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mate effect of all invention, as I have attempted to prove in an essay on "The Distribution of Products," being to leave with the laborers an increasing share of an increasing product, and to leave to capital a decreasing share of an increasing product which may yet be consistent with an

and for bank reserves. Consumption is restricted, because the roads are bad and the time required to make the exchange is long. If a large quantity of gold is added to the quantity of coin, without being accompanied by other improvements, through the sudden opening of a mine in which the labor cost of procuring the gold is small, would not the only effect be a rise in prices, unless the coin could be exchanged for imports?

Second. Suppose, on the other hand, that no addition is made to the stock of gold, but that railways are substituted for common ways, with no improvement in the processes of production. Yet would there not be a great saving of time in making the exchanges, and would not this cause, less coin to be required? Would not a fall in prices of bulky commodities probably ensue, if this change were accompanied by a transfer of the coin which could be spared to foreign countries in exchange for something which had before been beyond the means of the community?

Third. Suppose a great reduction in the labor cost of production and of transportation were made at the same time, with no addition to the stock of coin, in such case would not increased consumption and activity ensue, the saving of time offsetting the increase of transactions, so that the old stock of coin might still suffice, and the end would be greater abundance and increased consumption at the same prices?

Fourth.-But now let us assume what seem to me the actual facts. Between 1850 and 1860 the modern railway and the modern steamship began to have their effect upon commerce. Agricultural machinery, improvement in steam engines and in the processes of manufacture began to have their effect on production-the electric telegraph came into use-and had the volume of the precious metals remained the same, a great reduction of prices might well have been expected growing out of the increased production and decreased cost of distribution and great saving of time. Such had been the effect of the last series of great inventions, such as the first application of steam, of the power loom, of the locomotive and the great development in iron mining and manufactures, without which England especially could not have sustained the wars of the first part of the century. But coincident with the changes in production between 1850 and 1860 came the vast addition of the precious metals at the lowest possible cost of production, and they more than counteracted the lessening cost of production of other commodities. As compared to 1845-50, prices steadily rose until the advance culminated between 1870–75. Increase of gold in circulation more than counterbalanced the increased production and wider distribution of other commodities. It will be observed that in such periods great fortunes are made, because the rise in wages is much more slow than the rise in prices, and wage-earners are the great consumers of the goods and wares from the sale of which fortunes are secured. The advantage which rising or high prices bring to wage-earners is that of continuous employment; otherwise they are a disadvantage to them. During the period from 1865 to 1875, however, another era of unusual invention and of great reduction in the labor cost of

absolute increase in the amount of capital saved. But in such vast changes the accumulation of property, i. e., capital, has borne the burden of the change. The recent period of depression has been the rich man's funeral, and not the poor man's. The recent period has been one in which capital has been reduced in its market value. i. e., in the price

all production took place, and again it would have been reasonable to expect a fall in prices; but, although the panic of 1873 had been severe, it did not result in a permanent fall-it caused a fluctuation only—the enormous mass of precious metal added between 1850 and 1870 had not worked out its full results. The excessive abundance of gold enabled Germany to substitute gold for silver, and in this way caused a depreciation of silver, the product of which was still increasing; the United States and Italy found abundance of gold for their purposes without causing a sign of scarcity anywhere, and such has been the stimulating effect on prices of the vast addition to the stock of gold at low cost of production that the effect of all these improvements, which would otherwise have immediately caused a decrease in the prices of grain, cotton, iron, copper, sugar, textiles-in short of every great staple except lumber-was deferred until 1882-3. This great and sudden excess of gold has now at last become disturbed; the production of gold is ample to provide for waste; there is no sign of a scarcity anywhere of gold, and there is still a small excess of silver, and at last the beneficent results of all the inventions to which I have referred are becoming apparent, from which we are now obtaining our vast abundance of food, fuel, metal and clothing, accompanied by a great reduction in rents, both of land devoted to agriculture and of city property, and we have at last the lower prices to which they entitle us. In such periods the owners of railways, factories, warehouses and works which have been constructed on a basis of high prices, must suffer; merchants and manufacturers who carry stocks of goods also suffer, and the small proportion of the working classes who are customarily employed in constructive enterprise find employment with difficulty. All the rest gain. Abundance and low prices are a permanent benefit-the great volume of the necessary traffic, which constitutes at least ninety per cent. of the whole, goes on its customary way, and, when the adjustment shall have been made, when constructive enterprise begins again and when general prosperity returns, every one will see what is now apparent to only a few; that such hard times as are produced by an abundant production at a decreasing cost, measured in terms of labor, are, in fact, the periods when the mass of the people are making the greatest progress in substantial welfare. Aside from the entirely abnormal conditions of war, I have myself witnessed the purely commercial crisis of 1857, the railway panic of 1873, the long period of depression and progress preceding the restoration of the specie standard in 1879, and the recent era of abundance and adjustment of prices which have been called "the hard times" between 1882 and 1885. Each of these periods has been one of the cure of a previous disease in the financial fabric and after the remedy has worked great prosperity has ensued; and the present era will, in my belief, very soon prove to have been one of the most wholesome processes, during which the foundations are being laid for rendering the struggle for life vastly easier than it has ever been before, and in which a very few will have suffered for a time, while the vast majority will have gained. Time would not suffice to analyze the beneficent effects of permanently low prices growing out of abundance, but if you have followed me closely you will observe that such low

at which it could be sold or exchanged, much more than labor. The price of wage of labor, taken in the aggregate, has been reduced much less than the price of capital. The purchasing power of wages has increased, while the income of capital has decreased. I believe we are now entering upon a new period, which will be a period of great progress and prosperity for rich and poor alike in this country upon this new foundation of more effective capital and more productive labor.

In this hasty sketch I have endeavored to present to you the importance of some of the suggestions which I have made for determining, first, the relative share which capital can secure from our present product; second, the relative share which enures to the laborer; third, the use to which the laborer may put his share, as indicated by the statistics of consumption. These problems present almost a new field to the statistician, and the application of these statistics by scientific methods may result in showing a way of saving force which will become a part of the common knowledge. What is this purpose, merely bread and butter? Far from it. When we have learned the way through labor to leisure, well earned and well used, we shall have established a moral basis for the material science to which we devote so much of our time and of our attention. Through effort and labor to knowledge, through the control which a knowledge of science may give over the forces of nature to leisure, and through leisure to welfare not only material, but also moral and spiritual, appears to be the method of evolution which the power that makes for righteousness has established as the law governing that portion of human life which is spent on this earth, while man dwells upon it in a material body.

Gentlemen, I have addressed you with a great sense of the responsibility which rests upon you. You are looked upon, to a certain extent, as the special spokesmen of laborers. It has been in their interest, as a distinct class, that your offices have been created, and that you have been charged with your duties. Yet for you to become parties in

prices are accompanied by correlatively high wages, the necessary consequence being a much more equitable and natural division of products between labor and capital, to the enduring advantage of the former.

In the periods of adjustment to a lower plane of prices and to lower wages, even if the wages of those whose employment is continuous are somewhat reduced, there may be real hardships and many more which are imaginary, both tending to widespread discontent. Most of these difficulties would be greatly alleviated if very sudden fluctuations could be avoided. Yet whatever may be the dangers and distress occurring in such periods, I am of the profound conviction that each adjustment to such lower and lower prices as are caused by an increasing abundance of products at a lessening cost, measured in terms of labor, is a step in material progress and to the lasting benefit of the working people of the country.

a supposed conflict between laborers and capitalists would be most disastrous to those whom you are assumed especially to represent. Nothing can be more important to the rights of labor than that laborers should respect the rights of capital, while the danger of the laborer consists in the greater measure in restrictive legislation than that of any other class. Capital can adjust itself to almost any conditions, and can even secure to itself a larger share of the smaller product which will inevitably ensue when free competition is restricted by statute laws; but the laborer who invokes the power of the law to deprive him of the liberty of contract, and who prevents the free working of competition by such restrictive statutes, must bear the greater share of the loss which will almost certainly ensue, even more than his relative proportion. In the last analysis the earnings of the laborer rest wholly upon his individual character, capacity and integrity, and any statute or legislative act which prevents him from disposing of his time, his skill, his work, or his money with absolute freedom, provided he does no injustice to his fellows, will be the gravest misfortune to which he can be subjected. I know of no position of trust or respon sibility which calls for higher quality of mind than the positions which you hold. No one knows better than the statistician what a snare statistics may become, nor how untrue may be the deductions from them if they are not complete, or if they are not used with judicial integrity and under the strictest sense of responsibility to truth.

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4th. Harsh and unneccessary conditions imposed on workingmen.

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