount embezzled, amounted to 37,000puds, thepudbeing equal to 16.3 kilogrammes. The best year, 1847, gave a yield of 1,757puds; 1852-1861, an average of 1,556puds; 1861 alone, 1,442puds, of which 1,041 came from the private Siberian gold-sand washings. (Walcker, in Faucher's Vierleljahrsschrift, 1869, II, 115.)841.Spanish silver production yielded, in 1845, over 184,000 marks; in 1850, over 291,000. (Willkomm, Halbinsel der Pyranäen, 1855, 537.)842.Annales des Mines, X, 831 ff.843.Of this amount, there came to Europe, not including Russia, 150,000 kilogrammes of silver, 2,650 kilogrammes of gold; to Russia, 24,000 kilogrammes of silver and 30,000 kilogrammes of gold (embracing the quantities probably withdrawn without the knowledge of the custom's authorities); to the rest of Asia, 100,000 kil. of gold; to Africa, 4,000. (M. Chevalier.)844.According toHumboldt'sassumption before the time of Columbus, Europe had a circulation of 170,000,000 piasters; about 1600, of 600,000,000; about 1700, of 1,400,000,000; in 1809, of about 1,824,000,000. Up to 1803, there was produced in America, 9,915,000 marks (Spanish) of gold, and 512,700,000 of silver. (N.E., 245.)Gallatinestimates that, before Columbus, there were 1,600,000,000 francs; in 1830, in Europe and America, from 22,000,000,000 to 27,000,000,000 francs. (Considerations on the Currency and Banking System of the United States, 1831.) According toM. Chevalier, 1850, all the silver which America produced had a volume of only 11,657 cubic meters; and all the gold of only 151 cubic meters. The latter, therefore, would not even fill the half of a French gentleman'ssalon.845.All the more in favor with governments because they affect principally foreign consumers. Thus, the Spanish government at first imposed a tax of 50 per cent. of the gross yield of the raw material, on the purchaser of silver; since 1503, under Orando, of 33-⅓ per cent.; and later yet, of 20 per cent. This last tax was therefore in full force under Cortes. This tax was reduced in Mexico, in 1725, and in Peru in 1736, to 10 per cent., and later, in the case of gold, to 3 per cent. Heavy taxation of Russian gold ore (35 per cent. of the raw material), by virtue of the ukase of April 14, 1849. CompareM. Chevalier, III, 274.846.Cantillon, Nature du Commerce, 215, 236, shows very clearly how the increase of the price of commodities was produced, in the first instance, by the increased consumption of the possessors of gold, and how it, therefore, first affected those commodities which they especially desired.847.This is the opinion ofAdam Smith. Similarly ofDavid Hume, On Money. According toLetronne, Considérations sur l'Evaluation des Monnaies Grecques et romaines, 119, andBöckh, Staatshaushalt, I, 88, the average value of wheat in relation to silver was, in Athens, 400 B.C., as 1:3146; in Rome, 50 B.C., as 1:2681; in France, shortly before 1520 after Christ, as 1:4320; in the nineteenth century it is as 1:1050.Th. Smith, De Republ. Anglorum, I, assumes that the price of silver, from the age of chivalry to 1625, decreased in the ratio of 120:40. The Spaniard,Moncado(1619), says as 6:1. (Jacob, ch. 19.)Jacob, himself, in comparison with his own time, as 7:1 (ch. 15.) Much more moderate isNewmarchinTooke'sHistory of Prices, VI, 345 ff., who assumes an increase in the prices of commodities of about 200 per cent. The estimated value of tithe-wine (Zehntwein) about doubled in lower Austria, during the sixteenth century. (Oberleitner, Finanzlage N. Oesterreichs im 16 Jahrhundert, 36.) According to the important researches ofMantellier, Mémoires de la Société Archéologique de l'Orleanais, vol. 1, 103 ff.; extract ofLespeyresinHildebrand'sJahrb., 1865, I, 1, the purchasing power of silver as compared with the average value of twenty-seven commodities, assuming it to have been 1 from 1750 to 1850, was, from 1350 to 1450, 2.9; from 1450 to 1550, 2.8; from 1550 to 1650, 1.5; from 1650 to 1750, 2.1. According toRogers, the prices of corn in relation to silver were from 1596 to 1636, at most 2.3 times as high as from 1260 to 1400; from 1637 to 1700, 2.6 times; from 1701 to 1764, 2.1 times; from 1726 to 1820, 3.2 times. (Rogers, I, 180.)848.In Germany, the rise in prices was first observed in the price of foreign groceries, which partly rose 400 per cent. Popular opinion looked for the cause in the evil disposition of the large commercial houses. In order to facilitate the competition of the smaller houses with the larger, the Reichstag, in 1522, prohibited all companies with a capital of more than 50,000 florins; and, in 1524, the royal treasury wished to bring suit against the violators of this law. But the cities contrived to avert the blow. (L. Ranke, Geschichte der Reformation, II, 42 ff., 134 ff.) In Spain, the government, especially between 1550 and 1560, endeavored to oppose the growing dearness of goods of all kinds, by prohibiting the exportation of the most important commodities, and by putting obstacles in the way of retail trade. The lower classes in England ascribed the rise to the suppression of the monasteries (Percy, Reliques of ancient Poetry, II, 296), while Henry VIII. endeavored to improve the condition of things by laws against luxury, the governmental establishment of fixed prices, the expulsion of foreign merchants etc. (21 Henry VIII.) The first writer who seems to have clearly seen the true cause of the changes in price wasBodinus, Response aux Paradoxes de Mr. de Malestroit touchant l'Enchérissement de toutes Choses et des Monnaies (1568). This work was translated into Latin byH. Conring, 1671; and done over in the work: Discours sur les Causes de l'extrême Cherté, qui est aujourd'hui en France (1574). Next, we have the English authorW. S., A Compendious or briefe Examination of certayne ordinary Complaints of divers of our Countrymen of these our Days, London, 1581. InBefold'sVitæ et Mortis Consideratio politica, 1623, 13 f., we have a right explanation of thecaritas sine inopiawhich is to be considered as the common property of his time.849.SimilarlyQuesnay, 77, Daire.Sir J. Stewart, Principes, ch. 3.Kraus, Vermischte Schriften, II, 131 ff.Hermann, Staatsw. Unters., 127.Helferich, Von den periodischen Schwankungen im Werth der edlen Metalle, 1843, 70 f.850.According toCibrario, a hectolitre of wheat was worth, in Turin, from 1289 to 1379, on an average, 905 gr. of fine silver; that is, about three times as much as in Paris before the discovery of America, and as much as in Paris from 1546 to 1556. In Turin, from 1825 to 1835, it was worth about 1702 gr. In the fifteenth century even, the foreign embassadors complain of the enormous cost of living there. So, for instance,Raumer'shistor. Taschenbuch, 1833, 162. Compare also,Carli, Del Valore della Proporzione dei Metalli monetati con i Generi in Italia prima delle Scoperte dell' Indie, 1760, in which he, indeed, exaggerates the matter, and seeks to prove his views by the coarsest sophistry.851.The chief result ofHelferich'sexcellent researches. (Helferich, loc. cit.) The general opinion, indeed, is that thisstatu quoof the value of the precious metals was interrupted about the middle of the eighteenth century by another decline, and that the latter yielded to a subsequent rise in 1815 and afterwards. ThusDavid Hume, History of England, ch. 44, App. 31, ch. 49, App. A.Young, Political Arithmetics, ch. 6. More recently,Rau, Lehrbuch, I, § 176.M. Chevalier, Cours, III, 320 ff. One of the principal advocates of the opinion that every increase made in the medium of circulation produces a corresponding depreciation isNebenius, Deutsche Vierteljahrsschrift (1841). In England a quarter of wheat was worth, on an average, 38s. 8/9d., from 1595 to 1685. On a similar stability of corn prices in Belgium, seeSchwerz, Belgische Landwirthschaft, III, 37. According to Suckburg (l.c.), the value in exchange of money from 1640 to 1700 declined 32-2/9 per cent.; from 1700 to 1760, 43 per cent.; from 1760 to 1806, 84 per cent.852.From 1637 to 1700 the price of corn in England averaged 51 shillings; from 1701 to 1764 only 40½ shillings.853.Thus, the dearness of wheat in Germany, during the first thirty years after the Thirty Years' War was caused, in large part, by the depopulation produced by the War.854.In Germany, also, the cause of the enhanced dearness of so many goods during the Thirty Years' War is to be sought for in the goods themselves.855.Since 1815, most Birmingham and Sheffield wares have fallen from 50 to 70 or 80 per cent. in price—at least from 20 to 30. (McCulloch, Statist. Account, I, 705.) The Quarterly Review, May, 1830, speaks even of an average decline of prices of English commodities in general, of 50 per cent.856.Excellently carried out inTooke, History of Prices, III, 1838. That the world's market is not so very readily affected by an increase of the medium of circulation, is established by this fact, among others, that the immense exportation of French metallic money in consequence of the issue of paper money between 1716 and 1720, and again in 1790 and the following years, is coincident with very low prices of wheat in the neighboring countries. (Helferich, loc. cit., 139, 190 ff.) And yet, in the former case, the amount was 400,000,000 francs, and in the latter, at least 1,000,000.857.Jacobestimates this part at only 2-½ per cent.,McCulloch, at 20,Loweat 25,NeckerandHelferichat 50,Humboldtat 66-⅔ of the whole quantity worked. It certainly is, in our day, on account of the ever growing aggregate supply, greater than hitherto; but it is very different in different countries.Nebenius, Deutsche Vierteljahrsschrift, 1851, 56 seq., estimates the aggregate consumption of new gold and silver for industrial purposes at 14-½ piasters yearly, and in addition to this seven millions of old gold and silver (Bruchgold und Bruchsilber). The annual wear and tear of previously existing articles of gold and silver, it is estimated, amounts to 4,420,000 piasters (1/420); the annual increase of their aggregate amounts in Europe to 6,000,000 piasters (1-½ per cent., corresponding to the increase of population), and 4,200,000 (one-fifth of the entire consumption), is employed, as he claims, in gilding, plating etc. The last item is probably much increased by galvanic silver-plating, the invention of photography etc.858.Jacobembraces in the amount of metal employed in industrial purposes, in the sixteenth and seventeenth centuries, 1/5 of the amount which, after deducting the loss in Asiastic trade, was added to the gold and silver stores of Europe; i.e., in the seventeenth century, about 2,500,000 piasters yearly; in the eighteenth century, ⅔ (!); that is, annually, 15,000,000 piasters; in 1830, in England, £2,457,221; in France, 120,000; Switzerland, 350,000; in the rest of Europe, 1,605,490; in North America, about 300,000; altogether, £5,900,000.Humboldt'sestimate is 21,000,000 piasters;McCulloch's, £6,050,000. According to the records of the ParisMonnaie, the amount of silver ware in France increased seven fold between 1709 and 1759. (Humboldt.) In England, between 1807 and 1814, 8,290,000 ounces of silver were stamped for manufacturing purposes, from 1830 to 1837, only 7,387,000; in 1851, 924,000.McCullochestimates the annual consumption of silver, in Birmingham alone, for plating purposes, at 150,000 ounces; in Sheffield, at 500,000; and the gold consumption in the pottery districts at £650 per week. Birmingham consumed (1831) for gilding purposes, £1,000 gold yearly. (Whately.) It now employs weekly 3,000 ounces of gold and 6,000 ounces of silver in the manufacture of gold and silver ware, besides the quantity intended for gilding and silver-washing purposes. (Quart. Rev., April, 1866, 381.) The jewelers of New York manufacture yearly 3,000,000 of dollars worth of gold and silver ware, mostly new material. (Economist, April 16, 1853.) There were in Vienna, in 1781, only 167 workers in gold and silver; in 1840, 229; in 1847, 539. (Baumgartner, in the Wiener Akademie, May 3, 1857.)Jacobestimates the aggregate mass of gold and silver ware, in plate, instruments etc., in Europe and America, to be 1-¼ as great as that of the ready money; and in England alone to be twice as great (ch. 28); whileTengoborskithinks that at the beginning of the nineteenth century, the coin constituted ⅔ of the entire amount of the precious metals. Sometimes a movement in the opposite direction takes place, as, for instance, in those revolutions in which the silver of the church was confiscated; in the unfortunate wars of Louis XIV., etc.Nebenius, loc. cit., 17, mentions a South German silversmith who melted down in the years succeeding 1802, monastery silver to the amount of 11,000,000 guldens.859.On the wear and tear of coin, see §120, andHermann, in the Archiv. der politischen Oek., I, 1841. Compare also,Faust, Concilia pro Aerario, 1641, 263 ff. This wear and tear is so great thatM. Chevaliersupposes that it alone would suffice to reduce an amount of money under Constantine the Great of 5,000 millions to 300 millions, in the time of Philip IV. (ob. 1314.) Cours, II, 322. How great a number of coins, especially of the smaller denominations, are entirely lost is evident from the fact, that at the time of the demonetization of the 15-sous and 30-sous pieces of 1791-92, amounting to 25,000,000, only 16,000,000 were presented for redemption. Of the 10-centime pieces stamped with an N, amounting to 3,286,932 francs, there were only 2,000,000 left when they were withdrawn from circulation, and this although individuals had added to the coinage. (M. Chevalier, III, 321.) The total loss caused on this score,McCullochestimates at 1 per cent. per annum, andHelferich, at ¾ per cent. The greater the aggregate stock of gold and silver, the greater the absolute amount of wear and tear. If, therefore, there were annually an equal influx of mineral products to the markets, the pressure of this increase of supply from that cause alone would take the shape of a converging series of prices. (Tooke, History of Prices, II, 151 ff.)860.The British East India Company exported gold and silver on an average per annum from:1711-1720, £434,0001721-1730, 532,0001731-1740, 487,0001741-1750, 631,0001751-1760, 571,0001761-1770, 152,0001771-1780, 43,0001781-1790, 393,0001791-1800, 352,0001801-1807, 852,000Milburn, Oriental Commerce, 1813, 419. According toM. Chevalier, Introduction aux Rapports de l'Exposition de 1867, the trade of Europe and North America, with India, China, Japan and the Australian islands, amounted in 1800, to only 410 million francs, in 1866, to 4,024 million. Yet, for a time, the largely increased exportation of English manufactures to East India and of East Indian opium to China, had changed the relation so that the exportation of the precious metals from South Asia, by a great deal, more than counterbalanced the imports. On the other hand, between 1853 and 1856 240,000,000 thalers were shipped to India and China from England and the Mediterranean harbors; in 1863 and 1864, even as much as 300 millions, to be, for the most part, buried there. Moreover, the immense quantity of cash money—often as much as from 12 to 15 million in pounds sterling—in the state treasury, and silver ornaments (§§ 44, 123) customary in India, demand a considerable yearly supply to make up for wear.Newmarchspeaks of 400 million pounds sterling which can be maintained in its condition hitherto by a yearly increase of 1 per cent. (History of Prices, VI, 723.) From 1865 to 1869, English steamships carried gold and silver to the East in the following quantities, yearly: 93.9, 66.3, 24.6, 70.2 and 60.4 million thalers, in addition to which almost as much came directly from California. Statist. Journ., 1871, 122 seq.861.Tooke-Newmarch, History of Prices, VI, 147 ff., estimates the aggregate stock of gold at the end of 1848 at £5,600,000; in 1856, at £172,000,000 more. According toLavasseur, the amount of silver in the East increased, between 1848 and 1857, from 22 to 24 milliards of francs; and the amount of gold from 9-½ to 15-½ milliards. (Annuarie d'Economie politique, 1858, 632.) The total amount of gold and silver in the civilized world,Wolowskiestimated at from 55 to 60 milliards of francs, in 1870. (L'Or et l'Argent, Enquête, 19.) CompareMason, The Gold Regions of California from the Official Reports, 1848.Tengoborski, Sur les Gîtes aurifères de la Californie et de l'Australie, 1853. Goldfield's Statistics issued from the Mining Department in Victoria, 1862.W. R. Blake, The Production of the precious Metals, or statist. Notice of the principal Gold and Silver producing Regions of the World (New York, 1869).862.Soetbeer'sDenkschrift betr. die deutsche Münzeinigung Mai, 1869, and earlier yet, inFaucher'sVierteljahrsschrift, 1865, II. According toM. Chevalier, all the mines of the world, a short time previous to 1865, produced 284,000 kilogrammes of gold, and 190,000 kilogrammes of silver in a year: a total of 373,000 thalers (Journal des Economistes, June, 1866), while, in 1848, the total amount of gold coinage in the world was estimated at 560,000,000; Great Britain, France, North America and Sidney had, since that time and up to 1871, added to this £597,780,000. The additions have been made in decreasing quantities: thus, 1857-59, 37.2 millions annually; 1869-71, 16.99 millions annually. (Statist. Journ., 1872, 376 ff.) The estimates as to how much a gold-digger might make in a day have been variously estimated. Thus,Larkinestimates it from $25 to $50;Mason, at $10;Folson, at $25 to $40;Butler King, at $16, reckoning one ounce at $16. All these estimates seem to give an altogether too high average. In Australia, according toKhull, Colonial Review, June, 1853, a digger can produce only one ounce daily, or less than 4 thalers. According toW. Stamer, Recollections of a Life of Adventure, II, 1866, a gold-washer in Victoria earned in 1858, on an average, £250 per year; in 1865, only £70; while day labor was worth 15 shillings. Hence, great hopes have to be built on the lottery-nature of gold-washing. On the Rhine, a gold-washer is satisfied with ⅔ of a gramme of gold, that is worth from 13 to 18 silver groschens. (Daubrée, Comptes rendus de l' Académie des Sciences, XXII, 639.) It should be borne in mind, however, that the Rhine-lander devotes to gold-washing only the leisure time which his avocation as a fisherman leaves him, while the gold-washer in the new world, as a rule, devotes his whole time to it; and that his labors are interrupted by the long rainy season, attacks of fever etc. To this must be added the great difference of the average prices of the means of subsistence and the difference of all social conditions.863.Compare, for instance, on the early productiveness of the Brazilian gold districts which soon ceased:Spix und Martius, Reise nach Brasilien, I, 262 f., 350.Gardner, Travels in the Interior of Brazil, 1846. On Hispaniola, seeBenzoni, N. Mundo, I, 61, andPeschel, Gesch. der Entdeckungen, 304, 556. Hitherto, gold had been obtained by the usual mining process, only in very few places. As a rule, it has been found in alluvial land not far from the surface. CompareAnsted, The Gold-Seekers' Manual, 1849. These circumstances have made the production of gold important from the first; and they still make it comparatively easy, while it causes little demand for capital but for great skill. As soon, therefore, as the greater part of the country washed for gold has been worked, which does not require a long time, the whole is abandoned, while in the production of silver the great amount of capital fixed in pits, shafts, kilns etc. ties the parties engaged in the enterprise to the spot, and necessitates the continuation of the enterprise. In recent times, however, Australia and California have developed the mining and machine production of gold to a surprising extent. According toLaur, La Production des Métaux précieux en Californie, 1862, 33, and the Journal des Economistes, Nov. 1862, Californian gold-quartz produced, in 1851, on an average, 635 francs per ton; in 1860, only from 80 to 85 francs; but the gold-washing methods have become cheaper in the ratio of 2,500:1. However, the production of the precious metals seems even now to be decreasing. According to the Statist. Journal, 1866, 99, it amounted on an average to:in 1849-51, gold £23.9 million, silver £15.5 million.in 1852-56, gold 38.7 million, silver 16.1 million.in 1857-59, gold 36.5 million, silver 17.1 million.in 1860-63, gold 33.5 million, silver 18.2 million.in 1864-68, gold 30.0 million, silver 19.5 million.The number of gold-diggers in Victoria steadily decreased from 125,764 in 1857, to 63,053 in 1867.864.One of the chief difficulties in the way of the production of gold is the loss by embezzlement, which is estimated at an average of 20 per cent. Small companies of men working on their own account would be less exposed to temptation, and the Anglo-Saxon races and the North Americans are very well adapted thereto. (M. Chevalier, III, 261.)865.Gold is in a certain sense one of the most widespread of metals, although it is found anywhere only in small quantities; so that on the Rhine, for instance, it takes from 17 to 22 millions of gold grains to make a kilogramme. An extraordinary large number of places owe their civilization to gold-seekers. CompareTacitus, Agr., 12. I select the following“finds”fromRitter'sErdkunde. The Shangallas (I, 249); still more the terrace of Fazoglu itself (I, 253, compareBruce, Travels, V, 316, VI, 255, 342), in Monomotapa (I, 140); in Manica, west from Sofala (I, 145), especially since the suppression of the slave trade (I, 305, 471); in Mandigo land (I, 360, 372); on the road from Gambia to Timbuctoo (I, 457); on Lake Mangara (I, 493); between Timbuctoo and Finnin (I, 445); in Nubia (I, 667, seq.); unused silver and quicksilver mines on the lower Bagradas (I, 493); gold wealth at Malacca,aurea chersonesus(V, 6 f., 27); Tonkin, Lao and Ava (III, 926, 1, 216, IV, I, 213); Assam (IV, 294); smaller Thibet (III, 657); Kashmere (III, 1,155); on upper Setledsch (III, 654 ff., 668); in the mountainous sources of the Indus (III, 508, 529, 593, 608); on the Cabool (VII, 23); in Peshaver (VII, 223); Badakschan (VII, 795); rich silver mines abandoned for want of wood near Herat (VIII, 243); in Armenia (X, 273). It is said that in southern China there are great treasures of the precious metals, the removal of which has been opposed thus far. (IV, 756.) Arabia's richness in gold mines, spoken of byDiodor., II, 50, III, 45, andAgatharch, De Mare rubro, 60, is of doubtful existence, as no traces of them are to be found in the country to-day. On the other hand, on both shores of the Pacific Ocean, the portions of the earth richest in volcanoes seem to possess almost everywhere quantities of gold equal to those of California and Victoria. (Edinburgh Review, Jan., 1863, 82 ff.) What an amount of treasure can be obtained at times from old and long since forgotten“finds”is proved by the Altai (that is gold mountain), which even the old Tschudi had rummaged (K. Ritter, II); and where Herodotus' (III, 16) love of truth, so frequently called in question, has recently been so brilliantly vindicated. Comparev. Ungern-Sternberg, Gesch. des Goldes, 1835.A. Erman, Ueber die geographische Verbreitung des Goldes, 1835. According toMurchison, Siberia, ch. 17, gold is to be found only“in crystalline and paleozoic rocks, or in the drift from these rocks, which is a tertiary accumulation of the pliocene age;”and that it is found most abundantly“in quartz-ore, vein-stones and traverse altered Silurian slates, chiefly lower Silurian, frequently near their junction with eruptive rocks.”866.CompareHumboldt, N. Espagne, IV, 147 ff.;St. Clair Duport, Essai sur la Production des Metaux précieux en Mexique, 1843;M. Chevalier, Cours., III, 483 ff.867.The cost of a kilogramme of silver, expressed in terms of silver itself, up to the moment that it is shipped, is estimated byDuportas follows: salt andmagistral, 61 grammes; quicksilver, 112 grammes; stamping it, 171 grammes; transformation of the ore, 72 grammes; rent and superintendence, 38; duties etc., 145; smelting, transportation and shipping, 35. There remains as profit for mining it, 336 grammes. As to how the production of American silver increases and runs parallel with the cheapness of quicksilver, seeHumboldt, N. Espagne, IV, 91 ff.868.Wolowskicalculates that the absolutely much smaller yearly increment to the amount of the precious metals in the sixteenth century, frequently 1/12, now constitutes only 1/50 of the greater existing amount. (L'Or et l'Argent Enquête, 50.)869.In the United States the stock of cash money in 1820 was estimated at 5.1 thalers per capita; in 1849, at 8.6 thalers; in 1854, on the other hand, at 13 thalers.870.The weight of the mass of gold introduced into Europe annually stood to that of silver in the ratio of 1:60-65 in the seventeenth century; in the first half of the eighteenth century, in that of 1:30; in the second half, in that of 1:40; and yet the variations in price were not in the least parallel. According toSœtbeer(Beiträge und Materialien zur Beurtheilung von Geld und Bankfragen, 1855, 102 seq.), the average silver-course (silbercurs) of gold had, 1852-54, sunk only 2.05 per cent., as compared with that of 1800-40. And yet the value of the annual production of gold stood to the annual production of silver, in the beginning of the nineteenth century, as 29 to 71; in 1846, as 47 to 53; in 1848-56, as 3 to 1.871.While the public, even since 1850, think they have noticed a depreciation in the value of money, there are a great many learned political economists who are by no means prepared to grant it. The principal advocates of this opinion areTooke, andNewmarch, in vol. VI. of the History of Prices (1857). AlsoLavergne, in the Journal des Economistes. And really the enhanced dearness of many kinds of goods up to 1857, might have been accounted for by causes affecting the goods themselves: diminished supply by reason of bad harvests, commercial gluts etc.; increased demand by capitalization on a gigantic scale, speculation, but especially by the elevation of the lower classes etc.The London wholesale prices were on the 1st day of January, 1869, nearly all lower by 10 per cent. than on the 1st day of July, 1857. Only indigo, cotton and meat had risen. (Hildebrand'sJahrb., 1870, I, 328.) In many instances the enhanced dearness is entirely local, by reason of the greater facilities for transportation in places where prices were already higher. But as new truths are very easily exaggerated by their discoverers, much of Tooke's view concerning these events depends upon a polemic carried too far against the theory of the balance of trade which was customary in the so-called currency school. Compare, in opposition to Tooke,Lavasseur, in the Journal des Economistes, March, 1838, andM. Chevalier, La Baisse probable de l'Or, 1858.Lavasseur, from the difference between the official and real custom-house prices in France, calculates that raw materials in 1856 were on the average 63 per cent., and in 1858, 20 per cent. higher than in 1826; and that manufactured articles were in 1856, just as high, and in 1858, 6 per cent. lower than in 1856. An average made of all commodities showed, in 1856, an enhancement of 30 per cent, and in 1858 of 9 per cent. (Hildebrand'sJahrb., 1864, II, 118.)In the Hamburg market in 1847-65, 87 articles declined in price, 183 rose in price, and 24 remained about stationary. (Amtl. Statistik von 1887, 18 ff.)Jevonsassumes a general rise in the price of commodities between 1849 and 1869 of about 18 per cent. (Economist, May 8, 1869.) He makes this estimate from the average March prices of 50 of the principal articles. Assuming the average March price of 1849=100, we have, according to him, for the following years, respectively: 101, 103, 101, 116, 130, 125, 129, 132, 118, 120, 124, 123, 124, 123, 122, 121, 128, 118, 120, 119. Previous years showed: 1789=133; 1799=202; 1809=245; 1819=175; 1829=124; 1839=144. (Compare supra, §129, note 1.) The budget of a Swiss teacher's family consisting of five persons has become dearer since 1840 ff., their consumption remaining the same and of only the simplest articles, by 72.5 per cent. (Böhmert, Arbeiterervhältnisse etc., I, 302 ff., 355.) That, however, the depreciation is under-estimated most precisely in England and over-estimated in Germany,Kniesvery well accounts for by the price-leveling effects of the more modern means of communication. (Tübinger Zeitschr., 1858, 280 ff.)872.CompareLeibnitz, on the consequences which would follow the realization of the dreams of the alchemists. It would be a great misfortune, since then a pocket would no longer suffice for the transportation of money, and people would have to use wheel-barrows as they do now in Sweden. (Opera ed. Dutens, V, 199, 401.)873.Beccariaconsiders it equitable that the debtor should always pay the original value of the metal. (E.P., IV, 2, 17.)Galiani, on the other hand, would not permit individuals, even when the state arbitrarily causes a diminution in the real value of money, to maintain the real value of the coinage in their contracts. (Della Moneta, V. 3.)874.It is precisely this class which first comes to an understanding of the essential nature of the change effected.875.Thus the English lessees, who in the sixteenth century had leases for a long term of years, saw themselves rise in the social scale in consequence of the revolutions in price—a fact of importance in the political struggles of the seventeenth century. CompareSir F. M. Eden, State of the Poor, I, 119 ff.876.Too much stress is laid upon this byTooke-Newmarch, who, on that account, considers almost every increase of the precious metals as a blessing. As a matter of fact, the population of Australia, of the United Kingdom, and of the United States, increased, between 1848 and 1871, 44.5 per cent.; the production of coal and of railroads in England, between 1856 and 1869, by about 60.6 per cent.; the English production of woolen goods, linen and cotton and yarn, between 1848 and 1870, by from 110 to 335 per cent. (Statist. Journal, 1872, 376 ff.)877.Luther'scomplaint concerning the poor condition of the clergy. SeeSchmoller, in the Tübinger Ztschr., 1860. This very clearly shows how much surer for the crown domains are than a civil list, and donations of land to a church than payments in money. Law of Elizabeth, 18 Eliz., that, in the case of university property, ⅔ of the lease rent should be paid in metal and ⅓ in corn. InAdam Smith'stime, this latter third was worth as much again as the other two. (I, ch. 5.)878.In the sixteenth century, this class was of small importance in most countries; in our times, their ruin would cause general disturbance. The wiser class of capitalists would, indeed, find means to exchange their credits for more certain values, or make it a condition that they should receive in the end a large sum.879.Thus, for instance, the son of a deceased land owner who retains the lands as his own acquits himself towards his brothers who have entered the military or civil service of their country by paying them a certain sum periodically. If a revolution were really impending, the owners of land would soon emulate one another to improve their estates by borrowing capital, if for no other reason, to turn the depreciation of the medium of circulation to their own advantage. In the sixteenth century, the indebtedness of land owners was relatively unimportant.880.It appears fromRoger'sTables, Statist. Journal, 1861, 551 ff., that, between 1583 and 1620, a time during which the population of England increased neither in wealth nor in numbers, there was a considerable increase in the price of nearly all English commodities. Thus, for instance, wheat was, from 1591 to 1600, 468 per cent., and from 1611 to 1620, even 495 per cent. higher than from 1530 to 1533. The Saxon laborer earned, in 1599, in corn, only half as much as in 1455. (Tübinger Ztschr., 1871, 354.)881.When labor is indispensable to employers, it may happen that a small decline in the supply may largely raise the price. Wages, in almost all branches of labor, rose between 1851 and 1856, by about from 15 to 20 per cent.882.This, also, was of little significance in the sixteenth century, but how important now!883.Income taxes,ad valoremduties and tithes rise and fall in their nominal amount as the price of the medium of circulation falls and rises.884.Thus, for instance, the victory of the English Parliament over the unlimited power of the crown, in the first half of the seventeenth century, was very much promoted by the fact that the crown, in spite of all its economy, was always in financial straits in consequence of the depreciation of money. (Power of the purse, power of the sword!) However, any force kept steadily in action is a two-edged sword. While under favorable circumstances, it may be thereby developed, under unfavorable circumstances it may be thereby exhausted. How great a number of representative assemblies, during the revolutions in prices in the sixteenth and seventeenth centuries, allowed their energies to grow dormant!885.Most of the above points are very well discussed in the workW. S., cited above, §137.886.As no one then doubted: CompareW. Raleigh, The Discovery of Guiana, Pref. I refer to Philip of Macedon.887.CompareRoscher, Kolonien, Kolonialpolitik und Auswanderung, 1856, 145 ff.888.Something similar might have been observed in England in 1819 etc., at the restoration of a depreciated paper currency. Among nations in a comparatively low stage of civilization, a variation in the medium of circulation is of less importance than among more highly civilized nations, because trade in money, and still more, credit, are relatively speaking undeveloped.889.Fawcettgreatly exaggerates when he says that with an increase of population and wealth, an increase of money is as much a want as hunger. (Manual, 370.)890.Galiani, Dellab Moneta, III, 1. At the time of the Lex Salica, 10:1. After the Edictum Pistense of Charles II., ch. 24 (Pertz, Mon. Germ., III, 488), 12:1. At the time of the Sachsenspiegel (III, 45), again, 10:1. Under Saint Louis, King of France, 12.5:1. (Leblanc, Traité historique des Monnaies de la France, ch. 1, 2.) In Poland, 1356, 12:1. (Muratori, Dissertt. Medii Aevi, II, 28.) In England, 1262, 9.6; 1272 = 12.5; 1345 = 13.7:1. (Rogers, 1, 593 ff.) Under Henry VI., and in 1494 = 12:1. (Anderson, Origin of Commerce, a. 1422, 1494.) In Denmark, under the former Kings of the Union = 8:1. (Dahlmann, Dänische Geschichte, III, 52.) And so throughout almost the whole of Scandinavia's medieval period, as for instance in the Graugans. (Wilda, Gesch. des deutschen Strafrechts, I, 329.) In Italy, 1579 = 12:1. (Scaruffi, Sopra le Moneta, 1582.) In Holland, 1589 = 11.6:1.Bodinus, De Republ., 1584, II, 3, maintains 12:1 as the general ratio; but the Apostolic Chamber adopted the ratio of 12.8:1. In Germany, according to the instances cited byA. Riese, 1522 = 10:1. The monetary laws of Germany give it in 1524 = 11-⅓:1, in 1551 = 11:1, 1559 = 11-3/7:1;Budelius, De Monetis, 1591 = 11-¼:1. At the beginning of the seventeenth century the relation in Spain was = 13.3; in Germany = 12.16; in Flanders = 13.22; in England = 13.5:1. (Forbonnais, Finances de la France, I, 52.) About 1641, in Flanders, it was 12.5; in France, 13.5; in Spain, 14.1. Immediately after Colbert's death it was, in Genoa, 15.03; in Milan = 14.75:1. (Montanari, Della Moneta, 80.) While in the seventeenth century gold rose, it sank in the eighteenth, on account of the Brazilian gold washings and the many bank notes in circulation, which were for the most part of a large denomination. (Steuart, Principles, III, ch. 13.) Still it was in Amsterdam in 1751 = 14.5:1.891.In Hamburg, the relation of the price of gold to that of silver bars, varied, between 1816 and 1852, from between 15.11-16.2 to 1 (Soetbeer); in London, from 1816 to 1837, between 15.80 and 14.97 to 1.892.In Asia, it is generally lower than in Europe—for centuries mostly = 10:1. But in Birmah it is = 17:1, mostly on account of the extent to which indulgence in luxury is carried there. (Crawfurd, Embassy, 433.Ritter, Erdkunde, V, 244, 266.) Concerning China, seeM. Chevalier, Cours, III, 359. In Africa, gold is low as compared with silver, in proportion to the distance from the civilized world. Thus, an ounce of gold in Shenaar cost 12 piastres; in Suakim, 20; in Djidda, 22. (Ritter, Erdkunde, I, 538.) In Timbuctoo, Mungo Park found the relation of gold to silver to be as 1-½:1. Compare Marco Polo, II, 39 seq.893.In antiquity, a similar course is to be observed. According to Manu's Indian laws, VIII, 134 seq., = 2-½:1; in the East, for a long time, = 10:1; under Darius Hystaspis, = 13:1. (Herodot., 111, 95.) In Greece, in the time of Lysias, = 10:1 (Lysias, pro bonis Arist., Conon); according toPlato,= 12:1 (Hipparch., 231); according toDemosthenes, adv. Phorm., 214, = 14:1 (Böckh, Staatst., I, 43); Menander's estimate, = 10:1, probably because Alexander's victory had made gold cheaper. (Pollux, IX, 76.) Among the Romans, about 189 B.C., = 10:1 (Livy, XXXVIII, 11); somewhat later, = 11.9:1 (Mommsen, in the histor. phil. Berichten der K. Sächs. Gesellschaft, 1851, 184 ff.); in the fourth century after Christ, = 14:1. (Theod., Cod. VIII, 4, 27.) We sometimes find sudden variations. Thus, according toPolyb., XXXIV, 10, gold, in Italy, sank about ⅓ in consequence of the opening of the mines at Aquilea. It sank to the proportion of 9:1 when Cæsar spent the contents of the Roman treasure, which consisted of gold. (Surton., Cæs., 54.) The ratio of 17:1, during Hannibal's wars, was a species of National bankruptcy. SeePlin., H. N., XXXIII, B.894.After the February revolution, the gold-agio, as compared with silver, rose from 10-17 to 70 per 1,000. (M. ChevalierCours, III, 346.) On the other hand, since the discovery of America, gold, as compared with commodities, has declined much less than silver. CompareHermann, Ueber den gegenwärtigen Zustand des Münzwesens, inRau'sArchiv., I, 151 ff. According toLord Liverpool, Treatise on the Coins of the Realm, the value of gold coin in the London market, as compared with bank notes, varied in 40 years, almost 5½ per cent.895.In recent times, it has become possible to extract from ancient silver coins a small quantity of gold, and with some advantage. European industry produced in this way about 1,600 kilogrammes of gold per annum. One half of this amount is obtained in France and the rest in Hamburg, Amsterdam, Brussels and St. Petersburg. (Michel Chevalier, Cours, III, 302.)896.Senior, On the Value of Money, 77 ff. It is certain that a simple variation in prices would not induce people to have gold table services, or architectural ornaments of silver.897.Rau, Lehrbuch, 6th ed., I, § 277 c. In Rau's opinion (loc. cit.) we may, in the course of the next decades, expect a decline of the price of gold of about 76 per cent., and of only 10 percent. of the price of silver (because of the low prices of quicksilver.) But here he seems to overlook entirely what influence a change of standard in important commercial districts would have.898.Compare the works already mentioned.Fleetwood, Chronicon preciosum, or an Account of English Gold and Silver Money, the Price of Corn and other Commodities etc., for Six Hundred Years last past, 1707;Dupré de Saint Maur, Essai sur les Monnaies ou Réflexions sur les Rapports entre les Denrées et l'Argent, 1746;Unger, Ordnung der Fruchtpreise, 1752;Paucton, Métrologie ou Traité des Mesures etc., des anciens Peuples et les modernes, 1780; the appendix toMacpherson'sAnnals of Commerce, 1805; the tables inGarnier'stranslation of Adam Smith, vol. II, 1822;A. Young, Inquiry into the progressive Value of Money in England, as marked by the Price of Agricultural Products, 1812;W. F. Lloyd, Prices of Corn in Oxford, in the Beginning of the fourteenth Century, and also from 1583 to the present Time, 1830;Helferich, in the Tüb. Zeitschrift, 1858, 471 ff. There are some very interesting notes on the history of prices during the Merovingian and Carolingian periods inGuérard, Polyptiques, I, 141 ff.899.Thus, for instance, the bonds (and their coupons) of states, cities, great corporations, certificates of stock, mortgages, bills of exchange, checks.900.A Prussian regulation of 1765 (Goldschmidt, Handbuch des Handelsrechts, I, 550), calls money-paper (Effecten), instruments of trade in which a value or avalutais designated.901.Garnier, French translation of Adam Smith, II, 143 ff., distinguishes between coin-paper and promise-paper: the latter is never found in circulation at the same time with the capital which it represents.Saysays that, for instance, evidences of state indebtedness, state bonds, call for money if they would circulate, but they seldom act as money in circulation. (Traité, III, ch. 2.)Sismondivery well determines the difference in his Richesse Commerciale, I, 160.Rau, Lehrbuch, I, § 293, requires of all good paper money: a., that its mere transfer, even without any proof of its rightful acquisition, should suffice to vest the property in it in the receiver; b., that the power emitting it should enjoy universal confidence or be able to compel universal recognition; c., that its redemption should not be fixed for any definite point of time.902.That it is not possible to keep paper money from declining in value, by the payment of interest, the people of North America learned from more than one experiment during the eighteenth century. (Benjamin Franklin, Remarks and Facts relative to the Paper Money of America, 1765.) The same phenomenon was observed in the case of the Spanishvales, which were created during the North American war in consequence of the absence of the silver fleet. (Bour-going, Tableau de l' Espagne, II, 38 ff.Humboldt, N. Espagne, II, 808.) When the Portugueseapolices(since 1797) still bore six per cent. they depreciated in value; and when the payment of the interest was suddenly stopped, the rate of exchange did not become any lower. (Balbi, Esai statist. sur le Portugal, I, 323.) In Austria, in September, 1820, the bank notes which bore no interest were at a premium as compared with the imperial treasury notes, which did bear interest of 1 per cent., although the credit of both kinds of paper had ultimately the same foundation, namely, Austrian state-credit.903.The attempt to make paper money pay interest suggests (as the Saint Simonists recommend it should, with much ado;Enfantin, Ser les Banques, d' Escompte in the Producteur, 1826), that awkward sword, invented by Count Wilhelm von Bückeburg, to the blade of which a pistol is affixed! Shortly before each term for the payment of interest, the circulation of such paper money would be arrested. If the rate of discount should sink below the rate of interest such notes bore, they would be sought after eagerly and disappear in quantities, and, not be ever seen again until the rate of discount had risen to a high figure, when they would be suddenly presented for redemption. Such interest-bearing paper money, therefore, would be a serious element to aggravate the fluctuations of the money-market between good and bad times. When interest-bearing paper money pays interest at the rate usual in the country, it is hoarded by misers, (v. Struensee. Abhandlungen, III, 387.) CompareForbonnais, Principes économiques, p. 234, ed. Guill., whereasv. Prittwitz, Kunst reich zu werden (1840, 359), takes delight in elaborating the idea of an interest-bearing paper money.904.Of jurists, seeThöl, Handelsrecht, I, § 51, and the authorities for and against inGoldschmidt, Handelsrecht, II, Kap. 4, 1, 2. The compulsory circulation of paper money is an essential element only in reference to the person that issues it. Of political economists, especiallyA. WagnerinBluntschli'sStaatswörterbuch, Art. Papiergeld, Band, VII, who, however, is very soon compelled to oppose to paper money“proper,”another kind not“proper.”Adam Smithunhesitatingly accounts bank notes also paper-money. (W. of N., II, ch. 2, p. 28, Bas.)Huskissonunderstands by“paper-money”only the irredeemable paper-money of the state, while bank notes should be considered as“paper currency.”(The Question concerning the Depreciation of our Currency, 1810.)905.Seyd, Münz, Währungs- und Bankfragen in Deutschland, 50 ff., distinguishes four classes of paper-money: 1st class, paper-money covered by cash; 2d class, bank notes covered after the manner of banks; 3d class, state paper-money; 4th class, such paper money as the notes of the Southern Confederacy after its defeat.906.EvenPlato, De Legg., V, 742, was acquainted with money after the Spartan type, intended only for internal trade: νόμισμα ἐπιχώριον, αὐτοῖς μὲν ἔντιμον τοῖς δὲ ἄλλοις ἀνθρώποις ἀδόκιμον. Besides the state kept for foreign trade a supply of the universal Hellenic money, of which in case of need, private individuals could acquire what portion they needed by exchange. When Dionysius I. issued tin instead of silver money, all the Syracusans, although they noticed the forgery, acted in their intercourse with one another as if they considered the coins genuine. (Aristot., Œcon., II, 21,Pollux, IX, 79.) Timotheos behaved more honorably when, pressed by the dearth of money, he gave his troops copper coin tokens, which passed for the time being for their full value in the camp; but which were later to be redeemed at their full value in silver. (Aristot., Œc. II, 22.) ComparePolyæn, Strateg., IV, 10, 2. The iron money which the Klazomenians exchanged with the rich for silver, which bore interest, but which the rich were forced to take, had a longer duration; the silver was used to pay foreign state creditors, the iron money circulated for the time being in the city, and was gradually redeemed. (Aristot., loc. cit, II, 17.)We are still more forcibly reminded of paper money by the Carthaginian leather money, where any object whatever of the size of a coin was shut up in a leather envelope with the state seal, and then circulated as if it were the coin it purported to be.Mieris, Beschryving der Munstn, 1726, explains the saga of Dido's ox-skin by means of this leather money. Certain it is, however, that the surprise with which the sophistical dialogue, Eryxias, mentions the matter, is a proof how foreign it was to the Greeks. Concerning the Roman plated denarii which were stamped with the silver coins, but which were also accepted by the state treasury, seeMommsen, R. G., I, 405.907.In the middle ages, leather money was issued as a promise of future payment: by the doge of Venice in the wars of 1122 and 1126 (Montanari, Della Moneta, 34); by King John, of England, during the struggle of the barons (Camden); Emp. Frederick II. at the siege of Faventia (Malespini, Hist. Fior., 130,Villani, Hist. Fior., VI, 21); by Louis IX. during his captivity (v. RaumerHohenstaufen, V, 461), John of France, 1360 (Anderson, Origin of Commerce). On the Frankfurt lead marks which were afterwards redeemed by theRechnerei:Kirchner, I, 541. Lavallette's copper tokens during the siege of Malta had the inscription:non æs sed fides. The paper money which was issued during the siege of Leyden, the inhabitants afterwards would rather preserve than have redeemed,ad perpetuam liberationis divinæ memoriam. (Bornitii, De Nummis, 1605, I, 15. Distress coins,melacs, during the siege of Landau and of the HungarianRagoczy,Marpurger, Beschreibung der Banquen, 213.Krones, Zur Geschichte Ungarns im Zeitalter R's, 1870.)908.The Chinese have had various kinds of paper-money in their country since the 7th century after Christ. Sometimes they called them“flying coins, convenient coins,”and sometimescoupons,bons,conventions(Klaproth, Mémoires relatives à l'Asie, I, 375 ff.), against which the caravans, as soon as they had passed the limits were obliged to exchange their silver (Pegolotti, Pratica della Mercatura in Della decima etc., III, 3). These had compulsory circulation in China. The great Mongolian khans here became acquainted with paper-money. (M. Polo, II, 21.) Thus, especially in Persia, where refusal to accept such money and the imitation of it was punished with death (1340). CompareFerishta, ed.Briggs, I, 414 ff.d'Ohsson, Hist. des Mongols, IV, 101 ff.; II, 487. Even here there occurred cases of state bankruptcy and finally withdrawals of the depreciated paper. (Klaproth, loc. cit.) In Japan, according toOliphant, Narrative of L. Elgin's Mission to China and Sapan (1859), all foreign coins were required to be exchanged against paper-money at the offices of the state bankers.909.Adam Smith mentions North American paper money of the amount of 1 shilling, and Yorkshire bank notes of the amount of 1-½ shillings. Sweden had, until 1828, notes of 28pfennigs.910.Hence in Sweden, with its copper standard of long duration, the system of banks of issue was developed very early. The transport-notes (Transportzettel) (to be found in that country as far back as 1661) of the Stockholm bank are considered the oldest bank notes. Compare, however,Palgrave, in the Statist. Journal, 1873. When, in 1768, Catherine II. introduced paper money into Russia, the people gladly paid ¼ per cent. exchange to the state treasury for it. (Brückner, inHildebrand'sJahrbücher, 1863, 49.) According toCancrin, Oconomie der menschl. Gesellschaft, 116, private individuals in from four to five months exchanged 40 millions of silver roubles for paper. And thus, in 1780, Berlin bank notes stood a few per cent. above par, and the notes of the S. Carlos-Bank, in 1788, from 1 to 1-½ per cent. (Rau, Archiv., II, 161.)911.When at times in which paper money is looked upon with diffidence, peasants and others bury their metallic money, this advantage of course is lost. On the other hand, the exportation of precious metal money, caused by the emission of paper money, must not be considered a necessary evil, but rather as the condition precedent which in most cases makes the above advantages of the paper money possible for the first time. CompareAd. Wagner, Die russische Papierwährung (1868), 22, 24, 33.Ricardo, Proposals for an economical and sure Currency, 1816, estimated that England, after the abolition of the bank restriction, needed twenty million pounds sterling. The interest on this amount of capital inclusive of wear and tear etc., should be estimated at at least ten percent.; that is for the whole kingdom at at least from two and one-half to three millions a year. On thisRicardofounded his proposal to base the bank notes on gold bars. In its time, the essay: Guineas an unnecessary and expensive Incumbrance on Commerce, or the Impolity of repealing the Bank-Restriction Bill considered (London, 1802), met with great approval.912.Adam Smithcalls attention to the analogous case in which a manufacturer replaces a costly machine by a cheap one, sells the former and employs the difference between the old one and the new in enlarging his business. (W. of N., II, ch. 2.) When, indeed, all nations have introduced the use of paper money, the greater portion of the advantages which the one nation was able to obtain by its means cease, and the only ultimate result is a depreciation of the value of money and of the precious metals. Formerly the advantage reaped by the single nation that emitted paper money was greater than its share in the depreciation. (Wolowski, Enquête de 1865, 108.)913.When E. Seyd calls bank notes more costly than metallic money, because the former in England require an outlay for administration of 1-½ per cent. per annum, while the wear and tear of metallic money amounts to 1 per cent. only in 20 years (Statist. Journal, 1872, 511), he overlooks the loss in interest and the costs of coinage in the latter case.914.Related to this is the fact that in France, during the assignat-crisis, the large bills of 10,000 francs were harder to get rid of than the small ones. (A. Schmidt'sPariser Zustände, III, 22.)915.The numbering of paper money. A state which should neglect this would not only reserve to itself the possibility of an unlimited increase, but would surrender all control of its officials charged with the emission of the paper money.Law, Trade and Money, 162, advises that a large money reward should be paid to any one who should show the existence of a higher number than allowed by law, or of a duplicate number. And indeed, as comptroller-in-chief, he caused theprévôt des marchandsto be removed, because charged with the duty of burning the paper withdrawn from circulation, he (theprévôt) noticed that the same number reappeared several times.916.If a traveler wished to pay his inn-keeper in the note of a bank entirely unknown in the place, the latter would certainly refuse it. If, on the other hand, the traveler were to offer him a silver coin, the stamp and inscription of which were not familiar, still it would be taken at the value of the metal it contained, after deduction made of the costs of testing it, re-coining it, and compensation for the trouble caused. Ignored byBerkeley, who, indeed, considered metallic money nothing but“counters”or tickets (Querist, No. 23, 26, 441, 475), and who ascribes important advantages to paper money,—which by“stamp”and“signature”is made as costly as gold (440)—over metallic money (226).917.Any person who has witnessed a tax-execution, or sale of property for the non-payment of taxes (Stuerexecution) will admit that a tax receipt is at least as real goods as an umbrella or a glass window that protects one from the storm.Michælisconsiders the amount of running payments to the state for duties, taxes etc., as the only right basis for full-value paper money. (Berliner Vierteljahrsschrift, 1863, III.) Better yet whenHöfkenadvises that only as much paper money should be issued as amounted to the average balance (Bestand) in the national treasury. The tax-basis is defended with great warmth byL. Stein. Louis XIV., in 1704 issued paper money bearing 7 per cent. interest, the acceptance of which by all the royal officers of the treasury was prohibited! (Dutot, Réflexions, 863, Daire.)Law, Trade and Money (1705) ascribes to parcels of land the greatest constancy of value, because they cannot be replaced, because they can be neither increased nor decreased, and because they help to produce all other goods (p. 170). While silver cannot but depreciate, they have a prospect but to rise (188). HenceLawrecommended notes based on parcels of land as the best money. (163, 191, 195.) Similarly,Benjamin Franklin, Modest Inquiry into the Nature and Necessity of a Paper Currency: and the Paper Money of Pennsylvania, New York and New Jersey was actually based on parcels of land, and was to be extinguished by the enfeoffed owners, and the interest paid by them. (Ebeling, Gesch. und Erdbeschreib, von N. Amerika, III, 621, IV, 649.)918.F. Renonard de Ste Croix, Voyage aux Indes orientales (1810), I, 32, describes a species of paper money based on parcels of land which had lost 40 per cent. of its nominal value, although the holders of them were invested with the fief at only one-half their value. The Frenchmandats territoriauxof 1796, declined in five months to 5 per cent. of their nominal value, although they contained the provision that the holders might, without public sale (Auction), have a certain amount of the national estates allotted to them in exchange for themandats. The assignats were still more defective after their redemption (at theCaisse de l'extraordinaire), which was at first intended, and their drawing of interest were not fulfilled. Leaving the tax-basis out of consideration, the notes might, at the sale of the national estates, be brought in as means of payment: a thing which would not have been inoperative, provided the amount of the paper money had been strictly limited to the price of the pieces of land estimated in money. On the 1st of April, 1790, 400,000,000 francs in assignats were issued, and in September, 800,000,000 more, both together about equal to the secularized property of the church. (Ad. Schmidt, Pariser Zustände, II, 97.) But as afterwards all proportion between these two magnitudes ceased, or rather as up to January 1, 1793, 3,626,000,000 assignats were issued; up to September, 1794, over 8,800,000,000; up to September, 1795, 19,700,000,000; and finally up to September, 1796, 45,578,000,000 francs, of which perhaps 6,500,000 were either burned or demonetized, the price of the national estates on lands must naturally have risen as vastly as the assignats declined.919.The paper money issued by Colbert's successor, Chamillard, soon lost on account of its too great amount, 25 per cent. of its value, spite of the fact that it bore interest, and that ¼ of all payments to private persons had to be made in it. (Forbonnais, Recherches et Considérations, II, 182.) When the people of the United States, in 1775, issued paper money, it did not decline in value up to the end of 1776, so long as the amount did not exceed $20,000,000, as it was considered a matter of honor to take it at par. Afterwards, when the amount issued continued to increase, not even the law that a refusal to accept it, or insisting on taking it below par, should be punished with the loss of the commodity, and that the guilty party should be declared a national enemy, could keep it from declining in value; so that in May, 1871, a dollar in specie was worth $200.5 in paper. CompareFranklin, Works, ed. Sparks, II, 421, VIII, 328, 505.France, during the Reign of Terror, on the 2d day of April 1793, threatened the claiming of a discount in the taking of assignats with six years' confinement in chains, and on the 1st day of August, on Couthon's motion, with twenty years' confinement. In addition to this, maximum prices for the principal necessities of life were fixed and the exceeding of them was punished by severe penalties; and in France, and still more in the neighboring conquered countries, there were many persons who preferred to take assignats instead of payment rather than permit themselves to be robbed by requisitions. And yet on the 4th of June, 1796, one franc in specie exchanged for 800 francs assignats. CompareBüsch, Geldumlauf, III (§ 58 ff.,d'Ivernois, Etat. des Finances Française, 1796).920.The Prussian treasury notes of 1806, by virtue of a decree published in 1807, were to be taken by all at a rate of exchange to be officially published from time to time. Between December 1, 1807, and February 28, 1809, the highest“normal course of exchange”was 71, and the lowest 27 per cent. In January, 1815, a refusal to take them at par, except in certain cases, was threatened with from 500 to 1,000 thalers of a money-fine or from 6 to 12 months' imprisonment. But indeed, in December, 1812, of 8,000,000 thalers, there were only 731,625 still circulating. Compare § 7 of the decree of the 19th of January, 1813. In April, 1815, it was ordered that the half of all taxes should be paid in such notes, or that if not, 8-½ per cent, should be added as a penalty. This penalty, reduced in 1827 to 1 silver groschen, was not formally abolished even in 1870, although it had long fallen into disuetude. There was a run of the owners of the notes in 1830, for redemption, and again in 1841 and 1848; in 1848 to the extent of at most 40,000 thalers in one day, and altogether not over 100,000 thalers. (Bergius, in the Tübinger Zeitschr., 1870, 226 ff.) About 1846, it was estimated that scarcely 1/250 a year of Prussian paper money was presented for redemption, while ⅓ of the state receipts came in in the shape of paper money. (Rau, Archiv., V, 125, 207.) The Saxon treasury notes never lost over 2 per cent., although the state treasury redeemed them up to 1804 only at anagioof 9pfennigsper thaler, and afterwards of 1pfennig.921.Those entitled to make money claims are either compelled to accept the paper money at its nominal value or only at its current value for the time being. In the latter instance, the unjust compulsion is much smaller, but at the same time the whole expedient is much less productive to the state; and hence the former is the more usual. It was provided in Austria on the 22d of May and the 2d of June, 1848, that the former should be the rule, and that the latter should govern in cases in which gold or foreign silver had been stipulated for. (Höfken, Oesterreichs Finanzprobleme, p. 53.) On the 7th of February, 1856, it was permitted to contract by express promise for loans in the metallic currency of the country, both for the interest and the repayment of the principal. Hence a species of parallel-currency. If it be made entirely impossible for private individuals to protect themselves against the compulsory circulation of paper money, the more prudent are forced to send their capital into foreign countries, which operates very disadvantageously to poor countries especially. (Wagner, Tübing. Zeitschr., 1863, 441.)922.Thus, for instance, the Frederick coins, and for a time the French assignats were helped by the popular enthusiasm, while Gustavus III., of Sweden, could give little value to his paper. (v. Struensee, Abh., III, 577.) In France, in 1796, 2,400,000,000mandatswere issued instead of all the outstanding assignats; that is, as many as there were assignats at the close of the year 1792. And yet the latter were then only 25 per cent. below par; the former, before one month had elapsed, 80, and in nine months, almost 98 per cent. below par. (St Chamans, Nouvelle Essai sur la Richesse des Nations, p. 150.A. Schmidt, Parisier Zustände, III, 121 ff.) In Austria, in 1811, the volume of paper money was contracted, but in a manner so violent and destructive of credit that its rate of exchange did not rise in consequence. (Tub. Zeitschr., 1763, 1874.) After 1848, also, the rate of exchange of Austrian paper money was much more perceptibly influenced by the variations in the political state of affairs than by the changes in its volume. (Tub. Zeitschr., 1856, 129.) In the summer and winter of 1866, about 650,000,000 paper rubles circulated, with scarcely any increase or decrease; and yet the ratio of exchange was, during a part of the summer, 66, and in winter, 84 per cent. of the silver value of the ruble. (Wagner, Russ. Papierwährung, 74.) Instances in which the increase in the price of commodities began to be more general only after the volume of paper money had decreased; in Austria, in 1851 and 1866; in Russia, in 1857 (loc. cit).923.Then precious metal money becomes a commodity of which great stores may be collected in the country itself, at the banks, but chiefly for foreign trade. It is said that Austrian business men in 1860 and the following years invested“hoards”to the amount of several hundred million florins in exchange on metallic-currency countries. (Tüb. Zeitschr., 422.) Good paper money will never drive out the whole supply of cash money out of a country, because a good portion must always be kept for purposes of redemption; depreciated paper money operates much farther in this direction. Even the exportation of small change may become a profitable speculation as soon as the amount of depreciation of paper money exceeds the seigniorage. Then usually small change of a worse kind is stamped, as, for instance, in Austria, copper instead of silver; and in 1860, 12 millions florins of paper small change. Here the exportation of the better money is not a consequence, but the motive to the manufacturing of the worse.924.During the assignat-period it could happen that a land owner, after the term for which he had farmed out his land, might be compelled to surrender it to the farmers, for the reason that the taxes, requisitions, etc., paid by the farmers, amounted to more than the farm rent. In the case of the former, the calculation was based on the recent depreciated value of the assignats; in the case of the latter, on the higher value the assignats had at the moment that the contract was concluded. (Büsch, Geldumlauf, III, 62.) A writer in the Revue des deux Mondes, April 15, 1865, thinks that one reason why the American civil war was so popular in the northwest was because the paper money issued during the rebellion made it easy for that part of the country to pay off the mortgage-debts which had burthened it since 1848. Even of the two law catastrophes,Duclos, in his memoirs, remarks that they produced a great admixture of those who had been formerly separated by differences of class and wiped out the previous ideas of decorum, fitness, etc.925.During the time that the clipping of the coin was practiced, it is scarcely possible to show that money was debased below 11 per cent. of what its value should have been. See, on the other hand, §3. In Austria, in 1810, a person had to give 1,200 florins in paper money for 100 florins in silver. (Tüb. Zeitschr., 1861, 593.) In North America, in 1781, it took $280 in paper to purchase $1 in silver. (Ebeling, Gesch. und Erdbeschreib., von N.A., 1856, III, 580; IV, 440; V, 437.) During the American civil war, the paper money of the Southern States declined to ½ (December, 1863) and even to 1/35 (October, 1864) of its nominal value. CompareHock, Finanzen der V. Staaten, 514 ff. Observed even byStorch, Handbuch,Rau'stranslation, III, 141 ff. (See, on the other hand,C. King, Thoughts, p. 113.) In Paris in July, 1795, the greater number of commodities estimated in assignats were worth as much as if the rate of exchange of the latter was 6-14 per cent. of their nominal value, while it actually amounted to only 3-½ per cent.926.Where anagioof exchange of metallic money as compared with paper is prohibited, the decline of the latter will manifest itself not only in foreign rates of exchange, but also in the price of bars of the precious metals.927.The changes of the agio or premium depend mainly on the supply and demand of the precious metals, that is, on the extent and intensity of the business transactions which have to be made in these metals themselves. (Wagner,Russ. Papierw., 87.) Hence, for short periods of time, it may be said in a paper currency country, that business transactions based on cash money have a great element of variation in them. (WagnerinBluntschli'sStaats-wörterbuch, III, 971.) The purchase and lease-hold prices of fixed capital, of houses, for instance, rise much less because most people look upon the distress as transitory, and of short duration. (A. Walker, Sc. of W., 133.) In Austria in 1859, the rise of the agio of exchange of silver from par to 40 per cent., and its subsequent fall within 7 months to 20 per cent., left the price of coin almost entirely unaffected. (A. Wagner, Gött. Anz., 1860, 114.) That country people in general suffer more from a bad paper currency than the towns people and inhabitants of cities, seeBonamy Price, Currency and Banking, 175, seq. In the northern states of the American union, in 1864, 12 home kinds of commodities had risen 148 per cent., 7 foreign kinds of commodities, 164 per cent., and 7 which could be obtained only from the southern states, 353 per cent. (v. Hock, 186 seq.) As too great issues of paper money are so frequently made on account of war, it is comparatively easy to understand why it is that articles for which war creates a demand should rise in price very soon and very high; while the very opposite happens in times of taxation-distress, in the case of a great many articles of luxury, which can readily be dispensed with.Büschremarks (Werke, VII, 91), that retail dealers frequently raise their prices in order not to be obliged to pay out so many small coins as change for the paper dollar.928.CompareHufeland, N. Grundlegung, II, 241. Self-seeking undertakers (Unternehmer= men of enterprise) have, on this account, both in Austria and Russia (Wagner, Russ. P.W., 105), but more so in North America (v. Hock, 556 ff.), opposed measures intended to restore values (Valuta), on the ground that they were anti-national. EvenSperauskyexperienced this in 1809, when he published very correct ideas on paper money, while in the“fairy”times of Catherine II., no one even thought that state paper money is a state debt. (Bernhardi, Russ. Geschichte, II, 2, 636.) One of the principal representatives of this course isH. C. Carey, Our Resources (1866), and in the New York Herald, 1865. On the other hand,Faucherrightly calls the more active exportation of countries, with a bad paper currency, an exportation of barbarous nations, the commerce of misery, to which any price paid in metal or in any higher-standing product of civilization is acceptable. (Vierteljahrsschrift, 1868, IV, 167.) The nation in the aggregate loses in international trade for the simple reason that its foreign creditors will accept its paper money at most at its current rate of exchange against specie, while foreign debtors force it upon the nation at its nominal value.929.The different provinces also of a large empire may have very different degrees of depreciation of the same paper money. Thus, in the interior of Russia its rate of exchange against specie had for a long time not declined beyond 50 per cent. of its nominal value; while the foreign rate of exchange supposed a decline to 33-⅓ per cent. (Cancrin, Weltreichthum, 68.)930.An enhancement of duties, taxes (Abgaben) etc., will seldom be able to progress in the same measure as the paper money sinks; in any case, a law would be necessary to effect this, which, however, comes always later than the decline. (Sismondi, Du Papier Monnaie, 27.)931.Wagner, Russische Papierwährung, 142, estimates that the Crimean war depreciated the average current rate of exchange of Russian paper money by 11.1 per cent., the Italian war of 1859 by 14.5 per cent., the German war of 1866 by 19.4 per cent., spite of the fact that Russia did not participate directly in the last two wars.932.The more than forty-five milliards French assignats, estimated at their rates current, really produced to the state only about six milliards. (Gentz, Histor. Journ., 1800, II, 317, afterLecoulteux.)933.Very well explained byH. Thornton, Paper Credit of Great Britain, ch. 10. As to how, in Austria, the paper-money crisis contributed to bring the rigid national resources into a molten state, and to shake off the national inertia by the feeling of insecurity, seeBuquoy, Theorie d. Wirthschaft, 1816, 347 ff.Schäffle, System, 3 aufl., 254 seq., thinks that if Austria should first adjust its values, and then, in case of another war, have recourse to a second depreciation, the disastrous disturbances of its national economy consequent herein would be produced twice instead of once, and not without reason.934.The Prussian treasury-bills stood, in June, 1809, at 36 per cent. of their nominal value; June, 1810, 84-½ per cent.; January, 1812, 13-½; December, 1812, 44-½; June, 1813, 26-½; July, 1813, 24-½; December 31, 1813, 49-½; January, 1815, 88; January 5, 1816, 99 per cent. Austrian paper money expressed in terms of metallic money, amounted, on an average, between 1849 and 1855, to 292,000,000 florins: but at certain moments, it fluctuated from 231,000,000 to 337,000,000. (Tübing. Zeitschr., 1856, 124.) The agio of silver fluctuated during theBancozettel(bank-billets, a species of Austrian paper money) period from one day to another on Change 40 and even 100 per cent.: thus, on the news of Napoleon's entry into Paris, between the 25th of March and the 4th of April, from 330 to 440; on the receipt of the news of the result of the battle of Waterloo, in three days, from 458 to 412; after Napoleon's abdication, from 412 to 320. (Gentz, Werke, V, 62.)Huskissonrightly calls a depreciated paper currency a much worse thing than clipped coin: the clipping of the coin is, so to speak, one great blow after which people can again calculate with certainty; but bad paper money is one continual fluctuation.935.“The only difference here is that it is not left to individuals to say whether they will join in the game or not.”(Helferich.)936.During the later assignat-period every house was full of commodities, every pocket of samples; every“exquisite”and every lady was a merchant, because no one had any further confidence in the money. People had retrograded to the barbarous condition of trade by barter. (Goncourt, Histoire de la Société française pendant le Directoire, 1854.) The French constitution of 1795 fixed the salaries of members of the Directory at the value of 50,000myriogrammesof wheat (art. 173, 68). In Delaware, while the depreciation of paper money lasted, farm rent was usually required to be paid in produce. (Ebeling, V, 37.)937.“Of all contrivances for cheating mankind, none has been more effectual than that which deludes them with paper money.”(D. Webster.) The American Secretary of the Treasury,McCulloch, says, in the report of December 7, 1868, of the legal tender notes:“there can be no doubt that these acts have tended to blunt and deaden the public conscience, and they are chargeable in no small degree with the demoralization which so generally prevails.”Niebuhrattributes the decline of old Spanish honesty which was formerly so much relied on in all great money centers, principally to thevales. (Nichtphilol. Nachlass, 489.)938.This calls to our mind the impersonal mass-crimes to which our own times so frightfully incline, when many a man who would recoil in horror from an ordinary act of pocket-picking or from manslaughter with intent to commit larceny, robs thousands in cold blood by means of a swindling enterprise, or, for the sake of a fraudulent insurance, destroys the lives of a whole ship's crew.939.Saxon loans of two million thalers treasury notes (Kassenbillets), August, 1813, which were then to bear interest in silver and to be paid in silver. The purchase of the precious metals, or loans made by the state in foreign countries, with the intention of redeeming paper money, effect the same end at a much greater cost. (Peschel, D. Vierteljahrsschrift, 1858, III, 254.) If the currency consists of bank notes endowed by the state with compulsory circulation and an irredeemable character, such a metallic loan made in order to reimburse the bank for a loan to the state in depreciated notes is a gift made to the bank without reason; and the metallic money brought into the country flows back into foreign parts when the bank restriction is removed, because it, together with the appreciated notes, creates a too abundant circulation.940.Although in England the suspension of the redemption of notes had lasted from 1797 to 1819, depreciation of notes during the greater part of this time either did not occur at all (Summer of 1797 to 1799, 1802 ff.) or was very small; and even during the last five war years, it did not amount to much over 30 per cent. About 1817, the notes of themselves again rose to par, and had lost but little during the following years, in consequence of the great loans of the continental powers in the English market. Under such circumstances, the repeated promise of the state to make the notes redeemable at their full nominal value was certainly a cogent reason for the Peel's Act of 1819. In favor hereof are especiallyTooke, Hist. of Prices, II, p. 60 ff., andJ. S. Mill, Principles, III, ch. 13. Opposed to it, the so-called Birmingham-Atwood school and alsoLord Ashburton, in his statement before the Agricultural Committee, 1836. But according toRob. Muschet, Tables, exhibiting the Gain and Loss to the Bondholders arising from the Fluctuations in the Value of the Currency (1826), the state creditors, on the whole, lost more by the depreciation of the notes than they gained by their subsequent rise.Ad. Wagneralso is decidedly in favor of the course A.941.This has occurred not unfrequently in the case of the paper money of subdued revolt: thus, for instance, the Hungarian of 1849; in the case of the Southern Confederacy. But the assignats, too, came to this end, although, according toBüsch(Werke IX, 526), the intentions of the country at first were good; and in Austria, in 1810, many prophecies looking in this direction were made. (Per contraRehberg, Sämmtl. Schriften. IV, 334.) Not very differently did it fare with the Swedish coin-tokens (Münzzeichen) of Charles XII, which were altered 7 times between 1715 and 1718; and where besides, the tokens called in in a much too short space of time were transformed into small change coins 1/32 their value hitherto. (BrücknerinHildebrand'sJahrb. 1864, I, 161, ff.)942.Thus it was, for instance, in Austria, in 1811 and 1820, at 1/5 and 2/5 of the nominal value, in 1799 in the United States, in 1813 in Denmark with the currency notes (Courantzettel), in 1816 in Norway with the royal bank dollar notes, in Sweden in 1814 with the bank notes (Bancozetteln) at 37-½ per cent., in 1839 in Russia with thebankassignationen, at 2/7 of their nominal value. Of theoretical writers this course is recommended among others byJacob, Staatsfinanzwissenschaft, § 980 ff.;Nebenius, Œff. Credit, 2 Aufl., ff.; Deutsche Vierteljahrsschrift, 1841, I, 65;Rau, Lehrbuch, III, § 528;Helferich, Tüb. Ztschr., 1856, 435 ff. According tov. Rotteck, Lehrbuch, IV 402, it may be assumed that paper money is spread among the people of a country in proportion to their resources: which is also the hypothesis on which all direct taxation is based. Hence the gradual depreciation of paper money operates like the imposition of a tax and thereduction of value(Deralvirung) is, so to speak, only the release of the same. BesidesGentz(Werke by Schlezier, IV, 58) shows from the example of Austria in 1811, that in the case of the taking up of a depreciated paper currency it makes a better impression to give 100 florins in specie for 1,000 florins in paper, than 200 florins in a new kind of paper. The holders of the old paper money have now lost confidence in all paper currency. Of similar import is the immediate abolition of the compulsory circulation of paper money at its nominal value (Prince SmithinFaucher'sVierteljahrsschrift, VII, 126 ff.), and the introduction of compulsory circulation in accordance with the day's quotations of the actual value of the paper as compared with specie. (Strache, Die Valuta in Œsterreich, 1861;per contra,Ad. Wagner, Tüb. Zeitschr., 1861, 606 ff.)943.Such measures as were adopted in Austria, in 1811, where a“redemption and extinction deputation,”independent of the government was established and sworn to prevent a further increase of paper money, are not sufficient of themselves alone.944.The Code Civil (art. 1895) makes the nominal value entirely conclusive; so, also, the Prussian Landrecht (I, § 790): which is to proclaim the omnipotence and infallibility of the state power in the most ingenuous or else in the most brutal manner. The power given byPuchtato metallic value (Pandecten, VII, aufl., § 38) is applicable neither to paper money nor to small coin; and it ignores entirely that stamped coins and currency money are something different from mere metallic commodities and even from metallic bars. The Austrian civil law (bürgerliche Gesetzbuch) decides in favor of the current value (986 seq.): a view which most modern jurists sinceSavigny(Obligationenrecht, I, 404; earlier yet,Hufeland, Ueber die rechtliche Natur des Geldschulden, 180) entertain. But they even fail to recognize that the depreciation, for instance, of paper money as compared with specie and general decrease of purchasing power are identical only in the case of such paper money or reduced coins which have no compulsory circulation. (A. Wagner, Tüb. Ztschr., 1863, 478 ff.)945.Let us suppose that at the moment the state could perform its duty to its servants only to the extent of one half. If it should frankly admit this, pay one-half in good money and remain in debt for the other half, it might subsequently, in better times, make good to them or to their heirs what it had now refused; and thus private credit, from the disturbance of which the state can only suffer, suffer no diminution. Both are quite different when the state disguises its insolvency under the mask of apparent full payment in paper money which has lost 50 per cent. of its nominal value. In opposition to the myth that the assignats saved France, seeLevasseur, in the Acad. des Sc. m. et. p.946.It not unfrequently happens that a nation's paper money has been directly or indirectly affected by an unfriendly state. Thus for instance, England, in 1794, tolerated an assignat manufactory at Lambeth, while Frenchmen imitated English bank notes. (Archenholz, Aenalen XI, 429.) Napoleon in 1812 issued forged Russian bank notes. (Cancrin, Œconomie der menschl. Gesellschaft, 136.Niebuhr, Gesch. der Revolution, II, 314.) When Maria Theresa first wished to introduce paper money, Bolza, her minister of finance, in his urgent appeal to her to desist from adopting such a measure, foretold the subsequent bankruptcy etc. (Mailath, Oesterr. Gesch., V., 83.)Adam Smithcompares gold and silver circulation to a highway which, indeed, produces nothing directly. Paper money is an advance similar to that which would be produced by the construction of a machine adapted to the carriage of persons and goods through the air, and which permit the highways hitherto used to be turned into meadows, arable land etc.Ad. Smithvery strongly emphasizes the insecurity of these“Dædalian wings”as compared with the“solid ground of gold and silver,”especially in the transitory misfortune produced by war. (W. of N., II, p. 78, Bas.)David Humesays of all paper media of exchange, that they share all the harmfulness of an increase of specie money, enhancement of the price of commodities, aggravation of the obstacles to exportation; but that they do not share in the useful properties of specie money. (Discourses, On Money and on the Balance of Trade.) The youngerMirabeaukept Necker from pursuing his plan to issue paper money with the words:du papier monnaie c'est la peste circulante!Inconsistent as Napoleon was in his bank policy (compareHorn, Bankfreiheit, 304), he always rejected paper money. As in 1805 he wrote to the minister of justice:je ne veut pas de papier monnaie: so, in opposition to the minister of the interior, he in 1810 compared it to the plague:le plus grandfléau des nations. (Acad. des Sciences m. et p., 1864, II, 212.)Sismondi, too, compares paper money to the paper cannons of the Chinese, which render a cheap service until the hour of danger comes. (N. Principles, II, 107.) Of the banks he says:les avantages aussi-legers les dangers aussi graves. (Eludes, II. 421).Cancrin, Œkonomie der menschl. Gesellschaft, 1845, 152 ff., says he thinks that possibly it might have been well never to have established banks, but that yet the craving for the new is preponderately good, it brings inventions and improvements with it. EvenTookeconsiders the insecurity of paper money a disadvantage which more than counterbalances its cheapness. (Considerations on the State of the Currency, 1829, 85.) On the doubts ofJeffersonandGallatin, seeWolowski, Enquête, 170, seq.Webstercalled paper money“the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow.”Tout papier monnaie par lui même est un mensonage.(M. Chevalier, Cours, III, 428.)M. Niebuhrcalls banks a poison which should be used with moderation. (Bankrevolution und Bankreform, 1846, 37.) Compare the writers named in §2.947.Avec la liberté un peuple n'a jamais de mauvaises monnaies(F. Lenormant): entirely so, providedlibertébe translated“true and insured freedom.”948.Law's giddy projects under the regents of Orleans and the assignats of the first republic; Austria, Russia and the United States; the Danish absolute monarchy, and Sweden, both under Charles XII., and its oligarchical times. The history of Rhode Island paper money is peculiarly scandalous. All debts had to be paid within two years, or to be held invalid, and juries were dispensed with in such cases. (Ebeling, Gesch. und Erdbeschreib. von N. America, II, 173 ff.)949.Ad. Müllercompares“cosmopolitan”metallic money to a universal language: paper money ties one to the country, as people do not like to travel in foreign parts when they understand only their native language. As paper money compels subjects to take an interest in the state, a state like Austria would act very foolishly if it should begin its reorganization by enhancing its depreciated values (Valuta). (Elemente der Staatskunst, 180, III, 171; II, 339 ff.) Even in 1830, he found fault with the Austrian loan for the payment of the paper money. (Briefwechsel mit Gentz, 321 seq.) He lauded paper money because he claimed it led a country back to the barter And service-economy of the middle ages. (Verm. Schriften, I, 59 ff.) Similarly,Gentz, in his later writings. CompareRoscher, Gesch., der N. Œk., in Deutschland, II, 762.950.Who, for instance, would lay by a paper dollar in the savings bank for his godchild? In this respect, too, oriental countries have preserved much of the medieval. Concerning the aversion of the Egyptians of our day for all paper money, seeStephan, Ægypten, 250 seq. This is all the more surprising since during several months after the harvest, there are from 4,000,000 to 8,000,000 piasters in specie sent every day from Alexandria by post to private individuals in the provinces. In addition to this there is the immense difference in the French, English and Austrian coins circulating in the country, and which have very different rates in the different provinces. It is still worse in Arabia. (v. Maltzan, Reise, I, 27.)951.Comparev. Schlozer, Anfangsgründe, I, 140 ff.M. Niebuhr(Rau's Archiv. N.F. II, 125) finds paper money best adapted to countries without any exchange-trade, but which at the same time require a species of money easily computed and easy of transportation (Russia); countries whose national economy has an extraordinarily rapid growth (the United States); and in unusually solid countries (Scotland).952.List, Nat. System der politischen Œk., I, 394. A private individual of small means who should go on his travels without money would be subject to all sorts of annoyances; a king or a Rothschild, just as soon as he was recognized as such, would find credit everywhere. Thus, English businessmen have outstanding claims in all parts of the world, which might without any great difficulty be called in in the precious metals. The more the division of labor is developed, the better may the condition of a nation's whole economy be seen reflected in the course of its banking system and its exportation and importation.

And he adds:“Animals which yield only to an impulse or blind instinct, come together only fortuitously or periodically and in a manner destitute of all morality. But in the case of men, reason is mixed up more or less with every act of their lives. Sentiment is found side by side with desire, and right succeeds instinct. I discover a real contract in the union of the two sexes.”

It would be impossible to present a more complete or eloquent refutation of the definition of the Roman jurisconsults which debases marriage to the level of the promiscuous coming together of animals, and which limits the natural law to the law common to man and beast.“Jus naturale est quod natura omnia animalia docuit; nam jus istud non humani generis proprium, sed omnium animalium quæ in terra, quæ in mare nascuntur, avium quoque commune est. Hinc descendit maris atque feminæ conjunctio, quam nos matrimonium appellamus, hinc liberorum procreatio, hinc educatio; videmus etenim cætera quoque animalia, feras etiam, istius juris peritia censeri.”D. L. I. De Just. et Jure.

In one of his latest productions (Ueber die sogennante historische und nicht historische Rechtsschule, Archives du Droit Civil, Heidelberg, XXI 1838) the veteran of the philosophical school, resuming a debate begun a quarter of a century before, energetically defends himself against the erroneous interpretations which it was sought to give to his thoughts.“Does it follow,”he inquires,“that because a man is desirous of reform, he must surrender the study of the past? And if there be new laws to construe, how could his evil genius deter him from the necessary knowledge of ancient laws? Is there a single jurisconsult, who, in the hope of a better future, despises the meaning and spirit of that which still exists? I do not know even one.... And when I am accused of passing by the institutions of the past with coldness and hatred in my heart, because I was one of the first to express the hope of a better future, a charge is laid at my door which is perfectly incomprehensible ... I am reproached with despising the history of law. It is a slander on me. Although I have only laughed at these reports, one man's mistake grieved me; for that man's name was Niebuhr.... When he [Niebuhr] returned from Italy to devote himself entirely to science, in his retreat at Bonn, he passed through Heidelberg, where he remained five or six days. During a great part of that time we came frequently together. He was at first a little cold; but Cicero made us friends. After a happy word let drop concerning that writer, he asked me what I thought of him. I answered laconically:‘If they were burning all the Latin authors, and I were permitted to grant a pardon to one of them, I should say, without hesitation: Spare the works of Cicero.’He joyfully exclaimed:‘I have at last found a man who judges rightly of Cicero. I share your admiration for him, and that is the reason I have given my boy the name of Marcus.’The ice was now broken, and he frankly told me that he could not understand how I could be an inveterate enemy of Roman law and of the history of law. I gave him to understand that I had simply been slandered, and I added, that, in order to live entirely with the classics, I had always refused to give legal advice, or act as a counsellor, although I might have made a fortune in that way. I told him that I owed my gayety and vigor, in great part, to my love for the classics of all ages, even those outside the domain of jurisprudence; but that I held, above all things, to the good qualities of the German nation, and that I did not hesitate to say with Facciolatus:‘Expedit omnes gentes Romanis legibus operam dare, suis vivere.’

“When he heard those words of mine, he exclaimed with his usual energy and vivacity:‘Habes me consentientem, labes me consentientem.’From that moment all coldness between us was at an end, and we approached, without any embarrassment, a host of questions in one conversation in which I endeavored, as I had before, to learn from him.

“Thus I receive with sincere gratitude, all the works, both useful and profound, which have appeared in our day on the history of law. It would be folly in me to deny the impetus which the study of positive law has received. New sources have been discovered. Their newness and importance have excited the zeal of many scholars who have studied them profoundly; a fact which made a review of the older sources, still by far the most important, necessary. These two circumstances soon rendered it imperative to proceed to the making of scrupulous dogmatic researches. Thus there now is a new life among jurisconsults, and a great activity, which, it is my hope, may continue long.”

Roscher'scomplete work he calls“A System of Political Economy.”It embraces the four parts above referred to; but each of these parts constitutes an independent work. The first part, or the Principles of Political Economy, covers the ground generally covered by English treatises on Political Economy.

Besides the works above mentioned,Professor Roscherhas written Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte, 2d ed., Leipzig, 1861; Die deutche Nationalökonomik an der Grenzscheide des sechszehnten und siebenzehnten Jahrhunderts, Leipzig, 1862; Gründungsgeschichte des Zollvereins, Berlin, 1870; Betrachtungen über die geographische Lage der grossen Städte, Leipzig, 1871; Bertrachtungen über die Währungsfrage der deutschen Münzreform, Berlin, 1872; Geschichte der Nationalökonomik in Deutschland, Munich, 1874; Nationalökonomik des Ackerbaues, 8th ed., Stuttgart, 1875.—Translator's note.

In France, according toCordier(Mémoire sur l'Agriculture de la Flandre Française), the wheat harvest yielded, in

1817, forty-eight million hectolitres, with a value in exchange of two thousand and forty-six million francs; in

1818, fifty-three million hectolitres, with a value in exchange of one thousand and four hundred and forty-two million francs; in

1819, sixty-four million hectolitres, with a value in exchange of one thousand and one hundred and seventy million francs.

A rise in the value in exchange of wheat, such as was witnessed in 1817, is synonymous with a decline in the value in exchange of money, and of all those goods whose money price has not risen. It is no objection to the views here advocated, that when the necessaries of life are very scarce, the want of clothing, furniture, articles of luxury etc., is not felt so keenly as at other times, and that the value in use of these commodities really falls; andvice versa.

Rau(Lehrbuch, I, § 61 ff.) distinguishes between the concrete or quantitative value which a certain kind of goods may have for a certain person, under certain circumstances, and the abstract or species-value which a whole class of commodities may have for men in general.

ButF. J. Neumann, (Tübinger Zeitschrift, 1872, p. 288 ff.) objects, that even the abstract value of a commodity always suggests the relation of a definite number of concrete men to a definite quantity of goods; else, by the expression, value of goods, is to be understood not what it is generally meant to signify, but only the capacity to satisfy a single want.

According toTh. Cooper, Lectures on the Elements of Political Economy, (1726), 1, 15 ff. 117, the wealth of society is nothing but the aggregate wealth of all the individuals that compose it. Each individual looks out best for his own interests, and, hence, that nation must be the richest, in which each individual is most completely left to himself. (If this were so, savage nations would be the richest!)Coopergoes so far as to disapprove of the protection afforded to commerce on the high seas by a national navy; no naval war is worth what it costs, and merchants should protect themselves. He says, too, that the word“nation”is an invention of the grammarians, made to save the trouble of circumlocution, a nonentity!Adam Smithis, as might be expected, far removed from such absurdities. (Compare Wealth of Nations, IV, ch. 2, and the end of the fourth book.) But, even he is of opinion that men, in the study of their own advantage are led“naturally, or rather necessarily”(IV, ch. 2), to the employment which is most useful to society. But hereAdam Smithoverlooks the fact, that every individual nation strives after earthly immortality, and is, in consequence, frequently compelled to make immediate sacrifices for the sake of a distant future, a thing which can never be to the private interest of the mortal individuals who compose it. And thus,D. North, Discourses upon Trade (1691), 13 seq., says, that in commercial matters, different nations stand in precisely the same relation to the whole world, that individual cities do to the kingdom, and individual families to the city. Similarly,Boisguillebert, Factum de la France, ch. 10, 327, Daire's edition.Benjamin Franklin(ob. 1790), Political Papers, § 4. AndJ. B. Say, Traité d'Economie politique (1802) I, 15: every nation is, in relation to neighboring nations, in the situation of a province in relation to neighboring provinces. Unfortunately, such doctrine is only too palpably refuted by every war!J. Bentham'ssaying:Les intérêts individuels sont les seuls intérêts réels(Traité de Législation, I, 229).Infra§98.

Among those who, in antiquity, most energetically maintained that the idea of national economy is not a merely nominal one, isPlato(De Republ., IV, 420, I, 462); more recently,Fichte(Der geschlossene Handelstaat, 1800), although, in general, the socialists attach as little importance to nationality as their most decided opponents. Adam Müller is a writer who deserves recognition for his advocacy of national economy, and of the state as a whole, paramount to individuals, and even generations. He gives war the credit of causing the scientific knowledge of the state to cast deeper roots, and of enlightening individuals in the most forcible way, that they are parts of one great whole. (Elemente der Staatskunst, 1809, I, 7, 113). He calls public economy, as a whole, the product of all products. What, he inquires, is the use of all wealth, if it does not guarantee itself? And this, it can do, only through the organization of the whole people, that is, through the nation (I, 202).Adam Smith'stheory of labor would be correct if it considered the entire national life of a people itself as one huge piece of labor. (II, 265). And so, Müller directs his polemics against Adam Smith's premise of a merely mercantile world-market. (II, 290). Similarly, the protective tariff theoreticians,Ganieh, Théorie de l'Economie politique (1822), II, 198 ff. andFr. List, Nationales System der politischen Oek. (1842), I, 240 ff.Colton, Political Economy of the United States, 1853.Sismondi, Nouveaux Principes (1819), I, 197, ridicules the opinion which resolves the public interest into merely private interests: It is A's interest to rob B; B, the weaker, is equally interested to let himself be robbed, that he may fare no worse. But the state—?!

John Stuart Mill, Principles of Political Economy (1848), I, p. 25, draws a distinction between the physical conditions which influence the economic situation of a people, and the moral and psychological conditions; which last have their origin in social institutions or in the fundamental principles of human nature. Only the latter belong to the domain of Political Economy. According toJ. B. Say, Traité, Introd., this science embraces at once agriculture, manufactures and commerce, but only in their relation to the increase or diminution of wealth, and does not concern itself with the means employed to reach the desired end. As a rule, saysArndt(Naturgemässe Volkswirthschaft, 1851, p. 16), it takes into consideration not so much things themselves as their exchange value.Lotz(Handbuch, I, p. 6 seq.), in like manner, defines Political Economy—the science of the one activity which constitutes the basis of all industries etc.F. G. Schulze(Ueber volkswirthschaftliche Begründung der Gewerbswissenschaften, 1826), characterizes Political Economy as the science of the fundamental conditions of the well-being of a people, in so far as they lie in human nature.

WhenAdam Smith(book IV, c. II) says that the government in respect to matters of economy is inferior to the first best person engaged in industrial pursuits, he is right only from a technic point of view. And whenStewart, on the other hand, vindicates for the state the office of a pater-familias (book II, ch. 13), he evidently means only in national economical matters.

It is of great importance to calculate here the number of days in the year in which the laborer is compelled to be idle on account of sickness.Fenger, (Quid faciant ætas annique tempus ad frequentiam et diuturnitatem morborum, Hafniæ 1840), finds the following result:

Between 15 and 19 years, 7.2 days. Between 35 and 39 years, 7.8 days.Between 20 and 24 years, 10.3 days. Between 40 and 44 years, 8.3 days.Between 25 and 29 years, 9.5 days. Between 45 and 49 years, 11.6 days.Between 30 and 34 years, 7.6 days. Between 50 and 59 years, 14.1 days.

According toVillermé, in the Annales d'Hygiène, II,

At 60 years, 16 days. At 67 years, 42 days.At 65 years, 31 days. At 70 years, 75 days.

The latter table is the result of a comparison made of the tables of seventy Scotch mutual aid societies. CompareDigler, Polyt. Journal, XXIV, 168.

Tucker, Progress of the U.S., 137. The following data also will serve for a comparison: In Belgium, in 1856, it was estimated that, leaving personssans professionout of consideration, 45.6 per cent. were agriculturists, 37.2 industrials, 6.7 in commerce, 2.8 in the liberal professions, 1.5force publique, 2.1propriétaires, rentiers, pensionnés, 3.7domesticité. In Prussia, in 1871, of the entire male population, 28.6 per cent. were engaged in agriculture, forest-culture, hunting and fishing: 32.3 per cent. in mining, industry, building, and in founderies: 8.56 in trade and commerce; 20.3 in personal services and handiwork not belonging to any of the groups above mentioned; 2.3 in the army and navy; 3.7 in other callings; 2.7 were renters, pensioners, and persons who lived by selling or renting houses, reserving lodgings for themselves therein, and persons who gave no account of their calling. (Preuss. statisc. Zeitschr., 1875, 32. ff.) It is, however, surprising thatEngel'sAmtl. Jahrbuch, III, 1867, gives only 48 per cent. as belonging to the first category, and 25 to the second. In the kingdom of Saxony in 1861, 25.1 per cent. of the population were agriculturists and foresters; 56.1 were engaged in industry; 7.7 in trade and commerce; 6.8 in art, science, the service of the state and of private persons; while 4.1 per cent were without any particular calling, or returned none. Bavaria, in 1852, had 67.9 per cent. of its population engaged in agriculture; 22.7 in the trades and in manufactures; 5.5 per cent., persons living on the interest of their money, and by performing the higher class of personal services; 1.9 in the army; and 2 per cent. of listed poor. InHermann, Beiträge zur Statistik des Königreichs Bayern. In France, according to the official reports, there were:

Agriculteurs61.46 per cent. in 1851, 51.49 per cent. in 1866;Industriels et commerçants25.95 per cent. in 1851, 32.78 per cent. in 1866;Professions libérales9.73 per cent. in 1851, 9.48 per cent. in 1866.

To which it must be added, that, in 1851, there were 2.86sans profession ou dont les professions n'ont pu être constatées; and that, in 1866, on the other hand, there were 2.87 per cent. inprofessions se rattachant à l'agriculture, industrie et commerce. (Legoyt.)In England and Wales, leaving the domestic class out of consideration (women without an independent means of employment, school children, servant girls etc.), and also the“indefinite class,”there were, in 1861, 25.3 per cent. of the population engaged in agricultural pursuits; 60.7 in industrial; 7.8 in commercial; and 6.06 in professional pursuits. In Italy, omitting housewives, children and infirm persons, there were, in 1862, 57.4 per cent. of the population engaged in agriculture; 22.9 in industrial pursuits; 4 in commerce; and 3.9 per cent. in the army and in the liberal professions. (Annali univ. di Statistica, Febbr., 1866.) On Holland, in the middle of the 17th century, seeJ. de Wit, Mémoires, 34 seq.

Considering the aversion exhibited against private property byJ. J. Rousseau, and the unlimited power which he accords to the majority for the time being in the state (Contrat Social, 1761, II, ch. 4), it cannot be denied that his freedom and equality contain, to say the least, germs of communism by no means insignificant. But, he would, in the present state of civil society, have a feeling of respect for the rights of property implanted in the mind of the child very early, and even before the feeling of liberty is developed. (Emile, 1762, Livre II.) About the same timeMorellypublished his Basiliade ou Naufrage des Iles flottantes, 1753, a political romance in the interest of communism. See the same author's Code de la Nature, 1755.Mably, in his two works, Doutes proposés aux Economistes, 1768, and La Législation ou Principes des Lois, 1776, recommended the abolition of all inequality and a real community of goods. The introduction of property seems to him,une faute qu'il était presque impossible de faire. EvenBeccariacalls property a dreadful but perhaps a necessary right which has left to the unfortunate nothing but a naked existence. (Dei Delitti e delle Pene, 1765, cap. 22.) The French Reign of Terror came pretty near carrying these ideas into effect. We need only refer to the abolition of the census, the payments made to the workingmen who attended the section meetings, two francs per diem, the enormous extension of confiscation, requisitions and forced loans, the revolution effected in the fortunes of individuals by the system of issuing assignats, the maximum affixed to the price of all the necessaries of life, the abolition of indirect taxes, and of what remained of the economic institutions handed down from the middle ages. According toSt. Just:l'opulence est une infamie; il ne faut ni riches ni pauvres. The Cahier des Pauvres demands, first of all, that salaries“should no longer be estimated in accordance with the murderous principles of unbridled luxury.”See Forster's letter dated November 15, 1793. (Sämmtl. Schriften, IX, 125.) On the conspiracy of Baboeuf, who was executed in 1796, and who wanted to see the completest equality and community of labor, of enjoyment and education, the abolition of large cities etc., seeBuonarotti, La Conjuration de B., 1821. This book contributed powerfully towards the revival of communistic ideas after the July revolution. Among modern communists who are to be distinguished from the more ancient, especially by the industrial coloring given to their theories,Cabet, Voyage en Icarie, 1840, II, holds a very prominent place. He declares the abolition of religion, of the family and of the state, to be open questions, and desires to bring the practice of a community of goods to a successful issue only through the peaceful channel of conviction.

CompareReybaud, Etudes sur les Réformateurs contemporains ou Socialistes modernes, 1840.L. Stein, Der Socialismus und Communismus des heutigen Frankreich. See, also, the learned history of socialistic systems inMarlo'sWeltökonomie, I, 2, 435 ff.; and in what concerns the most recent time,R. Meyer, Der Emancipationskampf des vierten Standes, II, 1874, seq.; a book which, in spite of its many defects, both doctrinal and journalistic, is as rich in thought, and in the knowledge of the subject it treats of, as it is permeated by a love of truth regardless of consequences. Among the opponents of socialism and communism,Malthus, On Population, B. III, ch. 3, andB. Hildebrand, Die Nationalökonomie der Gegenwart und Zukunft, vol. I, 1848, hold a very distinguished place.J. S. Mill, Principles, II, ch. 1, 3, calls attention to the fact that hitherto the principle of free property has never been consistently carried out. The first social arrangement of modern society was almost everywhere the result of conquest and violence, large traces of which yet remain. Things have always been made property which ought not to be property. Governments have endeavored to intensify the darkness of the dark side of property, and favored the concentration instead of the diffusion of wealth etc. Hence, no one can claim that the social wrongs, so-called, had their origin in property as such.Schäffle, Kapitalismus und Socialismus, 1870, has made a very note-worthy effort to recognize whatever of truth there is in socialism, and to combat its errors.

A similar development among the Greeks:

A. Rigorous slavery for debt, which Kypselos moderated at Corinth. (Pausan., V. 17, 2), and Solon abolished in Athens. (Plutarch, Sol., 15.Demosth., de fals. Legat., 412.)

B. The reckless creation of debts as seen in Aristophanes; while outside of Athens slavery for debt lasted yet a long time. (Hermann, Griech. Privatalterth., § 57, 20.) In the time of Demosthenes, the merchant in arrears in the payment of his debts was cast into prison, and the bottomry-debtor who deprived his creditor of his security might be punished with death, (Demosth.adv. Pharm., 922, 958), and this although thecessio honorumwas introduced.Hermann, § 70, 3. CompareXenoph., Vectigg., 3,Demosth.adv. Apat., 892; adv. Lacrit., and adv. Dionys. In Corinth, the state superintended expenses made by parties. This was part of its credit-policy. (Athænæus, VI, 227.) For a remarkable Rhodian law relating to debts, seeSext.Emp., Hypot. I, 149.

In Rome:

A. The chief characteristic of the ancient law in this matter was the eventual sale of the person of the debtor on the getting of the loan (nexum); the power of the creditor to put theaddictusto death or to sell him in foreign parts; finally, thein partes secanto, in the concourse of creditors. Without these rigorous provisions, the borrower might easily have evaded his debts, by the emancipation of his son and turning over his property to him. (Niebuhr, Rom. Gesch., II, 770 ff;Savignyin the Abb. der Berliner Acad., 1833.Zimmern, Gesch. des röm. Privatrechts, III, 131 ff.)

B. Later, we find nothing of the execution of the debtor, or of the sale of his person; but he might be compelled to do slave labor for his creditor without any protection against ill-treatment. Slavery for debt was restricted by the Lex Poetelia. (Niebuhr, III, p. 178;Mommsen, III, 494.) The Prætorian law introduced the custom of putting the creditor in possession of the goods of the debtor, with power of sale, which proceeding rendered the debtor infamous. See several passages inWalter., Röm Rechtsgesch, 763 ff;Tertull., Apol., 4; Tab. Herac. I, 115 ff. Later, Cæsar's Lex Julia permitted the honest debtor to escape imprisonment by the assignment of his goods.

C. The moneyed oligarchy which prevailed in Rome caused the adoption of exceedingly severe measures against delinquent debtors. (Plut., Lucull., 20.Cic., ad. Att. V. 21, VI.), although its members themselves incurred debts in the most reckless manner. Cæsar, in the year A.C. 62, excluding his active (activen), owed debts to the amount of 25,000,000 sesterces; M. Antonius, in the year 24, 6,000,000; in the year 38, 40,000,000; Curio, 60,000,000; Milon, 70,000,000. (Mommsen, Römische Geschichte, III, 486.) CompareGellius, XX, 1, XV, 14.

Concerning the arguments by which the commercial restrictions of the middle ages were defended, see below. They were, for the most part, well founded for the age in which they were advanced. A judicious education will often be compelled to provide limitations, but always with the intention, by this means, of making possible a really greater independence. Thus the current of commerce may be too weak in a poor and thinly settled country in order that supply and demand should always and everywhere meet and be satisfied. Under such circumstances, their artificial concentration at certain points is among the most efficient means of promoting the economy of the whole people. The policy of freedom of commerce was recommended even in the seventeenth century byJ. Child, byNorthandDavenant. W. Roscher, Zur Geschichte der englisch. Volkswirthschaftslehre, 65 ff., 85 ff., 113 ff., 142 ff. And earlier yet, in Holland, bySalmasius, De Usurus, 1638, 583 andde la Court. Compare Tübinger Ztschr., 330 ff. ThusBoisguillebertsays:Il n'y avait qu'à laisser faire la nature et la libertê, qui est le commissionaire de cette même nature. (Factum de la France, 1707, ch. 5.) See, also, Dissertation sur la Nature des Richesses, ch. VI; Détail de la France, 1697, II, ch. 13; Tr. des Grains, II, 8. For the most part dictated by a reaction against Colbertism.

See further,Mélon, Essai Politique sur le Commerce, 1734, ch. 2.M. Decker, Essay on the Causes of the Decline of Foreign Trade, 1744, 31 ff, 106 ff.J. Tucker, Essay on the advantages and disadvantages which respectively attend France and Great Britain with regard to Trade, 1750.Forbonnais, Elémens du Commerce, 1754, I, 63.Genovesi, c. I, 17, 3, is of opinion that at least in case of doubt, commerce stood more in need of freedom than of protection.Verri, in his Meditazioni, goes still farther. The Physiocrates, with theirlaissez allerandlaissez fairerecommend competition as the best means to increase the net income of a people. According toDupont, 147 ff, éd. Daire, the province of legislation is confined to declaring the laws of nature. His motto is:liberté and propriété.Adam Smithasks that the state should do only three things: insure protection against foreign states, the administration of justice at home, the establishment and maintenance of certain institutions of advantage to the whole community, but which private interest could not establish for want of means to cover the expenses attending them. (Wealth of Nations, V, ch. I, 2.) Hence he demands (III, ch. 2) the abolition of all kinds offidei commissa, of royalty in mines (I, ch. 11, 2), of all corporate and exclusive privileges, of all protective duties etc. (IV, ch. I ff), but especially of the colonial policy hitherto in vogue. (IV, ch. 8.)

The attacks of the Socialists on freedom of competition were begun byFichte, Geschlossener Handelsstaat, 126, in which it is called a robber-system or system of spoliation. He would have the state have more solicitude for human industry than if men were so many swallows. See further,Sismondi, N. Principes, passim, who everywhere demands the protection of the government for the weaker.Fourier, N. Monde industriel, 396, who thinks thatle monopole généralis always apreservatif contre le commerce.Bastiat, Harmonies économiques, ch. 10, has a very valuable refutation of these follies. Recently,Rodbertus, Hildebrand's Jahrbücher, 1865, II, 272, is of opinion that“social individualism”has ever had in history the task of dissolving decaying societies, as, for instance, under the Cæsars.

Such exceptions there certainly are, even if it were not true“that the most godly cannot rest in peace unless he is acceptable to his ungodly neighbor.”Nations that furnish the same products as we do may, indeed,“spoil our market,”just as at home the selfish shoemaker may desire the prosperity of all wearers of shoes, that is of all other industries, but not that of all other producers of shoes. The view that long prevailed, that one man's gain was always some other man's loss (Th. Morus, Utopia 79, ed. Colon. 1555;Baco., Sermones fideles, cap. 15;quid-quid alicubi adiicitur, alibi detrahitur;M. Montaigne, EssaisI, 21:les prouficit de l'un est le dommage de l'autre) prevailed much longer in international affairs where observation is much more difficult than in national affairs; although even here,P. de la Court, Maximes politiques, 1658, contrasts the economic interest of Holland with that of the rest of the Netherlands and prefers it to theirs. EvenVoltairesays:“The desire of the greatness of the Fatherland includes the desire of evil to our neighbor. Evidently no country can gain except what another loses.”(Dict. philosophique, v. Patrie.) Compare, however, thepeut-êtrein his Histoire de la Russie, I, 1, on the occasion of the English-Russian treaty of commerce. Similarly,Galiani, Della Moneta, I, 1, IV, 1;Verri, Opuscoli, 335, and recentlyv. Cancrinwho says that“in every-day life, property is acquired only at some other person's expense.”(Weltreichthum, 1821, 119. Oekonomie der menschl. Gesellschaft, 1845, 23.) The cosmopolitan view (Xenoph., Cyrop., III, 2, 17. Hier., 10) which prevails in Adam Smith's school was introduced byHume, Essays, 1752, On the Jealousy of Trade.Quesnay, Encyclopédie, v. Grains, 294, ed. Daire;A. Smith, Theory of moral Sentiments, 1759, p. 6, sec. 2, ch. 2.Pinto, Lettre sur la Jalousie de Commerce, 1771, andJ. Tucker, Four Tracts on commercial and political Subjects, 1776, 34 ff and 42 ff.“The system of states exercises no influence whatever on the world's commerce.”(Lotz, Handbuch I, 11.) More recently,R. Cobden, in his Russia, Edinb., 1836, among others argued, that the conquest of Turkey by the Russians would be useful to England, because then more (?) English products would probably be sold there. Russia would become no stronger thereby, as conquests always injure the conqueror more than they benefit him. The idea of European equilibrium is therefore a chimera, because no state can be prevented from having an internal growth, as great as may be. Thus, in the summer of 1853, we heard the London Times sometimes preach that every cannon-shot fired by the English at the Russians might kill an English debtor or an English customer. The Venetians entertained a similar view at the beginning of the fifteenth century. CompareM. SanudoinMuratori, Scriptores, XXII, 950 ff. See above, §12.

Moreover, Malthus had recognized that there were natural rivalries between nations which produced exceptions to Tucker's laws. (Principles, Preface.) SimilarlyGarve, in Cicero's Pflichten (1783), III, 146 ff.

The wrong definitions of money may be divided into two classes: those which convey the idea that it is more than a commodity, and those which imply that it is less.

This was a point which was contested even among the Greeks. There were many who claimed that wealth consisted exclusively in the possession of much money; as we find, for instance, in the pseudo-Platonic dialogue Eryxias; while others insisted that money was something purely imaginary (λῆρος), and the creation, exclusively, of human laws. (Aristot., Polit., I, 3, 16, Schn.) Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (Plato, De Rep., II, 371.)Anacharsiscompares money to counters. (Plutarch, De Profectt in Virtute.)Aristotle, himself, subscribed to the second opinion, although he saw clearly, that only useful and current things (χρείαν εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3, 14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.)Xenophonascribed properties to money which no other commodity possessed; especially when he said that it could never be too plentiful, and that its price could never fall. (De Vectt. Ath., 4.) The finest ancient explanation of the nature of money is that of the jurisconsultPaullus, L. I.; Digest, XVIII, 1; and it well deserves the long commentary devoted to it byP. Neri, Osservazioni etc., inCustodi, P.A., VI, 324, ff.

Among the moderns,Melancthon., Corp. Ref., XVI, 498, andSeb. Frank, Chronik., 760, consider money as a mere symbol. On the other hand, the over-estimation in which the precious metals were held by the adherents of the Mercantile System was owing, without doubt, to their very superior utility as money; for we very frequently find that the adherents of that school insist that the precious metals must circulate. (See §9and § 210.)v. Schröder, Fürstl. Schatz- und Rentkammer, III f., considers new copper coins as an increase of the national wealth, but not other copper which is merely a commercial commodity. He frequently calls money, thependulum commercii, and expresses ideas concerning it as enthusiastic as they are obscure (p. 86.)Horneck, in his Oesterreich über Alles wenn es will, 1864, calls gold and silver“our best blood, the very marrow of our strength,”and“the two most indispensable universal instruments of human activity and existence.”(p. 188.)Th. Mun, England's Treasure by forraign Trade, 1664, (ch. 2) considers cash-money and resources as synonymous in every way. Only, he says (ch. 4) that it is sometimes advisable to allow one's money to remain in foreign countries, and to use bills of exchange, banks etc., at home, as a substitute.F. Gee, Trade and Commerce of Gr. Britain, edition of 1738, laments the“stiff-necked folly of those who think money a commodity like any other.”It is one of the most common demands of the adherents of the Mercantile System that the home mines of gold and silver should be worked at no matter what sacrifice, since the money employed in working them continues to remain in the country and the newly coined precious metal is clear gain. CompareSchröder, loc. cit. 109 ff., 181.Horneck, loc. cit. 173.Broggia, Della Monete, 1743, cap. 33;v. Fusti, Staatswirthschaft, 1755, I, 246:Forbonnais, Finances de France, 1758, I, 148.Ulloa, Noticias Americanas, 1772, ch. 12. We seldom meet with the correct view on this subject in the seventeenth century.Sully, of whom Henry IV. said that he never found anything to be possessed of beauty which cost double its real value, had it at times. (Economies royales, LXXIII.) So hadv. Seckendorff, Teutscher Fürstenstaat, 1655, 5th edition.

It is in accordance with the usual course of human development that the exaggerations of the Mercantile System led to a reaction characterized by an exaggeration in the opposite direction. EvenDavanzati, Sulle Monete, 1588, traces the value of money back to human convention and refuses to find it in nature. A natural calf, he thinks, ispiù nobilethan a golden one; although he elsewhere expresses his admiration of the precious metals, calls themcagioni seconde della vita beata, and lauds them because they procure ustutt'essi beni(20, 21, Cust.)Montanari(ob., 1687) demonstrates from the use of leather money etc., that the authority of the state is the only power which gives money its character as money. (Della Moneta, 35.)Davenant(ob., 1714) carries his inclination to call money“the servant of trade, measure of trade,”so far as to compare it to a ticket or counter. (Works, I, 355, 444.) Strongly asLaw, himself, opposes the convention theory (Trade and Money, ch. I; Sur l' Usage des Monnaies, 1720, p. 1.), his discipleDutot, in his Réflexions polit. sur le Commerce et les Finances, 1738, 905, éd. Daire, contrasts not only paper money but also gold and silver as representative wealth, with real wealth.Berkeley, Querist, 1735, teaches that the real notion of money is not that of a“commodity, standard, measure, pledge, but [No. 23] ticket or counter, entitling to power and fitted to record and transfer such power.”(441, 475.) Even if the names,livre, shilling etc., remain, and the metal is dropped, every article may still as well as before be counted and sold, industry promoted and the course of commerce preserved. (p. 440.) According toMontesquieu, Esprit des Lois, XXI, 22, gold and silver are arichesse de fiction ou de signe. Compare Lettres persanes, II, 18.Benjamin Franklinalso maintains that the value of gold, for instance, is principally a credit-value. Remarks relative to the American Paper-Money, 1765, Works, II, Sparks' edition.Forbonnais, Finances de France, I, 86 f., calls money, simply a means to put commodities, which alone have value originally, in circulation. Hence it is, in itself, a matter of indifference whether, for a given quantity of coin, a person gives one thaler, or ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a distinction betweenrichesses naturelles(raw material),artificielles(manufactured products), andrichessesde convention (money.)von Schlözer, Aufangsgründe, 1805, 100, 138, calls money something imagined; andTh. Smith, Essay on the Theory of Money and Exchange, 1807, asserts, that true money is only an ideal measure of value, of which coins in turn are only the representatives. Compare, however, Edinb. Review, Oct., 1808.Oppenheim, Die Natur des Geldes, 1855, grants that in the beginnings of trade, money possessed the character of a commodity; but says that as soon as the services of circulation of the money-commodity prevailed over its services in consumption, it lost all its importance for the latter purpose, and that all relations dependent thereon ceased. At present, he claims money is only the representative of commodities, but no commodity itself. See, on the other hand,Roscher'scritical analysis in the Literarisches Centralblatt, 1855, December.

The true doctrine was advocated in a classic form byNicolaus Oresmius(ob. 1382). See his Tractatus de Origine et Jure nec non et Mutationibus Monetarum, newly edited byWolowski: Paris, 1864. SeeRoscher'sessay in the Comptes rendus of the Académie des Sciences morales et politiques, vol. 62, 435 ff. Based on the latter we haveGabr. Biel(ob. 1495), De Monetarum Potestate simul et Utilitate, 1542, andG. Agricola, De Re metallica, 1556, I, 4 ff. This true doctrine was acclimated earliest in England and Holland, and before the mercantile system invaded them. CompareHobbes, Leviathan, 24, in which theconcoctio bonorumis described by means of money, and the full and clear chapter 12 ofSalmasius, De Usuris (1638), who, among other things, shows how Midas, who turned everything into bread, died of thirst.Pettyshows very clearly that national wealth does not consist exclusively nor mainly in money. Every country, he says, needs a certain quantity of money to carry on trade. It would be a waste to increase the former, the latter remaining the same. But the precious metals, by reason of their durability and universally recognized value, possess the character of wealth in a higher degree than other commodities.

On the whole, the use of money in a nation is like the use of fat in the individual. (Quantulumcunque concerning Money, 1682.) CompareRoscher, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.DavanzatiandHobbeshad compared it to the blood, as has recentlySchmitthenner, Staatswissenschaften, 1839, I, 459.Northcalls money a commodity of which there may be an excess as well as a want. (Discourse on Trade, preface and postscript.) CompareLocke, Considerations on the Lowering of Interest, 1691, Works II, 13 ff., 19.Galiani, 1750, Della Moneta, IV, holds a very happy middle place between the alchymists and the philosophic contemners of gold. See, further,Quesnay, éd. Daire, 64, 75 ff.Turgot, Sur la Formation des Richesses, § 30 ff, had many clear views on this subject.Verri, Meditazioni, 1771, II, 1, calls money the universally current commodity. The expressions, measure of value, pledge, representative of all commodities might be true also of all other wares. It cannot, however, be denied that most modern political economists have not borne sufficiently in mind the peculiarities which distinguish money from all other commodities, as is apparent from the doctrine of the balance of trade prevalent in Hume's and Adam Smith's time. To this extent, therefore, the semi-mercantilistic reaction instituted byGanilh, Théorie de l'Economie politique, 2822, II, 380 ff., 426;St. Chamans, N. Essai sur la Richesse des Nations, 1824, ch. 3; andColton, Public Economy for the United States, 1849, 203 ff., who bring into relief the difference between“money as the subject”and“money as the instrument of trade,”was not wholly unfounded.Ad. Müllerexaggerates a correct thought, and causes it to degenerate into a species of mystic pleasantry, when he calls every individual in the state and every commodity that possesses value, in exchange or a social character, money.

The highest object of the state is to develop this money-character more and more. (Elemente der Staatskunst, II, 194, 199.) The statesman, he says, should be money. (III, 206.) A very valuable monograph on this subject isM. Chevalier'sDe la Monnaie, 1850, constituting the third volume of his Cours d'Economie polititique.Knies, Geld und Credit, I, 1873, is here most thorough and acute, especially in keeping separate, by well defined lines of demarcation, the five different functions of money: measure of value (by proper division into parts: price-measure), instrument of exchange, means of transportation of values, and means of storing up and preserving values.

Kniesshows how the making of money legal tender by the state, although of only secondary importance, is by no means an irrelevant matter, since persons must then have it, even if they do not want it for purposes of use or exchange, to discharge their liabilities thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)

In all these cases, barter-economy (Naturalwirthschaft) meets with greater and greater difficulties as civilization advances. How, for instance, could 50 days annually of socage-service or labor be redeemed by the achievement at one time of 1,000 days of socage-service or labor? The rich man requires money principally as a means of payment, the poor man as a medium of exchange. The requirement or need of a people of media of payment is much more susceptible of extension or contraction, than that of media of exchange, made especially so by the intervention of claim-rights instead of money.(Knies, loc. cit, 200 ff.)Ravit, Beitr. z. Lehre vom Gelde, emphasizes this feature of money altogether too much after the manner of a jurist. But he is entirely right in adopting the exclusion of therei vindicatioagainst the honest possessor as necessary to the completion of the idea of money.

The contrast between barter-economy and money-economy is of great and fundamental importance. It repeats itself with so much regularity in the history of every highly developed nation, that political economists gifted with perception for the historical, could not possibly overlook it. Thus,Aristotle, for instance, establishes with the utmost care and accuracy the difference between οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and artificial economy, corresponding to the difference between value in use and value in exchange. (Polit., I, 3, Schn.) SimilarlyD. Hume, who allows a period of luxury, culture, industry, of trade and manufactures, of freedom and circulation of money, to be preceded by one in which the feeling of wants is not awakened, in which coarseness and idleness prevail, one in which agriculture is alone pursued, and monetary economy and freedom decline, and trade by barter obtains. (Discourses, passim, especially On Interest and on Money.) A similar contrast we find frequently, and as one of his fundamental thoughts, inJ. Steuart.

As to how the transition from barter-economy to monetary-economy is generally effected, seeF. G. Hoffmann, Lehre vom Gelde, 1838, 176 ff. In the Tyrol, as late as 1820, the greater portion of purely mechanical work, such as that of the smith, the carpenter, and the washerwoman, were purely feudal duties. On the other hand, payment in money was the rule, in the beginning of the fourteenth century. (F. Beidermann, Technische Bildung in Oesterreich, 3.) Yet, for a long time after, the functions of a measure of value were performed by pieces of land, and those of an instrument of exchange by cattle and natural products. (Arnold, Gesch. des Eigenth., 207.) In France, money-economy, i.e., trade by money, had grown to importance earlier. (Nitsch., Ministerialität und Bürgerthum, im 11. und 12. Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated the rent of land in“cauldrons of victuals.”(Moryson, Itinerary, 1617, III, 155.) In ancient Italy, during the first three centuries of Rome, there was, with the exception of the Greek colonies, only trade by barter.Mommsen, Römische Gesch., I, 293, shows that the oldest ases were not money in the higher sense of the word, but belonged rather to the stage of barter-economy. On the other hand, we find in the time of the classic jurists, much as slavery had limited the sphere of action of money, the principle:pecuniæ nomine non solum numerata pecunia, sed omnes res, tam soli quam mobiles, et tam corpora quam jura continentur. (L. 222, Digest L. 16; compare 4, 5, 178.) Similarly inCicero, Top. 6. De Invent, II, 21. De Legg, II, 19, 21; III, 3. CompareDionys. Hal., N.R. IV, 15.

The use of thecauris(Cypræa moneta) in India this side and beyond the Ganges, in upper Asia, and in southern Africa depends on their employment for purposes of ornament, on their greater uniformity, and on the rarity of copper which would otherwise be better suited to purposes of change. In Calcutta, 1280caurisare equivalent to about half a shilling. (McCulloch.) CompareK. Ritter, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III, 233, 739; IV, 53, 420;Salin, III, 62;Botz, in the Tübinger Ztschr. Similarly among the fishing population of Northwestern America. (Stein-Wappäus, Handbuch I, 352.) Salt as money on the Chinese-Birman boundary (Marco Polo, 38), but especially in the interior of Africa, where nature does not at all produce it, but into which it is brought by caravans from the deserts, where salt is found in great quantities.M. Polo, Travels, 305, found the current price of a salt-tablet, two and a half feet long, one foot, two inches broad, and two inches thick, to be equal to the value of two pounds sterling among the Mandingos. In Abyssinia, the salt-bars are generally six inches long, three inches broad, one and a half inches thick, and they are bound with an iron ring to protect them against fracture. Sixty of them are worth one thaler. (Ausland, 1846, No. 35.) Slaves used as money:Barth, Reise, III, 338, 344. Tea-blocks in upper Asia and Siberia; and they are given by the Chinese to the Mongols as pay for troops. (Ritter, Asien, III, 252,) In Keachta, a tea-block is equal in price to one paper ruble. (Ausland, 1846, No. 20.Timkowski, Reise nach China, 143.) Date-money in the Sivah oasis. (Hornemann, Reise, 21.) Also in the Persian date-country, where, formerly, the lowest silver piece of money was coined in the form of a date (Ritter, Asien, VIII, 752, 819.)

The ancient Mexicans used as money cocoa-nuts, in bags of 24,000 pieces, cotton-stuffs, small pieces of copper, and gold dust in quills. (Humboldt, N. Espagne, IV, 11.) Cocoa-beans are still used as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes weighing one pound are used. (Smyth, Journey from Lima to Para, 1836.) Among the ancient inhabitants of Rügen, linen (Helmold, I, 39); and still among the Icelanders, the so-calledVadhmâl. During the middle ages, 120 ells ofVadhmâlwere equal in value to one milch cow or six milch sheep, or two and a half ounces of silver. (LeoinRaumer'shistor. Taschenbuch, 1835, 515.) That the ancient northern mode of valuation, by theVadhmâland in cows is older than by themarkis shown byWilda, Gesch. des deutschen Strafrechts, I, 331. The cod-fish money used by the Icelanders was, on account of its great commercial importance as an article of export, an advance upon the use of theVadhmâl. Among the Caffirs, besidescauris, mats, javelins, glass corals, but particularly brass rings, are used as money. From three to four hundred of these rings are strung together, and two such strings are equal in value to one cow. (Klemm, Kulturgeschichte, III, 308, 320 f.) Ivory used as money in the neighborhood of the Portuguese colonies in Africa. (Martius, Reise, II, 670.) In Logone,Denham(1822) ff., had met with pieces of iron as a medium of circulation; but on the other hand,Barth(1849), with small strips of cotton from 2 to 3 inches in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.) In colonies, money of this nature is continued for a long time. Thus cod-fish used in Newfoundland, sugar in the English West Indies (Adam Smith, I, ch. 4), tobacco in Maryland and Virginia. (Douglas, V, 2, 389;Ebeling, V, 435 ff.) The last was related to the inspection and storage of the tobacco intended for exportation. Payment was made in orders on the stored and inspected tobacco, even as late as the end of the eighteenth century. In 1618, the forced circulation of tobacco was decreed in Virginia, and under severe penalties. (Gouge, History of Paper-Money and Banking in the United States, ch. 1.)

Engel, at the usual tariff for land and railroad freight (10 and 5pfennigsper mile and hundredths of a mile) estimates the enhancement of the price of the following commodities, for one mile of transportation of a custom-hundred-weight (Zollcentner) at the following percentage of their average value:

Gold, value 47610 GermanReichsthalerper cwt., 0.000007 by land, 0.0000035 by railroad.Silver, value 3000, 0.00111 by land, 0.00055 by railroad.Cotton, value 45, 0.074 by land, 0.037 by railroad.Tin, value 24, 0.1389 by land, 0.0694 by railroad.Lead, value 8, 0.416 by land, 0.208 by railroad.Iron, value 2.5, 1.333 by land, 0.666 by railroad.Rye, value 2, 1.666 by land, 0.833 by railroad.Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.Coal, value 0.12, 27.777 by land, 13.888 by railroad.

Their great specific gravity, also, makes the precious metals easy of transportation. ThusCazeaucalculates that a given value of gold is 17,222 times as easy to transport as the same value in wheat. But as, where the weight is the same, the labor of transportation is inversely as the volume, this number must be multiplied by 26, and we therefore have 447,772 times. In the case of silver, the relation to wheat is as 1:15,554. Concerning copper, seeStorch, Handbuch 1, 488.Chevalier, Cours, III, 17 ff.

Davanzati, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that all terrestrial things which serve to satisfy the wants of men are, by virtue of agreement, equal in value to all the gold, silver and copper; and that the parts comport themselves as the whole. The price of a commodity is based on this, that men find in it as much of theirbeatitudineas is afforded them by a given quantum of gold etc. Similarly,Montanari, who adds as a limitation the quantity of moneyspendibile in commercio. (Della Moneta, 45, 64, Cust.) The same opinion leadsLocketo the singular conclusion, that, as there is now in the world, ten times as much silver as there was previous to the discovery of America, each single piece of silver, separately considered, and taken in relation to such commodities as have not varied, is worth only one-tenth of what it was then.Locke, here, starts out with the gross assumption, shared even byGanilh, Théorie, II, 386 ff., that in the case of money the demand is always, relatively speaking, equally strong and just as great as the supply, or as the amount in the market. (Works, II, 23 ff.) Further,Montesquieu, Esprit des Lois, XXII, 7, 8. Per contra, however, seeMontesquieu, ibid. XXII, 5, 6, andHume, On Money and on the Balance of Commerce, Essays II, 1752.

Hume knew perfectly well, that only circulating money and circulating commodities operated on price, but failed to take the rapidity of circulation into account. Similarly,Forbonnais, Eléments du Commerce, II, 212; evenCanard, Principes, ch. 6;Fichte, Geschloss. Handelstaat, 93 ff., andStein, Lehrbuch, 58. Contested byLaw, Trade and Money considered, 140, a work directed especially against the Mercantilistic essay, Britannia languens; 1680, byMélon, Essai politique sur le Commerce, ch. 22;Genovesi, Economia civile, 1764, II, 1, 15;Steuart, Principles, II, ch. 28;Verri, Meditazioni, XVII, 3 ff.;Büsch, Gedlumlauf, II, 40. The simple taking of an inventory of most private resources which possess so much greater value in other commodities than in money is enough to demonstrate the error ofDavanzati'sdoctrine. Thus, in France, in Necker's time, the cash money in the kingdom was estimated at 2,200,000,000 livres, and the average value of the wheat crop alone at 1,000,000,000.Necker, Législation et Commerce des Grains, 1776, I, 215. Recently,Michel Chevalier, estimated the amount of money in France at from 3-½ to 4 milliards, while the official estimate of its immovable property alone was over 83 milliards.

It is scarcely possible to determine exactly the amount of money in a country; for the reason that, outside of the suppositions of bankers etc., there is no authority which can be safely relied on, unless it be the reports concerning the coinage, and of the emission of paper money. The information, no less necessary, to be derived from the statistics of the importation and exportation of money, the melting down of coin by gold smelters etc., can never be exactly obtained. In England, at the end of the sixteenth century, the circulating medium was estimated at £4,000,000 (Hume, History of England, ch. 44, App.); under Charles II., at £6,000,000, when the population was 6,000,000. (Petty, Several Essays, 179.) About 1711,Davenant, New Dialogues, 11 ff., mentions £12,000,000 as the amount; andAnderson, Origin of Commerce, a., 1659, £16,000,000 in 1762. The circulation of gold, shortly before 1797, was estimated byRoseat, at least, £40,000,000; by LordLiverpool, at £30,000,000; byTooke, at only £22,500,000. (History of Prices, V, 130 ff.)Moreau de Jonnés, 1837, assumed £43,500,000 (Statistique, I, 329), andHelferich(Schwankungen der edlen Met., 1843, 147), £45,000,000.Sir Robert Peel, estimated the amount in 1845 at £59,000,000, to which was to be added an average of £28,000,000 in bank notes, after deduction made of the metallic reserve. According toJevons, the amount of British money is now £80,000,000 in gold, £14,000,000 in silver, £1,000,000 in copper; the sum total, including bullion and bank notes, after the deduction of their metallic representatives, £134,000,000. (Economist, December, 1868, July, 1869.) In France,Vauban, Dîme royale, 104 (Daire), estimated the cash money at about 500,000,000 livres, over 750,000,000 francs, with whichVoltaire, Siècle de Louis, XIV, ch. 30, agrees so far as the year 1683 is concerned. In 1730,Voltaire, assumes the amount to be 1,200,000,000 of the coins of that time.Necker, Administration des Finances, III, 66, estimated it, in 1784, at 2,200,000,000 livres;Mollien, about 1806, at 2,300,000,000. The valuations in Louis Philippe's time varied from 2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13, 1847), and 4,000,000,000. (Blanqui.) The valuations of 1870 were, according toWolowski, 4 milliards; and toBonnet, from 5 to 6 milliards. CompareWolowski, L'Or et l'Argent, 383 ff., Euquête, 42. The German Zollverein is said to have had, at the beginning of 1870 (Soetbeer) 480,000,000 or 520,000,000 thalers (Weibezahn) cash money.

In Wirtemberg,Memminger, 1840, estimated the resources of the country at 1,600,000,000 guldens, of which 36,000,000 were cash; and the yearly gross income at 179,000,000 guldens; so that the money was 20 per cent. of the latter and 2¼ per cent. of the former. The annual sales = 226,000,000. Therefore the coin currency must have circulated on an average between six and seven times in a year. In the electorate of Hesse, there wereper capita4 thalers, 18 sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers, paper-money. (B. Hildebrand, Statist. Mitth., 1853, 185.) The amount of money in Naples, in 1840, was estimated at 42,000,000 ducats. (Scialoja.) It has been estimated that, in 1830, Spain possessed 1,725,000,000 francs. (Barrego von Rottenkamp, 330.)

This explains the high price of gold in Farther Asia, which was formerly separated from America, the principal source of supply of the precious metals, by a journey around the earth, the then usual course of the world's trade.

The precious metals are generally higher in country places than in large cities, and in the interior than on the sea-coast. Since the public highways etc. in Germany have been so much improved, the difference in the value of money in upper and lower Germany has almost disappeared. (Rau, in the Archiv der polit. Oek., III, 338.)

The first clear germ of this doctrine, which is one of the most important theoretical principles of international-trade politics, is to be found inDavid Hume, On Interest;Cantillon, Nature du Commerce, 226, 369 ff.Ricardo, Principles, ch. 7.“Gold and silver having been chosen for the general medium of circulation, they are, by the competition of commerce, distributed in such proportions amongst the different countries of the world, as to accommodate themselves to the natural traffic which would take place if no such metals existed, and the trade between countries were purely a trade of barter.”Rebenius, Oeff. Credit, I, 29 ff. Still further developed, especially byJohn Stuart Mill, Elements, 1821, III, 4, 13 f.;Torrens, The Budget, 1844.John Stuart Mill, Essays on some unsettled Principles of Political Economy, 1844, No. 1, and Principles, III, ch. 19, § 3, 5th ed.:“The opening of a new branch of export trade from England; an increase in the foreign demand for English products, either by the natural course of events or by the abrogation of duties; a check to the demand in England for foreign commodities, by the laying on of import duties in England, or of export duties elsewhere; these and all other events of similar tendency, should make the imports of England, bullion and other things taken together, no longer an equivalent for the exports; and the countries which take her exports would be obliged to offer their commodities, and bullion among the rest, on cheaper terms, in order to re-establish the equation of demand; and thus England would obtain money cheaper, and would acquire a generally higher range of prices.”

Obscurely surmised byBeccaria, E.P., 3, 18, and even byGaliani, Della Moneta, II, 2.Senior'sadmirable work, Three Lectures on the Cost of Obtaining Money, 1830, follows up the thought that every country obtains indigenous and foreign products at a cost which grows smaller in the same proportion as the productiveness of its people's labor is large. This would, certainly, explain why it is that perhaps one hundred English days' work in cotton manufactures will exchange against as much silver as is produced by two hundred days' work in Mexican mines and foundries. This would not, by any means, produce a lowering of the price of the precious metals relatively to other English commodities, but the influence would be felt equally by all the products of English national industry.

Most countries go through these successive periods in their corn trade: in the first, exportation preponderates; in the second, there is an equilibrium; in the third, importation preponderates. (M. Chevalier, III, 74 ff.) CompareTacit., Ann., XII, 43. Omitting the two dearest and the two cheapest years, the Prussian provinces were circumstanced as follows:

In The Whole Kingdom, the price of Rye, 1816 to 1837, was 40. silver groschens. The population per square mile, 2,776In Prussia, 32.2 silver groschens, and 1,827In Posen, 34.3 silver groschens, and 2,180In Brandeburg, Pomerania, 38.4 silver groschens, and 2,093In Saxony, 40.3 silver groschens, and 2,366In Silesia, 38.0 silver groschens, and 3,612In Westphalia, 47.7 silver groschens, and 3,600In Rhine Province, 49.4 silver groschens, and 5,078

Rau, Lehrbuch, I, § 183. As to when it may be assumed that the price of corn has remained unchanged, seeHermann, loc. cit., 125 ff.

In Buenos Ayres, in the nineteenth century, beggars on horseback were to be seen. (Robertson, Letters on South America, II, 294.) In Krasnojarsk, in 1770, 1-½ rubles was the price of an ox, 1 ruble of a cow, from 2 to 3 of a horse, from O.3 to O.5 of a sheep; O.15 of a deer. (Pallas, Sibirische Reise, III, 5, II 12.) According to the Tables of Prices inSir F. M. Eden, State of the Poor, Append. I, andRogers, History of Agriculture and Prices (1866), I, 245, 361, the following prices obtained in England;

(On an average.)

in 1125-26, one ox, 1 shilling; one quarter of wheat, 20 shillings;in 1260-1400, one ox, 13 shillings 1-¼d; one quarter of wheat, 5 shillings 10-¾d;in 1406, one ox, 9-½ shillings; one quarter of wheat, 4-½ shillings;in 1463, one ox, 10-20 shillings; one quarter of wheat, 1-⅔-4-⅔ shillings.

CompareHume, History of England, a. 1327. Under Henry VIII. veal, beef, mutton and pork were food for the poor in England, and cost on an average 1-½d per pound; while wheat cost from 7 to 8 shillings a quarter. (24 Henry VII, c. 3.Price, Observations, II, 148 f.) The same appears from the“reasonable prices”which Charles I, in 1663, had established by sworn juries viz.: that the different kinds of meat were much cheaper comparatively than corn in our days.(Rymer, Foedera, XIX, 511.Anderson, Origin of Commerce, a. 1633.) In many places in the highlands of Scotland, in the middle of the seventeenth century, one pound of oat-bread cost as much or more than one pound of the best meat. The union of Scotland with more highly civilized England soon changed the relation, so that inAdam Smith'stime, good meat, in nearly all parts of Great Britain was worth from 2 to 4 times as much as the same weight of wheat bread. (Wealth of Nations, I, ch. 11, 1.) The Thomas Hospital in London paid, on an average, for good beef per stone weight:

1701-1710: 1s. 7.9d.1764-1773: 1s. 3.7d.1794-1803: 1s. 5.d.1804-1821: 1s. 10.9d.1822-1842: 1s. 1.5d.

(Porter, Progress of the Nation, III, 112.) Among the most certain proofs of the high degree of economic civilization attained in upper Italy about the close of the medieval times is the fact, that the price of cattle, compared with that of wheat in the thirteenth and fourteenth centuries, varies very little from what it is to-day. (Cibrario, Economia politica del medio Evo, III, 335-383.) CompareRau, Lehrbuch I, § 185. In Athens, the cost of amedimnosof wheat was as great as that of a sheep in Solon's time. In the age of Demosthenes, it cost only half as much. (Böckh, Staatshaushalt der Athener, I, 107, 132.) It is obvious, however, that the price of meat compared with that of corn, was lowered by the great extension of the artificial cultivation of meadows; for, when the former has reached its maximum, it becomes a great spur to the promotion of the latter. Thus, in England, the price of meat, at the beginning of the sixteenth century, was on an average, higher than inAdam Smith'stime. (loc. cit.) To the same cause is to be ascribed the state of things in Prussia mentioned byv. Podewils, Wirth schaftserfahrungen, II, 15.

As a common basis for such calculations, the following may be accepted. It is plain that meadows, pasturages and forage-fields must yield as much in meat, as corn-fields of the same dimensions of equal goodness, and situated as favorably, in corn. According toBlock, a Prussian acre (Morgen) of the best quality, used as a meadow, produces a hay-value equal to 1,000 pounds, a clover-value equal to 2,420; as a vegetable field, a beet or potato-value equal to 6,050-6,930 pounds,v. Lengerke'sestimate is that 110 pounds of cattle-fodder expressed in terms of hay, produces on an average 40 pounds of milk, and from 3-½ to 4 pounds of meat. This would, at most, give 36, 88 and 220-252 pounds of meat. The yield of wheat,v. Lengerkeestimates, on the best soil, and on an average, at 14 Prussianscheffels(at 80 pounds, i.e. 1,120 pounds) yearly per acre (Morgen). The three periods in the history of the prices of cattle were clearly recognized byThaer, Landw. Gewerblehre, 1815, 100.

Thus Wolff's experiments made at Möckern have shown that in the case of sheep fed with hay, the wool becomes much heavier and the flesh leaner than those of sheep fed with a more concentrated food. While it is estimated in England, at the present time, that the wool of South-Down sheep is worth scarcely one-tenth what their flesh is (Jacob, On Corn Trade, 166), mutton, from the year 1260 to 1400, was, on an average, worth 17 pence; and this even at a time when prices were gradually rising; but the wool of one animal (1 lb., 7-¾ ounces), 5-¼ pence. (Rogers, I, 362, 395.) Even under Anglo-Saxon kings the fleece was worth 40 per cent. of the value of the whole sheep, (David Hume.) And soW. Macann, Two Thousand Miles Ride through the Argentine Provinces, 1853, I, 151, says that in the interior of Buenos Ayres, he purchased 8,000 sheep at 18 pence a dozen, and after a march of 200 English miles, sold the skins for sixty pence a dozen. In Goya, formerly, a live horse cost 3 pence, its skin on the coast 12 pence; and the slaughtering of the beast cost 3 pence, the removal and cleaning of the skin 3 pence; and 3 pence were paid for transportation. (Robertson.)

In Ireland, in 1763, it not unfrequently happened that the skin and tallow of an ox cost as much in a commercial city as the whole ox had cost in the nearest market town. (Temple, Works III, 13.) In England, from 1260 to 1400, the average price of a whole cow was 9s. 9d.; of the hide 1s. 8d., and cows were cheapest in the first decade, i.e., 6s. 2d., and the hides dearer than they were generally afterwards, i.e., by from 1-9-¼d. (Rogers, I, 361, 451.) In Saxony, according toEngel(1853), the average price of horned cattle was about 46 thalers; of their hide, 4 thalers and 21 silver groschens. Russia exported, 1842-1847, 72,636,166 silver rubles worth of tallow, 1,832,137 silver rubles worth of horse hair, 10,811,735 worth of bristles (Borsten), 7,387,140 of uncured skins, 36,159,452 of sheep's wool, but flesh-meat only to the amount of 370,362 rubles, and entire animals to the value of 6,853,241 rubles. (P. Storch, Der Bauernstand Russlands, 289 ff.) Tallow is there ten times dearer than the same volume of wheat. (Steinhaus, Russlands industrielle und commercielle Verhältnisse, 294 ff.); while in Saxony, according toEngel(1821), a pound of wheat cost on an average 7.8pfennigs, and a pound of tallow 30p.However, Russia's recent progress in civilization has had for effect: that the exportation of tallow (1833 = 4-½ millionpuds; 1869 = 2-¼ mill.) has greatly fallen off; while that of butter and live stock has increased. (v. Lengefeld, R. im 19. Jahrh., 220 ff.)

In England, during the fourteenth century, a pound of meat cost, on an average, ¼d.; of lard, from 1-½ to 2. (Rogers, I, 411.) On the other hand, from 1848 to 1856, the average January price of beef from America was 110 shillings; of tallow from St. Petersburg, 48s. 11d. per cwt. (Newmarch.) And so, in the time ofPallas, the Cossacks chased the deer of their steppes only for the sake of its skin and horns. (Pallas, Reise, III, 524.) While the Greeks got horn from Macedonia and Thrace (Herodot., VII, 156), it is a striking proof of high civilization that at Athens (?), about the time of the hundredth Olympiad, an ox-hide was worth only 3 drachmas, and the whole ox 77 drachmas. (Böckh, Staatshaushalt, I, 105 ff.)

As the ox is primarily serviceable as an object of food and an instrument of labor, and the sheep on the other hand, only an instrument to produce wool, it is easy to understand why, with the further advance of civilization, the price of oxen rises comparatively much more than the price of sheep. In Athens, during the time of Solon, an ox was equal in value to five sheep. (Plutarch, Solon, 23.) So also in countries with a low civilization in the time of Polybius. (Polyb., XXXIV, 8;Gell., XI, 1.) Why the same was the case in Rome at the beginning of the Republic? (Plut., Popl., 11). In England the proportion between the price of an ox and that of a sheep was,

in 927 as 6:1 (Henry.)in 1125 as 3:1in 1182 as 6.3:1in 1197 as 9:1in 1229 as 8:1 (Eden.)in 1260-1492 (av.) as 9.2:1 (Rog.)in 1497 as 10:1in 1500 as 11.6:1in 1511 as 8:1in 1528 as 10:1in 1529 as 12.8:1in 1531 as 9.4:1in 1551 as 10.6:1in 1597 as 8.2:1 (Eden.)

At present the proportion may be from 10 to 20:1. In Saxony, it is as 48 thalers to 5.27. (Engel.)

During the middle ages, pork constituted the most usual animal food even of the best classes. (Büsching, Ritterzeit und Ritterwesen, I, 164.) Immense importance attached to pork by theLex Salica. (Tit., II, XIV; Emendatt. Caroli Magni, II, 1 ff.) The archbishop of Cologne used every day 24 large and 8 medium-sized hogs, and four more on the three great festivals. The abbot of Corvey used daily five fat and one lean hog, besides two young ones. (Kindlingen, Münsterische Beitr., Urkunden, 147, 126.) In 1345, at the court of Dauphiny, there were used annually for 30 persons, 30 salt and 52 fresh hogs; whereas, in modern Paris, with 800,000 inhabitants, only 32,000 hogs are consumed yearly. (Roquefort, De la Vie privée des Fr., I, 310 f.) Compare herewith the place occupied by the swine-herds in the Odyssey in Greece's age of chivalry. In England, in the time of William I., woods were taxed according to the number of hogs they might feed. At present, there is an enormous production of hogs in Servia, which, in many places, constitutes the only source of ready money to the agricultural population.

And about the end of the eighteenth century, it is said that Servia received from Austria alone 1,300,000 florins yearly for hogs. (Ranke, Serb. Revolution, 95.) In 1864, Servia's total exports amounted to 62,500,000 piasters, of which 28,162,260 were for hogs, 7,043,000 for wool, 7,662,000 for the skins of sheep and deer, 5,732,000 for cattle, 1,222,400 for tallow. (Kanitz, Serbien, 598 ff.) Great production of hogs also in the Moldau and in Wallachia, in the United States and Mexico, where, instead of butter, only lard and suet are used; also in Lombardy, the Prussian Rhine province, Belgium, the English milk-producing districts, Gloucester, Wilt, Dumfries, Galloway and the districts where agricultural proletarians abound—Ireland and Yorkshire. It is a consequence of the same law that, among the South Sea Islanders, the hog was the principal domestic animal, as it still is among the Chinese. Similarly in the whole of Asia, beyond the Ganges (Ritter, Erdkunde, IV, 938, 1101); in semi-barbarous upper Italy in the time ofPolybios(II, 15); in Gall itself, in the time of Augustus. (Strabo, IV, 192, 197.) The America of the ancient Greeks, Sicily, exported hogs, mainly, in the time of Hermippos. (Athen., I, 27.) And even among the Romans, the consumption of pork was much greater than the consumption of beef. (Marquard-Becker, Handbuch, V, 2, 39.)

According toSchuckburg, Philosophical Transactions of 1798, andKraus, Vermischte Schriften, I, tab. I, the prices of the following species of animals rose in England between 1550 and 1795: horses, 904 per cent.; oxen, 896 per cent.; sheep, 876 per cent.; cows, 2050 per cent.; hogs, 1964 per cent.; geese, 300 per cent.; butter rose from 5d. per pound to 11-½d.; beer from 1d. per gallon to 2-¾d.; agricultural day wages from ½s. to 1s. 5-¼d.; wheat 326 per cent. Compare, however, Edinburg Review, III, 246 ff. In Germany also, cows and hogs have increased much more in price than horses and sheep. (Tübinger Ztschr., 1871, 342.)Dutot, Réflexions, 946 ff., éd. Daire, says that the value of the precious metals in France decreased in value between the times of Louis XII. and Louis XV. in the ratio of 3-79/91:1. On the other hand, the prices of different commodities rise in very different degrees:

Fat sheep, from 7 sous to 10 livres.Lean sheep, from 5 sous to 5 livres 10 sous.Hogs, from 10 sous to 25-35 livres.Capons, from 1 sou to 12 sous.Hens, from 1-½ sous to 6 sous.Pigeons, from 1-½ sous to 3 sous.Deer, from 1-½ sous to 15 sous.

Thus, in Thuringia, the average price in silver of corn from the sixteenth century until the period 1848-61 increased in the ratio of from 1 to 3-4; the price of the different kinds of animals, on the other hand, from 1 to 5-10. (Knies, inHildebrand'sJahrbb., 1863, 78.) The price of the different kinds of corn as compared with one another may, however, be modified by many different circumstances. Thus the Capitulare Saxoniæ of 797, c., II, estimated the prices of rye, barley and oats to be to one another as 30:30:15; while the Magdeburg Chamber of 1804 estimated them to be as 17:14:8. In the kingdom of Saxony, in 1841-9, the average prices of wheat, rye, barley and oats stood to one another in the ratio of 144:100:75:47 (Engel); while, in the middle ages, wheat, rye and oats were as 9:6:3 (Gersdorf, Cod. Depl. Sax., II, p. XXXIV); under Prince August, corn, barley and oats were as 24:22:12. Assuming the price of rye to be equal to 100, the cost was:

At Brussels, in the 16th century, wheat 126.7, barley 80, oats 50At Brussels, in the 17th century, wheat 138.8, barley 82.9, oats 51.9At Brussels, in the 18th century, wheat 147, barley 86.7, oats 55.2At Brussels, 1815-1844, wheat 156At Brussels, 1841-1850, wheat 153, barley 82.7, oats 51At Berlin, 1789-1818, wheat 135, barley 74.8, oats 54At Berlin, 1819-1832, wheat 143.5, barley 74.9, oats 52

(Rau, Lehrbuch, I, § 183.) To understand this, it is necessary to bear in mind the relatively great increase of wheat bread, beer made of barley, and horses, as objects of luxury. The unusually low price of oats in North America, as compared with the price of wheat, is dependent on the facility of exporting the latter. In Florence, in the fifteenth century, the price of wheat was 22-⅔, of rye, 12, of barley, 8soldi. (Pagnini, Sopra il giusto Pregio delle Cose, 325.)

The English so called custom-house prices (Zollhauspreise) correspond to the market prices of 1696. If these are assumed = 100, the price

Of steel and iron was, in 1826, 83, in 1831, 56Of coal was, in 1826, 47, in 1831, 45

Between 1835 and 1850, Scotch iron had already become cheaper by one-half (Meidinger, 387), and coal in London by one-third (Porter).

Thus, in England, the price:

Of glass was, in 1826, 387; in 1831, 369 per cent.Of leather was, in 1826, 285; in 1831, 123 per cent.Of silk goods was, in 1826, 158; in 1831, 249 per cent.

of the price of the same articles in 1796. (Rau.) Of 29 chemical products of the Parisian manufacture, the wages of labor is on an average only 7.4 per cent. of the selling price; and, in some cases, only from 1 to 2 per cent. (Chabrol, Richerches Statistiques sur la Ville de Paris, 1821;Hermann, Staatsw. Untersuch., 137.) In Buschtiehrad, between 1670 and 1870, barley rose from 1 to 4.8; hops to 6.52; fire wood to 6.14; the excise to 6.54; but beer only to 2.81; although wages increased ten fold. (Inama Sternegg, Gesch. der Preise im österreich. Ausstellungsbericht von 1873, 43.)

The British East India Company exported gold and silver on an average per annum from:

1711-1720, £434,0001721-1730, 532,0001731-1740, 487,0001741-1750, 631,0001751-1760, 571,0001761-1770, 152,0001771-1780, 43,0001781-1790, 393,0001791-1800, 352,0001801-1807, 852,000

Milburn, Oriental Commerce, 1813, 419. According toM. Chevalier, Introduction aux Rapports de l'Exposition de 1867, the trade of Europe and North America, with India, China, Japan and the Australian islands, amounted in 1800, to only 410 million francs, in 1866, to 4,024 million. Yet, for a time, the largely increased exportation of English manufactures to East India and of East Indian opium to China, had changed the relation so that the exportation of the precious metals from South Asia, by a great deal, more than counterbalanced the imports. On the other hand, between 1853 and 1856 240,000,000 thalers were shipped to India and China from England and the Mediterranean harbors; in 1863 and 1864, even as much as 300 millions, to be, for the most part, buried there. Moreover, the immense quantity of cash money—often as much as from 12 to 15 million in pounds sterling—in the state treasury, and silver ornaments (§§ 44, 123) customary in India, demand a considerable yearly supply to make up for wear.Newmarchspeaks of 400 million pounds sterling which can be maintained in its condition hitherto by a yearly increase of 1 per cent. (History of Prices, VI, 723.) From 1865 to 1869, English steamships carried gold and silver to the East in the following quantities, yearly: 93.9, 66.3, 24.6, 70.2 and 60.4 million thalers, in addition to which almost as much came directly from California. Statist. Journ., 1871, 122 seq.

Compare, for instance, on the early productiveness of the Brazilian gold districts which soon ceased:Spix und Martius, Reise nach Brasilien, I, 262 f., 350.Gardner, Travels in the Interior of Brazil, 1846. On Hispaniola, seeBenzoni, N. Mundo, I, 61, andPeschel, Gesch. der Entdeckungen, 304, 556. Hitherto, gold had been obtained by the usual mining process, only in very few places. As a rule, it has been found in alluvial land not far from the surface. CompareAnsted, The Gold-Seekers' Manual, 1849. These circumstances have made the production of gold important from the first; and they still make it comparatively easy, while it causes little demand for capital but for great skill. As soon, therefore, as the greater part of the country washed for gold has been worked, which does not require a long time, the whole is abandoned, while in the production of silver the great amount of capital fixed in pits, shafts, kilns etc. ties the parties engaged in the enterprise to the spot, and necessitates the continuation of the enterprise. In recent times, however, Australia and California have developed the mining and machine production of gold to a surprising extent. According toLaur, La Production des Métaux précieux en Californie, 1862, 33, and the Journal des Economistes, Nov. 1862, Californian gold-quartz produced, in 1851, on an average, 635 francs per ton; in 1860, only from 80 to 85 francs; but the gold-washing methods have become cheaper in the ratio of 2,500:1. However, the production of the precious metals seems even now to be decreasing. According to the Statist. Journal, 1866, 99, it amounted on an average to:

in 1849-51, gold £23.9 million, silver £15.5 million.in 1852-56, gold 38.7 million, silver 16.1 million.in 1857-59, gold 36.5 million, silver 17.1 million.in 1860-63, gold 33.5 million, silver 18.2 million.in 1864-68, gold 30.0 million, silver 19.5 million.

The number of gold-diggers in Victoria steadily decreased from 125,764 in 1857, to 63,053 in 1867.

While the public, even since 1850, think they have noticed a depreciation in the value of money, there are a great many learned political economists who are by no means prepared to grant it. The principal advocates of this opinion areTooke, andNewmarch, in vol. VI. of the History of Prices (1857). AlsoLavergne, in the Journal des Economistes. And really the enhanced dearness of many kinds of goods up to 1857, might have been accounted for by causes affecting the goods themselves: diminished supply by reason of bad harvests, commercial gluts etc.; increased demand by capitalization on a gigantic scale, speculation, but especially by the elevation of the lower classes etc.

The London wholesale prices were on the 1st day of January, 1869, nearly all lower by 10 per cent. than on the 1st day of July, 1857. Only indigo, cotton and meat had risen. (Hildebrand'sJahrb., 1870, I, 328.) In many instances the enhanced dearness is entirely local, by reason of the greater facilities for transportation in places where prices were already higher. But as new truths are very easily exaggerated by their discoverers, much of Tooke's view concerning these events depends upon a polemic carried too far against the theory of the balance of trade which was customary in the so-called currency school. Compare, in opposition to Tooke,Lavasseur, in the Journal des Economistes, March, 1838, andM. Chevalier, La Baisse probable de l'Or, 1858.Lavasseur, from the difference between the official and real custom-house prices in France, calculates that raw materials in 1856 were on the average 63 per cent., and in 1858, 20 per cent. higher than in 1826; and that manufactured articles were in 1856, just as high, and in 1858, 6 per cent. lower than in 1856. An average made of all commodities showed, in 1856, an enhancement of 30 per cent, and in 1858 of 9 per cent. (Hildebrand'sJahrb., 1864, II, 118.)

In the Hamburg market in 1847-65, 87 articles declined in price, 183 rose in price, and 24 remained about stationary. (Amtl. Statistik von 1887, 18 ff.)Jevonsassumes a general rise in the price of commodities between 1849 and 1869 of about 18 per cent. (Economist, May 8, 1869.) He makes this estimate from the average March prices of 50 of the principal articles. Assuming the average March price of 1849=100, we have, according to him, for the following years, respectively: 101, 103, 101, 116, 130, 125, 129, 132, 118, 120, 124, 123, 124, 123, 122, 121, 128, 118, 120, 119. Previous years showed: 1789=133; 1799=202; 1809=245; 1819=175; 1829=124; 1839=144. (Compare supra, §129, note 1.) The budget of a Swiss teacher's family consisting of five persons has become dearer since 1840 ff., their consumption remaining the same and of only the simplest articles, by 72.5 per cent. (Böhmert, Arbeiterervhältnisse etc., I, 302 ff., 355.) That, however, the depreciation is under-estimated most precisely in England and over-estimated in Germany,Kniesvery well accounts for by the price-leveling effects of the more modern means of communication. (Tübinger Zeitschr., 1858, 280 ff.)

EvenPlato, De Legg., V, 742, was acquainted with money after the Spartan type, intended only for internal trade: νόμισμα ἐπιχώριον, αὐτοῖς μὲν ἔντιμον τοῖς δὲ ἄλλοις ἀνθρώποις ἀδόκιμον. Besides the state kept for foreign trade a supply of the universal Hellenic money, of which in case of need, private individuals could acquire what portion they needed by exchange. When Dionysius I. issued tin instead of silver money, all the Syracusans, although they noticed the forgery, acted in their intercourse with one another as if they considered the coins genuine. (Aristot., Œcon., II, 21,Pollux, IX, 79.) Timotheos behaved more honorably when, pressed by the dearth of money, he gave his troops copper coin tokens, which passed for the time being for their full value in the camp; but which were later to be redeemed at their full value in silver. (Aristot., Œc. II, 22.) ComparePolyæn, Strateg., IV, 10, 2. The iron money which the Klazomenians exchanged with the rich for silver, which bore interest, but which the rich were forced to take, had a longer duration; the silver was used to pay foreign state creditors, the iron money circulated for the time being in the city, and was gradually redeemed. (Aristot., loc. cit, II, 17.)

We are still more forcibly reminded of paper money by the Carthaginian leather money, where any object whatever of the size of a coin was shut up in a leather envelope with the state seal, and then circulated as if it were the coin it purported to be.Mieris, Beschryving der Munstn, 1726, explains the saga of Dido's ox-skin by means of this leather money. Certain it is, however, that the surprise with which the sophistical dialogue, Eryxias, mentions the matter, is a proof how foreign it was to the Greeks. Concerning the Roman plated denarii which were stamped with the silver coins, but which were also accepted by the state treasury, seeMommsen, R. G., I, 405.

The paper money issued by Colbert's successor, Chamillard, soon lost on account of its too great amount, 25 per cent. of its value, spite of the fact that it bore interest, and that ¼ of all payments to private persons had to be made in it. (Forbonnais, Recherches et Considérations, II, 182.) When the people of the United States, in 1775, issued paper money, it did not decline in value up to the end of 1776, so long as the amount did not exceed $20,000,000, as it was considered a matter of honor to take it at par. Afterwards, when the amount issued continued to increase, not even the law that a refusal to accept it, or insisting on taking it below par, should be punished with the loss of the commodity, and that the guilty party should be declared a national enemy, could keep it from declining in value; so that in May, 1871, a dollar in specie was worth $200.5 in paper. CompareFranklin, Works, ed. Sparks, II, 421, VIII, 328, 505.

France, during the Reign of Terror, on the 2d day of April 1793, threatened the claiming of a discount in the taking of assignats with six years' confinement in chains, and on the 1st day of August, on Couthon's motion, with twenty years' confinement. In addition to this, maximum prices for the principal necessities of life were fixed and the exceeding of them was punished by severe penalties; and in France, and still more in the neighboring conquered countries, there were many persons who preferred to take assignats instead of payment rather than permit themselves to be robbed by requisitions. And yet on the 4th of June, 1796, one franc in specie exchanged for 800 francs assignats. CompareBüsch, Geldumlauf, III (§ 58 ff.,d'Ivernois, Etat. des Finances Française, 1796).

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