Charles Franklin Dunbar.

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work unduly modest. With his reserve went a quiet dignity which
was often mistaken for coldness. Even those who enjoyed his
closer acquaintance sometimes found him silent and uncommuni-
cative. But in intercourse with intimate friends this veil disap-
peared, and he became no less warm-hearted than charming. He
had a keen sense of humor, enjoyed alike to hear and to tell a
good story, and saw the mirthful side of every subject. These
attractive lighter qualities unfortunately showed themselves little
in his dealings with students. With classes of mixed undergradu-
ates he never was a highly successful teacher. He hesitated to
commit himself on those large questions, the most difficult to
answer, which arise in a survey of the subject as a whole, and he
was thus less effective and stimulating than one who was willing
rashly to plunge into the discussion of fundamentals. On the
other hand, he was an ideal teacher on the special topics to which
he confined himself in the later years of his life. He had a re-
markable gift of clear and well-ordered exposition, and a remark-
able command of apposite language. The rounded stateliness of
diction which marks his writings showed itself also in his lectures.
Here, with a moderate number of selected students, his sound
judgment, his judicial temper, his nice discrimination, his thorough
information, were fully appreciated. Those who had the privi-
lege of his instruction under these favorable conditions felt for
him a reverent admiration, and took from his lecture rooms noble


During the last ten years of his life Professor Dunbar's work was
much interrupted by ill-health and waning strength. It was probably
a sense of physical weakness that led to the slowness and hesitation
with which, notwithstanding years of experience in writing, he took
pen in hand for literary work. He had always to nerve himself to
this task ; though when once it was entered on, the result was invari-
ably happy and seemingly spontaneous. No doubt the same sense
of weakness was in some degree the cause of the scattering of his
energies, to which reference has already been made in this sketch.
He found it easier and more interesting to begin on new subjects
and follow new clews than to persist in bringing to a close investi-
gations already well advanced. And yet, all in all, in view of the
difficulties he had to surmount, the surprising thing is not that he
did so little, but that he should have succeeded in achieving so

The editing of the present volume has been in the hands of
Dr. O. M. W. Sprague, who was Professor Dunbar's assistant
during the last years of his activity as teacher. For those papers
which had already been published, Dr. Sprague's task was the
comparatively easy one of arranging them in proper order. But
for those which were left unpublished, especially the three chap-
ters on the history of banking in the United States, much remained
for him to do, in verifying and completing the references, and in
bringing the manuscript as nearly as possible into the form
which the author would have wished. All credit for the volume
as it stands belongs, after the lamented author, to Dr. Sprague.

F. W. Taussig.


The century which has elapsed since our independence was
declared exactly covers the period for which the science of politi-
cal economy has been a systematized branch of human learning
and research. Before the pubhcation of Adam Smith's " Wealth
of Nations" in 1776, we have, indeed, discussions of detached
topics, and even attempts here and there to throw the whole into
connected form ; but, after all, the economist finds the foundations
of the science, as it stands to-day, laid deep and solid for the first
time by Adam Smith ; the great men who have since carried for-
ward the work have declared themselves his followers, and in
developing and extending the science have kept to the lines of
discussion which he laid down with such vigor and insight a
century ago.

The science which is thus coeval with our nation has been
studied with zeal and with measurable success in most parts of
the world. New principles have been evolved, tested by the
abundant experience of modern industry, and added to the body
of ascertained truths. Unceasing discussion has enforced constant
revision of the whole work, with increase of firmness and consist-
ency as the issue of every threatened revolution. The field prop-
erly occupied by the science has been surveyed and its limits
determined, even to the disappointment of overambitious econo-
mists or of a too expectant public. No other moral science has
equally engaged the attention of public men, and no other, it is
safe to say, has equally influenced public affairs, whether by the
correct or the incorrect application of its principles. Nor has any
nation had the monopoly of honors gained in this new pursuit.
Adam Smith, Ricardo, and Mill have secured the leading position
for England ; but France and Germany, and perhaps Italy, have
made contributions of lasting importance to the subject, and

1 North American Review, January, 1876.


have never been without then- full proportion of active and
judicious investigators. Notwithstanding the priority of England
in some remarkable advances, the centre of interest in economic
discussion has not always rested with her; it has at times been
in France ; it is now, probably, in Germany. In short, the science
has been made a common possession by the efforts of all.

When we come to inquire what part our own country has taken,
and what contribution it has made in building up this science, we
are struck at the outset by the fact that the growth of the United
States has been a circumstance of prime importance in the eco-
nomic history of the world during the century. It must be placed
in the same rank with the brilliant succession of discoveries in the
industrial arts, or with the extensive improvement of government
and social organizations, as one of the half-dozen great influences
which have changed the face of the civilized world. Without
entering into the details of a comparison, to which every reader
is likely to have his attention sufficiently drawn during the present
year, we may here note a few of the facts which have given to the
development of this country so great an influence upon that of
the rest of the world. Beginning with the statement of mere
area, the organized states of the Union now occupy a territory larger
than the whole of Europe, outside of the Russian Empire. The
improved land of these states, measuring two hundred and ninety-
five thousand square miles in 1870, cannot be much less than the total
improved surface of England and Ireland, France and Prussia, to-
gether. Of this vast field of production, we may fairly say that the
whole has been brought into the circle of international exchanges
and added to the available resources of mankind within this cen-
tury, so insignificant were its relations with the rest of the world a
hundred years ago. Moreover, the products to which this territory
is adapted by nature are such as have a singularly direct and
important bearing on the welfare of other countries. How great
an industrial revolution has been wrought by cotton, and what the
nineteenth century would be without that fibre, of which we pro-
duce more than half of all that comes to the markets of Europe
and America, it would be hard to say ; but the memory of our Civil
War is still fresh enough to tell us what universal disaster must
follow the interruption of our supply, and what a chain of conse-
quences, involving the well-being, the peace, the institutions, and


even liberty of millions of men, have followed from the addition of
the cotton-plant to the agricultural products of the South. Of dif-
ferent but hardly inferior significance in the economy of the world
is our supply of gold. The astonishing expansion of industry and
commerce for which the close of the wars of Napoleon seems to
have given the signal, which has stimulated and been stimulated
by our growth, is one of the great phenomena in the history of
mankind. This expansion, however, must have been checked at
the most critical period, had not fresh discoveries of gold supplied
the enlarged medium of exchange required by the new scale of
transactions ; and of this series of discoveries, the second in impor-
tance in recorded history, California made one of the chief and
also the earliest. From that time the United States have con-
tinued to be the first in importance of the sources of gold; and
were this our only economic relation to the rest of the world, the
influence of our rise as a nation upon the general well-being must
be admitted to be direct and powerful in an extraordinary degree.
Tobacco, one of our earliest staples for export, has become not
only an article of great moment in the revenue systems of several
leading nations, but stands in a peculiar relation as one of the few
luxuries which enters largely into the consumption of the poorer
classes of all countries, thus requiring, as it were, a social impor-
tance far beyond its simple pecuniary value. And of tobacco, the
United States are now the leading source of supply for England,
France, and Germany. To turn from this to petroleum, one of our
newest staple articles of export, and now the third or fourth in
importance on our list, it may be doubted whether to the majority
even the ludicrous incidents of the discovery do not continue to be
more familiar than the reflection that by the timely introduction
of a cheap and excellent artificial light an immense boon was
conferred upon a large part of the civilized world. And last
among those economically important natural products to which
we shall refer are the cereals. Our capacity for the supply of
these, although of secondary importance in the markets of other
countries, has made it possible for us to sustain an increase
of population which, for years, has been cited as the standard
example of maximum natural growth. This abundance of cheap
food has also made it for our interest, simultaneously with this
rapid natural increase of numbers, to invite from the Old World


an immigration on a scale so vast as to constitute in itself an
economic phenomenon of no mean order, the result being the
relief of the older countries from a serious, if not dangerous,
pressure of numbers, by the transfer to our shores of more than
nine miUions of people, or a number equal to the whole population
of Great Britain at the date of our independence. And the popu-
lation thus established on our soil, whether native bo-n or of
immediate foreign extraction, has proved to be no inert mass, but,
from the start, has been active and resolute to a fault, in improving
all material advantages and in pushing its way to a place among
the great powers of the modern world. Mineral resources of
remarkable variety, and of extent not even yet fully measured,
together with fortunate conditions of physical geography, have
seconded these efforts and often enabled us to enter into sharp
competition with the longer established industries of Europe. To
excellent natural facilities for communication has been added a
railway system of seventy-five thousand miles, being little less than
half the railway mileage of the world, and going far to neutralize
the disadvantages of great distances, which, in some directions,
threatened to hamper our growth. A mercantile marine, which
even in its present depressed condition is not far short of the great-
est on the ocean, and is of nearly double the magnitude of its next
competitor, helps in part to connect this vast internal network
with the general commercial system of the world. So great, how-
ever, is the volume of our exchanges with other countries, that
scarcely one-third of it is transported by our own shipping. With
the mother-country, especially, our commerce has grown, until it
overshadows that of every other nation with whom she carries on
a trade either of export or of import. What a growth this has
been is shown by the fact that the steam-tonnage now annually
cleared for New York alone from the United Kingdom exceeds
the total tonnage of ships annually cleared for all parts of the
world down to the close of our Revolution.

In the process of development indicated by these few leading
facts, the United States, by a natural and steady though rapid
movement, have taken among commercial nations a place not
lower than the second, and likely soon to become the first, — the
second or first place it must be remembered, in a changed world,
and in a scale of magnitudes hardly comparable with those of


1776. We have advanced to the front among competitors who
were themselves all rapidly advancing. But, with improved facili-
ties for intercourse, the economic ties between countries have been
vastly multiplied and strengthened, and to hold a leading posi-
tion in commerce now implies a direct connection with the prog-
ress of others and with their material well-being, immeasurably
closer than has ever existed before. Every fresh conquest over
nature made by us belongs to the family of nations also, and every
loss suffered by us is also their loss. Infinite mutually dependent
interests unite us with Europe and with the very antipodes. Every
pulsation in the financial system is felt alike on each side of the
Atlantic. A crisis in London has its instant counterpart here, and
the great revulsions which periodically sweep over the commercial
world may begin, almost as chance may dictate, in New York or
in Vienna.

The value of the triumphs of material development achieved
by the United States is not to be underrated. They represent but
one side of human progress, but their influence on interests of a
higher order is immediate and powerful. The world cannot yet
dispense with the stimulus which the search for wealth gives to
some of the pursuits and institutions which most elevate and en-
noble civilized life. Doubtless Carlyle is right when he says that
" America's battle is yet to fight. . . . Their quantity of cotton,
dollars, industry, and resources I believe to be almost unspeak-
able ; but I can by no means worship the like of these." But
these have been one of the great factors in producing whatever
of progress and hope the world has gained in our age. If not to
be worshipped, they are still not to be despised, for from them
comes, as must be admitted, much that is itself worshipful. Even
our merely material growth may then fairly be a subject of pride,
so long as we remember that it is itself only the means for higher

Standing in this relation to the general advance in wealth
which the world has made, it might have been thought in advance
that the United States would be prompt in investigating the laws
which govern all economic progress. The philosopher who could
have foreseen in 1776 the amazing career of the weak and scantily
peopled colonies which then took their place as an independent
power, might easily have been persuaded that the new science.


then having its birth and treating of " the nature and causes of the
wealth of nations," would be taken up by this people with
especial animation and success. " Here," he might have said,
" is the beginning of an inquiry into the nature and causes of that
which will chiefly occupy the new nation. Others in their matur-
ity or decadence may prosecute this inquiry in the hope of dis-
covering the means of escape from impending evil ; this people
will pursue it with the enthusiasm of strengthening youth. Success
in this investigation and a wise application of its results will
account for the splendid triumphs in the acquisition of material
wealth, which are to distinguish the first century of independent
national life." How far the imagined anticipations of our philoso-
pher have been verified, and the reason for their failure so far as
they may be found to have failed, is the object of the review on
which we now enter.

The condition in which the breaking out of our Revolution
found the study of economic science in this country is well exem-
plified by the writings of Franklin. Of all our public men of that
period he was the one whom we should perhaps most naturally
expect to find dealing with this class of subjects, and, if not pro-
foundly investigating the causes of phenomena, at least deriving
from observation and reflection sound and consistent rules for
practical guidance. His activity in the political discussions of
more than half a century, and his natural fondness for every in-
quiry respecting material well-being, seem to mark him out as the
American who must deal with political economy if any one did,
and the one who could rise to the level of the national thought in
economic speculation, if he did not soar much beyond it. Frank-
lin wrote upon topics of this class from his twenty-third year, and
probably wrote as well in his twenty-third year as he ever did.
The questions of currency then raised in every colony by the
paper issues of the colonial governments he had occasion to treat
of at several different times. But the support which he gave to
issues of that kind rests on no well-defined systematic body of
opinions ; indeed, his discussion of the continental currency, in
some of his letters, raises questions as to his clearness of percep-
tion in morals as well as in political economy. He is quoted with
admiration by writers of the ])rotectionist school, and he might
equally well be quoted by their opponents. He was in fact a man


of expedients rather than principles, often sagacious in deahng
with immediately practical questions, but satisfied with the crudest
speculations as to the operation of causes in any way remote. His
economic writings were edited for Mr. Sparks's collection of his
works by the late Judge Phillips, himself an economist of no mean
capacity ; and the annotations of the editor afford ample evi-
dence that he found it no easy task to present with respectful
comment and due admiration the mass of ill-digested reasoning
placed in his hands. That Franklin read much of the writings
of others on questions of political economy is not to be inferred
from his works. Smith's " Wealth of Nations " is cited in a paper
on the increase of wages in Europe likely to be caused by the
American Revolution, written shortly after 1780, when Franklin
was abroad ; but the citation is made to settle a fact, and not to
further the discussion or elucidation of a principle.

Of Franklin then it must be said, that he not only did not
advance the growth of economic science, but that he seems not
even to have mastered it as it was already developed ; and little
more can be said for any of our public men or writers during the
period of Franklin's activity. We find no one well versed in
economic theory and entering upon speculative inquiries of real
value until we come to Alexander Hamilton. That great man,
whose remarkable career was finished at the point when most men
are just ready for action, was a reader and inquirer in political
economy in his twentieth year. In his twenty-fifth year, in such
leisure as the camp of the Revolution afforded, he matured a
scheme for a Bank of the United States, and became a corre-
spondent of Morris on that subject. And, finally, at the age of
thirty-four, he produced, as Secretary of the Treasury, his great
reports on the Public Credit, on a National Bank, and on Manu-
factures, the most powerful and comprehensive discussion of the
national finances ever made under our government, and the sub-
ject, it may be remembered, of one of Mr. Webster's noblest
periods. Those reports bear the evidence throughout of much
reading and reflection upon the experience of nations, and of
careful meditation on the speculations and theories of previous
writers. Examination of the report on Manufactures, in particu-
lar, will show that in some parts of it, in his selection of topics
and even in the order in which they are marshalled, Hamilton was


influenced by his familiarity with Adam Smith. The writings of
the French economists were probably known to him at this time,
as they certainly were a few years later, and some of the doctrines
of this school, as well as Smith's concessions to them, received
from him a successful refutation. Both the knowledge of eco-
nomic questions and the power of dealing with them exhibited
by Hamilton in these discussions warrant us in setting him down
as a writer who, under other conditions and freed from the press-
ure of public business, might have been expected to make some
positive contribution to the development of economic theory. But
his few crowded years left him little opportunity for such pursuits,
and it would now be hard to say that he left any impression
on the thought of the world, by his dealing with this subject.
His reports have continued to be the arsenal from which the
advocates of special measures have again and again drawn forth
weapons now well worn ; but systematic political economy cannot
be said to owe to him any recognized principle, any discovery in
method, or indeed any influence save the stimulus which his
example must always afford to the student of financial history.
If Hamilton did not permanently influence the economic
thought of the world, there is certainly no other statesman of
that period for whom such a distinction can be claimed. Among
Hamilton's great contemporaries none followed the discussions of
the new science with more interest than Jefferson and Madison ;
but neither of these statesmen was comparable to Hamilton in his
mastery of the subject. Jefferson had that fondness for it which
he had for all philosophical speculation, kept himself informed as
to all new publications abroad, was instrumental in bringing some
of these before the American public, and corresponded with some
of the leading French economists of his day ; but in his own dis-
cussions of economic questions it is difficult to find any firm
ground of logical principle, and impossible to find any addition to
what had been previously ascertained and better comprehended by
others. Madison, with interests less diffuse than Jefferson's, had
a much firmer hold upon this subject. He appears to have fol-
lowed its current literature with close attention, a^d to have
reflected upon principles and to have applied them, with great
although not uniform force, in his reasoning upon public ques-
tions. It is interesting to find Madison — and, indeed, Jefferson


also — giving in an early adhesion to the doctrines of Malthus on
population, and defending them by arguments from the experience
of the United States. But Madison could make as little pretension
as Jefferson to having added any results of original investigation
to the work of others. His merit was not as an economist, but as
a statesman who conscientiously prepared himself for the duties
of public life by following this necessary branch of a statesman's
studies. Of the other public men of this early period of our
history we need mention only Robert Morris and Gallatin ; and
of these eminent practical financiers the latter only has any claim
to notice in connection with scientific theory. The memorial
drawn up by him and presented to Congress, in 1832, from the
Philadelphia Convention in favor of tariff reform, is a full and
strong statement of the arguments against protection, and exhibits
familiarity with the results of theoretical discussion, as well as
with the practical side of the question ; but the complete oblivion
which now covers the document shows how narrow and temporary
is the influence to be credited to it. His pamphlet on " The
Currency and Banking System " is also a comprehensive and
sound discussion of these topics, but has ceased to be much
referred to, except for historical purposes.

Of the great m.en of the next generation, Mr. Calhoun was
doubtless well qualified by nature for this field of investigation,
and displayed a strong inclination to enter upon it; but, unhappily,
every mental power and every pursuit at last became subservient
with him to a narrow sectionahsm, which finally frustrated all hope
of sound fruit from a laborious life. The electric power with
which Mr. Clay acted upon the emotions of men was not coupled
with any special capacity for the research of principles ; and while
his name is inseparably connected with the " American system,"

Online LibraryCharles Franklin DunbarEconomic essays → online text (page 2 of 40)