148 Pierre Joseph Proudhon (born 1809) made a well-known attack on private property in his "Qu'est-ce que la Propriete," "What is Property?" (1840). His answer was, "It is robbery." See also Ely, "French and German Socialism" (1883), p. 140.

149 Louis Blanc (born 1813, died 1882). His chief book, the "Organization of Labor," appeared in 1840, in the columns of the "Revue du Progres."

150 Karl Marx (born 1818, died 1883) published "The Criticism of Political Economy" (1859); and an extension of the same book under the new title of "Capital" (1867), of which only the first volume has appeared, on "The Process of the Production of Capital." This was again enlarged in 1872 to 822 pages. A large part of the work is filled with extracts from parliamentary reports on the condition of English workmen. Before the Revolution of 1848 he edited a communistic journal, and was obliged to leave the country afterward, by which he was led to London. He was an able writer on history and politics. Marx was assisted by Friedrich Engels, who wrote "The Condition of the Working Classes in England" (1845). See Ely, ibid., chap. x.

151 Born 1825, the son of a rich Jewish merchant. In philosophy and jurisprudence he won the praise of Humboldt and Boeckh. But vanity and wild ambition checked the success due to great abilities and energy of character. He was finally shot in a duel in 1864. He appears as the antagonist of Schultze (of Delitzsch), advocating state-help against the self-help of the originator of the People's Banks.

152 For an account of this society see Theodore D. Woolsey's "Communism and Socialism" (1880); "Nineteenth Century," July, 1878; and Ely, ibid., chap. xi.

153 See New York "Nation," Nos. 684, 686.

154 From his posthumous "Chapters on Socialism," "Fortnightly Review," 1879, p. 513 (vol. xxxi), and written in 1869.

155 The Count de Saint-Simon served in our Revolutionary War in the French army, while very young, and ended a life of misfortune and poverty in 1825, a month after the publication of his "Nouveau Christianisme" (Woolsey's "Communism and Socialism," p. 107). For a fuller account, see R. T. Ely's "French and German Socialism," p. 53; A. J. Booth's "Saint-Simon and Saint-Simonism" (London, 1871); and Reybaud, ibid.

156 This experiment when put on trial in France first brought up the question of the legal justice of giving an absolute right to inherited property, and numbered among its disciples the economists, Michel Chevalier and Adolphe Blanqui, and the philosopher, Auguste Comte.

157 Fourier was born at Besancon in 1772. He wrote the "Theory of the Four Movements" (1808); "A Treatise on Domestic and Agricultural Association" (1822); "The Theory of Universal Unity" (1841). Died 1837. See Ely, ibid., p. 81; Victor Considerant's "La Destinee Sociale" (fourth edition, 1851); and Reybaud, ibid.

158 Robert Owen (father of Robert Dale Owen), born 1771, in 1799 was engaged in the famous New Lanark Mills, of which Jeremy Bentham was one of the partners. In 1825 he purchased Harmony, in Indiana, from Mr. Rapp. He believed in a full community of property; that the Government should employ the surplus of labor for which there was no demand; and that, until the members became fully trained, affairs should be managed by one head (as in Saint-Simonism).

159 For Brook Farm, see Noyes's "History of American Socialism," chapter xi, and the life of "George Ripley," by O. B. Frothingham (1882). In general, also, for American experiments see Charles Nordhoff's "The Communistic Societies of the United States"; W. A. Hinds's "American Communists" (1878); Woolsey's "Communism and Socialism" (1880); and Noyes's "American Socialism" (1870).

160 The extracts in large type in this section are taken from Mr. Mill's "Chapters on Socialism" ("Fortnightly Review," 1879), being only the beginning of a larger work begun in 1869, and given to the public since his death. They are of interest because they give his conclusions twenty years after his "Political Economy" was written.

161 "Logical Method," pp. 34, 36.

162 Cf. Cairnes, "Leading Principles," pp. 180-188.

163 In the "Fortnightly Review," May 1, 1869.

164 "Leading Principles," pp. 149-189.

165 Counting six days to a week and four weeks to a month.

166 "Leading Principles," p. 185.

167 Mr. Thornton replied to Mr. Cairnes ("Nineteenth Century," August, 1879). A succinct statement of the condition of the wages-fund controversy has been made by Henry Sidgwick, "Fortnightly Review," September 1, 1879. See also W. G. Sumner, "Princeton Review," "Wages," November, 1882.

168 He advanced the same view in the "North American Review," vol. cxx, January, 1875. In his "Political Economy" (1883) he advances a more extensive theory of distribution. See "Atlantic Monthly," July, 1883, p. 129.

169 See Cairnes, "Leading Principles," p. 209.

170 This proposition needs to be kept in mind for the future discussion of the cost of production of food and its relation to cost of labor. Book II, Chap. V, 5.

171 Mr. Carey takes this ground.

172 See the explanation of an economic law, Book II, Chap. II, 1.

173 "Constitutional History of England," vol. ii, p. 563. See also Nicholls's "History of the Poor Laws," vol. ii, p. 303.

174 For further discussion of the advantages of small holdings, see Book IV, Chap. V, 2.

175 "Leading Principles," pp. 64-69.

176 See Young, "Labor in Europe."

177 Walter Bagehot, "Lombard Street," p. 13.

178 "Work and Wages."

179 The reader is advised to consider, in connection with this, the former discussion on the relation between wages and the price of food (pp. 185, 186).

180 "Logical Method," p. 206.

181 "American Political Economy," p. 164.

182 Rickards, "Population and Capital," p. 135.

183 Rickards, ibid., p. 75.

184 "Political Economy," p. 288.

185 "Progress and Poverty," pp. 220, 221.

186 "American Political Economy," p. 164.

187 For other writers opposed to the doctrine of Rent as maintained by Ricardo and Mill, see Bonamy Price, "Practical Political Economy," chap. x; McLeod, "Principles of Economic Philosophy," chap. x; and J. E. T. Rogers, "Manual of Political Economy," chap. xii.

188 Cairnes, "Logical Method," p. 199.

189 "Theory and Practice of Banking," vol. i, p. 13. Cf. Cairnes, "Logical Method," p. 106.

190 "Leading Principles," p. 11.

191 "Political Economy," p. 5.

192 "Social Science," vol. i, p. 158.

193 "Harmonies," p. 171.

194 "Political Economy," p. 126.

195 "Political Economy," Introduction, Chap. I, 5.

196 "Precis d'Economie politique," p. 175.

197 "Precis de la Science economique," vol. i, p. 202.

198 "Political Economy Primer," p. 98.

199 "Leading Principles," p. 15.

200 "Theory of Political Economy," pp. 82-91. See Cairnes, ibid., pp. 17-19.

201 "Political Economy," p. 92.

202 "Social Science," vol. ii, p. 335.

203 "Political Economy," Introduction, Chap. I, 5.

204 "Precis," p. 206.

205 "Political Economy," p. 165.

206 "Logic of Political Economy."

207 Although here using demand in its proper sense, a little later Mr. Mill defines it as the "quantity demanded." As he again uses it in the proper sense in discussing excess of money (Book III, Chap. V), supply (Book III, Chap. XI), and foreign trade (Book III, Chap. XIV), I have omitted from his present exposition his evidently inconsistent use of the word.

208 "Leading Principles," p. 25.

209 "Leading Principles," p. 108.

210 See his chapter on "Natural and Market Price," book i, chap. vii.

211 "Report of the Director of the Mint," 1883, p. 69.

212 Supra, p. 222.

213 "Leading Principles," p. 41.

214 Book I, Chap. I, 2.

215 See supra, p. 210.

216 "Leading Principles," part i, chap. iii, p. 87.

217 "Work and Wages."

218 "Leading Principles," p. 136.

219 F. A. Walker ("Political Economy," pp. 248-259) expands this idea, and makes it the pivotal part of his whole theory of distribution among laborers, capitalists, and landlords.

220 "Money and the Mechanism of Exchange," chap. iii.

221 "Political Economy," p. 127.

222 "Money and the Mechanism of Exchange," p. 1.

223 "Political Economy," p. 144.

224 The substance of Mr. Mill's former chapter, XV (Book III), is here inserted in its direct connection with the functions of money.

225 F. A. Walker, "Political Economy," p. 363. A German, Count Soden (1805), Joseph Lowe (1822), and G. Poulett Scrope (1833), proposed this scheme. See Jevons, "Money and the Mechanism of Exchange," chap. xxv.

226 "Money and the Mechanism of Exchange," p. 31.

227 "A Serious Fall in the Value of Gold" (1863).

228 F. A. Walker defines the demand for money as "the occasion for the use of money in effecting exchanges; in other words, it is the amount of money-work to be done" ("Political Economy," p. 133); and the supply of money as "the money-force available to do the money-work which the demand for money indicates as required to be done, in the given community, at the given time. The supply of money is measured by ... the amount of money and the rapidity of circulation" (ibid., p. 136).

229 Jevons, "Money and the Mechanism of Exchange," pp. 336, 339.

230 "Edelmetall-Production," in Petermann's "Mittheilungen," Ergaenzungsheft, No. 57.

231 See Jevons's "A Serious Fall in the Value of Gold."

232 In his book "De la Baisse probable de l'Or" (1859). See also Cairnes's "Essays." For authorities on the new gold, see Robinson's "California" (Larkin's and Mason's Reports, pp. 17, 33); Executive Documents of United States, 1848, I, 1; Westgarth's "Colony of Victoria," pp. 122, 315; Wood, "Sixteen Months in the Gold Diggings," p. 125; Lalor's "Cyclopaedia," II, p. 851; Walker, "Money," part i, chaps. vii, viii. For the probable effects, see "North American Review," October, 1852; Tooke's "History of Prices," vi, p. 224; "Statistical Journal," 1878, p. 230; Levasseur, "Question de l'Or." As to how far the value of gold was lowered, Jevons, "Serious Fall," etc.; "Statistical Journal," 1865; ibid., 1869, p. 445; and Giffen's "Essays in Finance," p. 82.

233 "Report of the House of Commons on Depreciation of Silver," 1876, p. v.

234 See Macaulay, "History of England," chap. xxi.

235 "Money and the Mechanism of Exchange," p. 84.

236 Jevons, ibid., p. 138.

237 See S. Dana Horton, "Gold and Silver," 1877, p. 84, et seq.

238 See Linderman, "Money and Legal Tender," p. 161.

239 Director of the Mint, Report, 1883, p. 49, and Linderman, ibid., p. 173.

240 See "Atlantic Monthly," "The Silver Danger," May, 1884.

241 See "International Review," September, 1876; and for some further explanation of banks, see "Atlantic Monthly," 1882, pp. 196, 695, 696.

242 "Report of the Comptroller of the Currency," 1883, p. 34.

243 See "Nature," xix, 33, 588.

244 See Walker's "Money," p. 473.

245 Vol. i, p. 302. See Sumner's "History of American Currency" and Walker's "Money" for much valuable material.

246 See Cherbuliez, vol. i, p. 299.

247 "Money and the Mechanism of Exchange," p. 232.

248 For John Law's famous scheme (1718-1720) in France, called the "Mississippi Bubble," the best authority is Levasseur's "Systeme de Law" (1854). Also consult M. Thiers's "The Mississippi Bubble" (translated by F. F. Fiske, 1859); Steuart's "Political Economy" (1767); and McLeod's "Dictionary of Political Economy," article on "Banking in France."

249 For the best brief account of the issues of assignats, see President A. D. White's "Paper Money Inflation in France." See also F. A. Walker, "Money," pp. 336-347; Bazot's "Assignats"; and Alison's "History of the French Revolution," vol. ii, p. 606.

250 See "Some Account of the Bills of Credit or Paper Money of Rhode Island, 1710-1786," in "Rhode Island Historical Tracts," No. 8 (1880), by E. S. Potter and S. S. Rider.

251 See Felt's "History of Massachusetts Currency." Consult also Minot, Hutchinson, and Gouge. Walker, "Money," and Sumner, "History of American Currency," have given considerable accounts of paper experiments in the United States, and should be well studied.

252 See Walker, "Money," p. 329.

253 See J. J. Knox's "United States Notes" (1884); the Finance Reports during and since the war to 1879; Spaulding's "Financial History of the War" (1869); Bowen's "American Political Economy," chap. xv; "Chapters of Erie," by H. Adams and F. A. Walker; and the voluminous pages of the "Congressional Globe." For the decisions in the legal-tender cases, see "Banker's Magazine," 1869-1870, p. 712, and 1871-1872, pp. 752, 780. A collection of statutes affecting United States finance, especially since 1860, has been made in a small pamphlet, by Professor C. F. Dunbar (published by Sever, Cambridge, Massachusetts).

254 Report of 1861.

255 Mr. Malthus, Dr. Chalmers, M. de Sismondi, and various minor writers. It is especially likely that, in times of commercial depression, the journals of the day will contain arguments to show a general over-production.

256 Book IV, Chap. II.

257 This is practically the argument of a little book, "Excessive Saving a Cause of Commercial Distress" (1884), by Uriel H. Crocker.

258 Book III, Chap. II, 4.

259 "Leading Principles," pp. 302-307.

260 "Essays on some Unsettled Questions of Political Economy," Essay I.

261 I at one time believed Mr. Ricardo to have been the sole author of the doctrine now universally received by political economists, on the nature and measure of the benefit which a country derives from foreign trade. But Colonel Torrens, by the republication of one of his early writings, "The Economists refuted," has established at least a joint claim with Mr. Ricardo to the origination of the doctrine, and an exclusive one to its earliest publication.—MILL.

262 I have in this illustration retained almost the exact words quoted by Mr. Mill from his father's book, James Mill's "Elements of Political Economy," but altered it by changing the trade from Poland to the United States, and by speaking of iron instead of cloth.

263 "American Political Economy," p. 481.

264 For a fuller discussion of this question see Cairnes, "Leading Principles," p. 319, ff.

265 "Leading Principles," p. 323.

266 Cairnes, "Leading Principles," p. 301.

267 Book I, chap. VI, 4.

268 I have changed the illustration from England to the United States in this example.

269 Book III, Chap. II, 4.

270 Book III, Chap. I, 3.

271 See "Statistical Abstract," 1883, pp. 32, 33.

272 This substitution has been made for Brazil.

273 See close of last chapter.

274 I have also changed the illustrations in this chapter so as to apply to the United States.

275 The examples in this and the next section have been altered so as to apply to the United States.

276 I have changed the names of the countries in the illustrations contained in this chapter, but have not further altered the language beyond the occasional change of a pronoun.

277 The subjoined extract from the separate essay ["Some Unsettled Questions of Political Economy"] previously referred to will give some assistance in following the course of the phenomena. It is adapted to the imaginary case used for illustration throughout that essay, the case of a trade between England and Germany in cloth and linen.

"We may, at first, make whatever supposition we will with respect to the value of money. Let us suppose, therefore, that, before the opening of the trade, the price of cloth is the same in both countries, namely, six shillings per yard. As ten yards of cloth were supposed to exchange in England for fifteen yards of linen, in Germany for twenty, we must suppose that linen is sold in England at four shillings per yard, in Germany at three. Cost of carriage and importer's profit are left, as before, out of consideration.

"In this state of prices, cloth, it is evident, can not yet be exported from England into Germany; but linen can be imported from Germany into England. It will be so; and, in the first instance, the linen will be paid for in money.

"The efflux of money from England and its influx into Germany will raise money prices in the latter country, and lower them in the former. Linen will rise in Germany above three shillings per yard, and cloth above six shillings. Linen in England, being imported from Germany, will (since cost of carriage is not reckoned) sink to the same price as in that country, while cloth will fall below six shillings. As soon as the price of cloth is lower in England than in Germany, it will begin to be exported, and the price of cloth in Germany will fall to what it is in England. As long as the cloth exported does not suffice to pay for the linen imported, money will continue to flow from England into Germany, and prices generally will continue to fall in England and rise in Germany.

"By the fall, however, of cloth in England, cloth will fall in Germany also, and the demand for it will increase. By the rise of linen in Germany, linen must rise in England also, and the demand for it will diminish. As cloth fell in price and linen rose, there would be some particular price of both articles at which the cloth exported and the linen imported would exactly pay for each other. At this point prices would remain, because money would then cease to move out of England into Germany. What this point might be would entirely depend upon the circumstances and inclinations of the purchasers on both sides. If the fall of cloth did not much increase the demand for it in Germany, and the rise of linen did not diminish very rapidly the demand for it in England, much money must pass before the equilibrium is restored; cloth would fall very much, and linen would rise, until England, perhaps, had to pay nearly as much for it as when she produced it for herself. But, if, on the contrary, the fall of cloth caused a very rapid increase of the demand for it in Germany, and the rise of linen in Germany reduced very rapidly the demand in England from what it was under the influence of the first cheapness produced by the opening of the trade, the cloth would very soon suffice to pay for the linen, little money would pass between the two countries, and England would derive a large portion of the benefit of the trade. We have thus arrived at precisely the same conclusion, in supposing the employment of money, which we found to hold under the supposition of barter.

"In what shape the benefit accrues to the two nations from the trade is clear enough. Germany, before the commencement of the trade, paid six shillings per yard for broadcloth; she now obtains it at a lower price. This, however, is not the whole of her advantage. As the money-prices of all her other commodities have risen, the money-incomes of all her producers have increased. This is no advantage to them in buying from each other, because the price of what they buy has risen in the same ratio with their means of paying for it: but it is an advantage to them in buying anything which has not risen, and, still more, anything which has fallen. They, therefore, benefit as consumers of cloth, not merely to the extent to which cloth has fallen, but also to the extent to which other prices have risen. Suppose that this is one tenth. The same proportion of their money-incomes as before will suffice to supply their other wants; and the remainder, being increased one tenth in amount, will enable them to purchase one tenth more cloth than before, even though cloth had not fallen: but it has fallen; so that they are doubly gainers. They purchase the same quantity with less money, and have more to expend upon their other wants.

"In England, on the contrary, general money-prices have fallen. Linen, however, has fallen more than the rest, having been lowered in price by importation from a country where it was cheaper; whereas the others have fallen only from the consequent efflux of money. Notwithstanding, therefore, the general fall of money-prices, the English producers will be exactly as they were in all other respects, while they will gain as purchasers of linen.

"The greater the efflux of money required to restore the equilibrium, the greater will be the gain of Germany, both by the fall of cloth and by the rise of her general prices. The less the efflux of money requisite, the greater will be the gain of England; because the price of linen will continue lower, and her general prices will not be reduced so much. It must not, however, be imagined that high money-prices are a good, and low money-prices an evil, in themselves. But, the higher the general money-prices in any country, the greater will be that country's means of purchasing those commodities, which, being imported from abroad, are independent of the causes which keep prices high at home."

"In practice, the cloth and the linen would not, as here supposed, be at the same price in England and in Germany: each would be dearer in money-price in the country which imported than in that which produced it, by the amount of the cost of carriage, together with the ordinary profit on the importer's capital for the average length of time which elapsed before the commodity could be disposed of. But it does not follow that each country pays the cost of carriage of the commodity it imports; for the addition of this item to the price may operate as a greater check to demand on one side than on the other; and the equation of international demand, and consequent equilibrium of payments, may not be maintained. Money would then flow out of one country into the other, until, in the manner already illustrated, the equilibrium was restored: and, when this was effected, one country would be paying more than its own cost of carriage, and the other less."—MILL.

278 See Book III, Chap. XVIII, 5, of Mill's original work.

279 "Principles of Political Economy and Taxation," third edition, p. 143.

280 For an exceedingly good study on the conditions of our foreign trade down to 1873, and a prophecy of the panic of 1873, see Cairnes, "Leading Principles," pp. 364-374.

281 "Leading Principles," p. 357.

282 The illustrations in this chapter have also been changed, but only so far as to make them apply to the United States.

283 I am here supposing a state of things in which gold and silver mining are a permanent branch of industry, carried on under known conditions; and not the present state of uncertainty, in which gold-gathering is a game of chance, prosecuted (for the present) in the spirit of an adventure, not in that of a regular industrial pursuit.—MILL. It is, however, worth recalling that gold and silver mining have not been—for large effects on the value of the metals—anything like a permanent branch of industry, but that, in the main, great additions have been obtained suddenly and by chance discoveries.—J. L. L.

284 See Walker, "Money," Chap. XIX.

285 Book II, Chap. V, 1.

286 I do not include in the general loan fund of the country the capitals, large as they sometimes are, which are habitually employed in speculatively buying and selling the public funds and other securities.—MILL.

287 The rate of interest at such crises in New York has several times risen to 400 or 500 per cent per annum.

288 In this illustration I have retained as nearly as possible the form of that given by Mr. Mill for the trade between England and Germany in cloth and linen.

289 Book II, Chap. V, 5.

290 Book II, Chap. II, 3.

291 Cf. Cairnes, "Leading Principles," p. 209.

292 For a brief bibliography on our own Navigation Laws and the Shipping Question, see Appendix I.

293 Book III, Chap. III, 1.

294 Supra, Book III, Chap. II, 2, and Chap. XX, 4.

295 Henry George, however, asserts that, "irrespective of the increase of population, the effect of improvements in methods of production and exchange is to increase rent" ("Progress and Poverty," p. 220).

296 "Leading Principles," Part I, chap. v.

297 For the distinction between normal and market values, see supra, Book III, Chap. II, 4, and p. 269.

298 Before beginning this discussion the reader is advised to review the relation of profits to cost of labor, and the dependence of the latter on its three factors, Book II, Chap. V, 5.

299 Book I, Chap. IX

300 Mr. Mill commended, as the most scientific treatment of the subject with which he had met, an "Essay on the Effects of Machinery," by William Ellis, "Westminster Review," January, 1826.

301 Although their needs now attract more attention through the extension of newspapers and cheap books, the condition of the laboring-class is certainly better than it was fifty years ago. See Mr. Robert Giffen's "Progress of the Working-Classes in the Last Half-Century" (1884), referred to in Book IV, Chap. V, 1.

302 A comparison of Chart No. XVII with Chart No. VI will furnish some means of learning whether the building of railways has gone on faster than is warranted by the increase of our crops (see supra, pp. 138).

303 Book I, Chap. V, 2.

304 Book II, Chap. I, 6.

305 "Progress of the Working-Classes in the Last Half-Century" (1884), page 8.

306 "Leading Principles," pp. 278-280.

307 "Progress of the Working-Classes in the Last Half-Century" (1884), being his inaugural address as President of the London Statistical Society, November 20, 1883.

308 1825.

309 1825.

310 Wages per day.

311 Wages per day.

312 Year 1878.

313 These mills have not been able to pay ten per cent regularly, as mentioned in Chart No. XIX, but it has merely been supposed that ten per cent were demanded by capital, in order to show that, for such a dividend, it required a diminishing proportion of the price to meet that estimate.

314 Book II, Chap. V, 5; see also "North American Review," May, 1884, p. 517.

315 For the influences of small properties in restraining an undue increase of population, see supra, p. 119. For a more general account of the benefits arising from such holdings, consult Mill's original work, Book II, Chaps. VI and VII, and T. E. Cliffe Leslie's "Land Systems."

316 Cf. E. L. Godkin, "North American Review," 1868, p. 150.

317 Fawcett, "Manual of Political Economy" (last edition), chapter on Co-operation.

318 Giffen, "Progress of the Working-Classes in the Last Half-Century," p. 19.

319 "History of Co-operation in England" (2 vols., 1879), p. 105.

320 Mr. Holyoake ("History of Co-operation in England," p. 99) quotes as follows from another's experience: "My own pass-book shows that I paid on November 3d, of last year (1860), L1 to become a member of a co-operative store. I have paid nothing since, and I am now credited with L3 16s. 6d., nearly three hundred per cent on my capital in a single year. Of course, that arises from my purchases having been large in proportion to my investment. In a co-operative store you get five per cent upon the money which you invest as a shareholder; and, if the store be well conducted, you will get seven and a half per cent addition."

321 For a full account of the proper steps to be taken in establishing a store, with many practical details, see Charles Barnard's "Co-operation as a Business," p. 119.

322 Cf. Walker, "Wages Question," p. 276.

323 Godkin, "North American Review," 1868.

324 "History of Co-operation," vol. ii, chap. ix.

325 Holyoake, "History of Co-operation," p. 131.

326 Godkin, "North American Review," 1868.

327 Pp. 27, 31, 32.

328 Barnard, "Co-operation as a Business," pp. 150-152.

329 Holyoake, "History of Co-operation," p. 235.

330 See Thornton, "On Labor," p. 370. Also see "Parliamentary Documents," 1868, 1869, xxxi; "Trades-Unions of England," by the Count de Paris; Brassey's "Work and Wages," chap. xiii.

331 See Walker, "Wages Question," p. 283. Also see Mill, Book IV, Chap. VII, 5, for an account of M. Leclaire's experiments in France with house-painters.

332 See also Von Boehmert, "Gewinnbetheiligung," second edition, 1878, and Jevons's "Methods of Social Reform" (1883). Professor Jevons ("The State in Relation to Labor," pp. 146, 147) has given a brief bibliography, which I reproduce here:

Charles Babbage, "Economy of Manufactures," chap. xxvi; H. C. Briggs, "Social Science Association," 1869; H. C. and A. Briggs, "Evidence before the Trades-Union Commission," March 4, 1868, Questions 12,485 to 12,753 [Parliamentary Documents]; "The Industrial Partnerships Record"; Pare, "Co-operative Agriculture" (Longmans) 1870; Jean Billon, "Participation des Ouvriers aux Benefices des Patrons," Geneve, 1877; Fougerousse, "Patrons et Ouvriers de Paris" (Chaix), 1880; Sedley Taylor, "Society of Arts Journal," February 18, 1881, vol. xxix, pp. 260-270; also in "Nineteenth Century," May, 1881, pp. 802-811, "On Profit-Sharing"; J. C. Van Marken, "La Question Ouvriere: Essai de Solution Pratique" (Chaix) 1881.

333 In his last edition of his "Manual," Professor Fawcett thus describes a co-operative experiment in agriculture: "The one that has attracted the most attention was made nearly forty years since by Mr. Gurdon, on his estate at Assington, near Sudbury, in Suffolk. Mr. Gurdon was so much impressed with the miserable condition of the agricultural laborers who were employed on his estate, that he was prompted to do something on their behalf. When, therefore, one of his farms became vacant, he offered to let it at the ordinary rent, L150 a year, to the laborers who worked upon it. As they, of course, had not sufficient capital to cultivate it, he in the first instance loaned them the requisite stock and implements. The laborers were, in fact, formed into a company in which there were eleven shares, and no laborer was permitted to hold more than one share. The plan was so eminently successful that in a few years sufficient had been saved out of the profits to repay all that had been advanced, and the stock and implements became the property of the laborers. Each share greatly increased in value. Mr. Gurdon was so much encouraged, not only by the pecuniary advantages secured to the laborers, but also by the general improvement effected in their condition, that some years afterward he let another and a larger farm on similar terms. Although no statement of accounts has ever been published, the remarkable pecuniary advantages secured to the laborers is proved by the fact that, after enjoying at least as high wages as were paid in the district, they were able in a few years to become the owners of a valuable property, consisting of the stock and implements on the farms. One of the most significant and hopeful circumstances connected with the experiment is, that it was not carried out by a picked body of men; and if so much could be done by laborers who were probably among the worst educated in the country, it maybe fairly concluded, that when the intelligence of our rural population has been better developed, co-operation may be applied in a more complete form to agriculture, and with even more striking results than were obtained at Assington.... In the description which has been frequently given of the system of peasant proprietorship, it is shown how powerfully the industry of the laborer is stimulated by the feeling of property. When he cultivates his own plot of ground, he exerts himself to the utmost, because he knows that he will enjoy all that is yielded by his labor. Each year, with the extended use of machinery in agriculture, it is becoming more advantageous to carry on farming on a large scale. When, therefore, co-operative agriculture becomes practicable, land may be cultivated by associations of laborers, and thus many of the advantages associated with the system of peasant proprietorship may be secured, while at the same time the disadvantages of small farming may be avoided. The progress toward co-operative agriculture will no doubt be slow and gradual."

334 Godkin, "North American Review," 1868. Also see Hermann Schultze-Delitsch, "Die Entwickelung des Genossenschaftswesens in Deutschland" (1870). This eminent philanthropist died April 29, 1883. For other forms of co-operation, building associations, etc., see Barnard, "Co-operation as a Business"; Pajot, "Du Progres par les Societes de Secours Mutuels" (1878).

335 See "Economics of Industry," by Mr. and Mrs. Marshall, p. 223.

336 "Wealth of Nations," Book V, chap. ii.

337 Book II, Chap. I, 6.

338 Book III, Chap. XIX, 5.

339 A higher rate is now imposed on landed than on professional incomes.

340 Cf. Walker, "Land and Rent," page 134.

341 I have changed the sums mentioned in this illustration into our own money.

342 Another common objection is that large and expensive accommodation is often required, not as a residence, but for business. But it is an admitted principle that buildings, or portions of buildings, occupied exclusively for business, such as shops, warehouses, or manufactories, ought to be exempted from house-tax.

It has been also objected that house-rent in the rural districts is much lower than in towns, and lower in some towns and in some rural districts than in others; so that a tax proportioned to it would have a corresponding inequality of pressure. To this, however, it may be answered that, in places where house-rent is low, persons of the same amount of income usually live in larger and better houses, and thus expend in house-rent more nearly the same proportion of their incomes than might at first sight appear. Or, if not, the probability will be that many of them live in those places precisely because they are too poor to live elsewhere, and have, therefore, the strongest claim to be taxed lightly. In some cases it is precisely because the people are poor that house-rent remains low.—MILL.

343 I have here also changed the amounts into our own money.

344 This illustration has also been changed, but only so far as to fit the trade between England and the United States.

345 Probably the strongest known instance of a large revenue raised from foreigners by a tax on exports is the opium-trade with China. The high price of the article under the Government monopoly (which is equivalent to a high export duty) has so little effect in discouraging its consumption that it is said to have been occasionally sold in China for as much as its weight in silver.—MILL.

346 A land-tax is, to its extent, an evidence that the state claims a certain right in the soil, and that it stands to the contributor, as it were, in the place of a landlord. This tax, however, is generally so small that it does not materially diminish the rent of land. So far as it goes, it is a tax on rent.

347 Some argue that the materials and instruments of all production should be exempt from taxation; but these, when they do not enter into the production of necessaries, seem as proper subjects of taxation as the finished article. It is chiefly with reference to foreign trade that such taxes have been considered injurious. Internationally speaking, they may be looked upon as export duties, and, unless in cases in which an export duty is advisable, they should be accompanied with an equivalent drawback on exportation. But there is no sufficient reason against taxing the materials and instruments used in the production of anything which is itself a fit object of taxation.—MILL.

348 See Lalor's "Cyclopaedia," article "Distilled Spirits," by David A. Wells.

349 "United States Statistical Abstract," 1883, pp. 2, 3.

350 The old condition of things was well described by Sydney Smith: "We must pay taxes upon every article which enters into the mouth or covers the back, or is placed under the foot. Taxes upon everything which is pleasant to see, hear, feel, smell, and taste. Taxes upon warmth, light, and locomotion. Taxes upon everything upon earth and the waters under the earth. On everything that comes from abroad or is grown at home. Taxes on raw material. Taxes on every value that is added to it by the industry of man. Taxes on the sauce which pampers man's appetite and the drug which restores him to health. On the ermine which decorates the judge and the rope which hangs the criminal. On the brass nails of the coffin and on the ribbons of the bride. At bed or at board, couchant or levant, we must pay. The beardless youth manages his taxed horse with a taxed bridle on a taxed road, and the dying Englishman, pouring his medicine (which has paid 7 per cent) into a spoon (which has paid 30 per cent), throws himself back upon his chintz bed (which has paid 22 per cent), makes his will, and expires in the arms of the apothecary (who has paid L100 for the privilege of putting him to death). His whole property is then taxed from 2 to 10 per cent; besides the probate, large fees are demanded for burying him in the chancel: his virtues are handed down to posterity on taxed marble, and he is then gathered to his fathers to be taxed no more."

351 "Financial Reform Almanac," 1883, pp. 107-109.

352 "Handbuch der Verfassung und Verwaltung in Preussen und dem Deutschen Reich," by Graf Hue de Grais (second edition, 1882), p. 138.

353 "Le Budget. Revenus et Depenses de la France," by M. Block (1881), pp. 57, 82.

354 Taken, with modifications, from Milnes's "Problems in Political Economy," p. 377.

355 Book I, Chap. IV, 5.

356 Although Mr. Mill had reference to the French wars in the beginning of this century, his words apply also to the circumstances of our own late war, 1861-1865.

357 Cairnes, "Leading Principles," pp. 381, 382.

358 Book I, Chap. IV.

359 Mr. Mill here takes up political considerations, which are not properly to be included in a purely economic treatment. (See the beginning of 6.)

360 See "Sketch of the History of Political Economy," supra, p. 6, note 1.

361 For bibliography of the United States shipping question, see Appendix I.

362 D. A. Wells, "Cobden Club Essays," second series, p. 533.

363 See F. W. Taussig's "Protection to Young Industries as applied in the United States" (1883).

364 In a letter written February 26, 1866, to Mr. Horace White, published in the Chicago "Tribune," and reprinted in the New York "Nation," May 29, 1873.

365 Business men constantly use the term "cost of production" when in reality they mean that which to the economist is expressed by "cost of labor." If cost of labor becomes higher, it takes from profits—the place where they feel the difficulties of competition—but they say that the cost of production has risen: the cost, to them, only has risen, that is, the "cost of labor," not "cost of production."

366 Cf. Cairnes, "Leading Principles," pp. 324-341; and supra, Book III, Chap. II, 4.

367 The fact (sufficiently established by Mr. Brassey) is not considered also that England gives higher wages to operatives than the Continent, and yet England is able to undersell France and Germany in neutral markets. It is evident, however, that England can undersell only in occupations in which she has advantages.

368 Cairnes, "Leading Principles," pp. 382-388.

369 "Compendium," 1880, pp. 1343-1377.

370 "Princeton Review," 1883, p. 222.

371 The United States have at the present time but five persons engaged in agriculture for each square mile of settled area.

372 Book IV, Chap. I, 2.

373 "Fifteenth Annual Report of the Massachusetts Bureau of Statistics, 1884," by Carroll D. Wright.

374 See Milnes's "Problems in Political Economy."

THE END