The Science of Wealth

CHAPTER XIII. - Mercantile Currency.

A substitute for the precious metals; combines reliability with the convenience of paper; not a novelty, 224.— First substitute currency; Bank of Genoa, bills based on full specie; Bank of Amsterdam, 225. — Bank of Hamburg; England needs such a currency, 226. — English finance continually disturbed, and millions of annual loss involved, for a paltry saving; United States still worse, 227.-The change of currency easy to effect; issue of small notes, 228. - Amount of paper money required in United States; legitimate banking profitable, 229.— Needs no legislation; transition easy; some banks would be superseded; banking should be free, but not the manufacture of currency, 230. What of deposits in a mercantile currency? 231.- Would not involve any great risk to currency, 232.

CHAPTER XIV. — The National Currency of the United States. — Differs from the old system; is under national control; ultimate redemption of notes secured, 233. - Legal tender; uniform value through the States; provision made for banks holding "lawful money" with which to redeem, 234. - Last provision frustrated by allowing “balances” to be counted; these banks have no capital to lend, 235.

· Resembles the old system in liability to expand and contract; furnishes a standard of value equally delusive; raises prices and creates speculation; extends credit; increases imports; counteracts protection, and discourages home manufactures; will continue to cause stringency and panic; guaranty of ultimate redemption no security against a “run," 236. — Operations of the new system; where the profit is made, 237. - Quality of the new currency, 238.- Illustrated from an individual bank, 239.-New system better, as more susceptible of reform, 240.

CHAPTER XV.—Evidences of Debt. — Three kinds; book accounts, 240. - Ex parte, and not negotiable; notes; bills of exchange, 241.— Illustrated; exchange, foreign and domestic, 242.- Great saving of expense; indirect exchange, 243. - Foreign exchange illustrated, 244. — Saving calculated; indirect foreign exchange illustrated; trade of United States 1857, 245. - Natural rate of exchange, 246.Exchange the barometer of trade; rate of British exchange explained; value of the pound sterling, 247. - Expense of shipping gold, 248. Rectification of the legal value of pound sterling; are bills of exchange currency? do not pass from hand to hand, 249. Are themselves discharged by currency; are generally on time; not proper tender; if dishonored, do not reduce amount of currency, 250.-Do not affect prices; their scarcity cannot create panic, therefore not currency, 251.

BOOK IV.-DISTRIBUTION.

CHAPTER I. — Divisions of the Subject. — Distribution arises out of divi-
sion of labor, 252. —Labor, physical, mental, and subsidiary, all
receive wages; capital loaned in two forms, one receiving interest, the
other rent, 253. — Government claims a share; we have therefore to
provide for wages, profit, interest, rent, and taxation.

CHAPTER II.-Wages. - Governed by laws of value; vary in different

countries and ages, 254. — Importance of freedom and equality in

securing fair wages; necessary wages, 255.-Wages depend on

business enterprise; distinction between real and nominal wages;

illustrated, 256. — Facts in point, 257.

CHAPTER.III. — Proportionate Rise and Fall of Wages. — Do not rise

so soon or high as commodities generally; reason, no speculative

demand; fall sooner; difficult to ascertain rise or fall of real wages;

unquestionably have a tendency to advance; 1810 compared with

1860, 259. Difference from character of employments; danger;

disgrace, 260.— Unhealthy trades; compensation should be made;

agricultural wages, for this reason, lowest of all, 261.- Education of

the laborer; makes him more efficient, and commands a reward; fru-

gality of the laborer; makes him independent, 262.- Neutralizes

the advantage of the employer; distinction of sex influences wages ;

rate of difference, 263. — Equality of numbers; industrial sphere of

woman closely circumscribed; her products more dispensable; hence

inferiority of compensation, 264. Cannot be increased by mere phil-

anthropic efforts; change must be effected on economic principles;

her occupations must be increased, 265. — Another classification of

wages, paid respectively for physical, mental, moral power, 266.

Gradation of wages on this plan; economical importance and value of

integrity; high rewards, 267.- Objected, confounds moral and eco-

nomical philosophy; answer, they do meet, and this ground is

common to both, 268.

CHAPTER IV. — Labor Combinations.
Labor Combinations. - Laborers have same right

to combine as capitalists; friendly associations of England, 269.-

Their agency; official registration; moral influence, 270. Trades'

unions; lawful, but no coercion may be employed within or without

these unions, 271.-Strikes lawful within the same restrictions, 272.

Do not permanently raise wages; freedom, intelligence, and virtue

must do this, 273. Co-operative associations; account at length by

Professor Fawcett, 274.

The

CHAPTER V.-Profits. — The remuneration of the business man, 279.

Must not be confounded with interest, wages, or rent, 280.

forms may be united; freedom necessary to secure fair profits, 281.

Profits of capital an inaccurate term, 282. Rate of profit tends to

decline, from acceleration of exchanges, increasing competition, and

more rapid intercourse; difference in rate of profits in same commu-

nity, 283.- Rapidity of exchange; its effect on profit illustrated, 284.

Profits large in new countries; Western States of America; prof-

its governed by demand and supply, 285.- Tendency to reduce

profits further discussed; effect on profit of temporary rise of wages

illustrated, 286.- Dividends, how classified? 287.

CHAPTER VI. — Interest.

-Reward of circulating capital; justified by

right of property, 228.- By human wants; interest dependent on

productiveness of labor, 289.- Governed by demand and supply; abo-

lition of British usury laws; usury laws ineffective, 290.- Increase

expense of borrowing, by danger and secrecy of transaction; create

fictitious exchange, 291. Create compulsory deposits; interest

still further influenced by hazard of capital; this depends on honesty

and thrift of a people, and efficiency of laws affecting property;

interest influenced by unsoundness of currency, 292. — Illustrations

from Europe and America; legal rate should be fixed in the absence

of any agreement, 293.

CHAPTER VII.- Rent. Reward of fixed capital; not of great impor-

tance in United States; implies ownership; implies society, 294.

Land the foundation of rent; does not appear in hunter or

shepherd state; begins with agriculture, 295. — Location the first

element; rent would appear though there were enough land for all,

with no difference of quality; illustrated, 296. — Fertility the second

element; illustrated, 297. — Cost of importation, third element;

illustrated from Great Britain; application of capital, fourth element;

Great extent of

not proportionally productive in all cases, 298.

European improvements; land appendages; do not sell for cost, 299.

- Reason, difference between West and East, 300.- Improvements

become gratuitous; city rents generally on level with interest, 301.

CHAPTER VIII.- Wages, Rent, Interest, and Profits, as relatively af-

fected by Currency Inflation.-Not affected in equal degree; wages did

not rise in 1864-5 as prices did, 302. - Rents advanced little, interest

somewhat, but not as high as profits; state of things illustrated, 303.

-The laborer loses; the business man gains, but not so greatly as

supposed; is, however, the only party who gains at all, 304. — Ex-

cept speculators; loss on all fixed incomes, 305. — Facts of the war

hold to a degree in all expansions.

CHAPTER IX. — Principles of Taxation.

Necessity of government; it

receives revenue; by taxation, 306. — Importation in United States;

must be just and equal in a free country, 307. — Government own a

share in every product, has a lien on every article of value; principles

of taxation propounded by Adam Smith; first, equality of contribu-

tion, 308. Explained and illustrated; second, taxation must be

certain and plain, 309. — Third, convenience of payment to be con-

sidered; fourth, economy; how the last, principle may be violated ;

by great machinery of collection, 310. By disturbing industry; by

encouragement to smuggling; by interruptions and vexatious visits;

a fifth principle proposed, taxation of mischievous consumption;

forms of American taxation, 311.- National; State; taxes divided,

as direct and indirect, 312.

CHAPTER X.- National Taxation. - 1. Customs; duties of two kinds,

specific and ad valorem; American policy has fluctuated, 312.

Specific duties unjust; ad valorem create fraud, and so far defeat

revenue, 313. Customs as a mode of taxation; easy and effective;

a tax on consumption without reference to ability, therefore unjust;

not clear and plain to the contributor, 314.— Moreover, as they

raise the value of the home product, government gets only a small

part of what the people pay; illustrated, 315. — Example of taxa-

tion laid on articles not of home production; customs expensive

on account of the machinery, 316. — Additional estimates showing

expense of raising revenue by customs, 317. - Bounties preferable

for protection to customs, 318. - Excise as a mode of taxation; un-

equal, like customs; not so expensive; more vexatious, 319. - Taxes

on disadvantageous consumption; eminently desirable; revenue in

Great Britain thus obtained, 320.— Stamps, cheap, efficient, unequal;

licenses desirable, 321.

CHAPTER XI. National Taxation (continued).—Income tax; only

perfectly just principle; established in Great Britain; in United

States, 322. Should be no exemptions as to persons or amount;

difficulties alleged; people do not know their income; answer, should

know, and will learn; some are dishonest; answer, every year in-

creases difficulty of fraud; should be put on oath, 323. Do not like

to have income known; answer, all are copartners in taxation, and

the contribution of each ought to be known; income deferred must

be estimated, 324. — Taxation of exports reduces power in com-

merce, e.g. wheat, 325.-Effect shown; except where there is a

virtual monopoly of product, 326.— This we have in cotton; universal

demand, 327. — Restricted culture; United States control the pro-

duction; production constantly increasing; price advancing simulta-

neously; yield in United States different years, 328.— Value of crop ;

limited export duty would not curtail the market, 329. — Amount of

revenue yielded; cotton capacity of United States, 330.

CHAPTER XII.- State Taxation. Is direct; increased by rebellion;
method of; false position of poll-tax payers, in regard to appropria-
tions and expenditures, 332. - Income-tax would remove the diffi-
culty; poll-tax unreasonable in itself, but tolerated as part of a
system, 333. — Burden thrown on property; effect on small farmers
unjust and mischievous, 334. - Great disparity of taxation; ad-

vantages which the poll-tax payer derives from government, 335.

Return made for these; effect of State and national system com-

bined; affect each other's injustice, 336. — Apportionment of national

taxation among States considered; cheaper, if the States could

not be relied on; taxation of credits; propriety has been questioned,

337.- Matter discussed; this liability, being known, has entered as

an element into all purchases, 338. — Income-tax would avoid all

injustice; as it is, credit should be taxed; taxation of government

bonds; importance of the question, 339.-Proportion of national

debt to estimated wealth; large amount of income exempted; batter

pay higher interest, 349.- Such exemption diminishes the operation

of frugality; consolidation of national debt; proposition in Congress,