THE ARENA.



EDITED BY JOHN CLARK RIDPATH, LL. D.



VOL. XVIII



JULY TO DECEMBER, 1897



PUBLISHED BY THE ARENA COMPANY BOSTON, MASS. 1897

COPYRIGHTED, 1897 BY THE ARENA COMPANY.

SKINNER, BARTLETT & CO., 7 Federal Court, Boston.



CONTENTS.

PAGE

The Citadel of the Money Power: I. Wall Street, Past, Present, and Future HENRY CLEWS 1 II. The True Inwardness of Wall Street JOHN CLARK RIDPATH 9 The Reform Club's Feast of Unreason Hon. CHARLES A. TOWNE 24 Does Credit Act on Prices? A. J. UTLEY 37 Points in the American and French Constitutions Compared, NIELS GROeN 49 Honest Money; or, A True Standard of Value: A Symposium. I. WILLIAM JENNINGS BRYAN 57 II. M. W. HOWARD 58 III. WHARTON BARKER 59 IV. ARTHUR I. FONDA 60 V. Gen. A. J. WARNER 62 The New Civil Code of Japan TOKICHI MASAO, M. L., D. C. L. 64 John Ruskin: A Type of Twentieth-Century Manhood B. O. FLOWER 70 The Single Tax in Operation Hon. HUGH H. LUSK 79 Natural Selection, Social Selection, and Heredity, Prof. JOHN R. COMMONS 90 Psychic or Supermundane Forces CORA L. V. RICHMOND 98 The American Institute of Civics HENRY RANDALL WAITE, Ph. D. 108 An Industrial Fable HAMILTON S. WICKS 116 Plaza of the Poets: Reply to "Locksley Hall Sixty Years After," BARTON LOMAX PITTMAN 122 John Brown COATES KINNEY 125 Demos W. H. VENABLE, LL. D. 126 The Editor's Evening: Leaf from My Samoan Notebook (A. D. 2297); Vita Longa; Kaboto (a Sonnet) 128 A Stroke for the People: A Farmer's Letter to THE ARENA 134 Evolution: What It Is and What It Is Not Dr. DAVID STARR JORDAN 145 Has Wealth a Limitation? ROBERT N. REEVES 160 The Battle of the Money Metals: I. Bimetallism Simplified GEORGE H. LEPPER 168 II. Bimetallism Extinguished JOHN CLARK RIDPATH 180 The Segregation and Permanent Isolation of Criminals, NORMAN ROBINSON 192 How to Increase National Wealth by the Employment of Paralyzed Industry B. O. FLOWER 200 Open Letter to Eastern Capitalists CHARLES C. MILLARD 211 The Telegraph Monopoly: Part XIII. Prof. FRANK PARSONS 218 The Provisional Government of the Cubans THOMAS W. STEEP 226 A Noted American Preacher DUNCAN MACDERMID 232 The Civic Outlook HENRY RANDALL WAITE, Ph. D. 245 "The Tempest" the Sequel to "Hamlet" EMILY DICKEY BEERY 254 The Creative Man STINSON JARVIS 262 Plaza of the Poets: The New Woman MILES MENANDER DAWSON 275 Under the Stars COATES KINNEY 275 The Cry of the Valley CHARLES MELVIN WILKINSON 276 A Radical ROBERT F. GIBSON 277 The Editor's Evening: Our Totem; Vive La France! Le Siecle (a Sonnet) 278 The Concentration of Wealth: Its Causes and Results: Part I, HERMAN E. TAUBENECK 289 The Future of the Democratic Party: A Reply DAVID OVERMYER 302 The Multiple Standard for Money ELTWEED POMEROY 318 Anticipating the Unearned Increment I. W. HART 339 Studies in Ultimate Society: I. A New Interpretation of Life LAURENCE GRONLUND 351 II. Individualism vs. Altruism K. T. TAKAHASHI 362 General Weyler's Campaign CRITTENDEN MARRIOTT 374 The Author of "The Messiah" B. O. FLOWER 386 Open Letter to President Andrews THE EDITOR 399 Plaza of the Poets: The Onmarch FREEMAN E. MILLER 403 The Toil of Empire JOHN VANCE CHENEY 404 The Day Love Came THEODOSIA PICKERING 405 The Question JULIA NEELY-FINCH 405 Triolet CURTIS HIDDEN PAGE 406 The Cry of the Poor JOHN CLARK RIDPATH 407 The Editor's Evening: A Knotty Problem; A Case of Prevision; Concerning Eternity; A. L. (a Sonnet) 419 The New Ostracism Hon. CHARLES A. TOWNE 433 The Concentration of Wealth: Its Causes and Results: Part II, HERMAN E. TAUBENECK 452 The Rights of the Public over Quasi-Public Services, Hon. WALTER CLARK 470 Prosperity: the Sham and the Reality JOHN CLARK RIDPATH 486 Jefferson and His Political Philosophy MARY PLATT PARMELEE 505 The Latest Social Vision B. O. FLOWER 517 The Dead Hand in the Church Rev. CLARENCE LATHBURY 535 Hypnotism in its Scientific and Forensic Aspects, MARION L. DAWSON, B. L. 544 Suicide: Is It Worth While? CHARLES B. NEWCOMB 557 Plaza of the Poets: Old Glory IRONQUILL 562 Vita Sum JUNIUS L. HEMPSTEAD 563 Gold CLINTON SCOLLARD 564 Richard Realfe REUBIE CARPENTER 565 The Dreamer HELENA M. RICHARDSON 565 The Editor's Evening: The Greatest Lyric; "Thrift, Thrift, Horatio;" The Pessimist; The Physician's Last Call (a Sonnet). 566 Freedom and Its Opportunities: Part I Hon. JOHN R. ROGERS 577 "The Case Against Bimetallism" Judge GEORGE H. SMITH 590 The Initiative and the Referendum ELIHU F. BARKER 613 The Telegraph Monopoly: Part XIV Prof. FRANK PARSONS 628 The Laborer's View of the Labor Question: I. How the Laborer Feels HERBERT M. RAMP 644 II. Up or Down? W. EDWARDS 654 III. The Farm Hand: An Unknown Quantity WILLIAM EMORY KEARNS 661 Practical Measures for Promoting Manhood and Preventing Crime, B. O. FLOWER 673 The Demand for Sensational Journals JOHN HENDERSON GARNSEY 681 Is History a Science? JOHN CLARK RIDPATH 687 Plaza of the Poets: Our Brother Simon ANNIE L. MUZZEY 707 Thou Knowest Not HELENA M. RICHARDSON 708 Optim: A Reply GEORGE H. WESTLEY 709 The Murdered Trees BENJAMIN S. PARKER 709 The Hidden Flute MINNA IRVING 710 Retroensetta CURTIS HIDDEN PAGE 710 The Editor's Evening: Tantalus and His Opportunities; The Man in Bronze; Franklin (a Sonnet) 711 Idylls and Ideals of Christmas: I. What I Want for Christmas ROBERT G. INGERSOLL 721 II. Christmas, the Human Holiday Rev. MINOT J. SAVAGE, D.D. 722 III. Santa Claus: A Poem JAMES WHITCOMB RILEY 726 IV. The Aryan at Christmas JOHN CLARK RIDPATH 727 A Seance With Eusapia Paladino: Psychic Forces CAMILLE FLAMMARION 730 The Influence of Hebrew Thought in the Development of the Social Democratic Idea in New England CHARLES S. ALLEN 748 Priest and People E. T. HARGROVE 772 Immigration, Hard Times, and the Veto JOHN CHETWOOD, Jr. 788 The Founder of German Opera B. O. FLOWER 802 The Truly Artistic Woman STINSON JARVIS 813 Poor "Fairly Rich" People HENRY E. FOSTER 820 Shall the United States be Europeanized? JOHN CLARK RIDPATH 827 Hawaiian Annexation from a Japanese Point of View, KEIJIRO NAKAMURA 834 A Political Deal: A Story ELIZA FRANCES ANDREWS 840 Plaza of the Poets: Glad Tidings MARION MILLS MILLER 849 The Yule Log CLINTON SCOLLARD 852 How to Get an Article in a Magazine THE EDITOR 853 The Editor's Evening: Sir Thomas Kho on Education; Journey and Sleep (a Sonnet) 855

BOOK REVIEWS.

The Emperor 137 President Jordan's Saga of the Seal 284 Some Prehistoric History 426 A Bard of the Ohio 572 Critic, Bard, and Moralist 717 Guthrie's "Modern Poet Prophets" 860

ILLUSTRATIONS.

Opposite Page HON. CHARLES A. TOWNE 1 DR. DAVID STARR JORDAN 145 MULTIPLE-STANDARD TREASURY NOTE OF MASSACHUSETTS BAY 289 DR. E. BENJAMIN ANDREWS 433 GOVERNOR JOHN R. ROGERS 577 CAMILLE FLAMMARION 721 PSYCHIC SEANCE WITH EUSAPIA PALADINO 737



THE ARENA.

Vol. XVIII. JULY, 1897. No. 92.



THE CITADEL OF THE MONEY POWER.

I. WALL STREET, PAST, PRESENT, AND FUTURE.

BY HENRY CLEWS.

I.

The twenty-seven respectable citizens of New York who, in 1792, met under a buttonwood tree in front of the premises now known as Number 60 Wall Street, and formed an association for the purchase and sale of public stocks at a fixed and unvarying commission, with a proviso of mutual help and preference, committed themselves to an enterprise of whose moment and influence in the future they could have formed no adequate conception. At that date Wall Street was a banking district, small indeed when compared with its present condition, but important in its relations to the commerce of the nation. This transaction of the twenty-seven—among whom we find the honored names of Barclay, Bleecker, Winthrop, Lawrence, which in themselves and their descendants were, and are, creditably identified with the growth of the community—added the prestige and power of the stock exchange to those of the banks, and fixed for an indefinitely long period the destinies of the financial centre of the Union.

During the earlier part of this century the banking interests of Wall Street quite overshadowed those of the stock market. The growth of railway securities was not fairly under way until the opening of the fifth decade. Elderly men can recall the date when the New York Central existed only as a series of connecting links between Buffalo and Albany, under half-a-dozen different names of incorporation; and passenger cars were slowly and laboriously hoisted by chain power over the "divide" between the latter city and Schenectady. Since there were but few railways in the entire country, there were few opportunities for speculative dealings in their shares. These shares, too, were as a rule locally held, and were more frequently transferred by executors under court orders than by brokers on the stock exchange.

Prior to 1840 and 1845, however, the members of the stock exchange were not idle. Public stocks were largely dealt in. The United States government frequently issued bonds, and the prices of these bonds fluctuated sufficiently to afford tempting chances of profits. State bonds also were sold in Wall Street in larger amounts than to-day. About the year 1850 the sales of Missouri sixes and Ohio sixes frequently amounted to millions of dollars daily. During that uncertain epoch of finance when the United States Bank was both a financial and a political power, the shares of that institution were a favorite subject of speculative dealing. The shares of Delaware & Hudson, and of the original Erie Railway, the latter laboriously constructed over a rough, barren, and thinly settled portion of the State, partly by State funds, had also become actively exchangeable in the market.

During this period a relatively enormous quantity of banking capital had located itself in and near Wall Street. The Bank of New York existed before 1800, and later, although not long after, the Street witnessed the erection of buildings of a now obsolete, and yet at that time an attractive, style of architecture, devoted to the uses of the Manhattan Banking Company, the Bank of America, the Merchants, the Union, the Bank of Commerce, and others. Were it not that land in the banking district is so valuable, and that the need of upstair offices is so great, one might be tempted to regret the demolition of the graceful money temples occupied by three of these corporations on the north side of Wall Street. In each of them the entablature rested upon two fluted stone pillars with Doric capitals, in addition to the supports of the side walls. Between the steps and the doors of the temple extended a marble-paved court which often served as a convenient place of 'change for borrowers and lenders. Entering the doors you found yourself in a large, airy, dome-lighted room, the sides of which were occupied by the clerks of the institution, guarded by high barricades from the intrusive eyes and feet of the general public. At the rear were the offices of the president and cashier. Throughout the entire building there reigned a solemn and semi-religious silence. One may witness something like this to-day in the Wall-Street end of the U. S. Treasury Building, and only there.

Up to the epoch of the rise of railway building and railway-share speculation, the main aliment of Wall-Street banks was the profit derived from the discount of commercial paper and from loans upon government and State securities. But when railway shares and bonds, based upon lines of road which were constructed through the rich regions of the Union lying between the Atlantic and the Mississippi river, came upon the market in large amounts, affording ample security for investment and loans, the great banks of Wall Street were quick to appreciate the advantages of loans made upon such undoubted values, which were at all times convertible into cash on the stock exchange. In times of pressure, commercial paper is an inferior asset for a bank, all of whose obligations are payable on demand. At such times notes become practically unsalable, and are not always paid at maturity. A failure of one firm brings down others, and renewals are urgently required from banks just when they are least able to grant them. Salable securities are on such occasions an ark of safety, and, dating from the early fifties, this class of securities has always been the basis of a large amount of the loans of the banks of Wall Street and their near neighbors of the same class in lower Nassau Street and also Broadway.

With the immense outgrowth of business consequent upon the discovery of gold in California in 1849, and the construction of the great railways of the Middle West, such as the Michigan Southern, the Northern Indiana (now the Lake Shore), the Michigan Central, the Galena & Chicago, the Rock Island, and others of like importance and real value, the banks and banking houses of Wall Street, and the stock exchange, grew into most important factors in developing the prosperity of the country. Enterprises were originated by able men acting under corporate powers, and when these were brought before the committees of the stock exchange and duly approved and listed, capital instantly flowed forth from its reservoirs in answer to the securities thus offered. And it may safely be said that but for the combined machinery of the New York banks and the stock exchange the actual developments of twenty years would have dragged laboriously through an entire century.

Amid so much progress and activity, speculation was not idle. Those were the days of many of our greatest railway operators, daring, able, enthusiastic men, who had the rare gift of imparting confidence to their followers and the public, and realized the fable of King Midas, whose touch transmuted all things into gold. Their careers were those of conquest and accumulation, like that of Napoleon; and, like him, they underwent, with few exceptions, their retreats from Russia and their Waterloos. Of such were Jacob Little, Daniel Drew, Anthony Morse, and others, to whom now the motto of Junius applies: Stat nominis umbra. Merely the shadows of their names reach over to us from the horizons where their suns set so long ago.

There was an epoch too in the Wall Street of the past when gigantic and deeply considered combinations were set in motion, entitled "corners." As to corners, a word of explanation may not be amiss. There are always two factions in the stock market: the bulls, who want stocks to rise in price in order that they may sell out; and the bears, who want stocks to fall in price so that they can buy in. Contrary to the superficial belief of the public, the bulls are sellers and the bears are buyers. But in order to sell a commodity you must buy or borrow it; and in order to buy at a future date you must sell at a previous date; and thus the bull buys for the purpose of selling at a profit, and the bear sells something which he doesn't own for the purpose of buying it at a lower price. The bull therefore hopes to push prices up so that he can sell his purchase at a profit, and the bear hopes to drag prices down so that he can buy what he has sold, also at a profit.

Meanwhile, the bear has delivered the shares sold by him, and in order to deliver them, has borrowed them, and given security in money at its market price. Here he has placed himself in danger, because the owner of the shares may at any time tender him this money and demand the shares, which the bear may not be able to provide himself with, except at the price which the owners choose to set upon them.

Thus a person might be under contract to deliver the shares of some corporation which might be absolutely worthless, and yet these shares might be so held that the holders could exact one thousand dollars a share. Given a railway with a share capital of ten millions, one person or knot of persons might own every certificate of its stock, and have it all loaned out to bears who had sold, borrowed, and delivered it. It is obvious that this person or club of persons could compel purchases of the shares which he or they alone possess, at whatever price he or they think proper to demand; and since such things can be done by skilful combinations under able generalship, they have been done, and were a favorite scheme during the eventful years between the sixties and the eighties. The corners in Harlem, Hudson, Erie and Northwest, in which Vanderbilt, Drew, and Gould achieved such success for themselves and their associates, have passed into history as a conspicuous portion of the great events of Wall Street. Their interest is chiefly historical, because of late years no comprehensive corners have been organized. Share capitals are so large that it is difficult for one man to control any one of them, and a divided corner is apt to fail. But in their day and generation they have offered brilliant illustrations of genius and strategic skill in financial warfare.

The system of selling short, however, which gave birth to the idea of creating corners, and which came into vogue in the fifties, has never ceased to be a leading factor on the stock exchange. It was the result of certain inflations of values which necessarily follow the construction of great enterprises. However high a valuation may be set upon any given commodity, there are always persons who expect a higher price. Early historical examples of this fact are the South-Sea shares and John Law's Mississippi shares, over which England and France respectively went crazy in the last century. The loftier the figures to which these shares mounted, the greater was the eagerness of the public to buy them. But at that period the art and mystery of selling short had not been brought into practice, and when the bubbles collapsed there were universal losers and no direct winners.

During the latter half of this century there have been periods in the history of Wall Street when the prices of railway and industrial shares have been forced enormously above the standard of actual values, and innumerable persons have parted with good money in exchange for mere phantoms of imaginary values. At such times the short sales of discernment, directing the X rays of clear-sighted criticism into the swollen and opaque mass of financial carrion that is exposed for sale in the market, are of the utmost benefit to the public. The bear is then a benefactor to the community, and when he pulls down and tears to pieces the rotten carcass of some gigantic humbug, strewing the highway with its remains, we cannot praise his work too highly.

II.

The present condition of Wall Street is one of lassitude and expectancy. The great banks have an abundance, perhaps a superabundance, of money, their own and their depositors, which they are only too glad to lend on solid and readily salable collateral at low rates of interest, approximating the prevalent rates in London and Paris, where similar accumulations of idle capital exist. A large part of this money is deposited with them by local banks in all parts of the country, which recognize New York City as the financial centre of the Union, and are content with interest of from one to two per cent upon the funds which they are unwilling or unable to use safely at home. The stock exchange is also in a condition of quietude. The public are neither buying nor selling stocks in any large amount.

This state of things is the resultant of well-known facts. Numerous over-capitalized and badly managed railways have gone into bankruptcy, and either are in the hands of receivers or have emerged from such guardianship, and are painfully toiling along on the road to prosperity on the twin crutches of assessments upon stockholders and the withholding of dividends from the same long-suffering and patient class.

The transactions at the stock exchange at present average about two hundred thousand shares a day, exclusive of bonds, government, State, and railway; and a certain class of observers who like to subject circumstances to a minute analysis inform the public that the daily profits of the members of the exchange are about sufficient to pay the expense of office rent and clerk hire. This conclusion takes it for granted that these profits should be equally divided among the membership. This is not a reasonable supposition. Many of the members are such only in name, and rarely go on the floor. Others live during most of the time on their accumulations, and come into the market to buy or sell only when prices are abnormally low or high. The comparatively small busy portion manage somehow to keep fairly active, and are cheerfully looking forward to better times, through a vista from which the cloud of a change of the monetary standard has already passed away, and into which the genius of enterprise beckons them to enter.

III.

While in many respects the future is a sealed book, yet there is such a thing in the economy of nature as an absolutely accurate prevision of events, such as eclipses of the sun and moon, and conjunctions of the planets, and a relatively correct prevision of events depending upon the growth of enlightened communities. Since the incorporation of the Bank of New York, at the corner of Wall and Williams Streets, the banking capital of New York has increased more than sixtyfold, of which more than one-half is held and used in and around Wall Street, and the aggregation of deposited and loanable capital has grown from a few millions to over half a billion. If this has been the result during one century, what will take place in the same direction during the next century? The ratio of increase will not be kept up. A thousand dollars may be doubled in a day, but no such ratio as a hundred per cent a day can be predicated of a million. And yet it is certain that, under proper management, the million will go on increasing; and in the same manner will our half-billion increase by its own earning power, and by contributions from all parts of the Union. The development of the United States in the direction of population, agriculture, manufactures, and mines is so enormous and so steady that this nation will at some not distant period become the most opulent of all the nations of the planet, unless unforeseen and improbable political events happen by which our great commonwealth shall be disrupted or its financial stability overturned. Under a normal condition of things the capital of the citizens of the Union will continually increase, and the banks of the city of New York will be the depositary of larger and larger reserves of whatever capital is temporarily idle in the places where it is created. In due time the financial centre of the world will be shifted from London to our imperial city.

Such a destiny has been foretold for St. Petersburg, in view of the construction of the Siberian Railway and its branches, which in time will open up to industry an immense tract of productive soil in the most fertile parts of Asia, abounding in wheat and corn land, and full of superior water power. But in this superb rivalry between the United States and the colossus of Europe and Asia, the former nation has an immense start as to time, and a still greater advantage in the character of its population. And in addition to these we have the undoubted and constantly increasing supremacy of the English language. Just as during the Middle Ages Latin was the vernacular of the learned classes, and as to-day French is the language of diplomacy in Europe, so is English the common tongue in all the commercial localities of the globe. With English a man can commit himself to foreign travel anywhere, while outside of Russia there are few towns on the various continents in which Russian is not an unknown speech. These controlling conditions cannot be readily or easily changed, especially since no paramount reasons exist why they should be changed.

It is then a reasonable forecast of the future, that in due time the weighty import of the names of Lombard[1] and Threadneedle Streets will be transferred to the name of Wall Street, and the facts implied by such a transfer are of a dignity and power which it is impossible to estimate. The road leading to this great destiny can only be blocked by injurious legislation, and the good sense of our citizens may be confidently relied upon to prevent the creation of such a barricade against national prosperity.

[1] It will be recollected that Macaulay has pictured a New Zealander of some future day as sitting upon a broken arch of London Bridge, contemplating the ruins of St. Paul's cathedral; and readers of the classics may recall the forecast of Seneca in the time of Nero, as to the discovery of a Western continent by which Rome should be dwarfed: "In later ages the time shall come when the ocean shall loosen the chains which bind us, a mighty continent shall be disclosed, and a deity shall unveil a new world beyond Britannia."



II. THE TRUE INWARDNESS OF WALL STREET.

BY JOHN CLARK RIDPATH.

The organized powers of society are always anxious to conciliate public favor. They know that they exist by sufferance—by sufferance of a mightier than themselves. In proportion as they know themselves to be aggressors and spoliators their anxiety increases. Every abusive power in the world is thus driven to adopt schemes and devices—some dangerous and some merely ludicrous—to keep a footing at that silent bar of opinion before which all wrong must, sooner or later, quail and slink away.

The great concern called Wall Street is such an organized power in society. It exists as a fact in our American system, and would fain conciliate the favor of the public. Wall Street has become one of the most conspicuous features in our national life. Knowing that it is challenged by public opinion—knowing indeed that it is already under the ban and condemnation of the American people—it now seeks, after the manner of its kind, to save itself alive. It would go further than mere salvation; it would make mankind believe that it is a reputable part of the universal swim. Aye more; it seeks to ingratiate itself, sometimes by force and sometimes by gentle craft and stratagem, into the good graces of that civilization which it has so mortally offended.

To this end Wall Street strives to justify itself in periodical and general literature. No other power in human society to so great a degree and in so subtle a manner exploits its own virtues. Taking advantage of the well-known carelessness of American readers, and knowing full well how easily they are duped—how easily they are cozened out of their senses and led into false beliefs with mere plausibilities and sophisms—this imperial and far-reaching Wall Street, this elephantine fox of the world, takes possession of American journalism—owns it, controls it. It seizes and subsidizes the metropolitan press. It purchases newspapers and magazines by the score. It establishes bureaus; it buys every purchasable pen, from the pen of the gray philosopher to the pen of the snake editor. It overawes every timid brain, from the brain of the senator to the brain of the tramp. What it cannot purchase it terrorizes; and the small residue which it cannot terrorize it seeks to cajole: all this to the end that its dominion may be universal and everlasting.

In this work of gaining possession of public opinion and perverting that opinion to its own uses Wall Street employs all methods and uses all expedients. Wall Street deliberately marks its game; and we have to confess that the game generally falls at the first fire. We have heard, however, of a single case of a brave man, now dead, who, when offered ten thousand dollars for his voice against his conviction and his opinion against his soul, in the matter of electing President of the United States the man who was the candidate of Wall Street, told the subtle committee to make an immediate and expeditious visit to the bottom of the old theology.

This train of thought rises vividly to mind when I consider the article of Mr. Henry Clews on "Wall Street, Past, Present, and Future." This article came unsought and unexpected to the editorial desk of THE ARENA. I confess that I doubted its genuineness. For why should Mr. Clews address the public through the columns of THE ARENA? What has THE ARENA done to merit such distinction? Satisfying myself that the contribution was genuine, that it was not—and is not—a hallucination, I at once divined that it must be a sort of challenge to this magazine. I do the author of "Wall Street, Past, Present, and Future," the honor to believe that he does not suppose THE ARENA to be sufficiently verdant to publish his adroit and well-covered apology for the great institution which he represents,—without knowing the sense and significance of it. If indeed the distinguished gentleman imagined that we could do such a thing here, then in good sooth he must be undeceived. Or if he supposed that a paper of the kind submitted would be rejected at this office because of our well-known antagonism to the fact which Mr. Clews defends, let him in that instance also be undeceived.

At the office of THE ARENA we take all challenges. Nor should our friends suppose or fear that the welcome admission of Mr. Clews's article to the pages of THE ARENA implies timidity or some possible weakness in the presence of that gigantic institution known by the name of Wall Street. The fact is, that the nightmare which that power has been able to spread, bat-like, over the souls of men for a quarter of a century has about been dissipated; it is already the beginning of the end. It is the dawn; the day is not very far in the future when the American people, roused at last to the exertion of their majesty, will shake themselves from the dread of this incubus and spring up like a giant refreshed from slumber.

Mr. Clews's article on "Wall Street, Past, Present, and Future," is a most gentle and dove-like performance. It is not a paper intended to produce alarm, but to allay it. It is one of the finest examples of a literary opiate that I have ever seen. The bottom theme of the paper is that Wall Street is a natural growth, and is therefore inevitable. Wall Street has come by a gentle evolution. Good men and true have conspired with nature to bring it forth. Under natural and necessary conditions Wall Street has appeared in our American system, and under these conditions it flourishes. Whatever great fact in society has thus appeared has been born of necessity and out of the nature of things. If Wall Street have been born out of necessity and the nature of things, then it has come of righteousness, and is the child of truth. If of righteousness and truth, then Wall Street is good as well as glorious. That which is good and glorious ought to be admired and honored. Whatever is admired and honored, whatever is good and glorious, should have influence and power in society and state. Such a golden product of evolution is Wall Street; therefore the sceptre which Wall Street stretches forth over the prostrate Western world should be obeyed and upheld by the voice and hand of the American people.

Not only so, but the sceptre should be extended. The empire of Wall Street should become universal. It should be enlarged and confirmed until all outlying kingdoms and all islands of the sea shall pass under the beneficent sway of this monarchy of the world! Then with Mr. Clews we may well consider his "reasonable forecast of the future." With him we shall be able to see "that in due time the weighty import of the names of Lombard and Threadneedle Streets will be transferred to the name of Wall Street." With Mr. Clews we shall be able to see that "the facts implied by such a transfer are of a dignity and power which it is impossible to estimate." Then, finally, with Mr. Clews we shall agree that "the road leading to this great destiny can only be blocked by legislation." Mr. Clews says "injurious" legislation. Certainly; that is true—most true. The consummation hoped for by Mr. Clews can verily be blocked by legislation! But when it comes to the definition of "injurious" how fearfully do we part company! The writer of "Wall Street, Past, Present, and Future" flatters himself, in fine, with the belief that "the good sense of our citizens may be confidently relied upon to prevent the creation of such a barricade against national prosperity." Oh, it is "national prosperity" then that we have in view! That is good. If there be anything under heaven which Wall Street adores and dotes on more than any other thing in the world it is national prosperity! When it comes to national prosperity Wall Street is always full-handed. With the mere mention of national prosperity Wall Street raises a shout of sympathetic enthusiasm which reverberates from Passamaquoddy to San Diego, and from the Florida everglades to the snow-capped shoulders of Shasta!

Let me, however, explain to Mr. Clews one thing, and that is that the blessed condition of universal society in which Wall Street, having absorbed Lombard and Threadneedle, shall be supreme over the nations will occur only when our free American institutions shall be crushed into fragments and when civil liberty shall lie bleeding among the ruins. It will occur then, and not before. It will occur when the residue of the old American spirit has been stamped out, and when a miserable, slavish subserviency shall have been substituted for the revolutionary freedom which our fathers won and made sacred with their blood on every patriot battlefield from Lexington to Appomattox.

Temperately and patiently I will follow Mr. Clews's paper through. The writer of the article is a gentlemanly and able representative of that colossal power which he has helped to build up and fortify. From being a child of that power he has now become, in a most theosophical manner, one of the fathers of it! As such he has made himself the apologist of a gigantic and rampant beast on whose horns of hazard the values produced by the labor of seventy millions of Americans are tossed about as if the wreckage were so much waste excelsior thrown on the horns of a bull! Mr. Clews tells us that in 1792 twenty-seven gentlemen met under a buttonwood tree and formed the association known as Wall Street. The purpose of the association was "the purchase and sale of public stocks at a fixed and unvarying commission, with a proviso of mutual help and preference." The result was the addition of "the prestige and power of the stock exchange to the prestige and power of the banks." That indeed is a combination worthy to be considered! A consolidation of interests was effected between the exchange and the banks to purchase and sell stocks "with a proviso of mutual help."

The organization thus created has existed for one hundred and five years. It has made a history. It has become ever greater and more firmly fixed in and on American society. It has made itself to be the foundation of all things financial and political in the United States. The story of the process by which this prodigious result has been reached is narrated by Mr. Clews in the manner of one who gives an account of the formation of a temperance society or a Sunday school! In the whole article there does not appear a symptom of a suspicion that the thing of which he gives the history is the most dangerous and abusive fact that ever threatened the integrity of a nation. The argument is that if twenty-seven gentlemen thus met and created Wall Street, then the result, being a natural product, is good and wholesome. But the inquiry at once arises whether it is valid logic to suppose that what men do is right, simply because they do it. The affirmative of such a proposition would make Aristotle stagger. It amounts to this, that whatever is is right; therefore, let it alone.

By this argument of Mr. Clews all the tyrannies of the past, all the horrors that have afflicted the human race, all the sufferings which men have endured from sword and pestilence, from servitude, from the butchery of war and the cruelty of the Inquisition, have been right merely because they have been natural. Under this rule every monster that has tormented society from the first day until now can find full justification for itself on the simple ground that it exists! Under such an argument a howitzer is as good as a plough, a sword is as good as a sickle, a pillory is as good as a baby-wagon. By such reasoning a shark is as useful as a horse. By this logic a boa-constrictor is as good as a reindeer, a tiger is as useful and salutary in his office as an ox or a St. Bernard, and a cancer is as beautiful as a blush. That is, everything is good, not because it is useful and just, but because it is.

Or again, Mr. Clews's argument is this: that the men who created Wall Street were gentlemen; therefore their work was salutary. Just as though respectable people could not engage in a nefarious business. Just as though gentlemen could not, and would not, make a conspiracy to enslave the human race. The "gentleman" is a very uncertain factor in civilization; his devotion to right and truth requires always to be tested with a chemical and to be taken with the usual combination of chlorine and sodium.

Mr. Clews explains that the stocks underlying our old railroad properties in the United States were aforetime "held locally," and that they were transferred "more frequently by executors than by brokers on the stock exchange"—as though that were an evil. Then "there were but few opportunities for dealing in shares"—as though that were an evil! It thus became necessary for Wall Street to get the old stocks belonging to the people out of the people's hands and into the hands of the Street—as though that were a good. Our public improvements were in the first place made by the people, but the people were not fit to own them. Our railways were constructed with capital subscribed by the people, generally by those through whose country the given improvement was extended. The people themselves then owned their own, and controlled it. Until Wall Street reached out and clutched such properties—first putting down the prices of the shares to nothing and then pulling the given stocks to par—the people were able to protect themselves; but never afterwards.

The same was true of all other securities, whether public or private. Nearly all bonded debts were at first local; but the holding of securities locally has always been a thing abhorrent to Wall Street. The idea of the Street is that all stocks and all securities belong, not to the public, but to itself. Of course the money capital of the country belongs to the Street. And if, with the consent of public authority, the stocks of the country also can be held by the Street, then a humble peasantry, paying perennial rents and compound interest, can be created and kept under forever throughout the domains of the great Republic. It may ultimately require arsenals to do it, but these we can supply.

The next stage in the game was the creation by Wall Street of fictitious enterprises for the distinct purpose of getting possession of the stocks on which such enterprises were based, and of speculating in the shares of such properties. When the existing stocks of railways were not sufficient—when the bonds of States and of the general government were insufficient in quantity to fill the maw of the benevolent being called Wall Street—then an artificial supply must be created; that is, some scheme of debts must be invented by which the people might be made to pay tribute to the good Wall Street, and pay it still more abundantly.

Thus were invented new banks and new banking systems. Thus came the bull and the bear and the bucket-shop. Thus were projected a thousand railways and canals. Many of these were laid into impossible regions—all "for the benefit of the people!" Other enterprises which were not sufficiently stocked began to be stocked more heavily—this also for the benefit of the people. The plan of watering was invented; the method of "promoting" enterprises was perfected,—until, as early as the time of the Civil War, Wall Street had acquired the greatest skill in making debts, or, in the language of James Fisk, Jr., in "rescuing the property of other people from themselves."

These beautiful processes are glossed over by Mr. Clews with a pleasant account of how, with the growth of business and the discovery of gold and the oncoming of the age of construction, great enterprises were "promoted" by Wall Street, and how "capital instantly flowed forth from its reservoirs in answer to the securities" that flowed thereto. The author of "Wall Street, Past, Present, and Future," affirms "that but for the combined machinery of the New York banks and the stock exchange the actual developments of twenty years would have dragged laboriously through an entire century." Permit us to say that it would have been better that such "actual developments" should have dragged through two centuries than that the United States of America should have been stocked and mortgaged and bonded and enslaved, under the tyrannous lash of debt, by such a master as Wall Street.

Mr. Clews next comes to the subject of corners. On this topic we doubt not that he speaks as one having authority. He tells us quite complacently that there was "an epoch in the Wall Street of the past when the gigantic and deeply considered combinations were set in motion entitled 'corners.'" Then he goes on to explain what corners are. He does so without the slightest expression of criticism or aversion. He tells us of the bulls and the bears by whose agency a corner is conducted as though they were the friendly competitors in some great philanthropy! Instead of describing corners as so many carefully contrived schemes to rob the people of the proceeds of their labor by putting the prices of their commodities and securities down until such commodities and securities are taken from their hands, and then putting the prices up in order that the robbers may reap the harvest, he speaks of corners as offering "brilliant illustrations of genius and strategic skill in financial warfare!"

The fact is that the men who are reared in Wall Street, who from their youth are familiarized with its processes, and who are well set in the plastic age to consider human life as an auspicious opportunity for getting possession of something that does not belong to them, are fatally blunted in their sensibilities; the ethical quality in them is battered out—or at least battered; they come to regard the human race as an enormous ranch of sheep to be shorn at the pleasure of the shearers; they even grow to consider each other as so much mutton to be butchered and roasted by whoever is able to do it.

I notice with surprise that Mr. Clews in his sketch of Wall Street dwells not at all upon the benevolent agency of that power during the Civil War. This is an oversight which I beg leave to supply. There has never perhaps been an instance in human history in which a great power has so ardently devoted itself "to the preservation of free institutions" as did Wall Street in that epoch of mortal agony. Then it was that Wall Street engaged in the patriotic work, first of destroying the national credit, then of buying it up at half price, then of converting it into a bonded debt to be perpetuated for a full generation, and finally of compelling the people to pay it in a dollar worth four times as much as the dollar with which it was purchased. It was a beautiful scheme of devotion and self-sacrifice the like of which history has never before recorded. It was a speculation which involved the life of the American Republic. The Union was on trial. All nerves were strained, and all hearts were torn. The nation was bleeding at every pore. Every freight-train that came from the front brought back its loaded boxes of dead. Fathers and mothers gathered at the station, and each received his own. The rough coffin containing the body of the patriot boy who had given his life for the flag was taken by the silent father and mother to its resting-place under the apple trees. All true men had tearful faces, and a stern resolve in the heart. And while this was the condition of the nation and the people, the high-toned Wall Street was speculating on the life of the Republic. It bought and sold blood. It was a bull on disaster and a bear on victory. It established bureaus through which to falsify intelligence and to bring the nation to the verge of ruin. It had no compunction. It regarded the gore of battlefields as the rich rain and mould out of which its own harvest was to grow. The more blood the merrier. The more tears the richer the yield. The more war the more debt. The more depression of the national credit the more cheaply we shall be able to gather it up! The more grape-vine despatches the more distraction and the better opportunity for us. The more death the more millions. The more horror and devastation the heavier will be our coffers. The more the people groan the more we will shout. The more they die the more we will live. The more the flag is torn the more our damask curtains will flutter. The more liberty perishes and withers from the earth the more we shall plant ourselves and flourish and rule and reign over a nation that we have destroyed and a people whom we have enslaved. If Mr. Clews wishes any further outline of the history of Wall Street during our Civil War we shall be glad to contribute such a sketch as a reminiscence of a great fact which appears to be dim in his memory.

There is another almost fatal omission in Mr. Clews's article. He says but little about the principal work in which Wall Street, historically considered, has been engaged during the last thirty years. I do not like the way in which this great section of the "Past" of Wall Street is glossed over. During the period referred to, that institution has had one bottom purpose and one reason of action from which it has never deviated. This purpose, this reason of action, has been the perpetuation of the national debt and the increase of its value by bulling the unit of money in which the debt is payable. Wall Street knows that the bonded debt of the United States is the basis, or central fact, in the whole system of bonds and stocks. Wall Street knows that the dollar is the central fact in the bond. It knows that if the bond can be made everlasting and the dollar can be increased in value until a single unit of it shall be equivalent to an acre of farming land, then the Street can own the United States in fee simple, and can presently annex the rest of the world.

I acknowledge a certain admiration when I consider this stupendous scheme. It is more than Napoleonic; it is continental, interplanetary, sidereal! I cannot recall another conspiracy in the history of mankind quite equal in colossal and criminal splendor to the profound and universal plot of Wall Street to make perpetual the national debt, to keep that debt the bottom fact in the banking system of the United States, and to bull the unit of money and account until it shall be worth four times as much, or perhaps ten times as much, as it was when the bulk of the debt was contracted.

The history of this scheme in its true inwardness is the history of Wall Street for the past thirty years. The details of the history relate to such small circumstances as the transfer of the government of the great Republic from the hands and control of the people to the hands and control of the Street. Of course no such scheme as that referred to could be carried into successful operation unless the national government could be delivered over to the keeping of the Street and be locked up, as it were, in the same vault where the national debt is deposited.

This feat, however, was easily accomplished. Wall Street reached out its hand and plucked down the American eagle from his perch. Wall Street got possession of the government. The coup was accomplished while the nation was asleep—else it never could have been accomplished. Wall Street climbed the Tarpeian rock in the night, and no goose cackled to give the alarm. Columbia had gone to bed. The keeper of her treasure-house had already given the key to the enemy. The keeper of the treasury was a part of the enemy. He gave up both citadel and city. In the morning the walls were placarded with lying posters which said that the delivery of the government into the hands of the Hessians had been rendered necessary in order "to preserve the national honor!" It was done in order to keep faith with those benevolent patriots who had bought the debt of the nation at less than fifty cents to the dollar, and who, not satisfied with bringing it to par, were now engaged in the honorable work of making it worth two hundred cents to the dollar. The fact that the industries of the people would be crushed and the people themselves be reduced to poverty by the transfer of the national sovereignty from the capitol to the stock exchange was nothing in comparison with the "preservation of national honor."

The scheme was carried out. The methods by which it was carried out constitute the subject-matter of the true history of Wall Street during the past generation. Wall Street, from being a financial organization, became a political power. It took full possession of the executive and legislative departments of the government. It controlled them both. It promptly established and defended its ownership. It instituted one scheme after another. For the purpose of fortifying its usurpation, it learned to choose its men and to prepare its measures in advance. In 1884 it created an administration for its own purposes, and manned it to the same end. It forced its way into the House of Representatives and stood with a bludgeon behind the Speaker's chair. It entered every committee-room and dictated every successful bill. The people's bills all went one way. If by any chance one of the people's bills got before the House the subsidized press, owned by Wall Street, raised against it a chorus of groans and catcalls; that was "an expression of public opinion"!

From that day forth the popular voice was strangled into silence. The next administration (that of 1888) was prepared in the same manner. Wall Street has no politics except the politics of the bond; it has no platform except the platform of cent per cent. It suffices that when a president is to be elected he shall be one of us. He shall not be a man of the people; else in that case he would be a demagogue, a windbag, a vox et praeterea nil. Our man shall not even know the despised people. He shall not smell of the filthy ground, but must be "sound" on questions of finance. If he be not "sound," we will make him so. We will teach him his paces. If the people conclude to change their government, we will see to it that the incoming powers are just like the outgoing. As for the "principles" on which the candidate shall be chosen, we will attend to that. We will make his principles for him. We understand principles perfectly. We will fix the platform; we know the carpenters. If the candidate and his friends have already fixed a platform before the date of the convention, and if it have been published everywhere as the decision of the candidate and his following, we will take that platform from the wires and will carefully revise it, to the end that the "national honor" shall be preserved. We will write it over again into new meanings. We will interpret it so that no harm shall be done to the "national credit." We will make our candidate into a puppet. When we put our foot on the treadle his jaw shall drop and he shall utter many mocking words about the "national honor" and the "prospects of our glorious country"—signifying nothing.

All this we will do for the public good. We will say that we are striving for national prosperity. We will proclaim our candidate as the advance agent of prosperity—until after the election. Then we will say that prosperity will come with the inauguration. Then we will say that it will shine out promptly when Congress adjourns and ceases to menace the national credit. Then we will say that prosperity will reveal itself when the hot season is over. By this time the hoodwinked people can be coddled to sleep, or else set to dancing with rumors of foreign wars. To this end we will have our newspapers carefully promote our principles and studiously avoid all reference to those subjects in which the people feel the deepest concern. Finally, we will omit all these matters from our history of "Wall Street, Past;" we will proceed to speak of our "Wall Street, Present," and will explain that it is in a state of "lassitude and expectancy." Indeed "lassitude and expectancy" is good.

But there is still another yawning chasm in the history of "Wall Street, Past," and that is Mr. Clews's failure to discuss the transfer of the Treasury of the United States to the custody of the Street, and the consequent reduction of the Secretary of the Treasury to the rank of a clerk. This very thing has been most successfully accomplished. I believe that the Secretary still has an office at Washington, but that should be closed in the interest of economy and reform. To do so, we doubt not, would be a strong factor in the restoration of confidence. Perhaps the Washington office might be left in charge of a janitor, for it is understood that some official correspondence is still directed to the old address! The presence of the Secretary in New York, however, has become so essential to the proper discharge of his duties that the removal of his residence thither can only be deferred by an absurd deference to public opinion!

The results of the transfer of this vital function of the national government have, in the meantime, been so salutary as fully to vindicate the change. This was shown in 1893-94 when the Street, with a strong repugnance to investing money in useful enterprises, and having a prodigious accumulation of funds on hand, concluded that a sale of Government bonds was necessary for the "national honor." To this end the managers began to pull the treasury. In that institution a large sum of gold was stored, wholly without warrant of law. The people needed the gold beyond measure—that is, they needed the money; and gold is one form of money. The industries of the people had been prostrated by an international conspiracy, and the nation was quivering on the verge of apprehended ruin.

In this crisis the patriotic Street devised the bucket-chain, the crank of which was in the hand of the Street, while the "chain" ran through the Treasury of the United States. Every bucket came out filled with gold. Lazard Freres emptied out the gold and shipped it abroad to their confederates. This created the necessity for buying it back with bonds. The people were stunned with the audacity of the thing—just as the unfortunate owners of a house in flames are stunned to see gentlemen of the profession rush in and empty the safe. Wall Street danced and shouted while the work was done. The bonds were "popular," and the Street got them—got them for one price and sold them for another.

By this beautiful process the great American nation was literally held up and robbed of more than nineteen million dollars! No highwayman ever more successfully clutched the wizen of his victim than did the Street with its supple fingers around the white larynx of Columbia. The wheezing of the strangulated Republic could be heard from the St. Lawrence to the Rio Grande. The nation was thus "saved," and the robbers took the money and went sailing away on summer cruises to Norway and Venice and the Cyclades. The "national credit" was preserved; Wall Street "rescued" us from dishonor! That part of the proceeds not consumed in yacht races, pyrotechnics, and balls was passed to the credit of the reform fund, needed for the restoration of prosperity in the fall of 1896! Certainly a history of "Wall Street, Past," ought to contain some reference to these crimes.

Mr. Clews, turning to "Wall Street, Present," tells the nation that now "the great banks have a superabundance of gold to lend on solid and readily salable collateral at low rates of interest, approximating the prevalent rates in London and Paris, where similar accumulations of idle capital exist." This is a true statement of the facts. Mr. Clews has here spoken by the books. What he says signifies that Wall Street is now ready to go ahead and issue new mortgages on the American people. It is now ready to offer inducements to our fourteen millions of voters to sell themselves into another twenty-year cycle of bondage. If they will only be gentle and not interrupt us; if they will give us a true death-grip on themselves, on all they possess, and all they ever hope to possess, we will lend back to them a part of the very money which we have sucked up from their wheat fields and pastures, from their barns and potato patches, from their humble stores and markets, from their mills and their mines, and we will thus expedite them on the way to serfdom. Meanwhile we will continue to bankrupt their railways, to snatch their local stocks, to convert all shares in all enterprises into bonds, and to put the bonds into our safes to the end—that confidence may be restored and prosperity come back like the flowers that bloom in the spring.

For the time being we, the Street, are able to toss "two hundred thousand shares a day" on the horns of our bull, and to put the same amount of securities under the custody of our bear. "This conclusion takes it for granted that the profits should be equally divided among the membership." Such are Mr. Clews's very words. By the bond of my faith! there is nothing else so beautiful and magnificent as this among the arts invented by mankind! As for the people, one of your own kings, Messieurs of the Street, has very properly indicated your wish and purpose with regard to them.

Mr. Clews tells us that the "Future" of Wall Street is a sealed book; and yet we may allow that "there is such a thing as an accurate prevision of events." Of this kind are eclipses, occultations, and tides of the sea. If the capital of Wall Street has, since the institution was founded, increased more than sixtyfold, as Mr. Clews declares, then we may expect it, according to his philosophy, to increase full sixty times sixty, until the world shall be swallowed up. Then, when Threadneedle and Lombard Streets shall have lost their sceptre; then, when Seneca's forecast of the time to come shall have been fulfilled; then, when Macaulay's New Zealander shall have made his sketch, not only of St. Paul's, but also of the bank of England; then, when all the wealth, and all the power, and all the functions of civil society in the United States shall have been transferred to Wall Street; then, when nothing shall remain to the American people except their squalid huts and the sorrowful reminiscences of a great republic; then, when Wall Street in very truth shall have possessed itself of the earth and consumed mankind,—I suppose that the benevolent owners of the world will found a few libraries, build a few marble mausoleums for themselves, and sally forth to establish a stock exchange in Mars! That done, interplanetary wars may be engendered, bonds on the solar system may be issued and bought at half price, a gold standard of values may be fixed on the basis of the pound sterling good from the sun out to Neptune, and the inhabitants of the worlds, either by arms or by journalism, may become the helots of consolidated wealth enthroned as the governing power of the universe.



THE REFORM CLUB'S FEAST OF UNREASON.

BY HON. CHARLES A. TOWNE,

Chairman Provisional National Committee Silver Republican Party.

On Saturday evening, April 24, 1897, at the Waldorf Hotel, New York, there was held a political banquet intended as a most impressive function, but which has passed into history as a very ridiculous one. Big with self-complacence and puffed with pride, as it appeared in the brilliant lights and gorgeous appointments of the palatial supper-hall, within twenty-four hours the lacerating indignation of Mr. Watterson and the trenchant raillery of Mr. Bryan had let the tumid pretentiousness all out of it, and it had collapsed into a flaccid and "innocuous desuetude." The "star-eyed goddess" turned her back upon it, the "wild-orbed anarch" snapped his fingers at it, and even everyday Mrs. Grundy laughed it to scorn. Projected with the most alluring and satisfying expectations, the feast has dwindled to the memory of a sad mistake in the mind of every man that assisted at it. Planned as a sort of coronation ceremony, its completed performance unaccountably wore the complexion of belated obsequies irreverently disturbed by the guffaws of the multitude.

But the aspect of this banquet as a piece of ill-conceived political strategy that never was formidable, or as a rite in the ceremonial of a hero-worship that is as inexplicable as inopportune, does not now so much concern me as does its office as a dispenser of misinformation and unsound philosophy, which are always dangerous. Many who condemn the folly of it as a move in practical politics nevertheless loudly commend the economic doctrines it contributed to spread. But inasmuch as, in my opinion, the science it taught is as bad as the politics it practised, I propose to call attention to a few of the arrogant assumptions and mischievous theories that found emphatic and repeated expression at this feast.

Did the purpose of this article permit, it would be interesting to make Mr. Cleveland's speech the text of some examination into the ex-President's peculiarities of style. It was Clevelandesque to the core. All his protuberant characteristics are there: the leviathanic egotism, the profound and tenebrous ponderosity, the labored intricacy of the commonplace, the pedagogic moralizing, the oracular inconsequence. How absurdly obvious it all is now, and how inexplicable that the glamour of high place should ever have clothed such matter as his with the seeming of philosophy and statesmanship! 'Tis the very frippery and trumpery of the stage after the lights are out and the audience has departed.

In his opening Mr. Cleveland says: "On every side we are confronted with popular depression and complaint." This language stirs an echo of the long ago. In his special message to the extra session of the Fifty-third Congress in August, 1893, he thus announced a similar condition: "Suddenly financial distrust and fear have sprung up on every side." But he accounts differently for these two identical phenomena. The situation to-day he largely attributes to "the work of agitators and demagogues." In 1893 he declared: "I believe these things are principally chargeable to Congressional legislation touching the purchase and coinage of silver by the general government."

The ex-President's explanations are both wrong, and nobody ought to know it so well as himself. His relations with the great gold bankers were exceedingly intimate in 1892 and 1893, and have been so ever since. It is notorious that the panic of 1893 was a bankers' panic deliberately brought about by these men to frighten public sentiment into supplementing their demand for the repeal of the purchasing clause of the Sherman law of 1890. The agitation against that law was a whooped-up and manufactured agitation. No legitimate interest had suffered from its operation. On the contrary, the access of standard silver dollars coined under the laws of 1878 and 1890 had been of incalculable advantage to the country. In his annual message of December 2, 1890, President Harrison had thus referred to this fact: "The general tendency of the markets was upward from influences wholly apart from the recent tariff legislation. The enlargement of our currency by the silver bill undoubtedly gave an upward tendency to trade and had a marked effect on prices." And again: "It is gratifying to know that the increased circulation secured by the act has exerted, and will continue to exert a most beneficial influence upon business and upon general values."

Such an influence that circulation did indeed continue to exert. The comparative prosperity of the two following years, which, in contrast with the conditions of the subsequent period, causes 1892 to wear to wistful eyes so beautiful a hue in these unhappy days, would have been an absolute impossibility but for the silver legislation.

Nor was the credit of the government menaced. It was a malicious afterthought that represented the silver dollar as a charge upon the credit of the nation. That dollar was a standard dollar. It was never "redeemed" in anything but the money-work it did. There was no law for its redemption, and there was as yet no attempt, such as Mr. Carlisle in 1896 declared himself ready to make, to commit the crime of an administrative degradation of the circulating silver dollars into promises for the payment of gold. The Treasury Notes, issued in payment for silver bullion under the law of 1890, were redeemable in either gold or silver at the discretion of the Secretary of the Treasury; and inasmuch as there was silver behind every one of them, they could become a menace to the credit of the government only in case of the betrayal of his duty by that official.

But the contractionists looked with alarm upon the improving conditions of the country. Something must be done to discredit silver, or by and by there might arise such a demand for the full restoration of its mint privileges and money powers as could not be balked, as every similar demand had been balked since 1873; and in that event the slow villany of many years would have been fruitless and the contractionists' occupation would be gone. Then was formed the deep design to compel the repeal of the purchasing clause of the Sherman law. The gigantic forces that had been behind Mr. Cleveland in the memorable campaign of 1892 had not lost their cunning or their power. They knew their implements, and they had had much experience. Their strategy was customary and it was effective. To-day Mr. Cleveland complains because the Republican party, having won the contest of last November on the money question, should have hurried into the current extra session on the tariff question. Let him recall his own course when, having carried the country in 1892 on the tariff question, he summoned the extra session of 1893 to consider the money question. Such a reflection might possibly assist him in fathoming the present motives of the men who won in 1892 to achieve the gold standard and in 1896 to preserve it.

For the election of Mr. Cleveland was a carefully executed move in an elaborate and merciless programme. The president of a national bank in North Dakota, a man of character and thorough reliability, has recently made public a conversation between himself and a prominent New York bank president, held not long after that election, in which the latter, whose institution was a member of the Associated National Banks, declared in substance as follows: "We have just elected Grover Cleveland President of the United States upon the express understanding with us that the policy of the administration shall be to uphold and advance the gold standard"; and he foretold, with startlingly faithful prevision, the repeal of the Sherman purchase law, the successive bond-issues, and the general and ruinous fall of prices, which seem to have evidenced the strict performance of the agreement by the party of the second part.

How persistently the power of the executive was used, and how carefully the offices were dispensed, to influence Senators and members of Congress against the Sherman law, were matters of ordinary comment at the time. Meanwhile the banks were putting in motion their peculiar and enormous persuasions. For months no man could go into any bank in any State of the Union for any purpose without having thrust under his nose, with a more or less pointed request for his signature, a petition demanding the repeal of the obnoxious statute. Then, in the latter days of April, 1893, on the stock exchange, there began that concerted onslaught upon stocks and values, vaunted as an "object-lesson" to the people, as a result of which within eight months six hundred of the relatively smaller banking institutions of the country went down, dragging with them fifteen thousand industrial and business enterprises, involving a total loss of seven hundred and fifty millions of dollars.

The object-lesson served its purpose. With the business world shattered into fragments, enterprise stifled, and credit dead, a terror seized upon the people. The opportunity for which the big bankers had been coolly waiting had come. Cunningly and in many places at once they started the cry that the Sherman law had caused all this havoc, and that the only hope for a return of prosperity lay in the immediate repeal of the feature providing for the purchase of new silver bullion. The clamor was eagerly repeated, and fear eagerly believed it. At precisely the right moment the President himself made official proclamation that the rumor was true, and summoned Congress in extra session to obey the mandate of the bankers. Under this spell Congress acted and the law was repealed. Thus was the country made dependent upon gold alone for its new supplies of full-power money, and thus, aided by similar action elsewhere, was inaugurated an era of accelerated fall of prices more pronounced than the world has known since the middle ages, and a precipitate decline of values more ruinous than any other chronicled in history.

"Agitators and demagogues" indeed! Is it not monstrous that any intelligent man should believe the present frightful condition of the country to be due to the work of agitators and demagogues? Mr. Cleveland of course knows better; but many people have actually been convinced that some millions of our citizens would rather agitate than work; that thousands of them have deliberately and by preference forsworn business and become demagogues by trade. The thoughtful man knows that agitation is first a result and afterward a cause. It is a cruel as well as an ignorant thing for Mr. Cleveland and his disciples to cast into the faces of the suffering producers and workers of the United States, as a reproach, the fact of their discontent and complaining. Of course our people are in distress. Of course they are crying out against it. Of course they will endeavor to learn what occasions it. And of course when they have ascertained what the matter is they will agitate for relief. Substantially all men prefer to be busy about the ordinary and interdependent offices of social life. This is especially true of the great middle classes in the United States. Under just and rational laws they will be so. The absence of such a temper is ground for suspicion against the laws. Existing conditions confess their weakness and injustice when they revile admitted discontent. I would rather the cause I believe in sprang from suffering than that suffering should follow my cause.

The full magnitude of this achievement for the gold standard in the repeal of the law of 1890, will not be grasped unless we bear in mind that it occurred at a time when the indications were unusually favorable that an international bimetallic agreement, which the world had been trying to accomplish for nearly twenty years, might soon be secured on an acceptable basis. It has long been suspected that the strongest discouragement of this hope, and probably the determining factor in its failure, was the attitude of President Cleveland as quietly caused to be understood abroad. Very recently this well-grounded suspicion has been turned into certainty by the distinguished English bimetallist, Mr. Moreton Frewen, who, in a letter to the Washington Post, says:

But Mr. Cleveland made it known, through the subterranean channels of diplomacy, that, far from giving any support to silver, he was preparing to urge on Congress the repeal of the silver-purchase clauses of the Sherman act. Mr. Cleveland's intention became known in official circles in Calcutta. That this was the case I learned at the time and at first hand. The government of India believed that the cessation of all silver purchases in America would still further reduce the exchange value of the rupee, and therefore, in advance of the pending anti-silver legislation anticipated from Washington, the Indian mints were closed.

Mr. Cleveland may well be deified in the gold-standard cult, for clearly he has been the arch-enemy of bimetallism.

One of the characteristics of the discussion now going on between the advocates of gold monometallism and those of bimetallism is the disingenuousness of the former. They will rarely consent to a clear definition of the issue, but seek to evade it both by preempting the use of moral labels and catchphrases which satisfy their partisans without inquiry, and by stigmatizing their opponents with such vile imputations and base epithets as seem to place them beyond the pale of moral and intellectual tolerance. "Sound" and "honest" they write above their creed. They pose as consecrated guardians of public honor and private property. We are depicted as dishonest and imbecile, repudiators of national and individual obligations, communists or anarchists bearing the torch and axe. This specialty is Mr. Cleveland's long suit. Little wonder that his school should place him at its head. His preeminence in the field where self-admiration is a supreme virtue and ribald abuse passes for irrefutable argument will scarcely be denied by anybody who shall have read the following characteristic specimens from this Waldorf essay, carefully written down and calmly delivered: "We are gathered here to-night as patriotic citizens anxious to do something toward ... protecting the fair fame of our nation against shame and scandal." It is not recorded that anybody smiled at this. Indeed, the astonishing thing about this business is that these people seem able to impose successfully on one another. But Mr. Cleveland is even better at the other kind, as for example: "Agitators and demagogues," "ruthless agitators," "sordid greed," "inflamed with tales of an ancient crime against their rights," "unfortunate and unreasonable," "restless and turbulent," "reckless creed," "boisterous and passionate campaign," "allied forces of calamity," "encouraged by malign conditions," and so on ad nauseam.

This is the attitude of nearly all the defenders of the gold standard who have the hardihood to say anything at all. Undoubtedly in many cases it is assumed because of ignorance on the merits of the case, so that nothing remains but to "abuse the other fellow." But occasionally this course is adopted by men who are well informed, and who know that the gold standard is incapable of meeting bimetallism in an honest contest of argument with any hope of success. The strategy of these, therefore, is to avoid fair discussion by so prejudicing the public mind against their opponents as to forestall a hearing.

The result has been surprisingly successful. In many localities, and in fact in nearly all localities in the East, the most intolerant spirit has been manifested by the most prominent persons in the community, who had never taken the pains to examine the subject on which they so violently and fanatically expressed themselves. To people of any acquaintance with the literature, the history, and the science of money, it has seemed most marvellous that business men of large affairs, of much general information, and of excellent natural abilities, should be content to remain absolutely ignorant of fundamental monetary principles and the overwhelmingly attested lessons of past experience. It is infinitely pitiful to see men of affairs led away in so-called "business men's sound-money associations" and other similar movements, when a knowledge of the conditions on which their welfare depends would send them in an exactly opposite direction.

Why? Because business men are men who do business, or at any rate who want to do business; and all legitimate business consists in the performance of some appropriate function in connection with the production or the exchange of commodities. It is apparent to even the dullest apprehension that whatever prevents or discourages production is destructive of business, and that a money system which provides a measuring unit that constantly demands, as an equivalent, an increasing quantity of everything produced, is the greatest burden on production that could possibly be devised. But it is precisely this kind of a unit that the gold standard furnishes. No one economic fact is so conclusively established and so generally conceded as that of the progressive fall of average prices throughout the gold-standard world during the last twenty-four years. This fall amounts to almost fifty per cent, and indeed, in respect to the great staple products of the country, exceeds fifty per cent; so that, to state the same fact in its converse, the purchasing power of gold has increased since 1873 one hundred per cent.

The significance of this awful fact is deftly obscured behind the deceptive and specious plea for "a dollar of the greatest purchasing power." This is one of those artful expressions that are used by the advocates of the gold standard as a kind of thought-deterrent. It seems so obvious, at the first suggestion, that the best dollar is the dollar that will buy the most, that it is hard for a man to get even a hearing who asserts that, on the contrary, such a dollar is the very worst dollar conceivable. But a moment's reflection will satisfy any sane mind that such is the case. The demonstration is so simple that one feels like apologizing for making it. Yet it is in respect to principles just as plain as this one that people are constantly allowing themselves to be taken in by the supporters of the single standard.

The demonstration is this: whatever is bought by a dollar, itself buys the dollar. For example, when a dollar exchanges for a bushel of wheat, the dollar buys the wheat, and the wheat buys the dollar. To say, therefore, that a dollar that buys two bushels of wheat, being a dollar of greater purchasing power, is better than the dollar that buys one bushel, is to say that the dollar which it requires two bushels of wheat to buy is a better dollar than that which can be bought with one bushel. Consequently, to increase the excellence of your dollar all you need to do is to increase the scarcity of the stuff out of which dollars are made, so that each one shall constantly stand for more and more wheat, or, using wheat merely as representative of commodities in general, so that it shall constantly require more and more of all other things on earth to get a dollar. It is wholly credible that the man with dollars should profess this philosophy, but it is absolutely inexplicable how it should receive the support of men interested in getting dollars with things, who comprise about seven-eighths of society.

Now as it continually takes more products to get a given quantity of gold, is it not clear that the producer who becomes liable for taxes and gets into debt must constantly bear an increasing burden of taxation, and that his debt, payable in more commodities than it represented when he incurred it, needs only to run long enough to grow beyond the hope of his ability to pay it? Such a policy cannot but be fraught with certain ruin to producers. It is causing in the United States a condition frightful to contemplate. The mass of debts is piling up at a ratio that absolutely threatens, if a halt in the automatic process is not soon called, a universal insolvency. Indeed a general liquidation is already impossible. He is no alarmist who counsels a timely and rational remedy as not only demanded by justice, but as anticipatory of violent readjustment. Under such disquieting conditions is it not as criminal as it is unscientific for men to go about prating of the system that has occasioned these things as "honest money," and "sound money," and denouncing its opponents as repudiators and anarchists?

In the presence of epochal and fundamental disturbance, when men, patient beyond example and willing to argue the correctness of their claims, are crying out against the injustice of a money system that day and night and year upon year, with unerring and pitiless precision, takes from the producing many and hands over to the idle few that which it ruins those to lose and but pampers these to gain, our ex-President offends decency and insults millions of his fellow-citizens with this reference to their contention: "Honest accumulation is called a crime." Where does he find anybody calling honest accumulation a crime? Men indeed stigmatize the maintenance of this odious money system as a crime, but only because of the things they claim it to be guilty of. Why does he not join issue on these? He knows that nowhere in all this world is there, or has there ever been, a more honest body of citizenship than the millions of Americans who to-day are toiling on the farms and in the workshops of the country and who demand from the laws they obey nothing but equity and justice. It was easier, and more pleasant to those who heard him, to wrong these men with a sneer than to answer them with an argument. He might possibly have done well to relinquish this task to one who sat near him, his ex-Secretary of the Treasury, who had himself, in 1878, discovered something that he thought a crime and had thus denounced it: "According to my views of the subject the conspiracy which seems to have been formed here and in Europe to destroy, by legislation and otherwise, from three-sevenths to one-half the metallic money of the world, is the most gigantic crime of this or any other age."

The speech of Mr. Carlisle was notable for stating his position more extremely than he had previously done since his apostasy. He boldly takes the stand logically demanded by consistency in the man who opposes silver coinage and denies the arguments based on the appreciation of gold. He comes out squarely for the gold standard and places bimetallism of any and all sorts under a common ban. But alas! what a sorry appearance he makes. Nowhere in our political history do I find quite so pathetic a figure as that presented by this once strong and virile champion of the people's rights in his contrasted role of defender of their oppressors. Where now is that compact and cogent argument, that sincere and moving eloquence, which made his forensic style so singularly effective; which marked him the parliamentary darling of his party, a predestined president of the republic? Shrunken to the dreary platitudes of the gold-standard catechism, babbling of "sound currency" and "intrinsic value."

This talk of intrinsic value was not confined to Mr. Carlisle. Mr. Patterson, of Tennessee, and Senator Caffery, of Louisiana, were likewise guilty of it. It is, indeed, the characteristic folly of their school. Having destroyed the money demand for silver while adding almost incalculably to that for gold, they have caused an increasing disparity in the values of the two metals; and now, when it is sought to restore the parity by restoring the equivalence of use and demand on which alone it depends, they pretend to have discovered some inherent perfection in gold and an original sin in silver which forbid all attempts to reconcile them. In the face of monetary principles whose nature has been understood for more than two thousand years, and of historic and economic facts which every college freshman knows, Mr. Carlisle has the appalling audacity to use the following language: "Natural causes have separated the two metals, and while it is possible that natural causes may hereafter change their present relations to each other, it is certain that these relations cannot be changed by artificial means."

It is difficult to speak with becoming moderation of such stuff as this; and it is really pathetic to see the dominant opinion of whole sections of the country taking its cue from men who assume superior airs and rebuke the presumption of thinking on the part of some millions of Americans, while they peddle such insufferable nonsense as this just quoted from Mr. Carlisle. "Natural causes" indeed, when we can turn to the statute books of half the world and put our fingers on the "artificial means" whereby the hoarders of gold have legislated demand into one metal and legislated it out of the other. Let once a wrong be achieved by artificial means, and instantly those who profit by it represent it as the inevitable decree of evolutional forces. "Natural causes," we are asked to believe, have made gold dear and silver cheap during a period when the cost of producing gold has been cheapened more than any other mechanical process; when both metals have continued on substantially their old relative planes of use in every respect save as money; when their relative production has been from three to twenty times less disproportionate than at any other similar period in the past four hundred years; and when in actual weight the stocks of coin and bullion available for coinage have risen from a proportion of thirty-two of silver to one of gold up to that of sixteen of silver to one of gold coincidently with a fall of the so-called market ratio from fifteen and one-half to one, when the mints were open to both, down to thirty-three to one when only the one can be freely coined. It is simply an incredible and impossible proposition.

Intrinsic value is as unthinkable as intrinsic distance. Both distance and value are relations. Neither can exist or be stated except by comparison. The value of a thing is what it is worth; and it is worth what it will bring. Value in exchange is the only value that political economy knows anything about; and what a given thing will exchange for depends on the ratio of the supply of it to the demand for it. A piece of money is worth what it will buy. Other things remaining the same, it will buy more when the stuff out of which it is made is plentiful, and less when that is scarce. The proposition of the bimetallists rests on only time-honored doctrines of political economy as justified by the experience of mankind. We desire to restore the parity of gold and silver by perfectly "natural causes" set in operation by "artificial means." We propose to invoke the law to equalize their opportunity and to make them interchangeably and indifferently responsive to the same money demand.

Space has not permitted reference to all the errors committed at this wonderful banquet, nor a complete discussion of even those cited. I have endeavored only to point out the most glaring ones in the hope that some persons inclined to accept, somewhat carelessly, the assumedly authoritative statements of these eminent men, may be led to study this great subject whose proper understanding and wise management are of such vast importance not only in American politics but in the progress of the race. For the cause of bimetallism must commend itself to the intellect and the conscience of the country or it cannot win. Those who have spent some time in an earnest and thoughtful investigation of the matter and are convinced that the success of silver coinage is the first step in a series of rational, safe, and necessary reforms, are ready to be judged as much by the reasonableness of their doctrine as by the sincerity of their motives. They intend from now on to force the fight. The enemy will be sought out and assailed wherever found. No pretentious claims of infallibility will be accorded immunity from criticism. No authority will be permitted to shelter folly. It is time to expose the preposterous assurance of the gold-standard pundits. Nonsense will be called nonsense whoever utters it, and, what is more, it will be proved to be nonsense.



DOES CREDIT ACT ON THE GENERAL LEVEL OF PRICES?

BY A. J. UTLEY.

It is conceded by all standard writers on political economy that the value of money—that is, its purchasing power—is fixed and regulated by the amount of money available for use.

John Stuart Mill says:

If the whole money in circulation was doubled prices would be doubled. If it was only increased one-fourth, prices would rise one-fourth. There would be one-fourth more money, all of which would be used to purchase goods of some description. When there had been time for the increased supply of money to reach all markets, or (according to conventional metaphor) to permeate all the channels of circulation, all prices would have risen one-fourth. But the general rise of price is independent of this diffusing process. Even if some prices were raised more, and others less, the average rise would be one-fourth. This is a necessary consequence of the fact that a fourth more money would have to be given for only the same quantity of goods. General price, therefore, in any such case would be one-fourth higher. The very same effect would be produced on prices if we suppose the goods diminished, instead of the money increased: and the contrary effect if the goods were increased, or the money diminished. If there were less money in the hands of the community, and the same amount of goods to be sold, less money altogether would be given for them, and they would be sold at lower prices; lower, too, in the precise ratio in which the money was diminished. So that the value of money, other things being the same, varies inversely as its quantity; every increase in quantity lowering the value, and every diminution raising it, in a ratio exactly equivalent.

This is known as the quantitative theory of money, and is recognized by Ricardo, Jevons, Macleod, John Locke, James Mill, John Stuart Mill, Senator John P. Jones, David Hume, William Huskisson, Sir James Graham, Prof. Torrens, Prof. Sidgwick, J. R. McCulloch, Mr. Gallatin, Prof. Fawcett, Prof. Perry, N. A. Nicholson, Earl Grey, Prof. Shield Nicholson, Lord Overstone, and, in fact, by all writers on political economy of any prominence since Adam Smith. Formerly it was supposed that the value of money depended upon the cost of production; that the reason why a dollar in gold or silver was worth 100 cents was because it took 100 cents' worth of labor to produce metal enough to make a dollar. This theory, however, has been abandoned by the best writers and speakers; in fact, by all economists of any standing, and it is now conceded that the cost of producing the metal has no influence on its money value, only as it may tend to increase or reduce the amount of money, and that it is the quantity of money, the number of units, available for use that determines and regulates its value; that is, if the quantity is increased its value will fall, and if the quantity is diminished its value will rise, and that it will fall or rise in value in a ratio exactly equivalent to the increase or diminution of the volume of money; and that if sufficiently reduced in volume, a dollar, whether stamped on gold, silver, or paper, would buy a plantation or pay a man for the labor of a lifetime. There can be no doubt as to the correctness of the quantitative theory of money.

John Stuart Mill says:

That an increase in the quantity of money raises prices, and a diminution lowers them, is the most elementary proposition in the theory of currency, and without it we have no key to any of the others.

Prices, however, are not fixed by the total amount of money in existence; only that part of the money that is available for use can act on prices.

Mr. Mill says:

Whatever may be the quantity of money in the country, only that part of it will affect prices which goes into the market of commodities and is there actually exchanged for goods of some description. Whatever increases this portion of the money in the country tends to raise prices. Money kept in reserve by individuals to meet contingencies which do not occur, does not act on prices. Money in the coffers of banks, or retained as a reserve, does not act on prices until drawn out to be expended for commodities.

It is also conceded that in fixing prices not only all the money actually available for use must be taken into consideration, but the rapidity of circulation must also be regarded; and due allowance must be made for the number of times commodities change hands before consumption.

The same dollar may, by passing from hand to hand, make a number of purchases, and the same goods may be sold repeatedly before consumption. It is, probably, correct to say, that the money available for use multiplied by the rapidity of circulation, or, as Mr. Mill expresses it, by its efficiency, equals the total money to be considered; and the commodities sold multiplied by the average number of sales equals the total commodities to be taken into consideration in fixing the general level of prices.

Are there any other elements that act on the general level of prices? Of course an abundant yield, or a short crop, or an over-production, so called, or under-consumption, of any particular commodity may depress or raise the price of that particular crop or commodity; but are there any elements other than those above enumerated that act on the general level of prices? I think there are none.