No one, however, will deny that there has been a fall in the

prices of textile fabrics and manufactured goods. That is the

result of a general law of value, and of the tendencies of a

progressive state of industry.(372) The causes of this

acknowledged fall would be at work, no matter whether tariffs

existed or not. It is the result of the general forward march of

improvements, as evidenced in the application of new inventions

and the display of skill and ingenuity in new processes. To say

that it comes because of a tariff, is a complete _non sequitur._

How true this is may be seen by observing that a country like

England, without tariffs, shares in the general fall of prices of

manufactured goods equally with the country which has heavy

customs-duties. The causes must be wider than tariffs, if they are

seen working alike in tariff and non-tariff countries.

But the fact itself can not be gainsaid that protection does raise

the prices of the protected goods in the home market. The

comparison is not to be made between prices as they now are in

this country and as they were twenty or forty years ago also in

this country, for this would show only the general march of

improvements in this country; but a comparison is to be made

between prices in this country to-day and present prices in

foreign countries. Does, for instance, the tariff increase the

price of woolen goods and clothing to every consumer far beyond

what the price would be if the duty on imported woolens were

removed? The very existence of a protecting duty is the answer to

this. If the duty does not raise the price, then why does the

woolen industry wish a continuance of the duties? If goods can be

sold as cheaply here as the foreign goods, why do protectionists

want any duties? The duties are intended to keep foreign goods out

of our markets; and they would be unnecessary if our goods could

be sold as cheaply as the foreign wares.

The facts, however, are at hand to show that the statement of

principle as made above is corroborated by the statistics. In

1883, although average weekly wages in Massachusetts were over 77

per cent higher than in England, the American laborer had to pay

more for the articles entering into his real wages; and to that

extent lost the advantage of his higher reward in this country.

This is to be seen in the following figures,(373) which show, in

percentages, whether prices are higher or lower here than in

England:

Classes of Articles. Higher Percent. Lower Percent.

Groceries 16

Provisions, including meat, 23

eggs, butter, and potatoes

Dry goods (all grades) 13

Boots, shoes, and slippers 62

Clothing 45

And yet, in spite of the high prices, 31 per cent of the

Massachusetts workman’s expenditure represents more comfort and

better home surroundings than is enjoyed by the English workman.

If the American could purchase at English prices, he would have no

less than 37 per cent of a surplus for additional enjoyments

(after making due allowance for the higher rents paid here than in

England). In other words, higher prices cut off the American

laborer from reaping all the superiority in comfort which might be

expected from knowing that he had an advantage over the English

laborer of 77 per cent in the money wages received.

In order that the reader may easily find the arguments of the

protectionists, he is referred to the following books:

Carey’s “Principles of Social Science” (3 vols.). The form of

argument is, briefly, that all industries should be kept going

within the bounds of a country so as to avoid foreign trade. The

change of form into the finished commodity should, he holds, take

place near the spot where the raw materials are produced, so that

not so great a share should go to the mere middle-men, or

transporters.

Bowen’s “Political Economy,” Chap. XX, advocates protection on the

ground that it is needed to secure diversity of industries, and

that it lowers the prices of imported goods.

Sir J. B. Byles’s “Sophisms of Free Trade” is an answer to

Bastiat’s “Sophisms of Protection,” the latter having been

translated into English by Horace White.

Erastus B. Bigelow’s “The Tariff Question.” This is one of the

ablest discussions, from the protectionist point of view, based on

statistical tables and comparisons of the policy of England and

the United States.

Stebbins’s “Protectionists’ Manual” is a brief and handy

statement.

Ellis H. Roberts’s “Government Revenue” is the form into which he

has thrown his lectures at Cornell University (1884) on

protection, and is the latest statement emanating from that side

of the discussion. He goes at length into the history of taxes in

various countries; holds that wages are higher here than in

England because of protection; that our manufactures are more

flourishing than our agriculture, etc.

Frederick List’s “National Economy” is the German statement of

protection, much on Carey’s own grounds.

“The Congressional Globe” contains numerous speeches of members of

Congress on the tariff; and the Iron and Steel Association of

Philadelphia send out pamphlets explaining the protectionist

position.

The free-trade arguments may be found also in W. M. Grosvenor’s

“Does Protection Protect?” He studies the results of the various

tariffs of the United States, and gives many very valuable tables

and collections of statistics bearing upon this question.

W. G. Sumner’s “History of Protection in the United States” is a

very vigorous account of the evils of the various tariffs and the

protective system.

D. A. Wells’s “Reports” as Special Commissioner of the Revenue,

and his numerous pamphlets (see Putnams’ publisher’s catalogue),

are full of facts, and give the results of special study of the

subject as affecting the United States.

A. L. Perry’s “Political Economy” gives a radical free-trade view.

Henry Fawcett’s “Free Trade and Protection” explains the causes

which have retarded the more general adoption of free trade.

J. E. Cairnes’s “Leading Principles of Political Economy” gives

the ablest discussion of the economic principles involved in the

question which has yet been offered to the reader. Moreover,

almost all our systematic writers on political economy (excepting,

perhaps, Bowen and R. E. Thompson) give the system of free

exchange their support on economic grounds.

APPENDIX I. BIBLIOGRAPHIES.

A Brief Bibliography Of The Tariffs Of The United States.

I. _General Works._—Young’s “Special Report on the Customs-Tariff

Legislation of the United States” contains useful extracts from debates of

Congress, and also valuable tables of duties; in the Index, p. cciii,

under “Tariff Act,” will be found references to, and dates of, all acts to

1870. See, also, Sumner’s “History of American Currency,” and his

“Lectures on Protection in the United States”; A. L. Perry’s “Political

Economy,” chap. xiii; Grosvenor’s “Does Protection Protect?” A valuable

study is E. J. James’s “Studien über den Amerikanischen Zoll tariff.” For

different views, see Carey’s “Social Science”; Bolles’s “Financial History

of the United States,” vol. ii, Bk. i, chap. v, Bk. iii, chaps. iii to x;

and Stebbins’s “American Protectionists’ Manual.”

II. _Earlier Periods._—H. C. Adams’s “Taxation in the United States,

1789-1816”; F. W. Taussig’s “Protection to Young Industries”; the works of

Hamilton, Madison, Jefferson, Webster, and Clay; “The Statesman’s Manual”;

and of course the Debates in Congress, etc. See, also, Bristed’s

“Resources of the United States”; Pitkin’s “Statistical View of the

Commerce of the United States”; Seybert’s “Statistical Annals” (1818); and

the “American Almanac.”

III. _Noteworthy Documents._—Hamilton’s Reports: “Report on Manufactures,”

Works, ii, pp. 192-284, or American State Papers, Finance, i, 123-144.

Dallas, Treasury Report of 1816, American State Papers, Finance, iii,

87-91.

A report which is of the greatest importance and weight is Albert

Gallatin’s “Memorial in Favor of Tariff Reform” (1832). Printed

separately. Unfortunately, not in his collected works.

Walker’s Report, see Finance Report, December 3, 1845.

J. Q. Adams’s Report of 1832, Congressional Documents, 1831-1832, H. R.

No. 481.

D. A. Wells’s “Reports as Special Commissioner of the Revenue,” 1866,

Senate Documents, second session, Thirty-ninth Congress, vol. i, No. 2;

1868, House Executive Documents, second session, Fortieth Congress, vol.

ix, No. 81; 1869, House Executive Documents, third session, Fortieth

Congress, vol. vii, No. 16; 1869, House Executive Documents, second

session, Forty-first Congress, vol. v, No. 27; and his paper in the Cobden

Club Essays (second series).

W. D. Kelley’s “Speeches, Addresses, and Letters.”

“Report of the Tariff Commission,” 1882 (two vols). H. R. Miscellaneous

Documents, No. 6, Part I, Forty-seventh Congress, second session.

IV. _Pauper-Labor Argument._—See Taussig, “Protection to Young

Industries,” p. 69, note 1; Calhoun’s speech, Works, iv, pp. 201-212;

Greeley’s speech of 1843; Cooper’s “Politics,” pp. 99-109; Webster’s

Works, v, pp. 161-235; Cairnes, “Leading Principles,” pp. 382-388.

Fifteenth Annual Report of the Massachusetts Bureau of Statistics (1884),

by Carroll D. Wright. D. A. Wells, “Princeton Review,” November, 1883, p.

261; Schoenhof, “Wages and Trade.”

V. _View of Early Manufactures._—Bishop, “History of American

Manufactures”; Batchelder’s “Introduction and Early Progress of the Cotton

Manufacture in the United States”; N. Appleton, “Origin of Lowell”; G. S.

White, “Memoir of Samuel Slater”; B. F. French, “History of the Rise and

Progress of the Iron Trade of the United States for 1621-1857”; H.

Scrivenor, “History of the Iron Trade”; “Bulletin of the National

Association of Woolen Manufactures,” ii, pp. 479-488. Tench Coxe,

“Statement of the Arts and Manufactures of the United States for 1810”

(1814).

VI. _Later View of Manufactures_:

(1.) THE IRON MANUFACTURE.—See Swank’s “Reports of Iron and Steel

Association,” 1882; ibid., “Census Report,” 1880; ibid., “Iron Trade,”

1876; J. S. Newberry, for an excellent article in “International Review,”

i, pp. 768-780.

For Bessemer steel, Swank, “Census Report,” 1880, pp. 149-153; and

Schoenhof, “Destructive Influences of the Tariff,” chap. vii. A. S.

Hewett, Speech in Congress, May 16, 1882. Separately printed.

(2.) WOOL, WOOLENS, AND COTTONS.—Production and importation of wool, see

“United States Statistical Abstract”; “Tariff Commission Report,” i, pp.

1782-1785; ii, p. 2432.

Production and importation of woolens, see “Bulletin of Woolen

Manufacturers,” vii, p. 359; “Commerce and Navigation Reports.”

Prosperity of woolen manufacturers after 1867, see Wells, “Wool and the

Tariff” (a letter to the “New York Tribune,” March 20, 1873); R. W.

Robinson, article of December, 1872, in “Bulletin of Woolen

Manufacturers,” iii, p. 354. Edward Harris, “Memorial of the Manufacturers

of Woolen Goods to the Committee of Ways and Means,” Washington, 1872.

John L. Hayes, “The Fleece and the Loom.”

Production and importation of cottons, see “Commerce and Navigation

Reports”; Census Report of 1880.

(3.) SILK.—Manufacture since 1860, see “Silk Association Reports”;

Wyckoff, “Silk Manufacture in the United States” (1883) for recent

history, pp. 42-51. Wyckoff, “The Silk Goods of America” (1880), on

methods of manufacture, chaps. ii, iv, vi.

(4.) SUGAR DUTIES.—D. A. Wells, “Princeton Review,” vi (November, 1880),

pp. 319-335; and “The Sugar Industry of the United States and the Tariff”

(1878).

VII. _Present Tariff._—Heyl’s “United States Duties on Imports” (1881)

contains all acts in force to date of publication, and gives all acts

since the year 1861 in full. It is used by the United States officials.

“Imports Duties from 1867 to 1883 inclusive” (House of Representatives,

Miscellaneous Documents, No. 49, Forty-eighth Congress, first session)

gives duties on each article by years, and reduces specific to _ad

valorem_ rates.

“The Existing Tariff on Imports into the United States,” 1884 (Senate

Document, Report, No. 12, Forty-eighth Congress, first session).

A Brief Bibliography Of Bimetallism.

“The Report of the International Monetary Conference, 1878” (p. 754),

contains an extended bibliography on money, by S. Dana Horton. Chevalier’s

third volume of his “Cours d’Économie politique,” entitled “Monnaie,” also

gives a bibliography.

I. _Standard of Value._—See Jevons, “Money and the Mechanism of Exchange,”

chaps iii, xxv; S. Dana Horton, “Gold and Silver,” chap. iv, p. 36; F. A.

Walker, “Political Economy,” pp. 363-368, “Money, Trade, and Industry,”

pp. 56-77; Wolowski, “L’Or et l’Argent,” pp. 7, 22, 207; Mill, “Principles

of Political Economy,” book iii, chap. xv; Walras, “Journal des

Économistes,” October, 1882, pp. 5-13.

II. _Bimetallic Theory._—Horton, “Gold and Silver,” p. 29; F. A. Walker,

“Money, Trade, and Industry,” p. 157, “Political Economy,” p. 408; Giffen,

“Fortnightly Review,” vol. xxxii (1879), p. 279; Wolowski, “L’Or et

l’Argent,” p. 35; Jevons, ibid., chap, xii; A. J. Wilson, “Reciprocity,

Bimetallism, and Land Reform,” p. 107; S. Bourne, “Trade, Population, and

Food,” p. 227; Seyd, “The Decline of Prosperity,” and the various

pamphlets of Cernuschi.

III. _Operation of Gresham’s Law._—Macaulay, chap. xxi for clipped coin of

1695; Jevons, ibid., pp. 80-85, also gives an example taken from the

Japanese currency; for the case of France, see “Report of the Select

Committee of the House of Commons on the Depreciation of Silver, 1876,” p.

xlii, and Appendix, pp. 86, 148; for the United States, see _supra_, book

iii, chap. vii, § 3. See, also, Lord Liverpool’s “Treatise on the Coins of

the Realm,” chap. xii, for changes in the coin of England.

IV. _Compensatory Effect of Two Standards._—Jevons, ibid., pp. 139, 140;

F. A. Walker, “Political Economy,” pp. 411-416; Wolowski, “L’Or et

l’Argent,” p. 28; Mannequin, “Journal des Économistes,” August, 1878, p.

202.

V. _Effect of a League of States, or Law, on the Relative Value of Gold

and Silver._—Giffen, “Fortnightly Review,” vol. xxxii (1879), pp. 285-290;

Wolowski, “L’Or et l’Argent,” pp. 23, 24, 31; F. A. Walker, “Political

Economy,” p. 410, “Report of the International Monetary Conference, 1878,”

p. 74; Sumner, “Princeton Review,” vol. iv, p. 563; S. Dana Horton,

“Report of the International Monetary Conference, 1878,” p. 741; Bourne,

“Trade, Population, and Food,” pp. 228, 230; Jevons, “Contemporary

Review,” vol. xxxix (1881), p. 750; S. Newcomb, “International Review”

(1879), p. 314.

VI. _Production of Gold and Silver; Relative Value of the Two Metals._—Ad.

Soetbeer, Petermann’s “Mittheilungen,” No. 57; “House of Commons Report on

Depreciation of Silver,” 1876, Appendix, pp. 11, 12, 24; Bourne,

“Statistical Journal,” vol. xlii, p. 409, gives Sir H. Hay’s figures

corrected by him to 1878; Spofford’s “American Almanac,” 1878, gives

tables from the “Journal des Économistes”; the figures of Seyd, Hay,

Jacob, and Tooke and Newmarch are in the “House of Commons Report,” above.

Also see, _supra_, book iii, chap. vi, for references.

The relative values of gold and silver since 1834, as given in Pixley and

Abell’s (London) tables, are trustworthy. Previous to 1834 there is much

uncertainty. Soetbeer, ibid., gives Hamburg quotations since 1687. Another

table, probably incorrect in places, is that of White, see “Report of the

International Monetary Conference,” 1878, p. 647.

VII. _Demonetization of Silver by Germany._—For copy of laws of 1871 and

1873, see “Report of Directors of the United States Mint, 1873,” p. 82;

“House of Commons Report on Depreciation of Silver,” 1876, p. 18;

“Conférence Monétaire Internationale,” 1881, index, p. 215 for

“Allemagne.”

VIII. _Latin Union._—For treaty, see “Journal des Économistes,” May, 1866;

“House of Commons Report,” ibid, xxxviii, Appendix, pp. 92, 98, 106-109,

116; “Report of Monetary Conference,” 1878, pp. 779-787.

IX. _Flow of Silver to the East._—The figures of Sir Hector Hay after

1851, “House of Commons Report,” ibid., App., p. 24, are fullest, and

should be combined with Pixley and Abell’s figures for years before 1851,

ibid., Appendix, p. 21. See also Bourne, “Statistical Journal,” 1879, p.

422; Waterfield, “House of Commons Report,” ibid., Appendix, pp. 171, 172,

174; Quetteville, ibid., p. 184; “Conférence Monétaire Internationale,”

1881, p. 197; London “Economist,” February 24, 1883, Supplement, p. 7;

“Parliamentary Documents,” 1881, vol. xciii; “Report of the Director of

the United States Mint,” 1880 (in the Finance Report, 1880, p. 194); J. B.

Robertson, “Westminster Review,” vol. cxv, p. 200.

X. _Depreciation of Silver, 1876._—Causes, Bourne, ibid., pp. 206, 212,

222, 233; Wilson, ibid., p. 128; “House of Commons Report,” ibid.; Sumner,

“Princeton Review,” vol. iv., p. 570; S. Newcomb, “International Review,”

vol. vi (1879), p. 326; Cochut, “Revue des Deux Mondes,” i, December,

1883, p. 514; Cairnes, “Essays”; F. Bowen, “Minority Report of the United

States Silver Commission,” 1878.

Supposed cause of panic of 1873, see Williamson, “Contemporary Review,”

April 1879; Seyd, “Decline of Prosperity”; Bourne, ibid., pp. 226, 227.

XI. _Appreciation of Gold._—Giffen, “Statistical Journal,” vol. xlii, p.

36, started the theory for the period 1873-1879. Also see Bourne,

“Statistical Journal,” vol. xlii, p. 406; S. Newcomb, “International

Review,” 1879, p. 329; Wolowski, ibid., pp. 29, 30; Goschen, “Journal of

the Institute of Bankers” (London), vol. iv, part vi, May, 1883;

Patterson, “Statistical Journal,” vol. xliii, p. 1; for table of prices

see London “Economist” (e.g., December 28, 1878).

XII. _Bimetallism in the United States._—See _supra_, book iii, chap. vii;

for a vast array of materials, see “Report of the International Monetary

Conference,” 1878; Linderman’s “Money and Legal Tender”; the Finance

Reports of the United States; and Congressional Documents. For the coinage

laws of 1792, 1834, 1853, 1873, 1878, see pamphlet, “Extracts from the

Laws of the United States relating to Currency and Finance,” by C. F.

Dunbar. For detailed account of passage of Act of 1873, see “Report of the

Comptroller of the Currency,” 1876, p. 170. Present situation, “Atlantic

Monthly,” May, 1884, “The Silver Danger.”

A Brief Bibliography Of American Shipping.

I. _English Navigation Acts._—Macpherson’s “Annals,” ii, pp. 442, 484;

Scobell, “Collection of Acts,” p. 176; Ruffhead, “Statutes at Large,” iii,

p. 182; Roger Coke, “Treatise on Trade” (1671), p. 36; Sir Josiah Child,

“New Discourse on Trade” (1671); Sir Matthew Decker, “Essay on the Causes

of the Decline of Foreign Trade” (1744); Joshua Gee, “Trade and Navigation

of Great Britain” (1730); Lindsay, “History of Merchant Shipping and

Ancient Commerce”; McCulloch, “Dictionary of Commerce” (new edition),

articles “Navigation” and “Colonial Trade”; ibid., edition of Adam Smith,

note xii, p. 534; Huskisson, speeches, iii, 13, 351; Levi, “History of

British Commerce,” p. 158.

II. _Navigation Laws of the United States._—“United States Statutes at

Large,” i, 27, 287, 305; Act of 1817, Statutes, iii, 351; Revised Statutes

(1878), “Commerce and Navigation,” p. 795; Lord Sheffield, “Observations

on the Commerce of the United States”; Pitkin, “Statistical View of the

Commerce of the United States,” chap, i; D. A. Wells, “Our Merchant

Marine,” chap. v; Seybert’s “Statistical Annals”; Macgregor, “Commercial

Statistics of America.”

III. _Growth of American Shipping._—Rapid growth, 1840-1856. Levi,

“History of British Commerce,” p. 582; Bigelow, “Tariff Question,”

Appendix No. 57; “Harper’s Magazine,” January, 1884, p. 217; Lindsay,

“History of Merchant Shipping,” iii, p. 187; for ship-building, see Report

of the United States Bureau of Statistics, “Commerce and Navigation,”

1881, p. 927; for tonnage, ibid., pp. 928-930; also, see “United States

Statistical Abstract”; Dingley’s Report to House of Representatives,

December 15, 1882, No. 1,827, Forty-seventh Congress, second session, pp.

5, 8, 254.

IV. _Steam and Iron Ships._—Preble, “History of Steam Navigation”; Colden,

“Life of Fulton”; Porter, “Progress of the Nation,” section 3, chap. iv;

Nimmo, “Report to the Secretary of the Treasury in Relation to the Foreign

Commerce of the United States and the Decadence of American Shipping”

(1870); Dingley’s Report, pp. 4, 23; Kelley, “The Question of Ships,”

Appendix ii, p. 208.

V. _Decline of American Shipping._—“Report on Commerce and Navigation”

(1881), pp. 927, 928; Lindsay, ibid., iii, pp. 83, 187, 593, 645; ibid.,

iv, pp. 163-180, 292, 316, 376; “North American Review,” October, 1864, p.

489; “Report on Commerce and Navigation,” 1881, lxv, pp. 915, 916, 922,

934; Lynch, Report to House of Representatives on “Causes of the Reduction

of American Tonnage,” February 17, 1878, pp. ix, 80, 176, 195-213;

remission of duties, Revised Statutes of the United States (edition of

1878), section 2,513; Report on “Commerce and Navigation,” xi, 83, 210;

Dingley’s Report; Nimmo, “Decadence of American Shipping” (which gives

several charts), p. 17, “The Practical Workings of our Relations of

Maritime Reciprocity” (1871); Kelley, ibid.; Reports of the New York

Chamber of Commerce; Sumner, “Shall Americans own Ships?” in “North

American Review,” June, 1880; Codman, “Free Ships”; for high-rate profit

in the United States, Dingley’s Report, p. 4.

VI. _Burdens on Ship-Owners._—Tonnage duties, Wells, p. 179; sailors’

wages, Revised Statutes, sections 4,561, 4,578, 4,580-4,584, 4,600;

consular fees, Dingley’s Report, p. 9; pilotage, taxation, Wells, p. 172,

_et seq._; see also Act of 1884, abolishing many of these burdens.

APPENDIX II. EXAMINATION QUESTIONS.

The following problems and questions have been arranged to indicate to the

reader the character of examinations set by English(374) and American

universities. They have been taken in each case from papers actually

given. It is hardly necessary to state, perhaps, that these questions do

not exhaust the subject, and are only some of a kind of which many more

might be added:

DEFINITIONS.

1. Define briefly, Fixed Capital; Unproductive Consumption; Law of

Diminishing Returns; Effective Desire of Accumulation; Law of Increase of

Labor; Communism; Wages Fund; Wages of Superintendence; Real Wages; Value;

Price; Demand; Medium of Exchange; Gresham’s Law.

2. Explain carefully the following terms: Productive Consumption,

Effectual Demand, Margin of Cultivation, Cost of Production, Value of

Money, Cost of Labor, Wealth, and Abstinence.

3. Explain the following terms: Real Wages, Fixed Capital, Allowance

System, Margin of Cultivation, Price, Demand, Medium of Exchange,

Seignorage, Value of Money, and Bill of Exchange.

4. Define Supply, Value of Money, Productive Consumption, Cost of

Production, Cost of Labor, Exchange Value, Law of Production from Land,

Rate of Profit, Capital, and Gresham’s Law.

5. Define Political Economy: State the parts into which it may be divided,

and show how they are mutually related.

LABOR.

6. Distinguish between direct and indirect labor, and give an illustration

of the distinction.

7. Apply the distinction between productive and unproductive labor, and

productive and unproductive consumption, respectively, to each of the

following persons: a tailor, an architect, an annuitant, a sailor, and a

brick-layer.

8. Is an actor to be classed as a productive laborer? The inventor of a

machine? A confectioner?

9. In which of the two classes of laborers, productive and unproductive,

would you place the following?

(1.) The officers of our Government.

(2.) The maker of an organ.

(3.) An organist.

(4.) A schoolmaster.

(5.) An artist.

(6.) He who makes an article for which there is no use.

10. Classify as productive or unproductive the following laborers: a

clergyman, musical-instrument maker, actor, soldier, and lace-maker.

CAPITAL.

11. Explain fully what you understand by capital, and what function it

discharges in production. Consider whether or not the following ought to

be included in capital: (1) the original and acquired powers of the

laborer, (2) the original properties of the soil, (3) improvements on

land, (4) credit, (5) unsold stock in the hands of a merchant, (6)

articles purchased but still in the consumer’s hands.

12. Does a national loan add to the capital of a country?

13. Inquire how far, or in what cases, or in what sense, it may be said

that a common dwelling-house, an hotel, a school-house, a police-station,

a theatre, and a fortification, constitute part of the capital of the

country.

14. Discuss carefully the question whether money lying in a bank (or corn

lying in a granary) is always capital, or whether its economic nature

depends upon the intentions of the owner.

15. Are railway-shares, stocks of wine, wheat, munitions of war, and land,

to be considered capital, or not?

16. Explain fully whether you consider that United States bonds are

capital or not.

17. Is an investment in government funds capital, or not? Give your

reasons.

18. In what manner does a large expenditure for military purposes affect

the operations of capital and labor?

19. Distinguish between wealth and capital. Show that there is no

assignable limit to the employment of capital in bettering the condition

of the members of a community.

20. “If there are human beings capable of work, and food to feed them,

they may always be employed in producing something.” Explain the meaning

of this fully.

21. What is meant by saying wealth can only perform the functions of

capital by being wholly or partially consumed?

22. Explain and illustrate the statement that demand for commodities is

not demand for labor.

23. Show that expenditure of money does not necessarily increase the

demand for labor.

24. In what way would a general demand for luxuries affect productive

laborers and the wealth of the community?

25. In a community where capital is all employed, what would be the effect

if one employer gradually withdrew some of his capital, and spent this for

personal luxuries?

26. It is contended that “the demand for commodities, which can only be

got by labor, is as much a demand for labor as a demand for beef is a

demand for bullocks.” Criticise this position.

27. “It is often said that, though employment is withdrawn from labor in

one department, an exactly equivalent employment is opened for it in

others, because what the consumers save in the increased cheapness of one

particular article enables them to augment their consumption of others,

thereby increasing the demand for other kinds of labor.” Point out the

fallacy.

28. A college undergraduate, with the applause of shopkeepers, bought

twenty waistcoats, under the plea that he was doing good to trade. Examine

the economical soundness of his act.

29. A man invested a portion of his capital in a loan to a state which

subsequently repudiated its debts. The man thereupon gave up his carriage,

discharged superfluous gardeners, and reduced the number of his domestic

servants. Examine the effect of these changes on the employment of labor

in the district where he resides.

30. In the sixteenth century a great change in the mode of expenditure

took place. Retainers were dismissed, households were reduced and a demand

for commodities was substituted for a demand for labor. How would this

change affect wages, and why?

31. It is supposed by some persons that expenditure by the rich in costly

entertainments is good for trade. What is your opinion on the subject?

32. A is an absentee who spends his income abroad. B spends his income

chiefly on American pictures and other works of art. C spends most of his

income on American servants. D saves and buys United States bonds. E

employs most of his income in the production of manufactures. Explain the

various effects of these different modes of expenditure on the amount of

wealth in the United States, and on the working-classes of the country.

33. Compare the economic effects of defraying war expenditure (1) by

loans, (2) by increased taxation.

34. Define the term capital, and distinguish between fixed and circulating

capital, giving instances of each.

35. Distinguish between fixed and circulating capital, and point out how

far, or in what manner, each of the following articles belongs to one kind

or the other: a dwelling-house, a crop of corn, a wagon, a load of coal,

an ingot of gold, a railway-engine, a bale of cotton goods.

36. Of the following, which would you class under fixed and which under

circulating capital: cash in the hands of a merchant, a cotton-mill, a

plow, diamonds in a jeweler’s shop, a locomotive, a nursery-gardener’s

seeds, greenhouses, manures; a carpenter’s tools, woods, nails?

37. If in a country like this a large amount of capital becomes fixed in

the building of railroads, what effect will this change taken by itself

have upon the laboring-class, supposing the capital to be (1) domestic, or

(2) borrowed wholly or in part from abroad?

38. What conclusion is reached by Mr. Mill respecting the objections to

the use of labor-saving machinery?

39. Is the extension of machinery beneficial to laborers?

40. What is “the conclusive answer to the objections against machinery”?

EFFICIENCY OF PRODUCTION.

41. Explain briefly the chief causes on which the productiveness of labor

depends.

42. What are the principal ways in which advantage arises from the

division of labor?

43. What are the principal advantages of division of labor? In what cases

and why is it better to carry on a productive enterprise on a large scale?

44. Under what circumstances, and in what callings, can the division of

employment be carried out to the fullest extent?

45. Show how the amount of available capital and the extent of the market

for products limit division of labor.

POPULATION.

46. Give a brief statement of Malthus’s theory of population, explaining

the different checks on population in different stages of civilization.

47. Enunciate Malthus’s law of population, and give an outline of the

reasoning by which he established it. Give an account of any objections

that have been brought against Malthus’s position, and criticise those

objections.

48. When the growth of population outstrips the progress of improvements,

what are the means of relief for the laborer?

49. Does the increased facility of emigration nullify the Malthusian law

of population in your opinion or not, and why?

50. Explain the law of diminishing return and the Malthusian doctrine of

population; and trace the connection between them.

INCREASE OF PRODUCTION.

51. Compare the motives to saving in the case of savages, and of a country

like the United States. State the causes of diversity in the strength of

the effective desire of accumulation.

52. Capital is said to be accumulated by saving; what is saving? Is

hoarded money a saving while hoarded?

53. How far does the increasing productiveness of manufacturing industry

tend to neutralize the effect on profits of the diminishing productiveness

of agricultural industry?

54. What conclusion as to the limit to the increase of production does Mr.

Mill deduce from his investigation of the laws of the various requisites

of production?

PROPERTY.

55. What are the essential elements of property? Are the grounds of

property in land the same as those of property in movables?

56. Give what you conceive to be the chief arguments in favor of the

institution of private property, as opposed to common ownership.

57. What arguments does Mr. Mill suggest in favor of some redistribution

of landed property?

58. What are the economic arguments for and against Communism?

59. In what way, and by what means, do Socialists want to alter the

present distribution of wealth?

60. Sketch the principal forms of Communistic and Non-communistic

Socialism.

61. Should the power of bequest be limited?

WAGES.

62. On what, according to Mill, does the rate of wages depend? Hence, show

the fallacy of the popularly proposed remedies for low wages.

63. State and examine the principal theories which have been put forward

as to the circumstances which regulate the general rate of wages, saying

which you deem to be correct, and why so.

64. Mr. Thornton argues that the wages-fund is neither “determined” nor

“limited”: not “determined,” because there is no “law” to compel

capitalists to devote any portion of their wealth to the payment of labor,

nor are they morally “bound” to do so; and not “limited,” because there is

nothing to prevent them from adding to the portion of their wealth so

applied. Criticise this argument, and, if you dissent from Mr. Thornton’s

view, state the causes which “determine” and “limit” the fund in question.

65. State precisely what you mean by the “wages-fund,” and explain the

conditions on which its growth depends.

66. Explain generally the circumstances which determine the rate of wages.

Mention some of the reasons why wages should be higher in one occupation

than in another.

67. In what way does dearness or cheapness of food affect money wages?

68. What determines—

(1.) The general rate of wages in a country?

(2.) The relative rates of wages in different employments?

69. What causes different rates of wages in different employments, and by

what methods might wages be raised?

70. How do you explain the fact that some of the most disagreeable kinds

of labor are the most badly paid?

71. What, according to Mr. Mill, are the most promising means for the

improvement of the laboring-classes?

72. In the Island of Laputa a law was passed compelling each workman to

work with his left hand tied behind his back, and the law was justified on

the ground that the demand for labor was more than doubled by it. Examine

this argument.

73. Some coal-workers are calling for a diminution of the output of coal,

so as to keep up their wages. Examine how far, if at all, this result

would follow from their proposed action.

74. Discuss any remedies for low wages that have been or might be

suggested.

75. Why are the wages of women habitually lower than those of men?

PROFITS.

76. What is the cause of the existence of profits? And what, according to

Mr. Mill, are the circumstances which determine the respective shares of

the laborer and the capitalist?

77. (1.) What is the lowest rate of profit which can permanently exist?

(2.) Why is this minimum variable?

78. Analyze the remuneration received by any of the following: (1) the

proprietor of a cotton-mill managing his own mill; (2) a merchant

conducting his own business; (3) a railway shareholder; (4) a holder of

government funds.

79. Into what portions may we divide the return which is usually called

profit? Which of these portions would be received by a merchant carrying

on business with borrowed capital?

80. Analyze the payment called profits into its various elements. Point

out in what respects the earnings of the employer differ from or resemble

the wages paid to other classes of laborers.

81. It is asserted that “profits tend to an equality.” What conditions

must be satisfied before this position can be maintained?

82. How is the alleged tendency of profits to equivalence in different

employments to be reconciled with the notorious difference in the profit

of different individuals?

83. Which one of the elements in profit has the greatest effect on its

amount? Explain by comparing the causes which regulate each element.

84. How does Mill reconcile the high wages in America with Ricardo’s law

of profits?

85. Explain the proposition that the rate of profits depends on the cost

of labor, stating carefully what elements are included in cost of labor.

86. Explain what connection there may be between an increase of population

and any of the elements entering into cost of labor.

87. What effect would an increase or diminution of population have upon

cost of labor?

88. Explain Mill’s view as to the cost of labor being a function of three

variables, considering the passages in which he says, 1. “If without labor

becoming less efficient its remuneration fell, _no increase taking place

in the cost of the articles composing that remuneration_;” 2. “If the

laborer obtained a higher remuneration, _without any increased cheapness

in the things composing it_; or if, without his obtaining more, _that

which he did obtain would become more costly_”: profits in the last two

cases would suffer a diminution; and discussing—Firstly, if the

remuneration of labor falls, what can the cost of the articles composing

that remuneration signify to the capitalist? Secondly, if the laborer gets

a higher remuneration, what can the increased cheapness of the things

composing it signify to the capitalist?

89. Is the contest between capital and labor permanent and fundamental? If

not, give your reasons for your answer.

90. What is the effect on wages and profits of the introduction of

machinery?

RENT.

91. What connection exists between the law of Malthus and Ricardo’s

doctrine of rent?

92. What is the reason why land-owners can demand rent?

93. Explain and illustrate the distinction between rent and profits. In

what cases are they nearly indistinguishable?

94. It has often been observed that in America land is much less highly

cultivated than in England. Explain the economic reasons for this.

95. How does the theory of rent apply in a country like the United States,

where the farmer owns his land instead of hiring it?

96. How is it that some agricultural capital pays rent, even if resort is

not had to different grades of land?

97. Give a brief description of the theory of rent, and point out to what

payments not usually called rent the theory may be applied.

98. State briefly Ricardo’s theory of rent, and show that, if it be true,

the following statements of Adam Smith must be false:

“The most fertile coal-mine regulates the price of coals at all the other

mines in the neighborhood.”

“In the price of corn one part pays the rent of the landlord, another pays

the wages, and another the profit of the farmer.”

99. Why does the farming business pay rent, and the cotton business

(ground-rent excluded) pay none? Define rent.

100. “As population increases, rents estimated in corn increase, and the

price of corn rises; rents, therefore, doubly tend to increase.” Prove

this.

101. Professor Rogers adduces, in refutation of the common theory of rent,

the fact that land near New York pays a high rent, while land of the same

natural fertility in the Western States pays no rent. How far do you admit

the force of this objection?

102. Examine the following doctrine:

“If invention and improvement still go on, the efficiency of labor

will be further increased, and the amount of labor and capital

necessary to produce a given result further diminished. The same

causes will lead to the utilization of this new gain in productive

power for the production of more wealth; the margin of cultivation

will be again extended, and rent will increase, both in proportion

and amount, without any increase in wages and interest. And so,

... will ... rent constantly increase, though population should

remain stationary.”—Henry George, “Progress and Poverty” (p. 226).

103. What answer is made to Mr. Carey’s objection to Ricardo’s theory of

rent, that in point of fact the poorer, not the richer, lands are first

brought under cultivation?

104. Explain how land, “even apart from differences of situation,... would

all of it, on a certain supposition, pay rent.”

105. Explain clearly how it is possible for the land of a country which is

all of uniform fertility to pay rent.

106. “If the earth had a perfectly smooth surface the same everywhere, and

if it were all tilled and cultivated in exactly the same way, there would

be no such thing as rent.” Examine this proposition.

107. Show that rent does not increase the price of bread.

108. How is it shown that “rent does not really form any part of the

expenses of production or of the advances of the capitalist?”

109. (1.) What connection exists between the price of agricultural

products and the amount of rent paid? (2.) Can rent affect the price?

110. “Rent is the effect and not the cause of price.” Prove this.

111. Does rent enter into the cost of production of the following

commodities or not, and why: Corn, cloth, the wine of the best vineyards?

112. “Rent arises from the difference between the least fertile and the

most fertile soils, and from the fact that the former have been taken into

cultivation.... Rent is the difference between the market price of produce

and the cost of production.” Harmonize these statements.

113. In order that the actual payments made by farmers to landlords should

generally correspond with “economic rent,” what conditions must be

observed?

114. What is assumed, as to competition, in all Mr. Mill’s reasoning on

wages, profits, and rent? Explain its action in each case.

VALUE.

115. Enumerate, compare, and criticise any opinions known to you which

have been held concerning the nature, origin, or measure of value in

exchange.

116. Define precisely what it is which gives value to objects, and point

out the causes which vary the value of the same object under differing

circumstances.

117. Do men dive to the bottom of the sea to get pearls because they are

valuable; or are pearls valuable because men must dive to the bottom of

the sea to get them?

118. There are three forms of difficulty of attainment. State the law of

value applicable to each.

119. Explain the exact economic meaning of the words supply and demand.

120. When it is said that the value of certain commodities depends upon

supply and demand, what is meant by demand?

121. If the supply of all commodities were suddenly doubled, would any

changes in their relative values ensue or not, and why?

122. State the laws which regulate the permanent and temporary values of

agricultural products.

123. How far does the value of commodities depend on the quantity of labor

required for their production?

124. Has the term exchange value any precise meaning when we are comparing

times or places very remote from one another?

125. What is meant by the natural (or normal) price and the market price

of commodities? To what extent can they differ?

126. Does a general rise of wages raise the prices of commodities in

general or not, and why? Does it tend to cause any change in the relative

prices of commodities or not, and why?

127. Suppose that wages were double, would the values of commodities be

affected? What would be the effect on prices and profits of such an

increase of wages?

128. Are wages and profits influenced by prices?

129. Can employers recoup themselves by a rise of prices for a rise of—

(a.) Wages in particular employments?

(b.) General wages?

How does this question bear on the efficacy of trades-unionism?

130. Do values depend on wages?

131. Explain the following statement: “It is true the absolute wages paid

have no effect upon values; but neither has the absolute quantity of

labor.”

132. Explain the statement that “high general profits can not, any more

than high general wages, be a cause of high values.... In so far as

profits enter into the cost of production of all things, they can not

affect the value of any.”

133. Explain fully why it is that capitalists can not compensate

themselves for a general high cost of labor through any action on values

and prices.

134. “The value of a commodity depends on its cost of production.” Under

what conditions is this true, and what causes interfere with it?

135. Describe the hindrances which impede the free movement of capital to

those fields which apparently offer the highest return for its employment.

136. Give J. S. Mill’s analysis of the “cost of production,” and also

Professor Cairnes’s, with the arguments for and against each.

137. Analyze cost of production. What is its connection with cost of

labor?

138. Give an analysis of cost of production of any commodity.

139. Show carefully the distinction between wages, cost of labor, and cost

of production.

140. Define clearly value, price, real wages, and cost of production.

141. Define real wages, money wages, cost of labor.

MONEY.

142. Point out the difference between the scientific and popular

conceptions implied in the terms wealth and money.

143. Show the fallacy of confounding capital with money. Can there be a

glut of capital?

144. What is money? To what sort of necessity does it owe its existence?

What articles have been used for money? Enumerate the qualities which

render a commodity fit to serve as money.

145. What are the qualities requisite in any commodity in order that it

may serve as money?

146. Distinguish accurately between the functions of money.

147. How far is a fixed standard of value possible?

148. What effect does the great durability of gold and silver have upon

the value of money?

149. How far does the law of demand and supply govern the value of money?

150. Explain fully how it is that the value of the precious metals is

affected by “questions of quantity only, with little reference to cost of

production.”

151. What is to be said to the following: “Some political economists have

objected altogether to the statement that the value of money depends on

its quantity combined with the rapidity of circulation; which, they think,

is assuming a law for money that does not exist for any other commodity”?

152. Under what conditions is it true that the “value of money is

inversely as its quantity”?

153. Explain carefully the following: “The average value of gold is made

to conform to its natural value in the same manner as the values of other

things are made to conform to their natural value.”

154. In what various meanings is the phrase “the value of money” used? How

far does the value of money in each of these meanings depend on (1) the

cost of production, (2) supply and demand?

155. Are the values of gold and silver subject to exactly the same natural

laws as other commodities?

156. Give the explanations and qualifications required to render the

following proposition true: “The quantity of coin in every country is

regulated by the value of the commodities which are to be circulated by

it.”

157. Would the world be richer if every individual in it suddenly found

the quantity of money in his possession doubled?

158. How far, or in what way, do you consider it correct to say that the

general level of prices in a country depends upon the quantity of gold

coin existing in that country?

159. A single good harvest causes a considerable fall in the value of

_wheat_; but a great addition to the year’s supply of _gold_ from the

mines produces little effect on its general value. How do you account for

the difference?

160. Show the effect of establishing a double standard.

161. Show how Gresham’s law is illustrated by the history of the currency

in the United States between 1834 and 1873.

162. What effect had the discovery of gold in this century upon the

coinage of the United States?

163. What is the system upon which the small silver currency of the United

States is coined and issued?

164. State briefly the aim of the United States coinage act of 1853.

CREDIT.

165. How do you define credit? Form a classification of credit documents.

166. It has been said that “credit is capital.” Is this so or not?

167. Define capital, and examine the meaning of the term in the following

statements:

(_a._) Demand for commodities can not create capital.

(_b._) Credit is not a creation, but a transfer of capital.

(_c._) Wages depend upon the proportion between population and capital.

168. State the law of the value of money which governs general prices.

What change is to be made in the statement, if credit is to be taken into

consideration?

169. What is the part which instruments of credit, other than bank-notes,

play in the exchange of commodities?

170. Mention some of the principal features of a credit crisis.

171. What are inconvertible notes? What objections are there to currency

of this description?

172. Can an inconvertible currency be made to maintain the same value as a

convertible currency, and, if so, how? Supposing that it can, what

objections are there, nevertheless, to it?

173. “Nothing is subject to more variation than paper money, even when it

is limited, and has no guarantees; for this simple reason, that, having no

value of its own, it depends on the idea that each person forms of those

guarantees.” Comment on this passage.

174. How is it that a bad dollar does the work of buying as well as a good

one until it is found out? Is it that it makes no difference whether it is

made of gold or not?

175. To what extent is a government capable of giving fictitious value to

a paper or a metallic currency?

176. In a country with an inconvertible paper currency, how can it be

determined whether the issues are excessive or not, and why?

177. What will be the effect if the circulating medium of a country is

increased beyond its natural amount—

(1) when the medium is coin?

(2) when it is coin and convertible paper?

(3) when it is inconvertible paper?

178. What is the error involved in the assumption, frequently made by

writers and public speakers, that the currency of a country ought to

increase in like ratio with its wealth and population?

179. On what does the desire to use credit depend? What connection exists

between the amount of notes and coin in circulation and the use of credit?

180. Compare the advantages and disadvantages of a metallic and paper

currency.

181. A member of Congress advocated expansion of the paper currency by the

following argument: “Our currency, as well as everything else, must keep

pace with our growth as a nation.... France has a circulation _per capita_

of thirty dollars; England, of twenty-five; and we, with our extent of

territory and improvements, certainly require more than either.” State

your opinion of this argument.

182. Trace the effects, immediate and ultimate, on general prices of (_a_)

an extended system of credit, (_b_) an enlarged issue of paper money, and

(_c_) an addition to the stock of precious metals, respectively.

183. What is the error in the common notion that “a paper currency can not

be issued in excess so long as every note _represents_ property, or has a

_foundation_ of actual property to rest on”?

184. Explain the action of the check and clearing-house system, and state

what is meant by the restoration of barter.

OVER-PRODUCTION.

185. State the relation between supply and demand as aggregates, e.g.,

between the aggregate supply of commodities in a given community and the

aggregate demand for them, and show the bearing of the principle involved

on the doctrine of “general over-production.”

186. Prove that the increase of capital and the extension of industry can

not lead to a general over-production of commodities.

187. What is the error of those who believe in the danger of

over-production?

188. Distinguish “excess of supply” from a “commercial crisis.”

189. Give the substance of Mill’s examination of the theories of excess of

supply.

190. “When production is fully equal to consumption, every discovery in

the arts, or in mechanics, is a calamity, because it only adds to the

enjoyment of consumers the opportunity of obtaining commodities at a

cheaper rate, while it deprives the producers of even life itself.”

Discuss this opinion of Sismondi.

191. Explain the difference in the theories of Dr. Chalmers and Mr. Mill

on over-production, and the excess of supply.

PECULIAR CASES OF VALUE.

192. It costs as much to produce straw as to produce grain; how, then, do

you explain the comparatively low value of straw?

193. Suppose a considerable rise in the price of wool to be foreseen, how

should farmers expect the prices of mutton to be affected, and why?

194. Explain the operation of the laws of value by which the relative

prices of wool and mutton are regulated.

INTERNATIONAL TRADE AND VALUES.

195. What is the meaning of the statement that “it is not a difference in

the _absolute_ cost of production which determines the interchange [of

commodities between countries], but a difference in the _comparative_

cost”?

196. What are the advantages which a country derives from foreign trade?

197. Explain clearly the following passage: “We may often, by trading with

foreigners, obtain their commodities at a smaller expense of labor and

capital than they cost to the foreigners themselves.”

198. Is there any essential difference between trade between country and

country, and trade between county and county, or even between man and man?

What is the real nature of trade in all cases?

199. Why is it necessary to make any different statement of the laws of

value for foreign than for domestic products? What is the cause for the

existence of any international trade?

200. How would a serious decline in the efficiency of England, as compared

with other countries, in the production of manufactures affect the scale

of money incomes and prices in England, and why?

201. Mr. Mill refers the value of home products to the “cost of

production”; of foreign products to the “cost of acquisition.” Examine the

truth of this distinction.

202. It is said that in the home market the value of commodities depends

on the cost of production, in the foreign market on the cost of

acquisition. Comment on this distinction.

203. Is the cost of production the regulator of international values?

204. Discuss the following statement: “International value is regulated

just as inter-provincial or inter-parishional value is. Coals and hops are

exchanged between Northumberland and Kent on absolutely the same

principles as iron and wine between Lancashire and Spain.”—Ruskin, “Munera

Pulveris,” p. 84.

205. What determines the value of imported commodities?

206. Why does cost of production fail to determine the value of

commodities brought from a foreign country? Does it also fail in the case

of commodities brought from distant parts of the same country?

207. It is on the matter of fact that there is not much migration of

capital and labor from country to country that Mr. Mill has based his

whole doctrine of “international trade and international values.” Explain

and comment on the above statement.

208. What are the causes which determine for a nation the cost of its

imports?

209. It follows from the theory of international values, as laid down by

Mill, that the permanent residence of Americans in Europe may enhance the

cost of foreign imports to Americans residing at home. Explain in what

way.

210. Suppose two countries, A and B, isolated from the rest of the world,

and a trade established between them. In consequence of the labor of A

becoming less effective, the cost of production of every article which can

be produced in that country is greatly increased, but so that the relation

between the costs of any two articles remains the same. What, if any, will

be the effect of the change on the trade between A and B? Does your answer

depend upon your using the phrase “cost of production” in a sense

different from that given to it by some economists?

211. Show that every country gets its imports at less cost in proportion

to the efficiency of its labor.

FOREIGN EXCHANGES.

212. What is the ordinary limit to the premium on foreign bills of

exchange, and why?

213. What are the chief effects on the foreign exchanges which are

produced by the breaking out of a war? Account for the fact that in 1861

the exchanges on England in America fell considerably below specie point.

214. Suppose that the next harvest in England should be very defective,

and extraordinary supplies of American grain needed. How would this

probably affect the price of bills of exchange between England and

America, and the profit on the exportation of English manufactures to the

latter, and why?

215. Trace the process by which the precious metals spread from the mines

over the world.

216. Suppose the exchange between England and the United States to be

heavily against England, how will this fact affect the export and import

trade between the two countries, and why?

217. What is meant by exchanges being against a country?

218. Enumerate the principal circumstances which affect the rate of

exchange between two countries. How is the _par_ of exchange ascertained?

219. In what way are gold and silver distributed among the different

trading countries? Between different parts of the same country?

220. Trace the effects of large and continuous issues of inconvertible

paper currency on the prices of commodities, on importation and

exportation, and on the foreign exchanges.

221. State the conditions under which international trade can permanently

exist. What will be the ultimate effect of a large movement of foreign

gold upon prices, imports, and exports in the receiving country?

222. State the theory of the value of money (i.e., “metallic money”), and

clear up any apparent inconsistencies between the following statements:

(1.) The value of money depends on the cost of production at the worst

mines; (2.) The value of money varies inversely as its quantity multiplied

by its rapidity of circulation; (3.) The countries whose products are most

in demand abroad and contain the greatest value in the smallest bulk,

which are nearest the mines and have the least demand for foreign

productions, are those in which money will be of lowest value.

228. The effects of the depreciation of the paper currency in the United

States are thus described by Mr. Wells: “It renders it impossible to sell

abroad the products which have cost too much at home, and invites from

other countries the products of a cheaper labor paid for in a sounder

currency. It exaggerates imports, while destroying our ability to pay in

kind.” State how far you agree with the deductions here drawn, assigning

your reasons where you differ.

224. When the foreign exchanges are manifestly against a country, and a

balance of indebtedness is the cause, the equilibrium can be restored in

two ways. State and explain the operation of each.

225. What are the conditions which determine for a country a high range of

general prices? How far is this advantageous?

226. What is the effect of the imposition of a tribute by one country on

another upon the course of trade between them, and the terms on which they

exchange commodities; and why?

227. For what reasons may a nation’s exports habitually exceed or fall

short of its imports?

228. Explain the real and nominal exchange.

229. Expound Mr. Mill’s theory of the influence which a convertible

currency exercises on foreign trade.

230. What is the effect of a depreciated currency on (1) foreign trade,

and (2) the exchanges?

INTEREST.

231. How does the general rate of interest determine the selling price of

stocks and land?

232. Is there any relation between the rate of interest and the value of

money?

233. What are the relations of interest and profit? On what causes does

the rate of interest depend?

234. “High interest means bad security.” Comment on this saying.

235. Is the rate of interest affected by the supply of the precious

metals?

236. What determines the rate of interest on the loanable funds? Is the

“current [or ordinary] rate of interest the measure of the relative

abundance or scarcity of capital”?

237. What are the chief causes that determine the rate of interest?

238. If it be true that in America every man, however rich, is engaged in

some business, but that in England many rich men have no trade or

profession, how is the rate of interest in each country affected in

consequence, and why?

239. How does a fall in the purchasing power of money tend to affect, if

at all, and why, (1) the rate of interest, (2) the price of land, (3) the

price of government bonds, (4) the price of gold and silver ornaments and

plate?

FOREIGN COMPETITION.

240. Explain the grounds of Mr. Mill’s proposition that general low wages

never caused any country to undersell its rivals, nor did general high

wages ever hinder it from doing so. If you think the proposition needs

qualification, give your reason.

241. (1.) What is the true theory of one country underselling another in a

foreign market? (2.) What weight should be attributed to the fact of

generally higher or lower wages in one of the competing countries?

242. Discuss the question whether a high rate of wages necessarily lays

the commerce of a country under a disadvantage with reference to a country

where the rate of wages is lower.

243. What are the conditions under which one country can permanently

undersell another in a foreign market?

244. Point out distinctly the connection between the money wages of

laborers in the United States and the productiveness of the soil.

245. In the Eastern States iron-molders earn from fourteen to seventeen

dollars a week; in California their wages run from twenty-one to

twenty-seven dollars. Account for this variation.

PROGRESS OF SOCIETY.

246. What are the reasons for the change in the normal values of

manufactured and of agricultural commodities, respectively, during the

progress of society?

247. Wages and profits in different employments and neighborhoods are not

uniformly proportional to the efforts of labor and abstinence of which

they are the respective rewards. Classify the circumstances which prevent

this correspondence, and show how far their effect is likely to be reduced

(_a_) by general economical progress, and (_b_) by the extension of the

division of labor.

248. What is the law of diminishing returns? Can you point out any

connection between this law and the following phenomena?—

(_a._) Density of population.

(_b._) Rate of wages.

(_c._) Rate of profits in different countries.

249. Sketch the influence on rents and profits of an increase of

population and capital concurrently with a stationary state of the arts of

production.

250. Is there reason to believe that Mr. Mill has underrated the powers

possessed by man of extending the area of production and facilitating the

market of food? If such a statement has been made, to what extent is his

theory of population modified, and the risks he had indicated rendered

distant?

251. Compare the effects on rent, profits, and wages, of a sudden

improvement in the production (_a_) of food, (_b_) of some manufactured

articles largely consumed by the working-classes.

252. Trace the connection between Ricardo’s theory of rent and the decline

in the general rate of profits as a country increases in population.

Explain clearly the connection which exists between wages and profits.

253. What effect is produced upon rents, profits, and wages, respectively,

in a country like France, where population is stationary and capital

advancing?

254. If capital continued to increase and population did not, explain the

proposition that “the whole savings of each year would be exactly so much

subtracted from the profits of the next and of every following year,” if

improvements were stationary.

255. How does social and industrial progress tend to affect the prices of

land, raw produce, and manufactures, respectively, and why?

256. The capitalized value of land rises, in the progress of society, from

two causes—from one which affects land in common with all investments;

from another which is peculiar to land.

257. “The tendency of improved communications is to lower existing rents.”

How far is this true, and in what directions is it true?

258. What would be the effect on profits, wages, and rents of an

improvement in a manufactured article consumed by the laboring-class?

259. Explain the doctrine of the tendency of profits to a minimum, the

cause of that tendency, and the circumstances which counteract it.

260. What was Adam Smith’s doctrine as to the decline of profit in

progressive communities? Criticise his argument.

261. Mention some of the principal causes which, in the ordinary progress

of society, respectively tend to increase or to reduce the current rate of

profits.

262. Why do profits tend to fall as population increases, and how may this

result be retarded or prevented?

263. What is the effect of a general rise of money wages, apart from the

consideration of a greater efficiency of labor, in prices, profits, and

rent? Give reasons for your answer.

264. How does the general progress of society in wealth and industrial

efficiency tend to affect the rate of wages, the rate of profit, and the

rate of rent, respectively?

265. What is the general effect of the progress of society on the

land-owner, the capitalist, and the laborer?

FUTURE OF LABORING-CLASSES.

266. Examine the influences of machinery on the economic condition of the

working-classes.

267. Mention and discuss some of the popular remedies for low wages, and

especially the effect of the subdivision of landed property among peasant

proprietors.

268. Explain briefly what is meant by co-operation, and indicate the more

prominent forms assumed by the co-operative movement.

269. What is meant by the co-operative system of industry? Show ways in

which this system may affect, for good or for evil, the productiveness of

labor; and mention any moral benefits, or the opposite, in which it may be

expected to issue.

270. What are the difficulties in the way of co-operation for the

production of salable objects?

271. Explain the advantages of industrial partnership, in which the

employés share, in proportion to the wages received, half the profits of

the business beyond a certain fixed minimum which is assigned to the

employers.

TAXATION.

272. How is the state justified in undertaking any manufacture or service

which might be performed by private enterprise?

273. Enumerate Adam Smith’s canons of taxation.

274. Examine the argument in favor of the resumption by the state of what

is called the unearned increment in the value of land arising from the

development of society.

275. A picture by Gainsborough and a house in Broadway are sold in the

same year at the same price; at the end of fifty years each sells for five

times its first cost. Is there any, and, if so, what, reason why the

increase should be sequestrated for the public benefit in the one case and

not in the other?

276. Explain the incidence of taxes laid on wages.

277. Why should a tax on profits, if no improvements follow, fall on the

laborer and capitalist?

278. Explain what effect, if any, will be produced on the price of corn

by—

(1) a tax upon rent;

(2) a tithe;

(3) a tax of so much per acre, irrespective of value;

(4) a tax of so much per bushel.

279. On whom does a tax of a fixed proportion of agricultural produce

fall?

280. Discuss the question whether the income-tax ought to be a tax upon

income and property, or upon expenditure.

281. Discuss the expediency of a graduated income-tax.

282. State the arguments which you think strongest both for and against

exempting savings from the income-tax.

283. Explain the conditions which should be observed in imposing taxes on

commodities.

284. What taxes does a tradesman get back in the price of the articles he

sells, and what does he not?

285. Test by Adam Smith’s four maxims of taxation the policy of indirect

taxes on the necessaries of life.

286. All indirect taxation violates Adam Smith’s fourth canon.

287. Discuss the following:

“A man with $100,000 in United States bonds comes to Boston, hires a

house...; thus he lives in luxury.... I am in favor of taxing idle

investments such as this, and allowing manufacturing investments to go

untaxed.”

288. Compare the advantages and disadvantages of direct and indirect

taxation.

289. On what principles is this country now taxed?

290. Explain the arguments for and against the policy of maintaining a

surplus for the purpose of redeeming a national debt.

291. In estimating the ability of the United States to pay its public

debts, it is usual to include among the data of the question the increased

productiveness of industry in that country. How far is this a pertinent

consideration?

PROTECTION.

292. Mention some of the principal arguments brought forward in favor of

protective tariffs.

293. Connect the principle of the division of employments (or labor) with

the policy of free trade and the functions of government.

294. Sketch the effects of discriminating duties, including the operation

of the corn laws.

295. Examine the following argument, emending, if you think it necessary,

the free-trader’s doctrine on the point raised: The free-trader’s belief

is that a customs duty is added to the price of the article upon which it

is imposed. If the article is imported, according to his theory, the

increase of the price goes into the public treasury; if the article is

made in the country, the increase of the price goes into the pocket of the

producer. But in the former case there is no protection; and competition

will prevent the latter. Therefore protection does not increase the price

of the protected article. If a customs duty is imposed upon a commodity,

and its price is not raised in consequence, what inference can you draw?

296. Under what circumstances did Mr. Mill think nascent states might be

justified in adopting a policy of protection? Criticise his opinion, and,

if you agree with it, give some examples of its application.

297. American protectionists allege that the high rate of wages prevailing

in the United States disables them from competing with “the pauper labor”

of Europe. Examine the grounds of this statement, and consider how far it

forms a justification for protection to American industry.

298. A high rate of wages indicates, not a high, but a low cost of

production for all commodities measured in which the rate of wages is

high.

Explain and prove this proposition, and illustrate it from the

circumstances of the United States.

299. State under what limitations the proposition is correct, that profits

vary inversely with wages. Explain the circumstances which cause both a

higher rate of wages and profits to prevail in a young country, such as

the United States, than in England.

300. In America wages are much higher than in England, yet the general

rate of profits is higher also, according to Mr. Mill. How do you

reconcile the two facts?

301. Examine the following:

“It seems to me that protection is absolutely essential to the

encouragement of capital, and equally necessary for the protection of the

American laborer.... He must have good food, enough of it, good clothing,

school-houses for his children, comforts for his home, and a fair chance

to improve his condition. To this end I would protect him against

competition with the half-paid laborers of European

countries.”—_Congressional Globe_.

302. An American newspaper has said of the burning of Chicago: “The money

to replace what has been burned will not be sent abroad to enrich foreign

manufacturers; but, thanks to the wise policy of protection which has

built up American industries, it will stimulate our own manufactures, set

our mills running faster, and give employment to thousands of idle

working-men.” Comment on this passage.

303. On whom does a tax on imports, if not prohibitory, fall?

304. In what cases would duties on imported commodities fall on the

producers?

305. Are taxes on imports in any way paid by foreigners?

306. Discuss the effects of duties on exports.

307. Trace the effects of duties on the importation of raw materials, and

distinguish, with examples, between duties that violate and duties which

do not violate the principle of free trade.

308. Is it possible for any country by legislative enactments to engross a

larger share of the advantages of foreign trade than it would naturally

have? Discuss the question fully.

309. “Those are, therefore, in the right who maintain that taxes on

imports are partly paid by foreigners; but they are mistaken when they say

it is by the foreign producer. It is not on the person from whom we buy,

but on all those who buy from us, that a portion of our customs duties

spontaneously falls.” Explain and examine the reasons for this conclusion.

310. State the principle which determines the relation between the amount

of a country’s imports and that of its exports, and show how this relation

is affected by a system of protective duties.

THE END.

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CHARTS.

[Illustration: Chart XII.]

Chart XII. Fluctuations in the Price of Gold, from January 1st 1862, to

December, 1865.

[Illustration: Chart XVIII.]

Chart XVIII. Graphical Presentation of the Comparative Areas of the States

and Territories of the United States and the Countries of Europe, omitting

Russia and Alaska.

[Illustration: Chart XIX.]

Chart XIX. Giving the actual figures, compiled from the accounts of two

Cotton-Mills in New England by Edward Atkinson, of Wages, Cost of Labor,

etc., from 1830 to 1884, working on Standard Sheetings, No. 14 yarn.

[Illustration: Chart XX.]

Chart XX. Comparison of 1840 with 1883-1884, of the Relations of Labor and

Capital in the same Mills.

[Illustration: Chart XXI Part 1.]

Chart XXI Part 1.

[Illustration: Chart XXI Part 2.]

Chart XXI Part 2.

[Illustration: Chart XXII.]

Chart XXII. Outstanding Principal Of The Public Debt From 1791 To 1881.

FOOTNOTES

1 Yet Blanqui diffusively gives nearly one half of his “History of

Political Economy” to the period before the sixteenth century, when

politico-economic laws had not yet been recognized. A. L. Perry,

“Political Economy” (eighteenth edition, 1883), also devotes

thirty-five out of eighty-seven pages to the period in which there

was no systematic study of political economy.

2 Xenophon, “Means of increasing the Revenues of Attika,” ch. ix; also

see his “Economics;” and Aristotle, “Politics,” b. i, ch. vi, b.

iii, ch. i.

3 “Republic,” b. ii.

4 Roscher exhumed this book, entitled “De Origine, Natura, Jure et

Mutationibus Monetarum,” and it was reprinted in 1864 by Wolowski at

Paris, together with the treatise of Copernicus, “De Monetae

Cudendae Ratione.”

5 Sermon at St. Paul’s Cross, 1549 (also see Jacob, “On the Precious

Metals,” pp. 244, 245).

6 1530-1596. See II. Baudrillart’s “J. Bodin et son temps” (Paris,

1853). Bodin wrote “Réponse aux paradoxes de M. de Malestroit

touchant l’enchérissement de toutes les choses et des monnaies”

(1568), and “Discours sur le rehaussement et la diminution des

monnaies” (1578).

7 “A Briefe Conceipte of English Policy” (1581). The book was

published under the initials “W. S.,” and was long regarded as the

production of Shakespere.

8 For information on this as well as a later period, consult Jacob “On

the Precious Metals” (1832), a history of the production and

influences of gold and silver from the earliest times. He is

considered a very high authority. Humboldt’s “Essay on New Spain”

gives estimates and facts on the production of the precious metals

in America. A very excellent study has been made by Levasseur in his

“Histoire des classes ouvrières en France jusqu’à la Révolution.”

For pauperism and its history, Nicholl’s “History of the Poor Laws”

is, of course, to be consulted.

9 See Cossa, “Guide,” p. 119.

10 See Antonio Serra, “Breve Trattato delle Cause che possono fare

abbondare li Regni d’ Oro e d’ Argento,” Naples, 1613.

11 Thomas Mun, “England’s Treasure by Foreign Trade” (published in 1640

and 1664); “Advice of the Council of Trade” (1660), in Lord

Overstone’s “Select Tracts on Money”; Sir William Petty, “Political

Arithmetic,” etc. (about 1680); Sir Josiah Child, “New Discourse of

Trade” (1690); Sir Dudley North, “Discourse on Trade” (1691);

Davenant’s Works (1690-1711); Joshua Gee, “Trade and Navigation of

Great Britain” (1730); Sir Matthew Decker (according to McCulloch,

William Richardson), “Essay on the Causes of the Decline of Foreign

Trade” (1744); Sir James Steuart, “An Inquiry into the Principles of

Political Economy” (1767). For this period also consult Anderson’s

“History of Commerce” (1764), Macpherson’s “Annals of Commerce”

(1803), and Lord Sheffield’s “Observations on the Commerce of the

American States” (1783).

12 The English Navigation Act of 1651 is usually described as the cause

of the decline of Dutch shipping. The taxation necessitated by her

wars is rather the cause, as history shows it to us. Sir Josiah

Child (1668 and 1690) speaks of a serious depression in English

commerce, and says the low rate of interest among the Dutch hurts

the English trade. This does not show that the acts greatly aided

English shipping. Moreover, Gee, a determined partisan of the

mercantile theory, says, in 1730, that the ship-trade was

languishing. Sir Matthew Decker (1744) confirms Gee’s impressions.

It looks very much as if the commercial supremacy of England was

acquired by internal causes, and in spite of her navigation acts.

The anonymous author of “Britannia Languens” confirms this view.

13 This was, in substance, the whole teaching of one of the leading and

most intelligent writers, Sir James Steuart (1767), “Principles of

Political Economy.” See also Held’s “Carey’s Socialwissenschaft und

das Merkantilsystem” (1866), which places Carey among the

mercantilists.

14 Forbonnais, “Récherches sur les finances de la France” (1595-1721);

Pierre Clément, “Histoire de Colbert et de son administration”

(1874); “Lettres, instructions et mémoires de Colbert” (1861-1870);

“Histoire du système protecteur en France” (1854); Martin, “Histoire

de France,” tome xiii.

15 “Dîme royale” (1707).