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Seminary notes published by the Seminary of historical and political science online

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hour day is clearly recognized, and is
applicable to all classes and conditions ;
but, unfortunately, the word of promise
to the ear is broken to the sense by the
overwork proviso, which reduces the
arrangement to a mere matter of contract.
* * * 'pi^g same faint-hearted consid-
eration for the protection of the laborer
is met with in the laws of other states,
clearly showing that sentiment has been
in favor of the reduced hours, but that
second thought has made it a matter of
contract. * * * ^he demand for a
general eight-hour day is the newest feat-
ure of reform in labor arrangements. The
constitutional right of legislative bodies to
interpose between employers and employed
will scarcely be disputed, in the question
of hours, any more than in the questions
of health or morals. If the hours of work
cannot be regulated, neither can the con-
ditions for ventilation, health or bodily
safety against fire or accident. All fac-
tory or labor laws really hinge on the need
of protecting the humble and lowly against
the inhumanity or ignorance of their em-
ployers. This is the function of all legis-
latures, except where their powers are
expressly defined and limited." Since
June, 1890, nine hours have constituted a
day's work in Massachusetts, for all labor-
ers, workmen and mechanics in state and
municipal employ, and according to the
report of the Labor Bureau, the law is
observed. A summary of the Labor Re-
port for 1889 shows that in this state
(Massachusetts) ten hours is the normal
day's work in 82 per cent, of the manufac-
turing establishments. About one in four,
however, say that shorter hours are the
rule on Saturdays. Only one per cent, of
the entire number report the working-time
to be in excess of ten hours. In com-
menting on the effect which short hours
of labor would produce, the commissioner,
Mr. Wadlin, who has made a study of the
subject, says: "A current political econ-
omy has made the question of profits its
central idea, and has constantlv taught



that only as wages fell could profits rise.
A somewhat different economic theory is
possible. This rests upon the fact that
the mass of the people must always fur-
nish the market upon which the manufac-
turer depends for sales, and therefore for
profits ; if higher wages and shorter work-
ing time tend to raise the standard of
living among the workers, then they also
tend to increase the profits. Production
is only limited by the demand, and con-
sumption is limited by lack of employ-
ment and low wages. If employment,
although less per day, were continuous, or
if more persons were employed, although
for less time each day, the sum of wages
might be increased with a resultant in-
crease of consumption and consequently
of production, culminating in a gain both
in profits and wages."

In brief, our Kansas law provides that
eight hours shall constitute a legal day's
work for all laborers and mechanics, and,
in substance, for all other persons not paid
a regular stated salary, who are in any
way in public employ, and that the wages
paid shall be the same as are paid by pri-
vate employers for a full day's labor. The
reports received by the Bureau show that
1,428 persons are directly or indirectly
employed by the state, county and munici-
pal organizations ; but these are probably
not more than one-half the actual number,
which of course varies, depending largely
upon the amount of public work in prog-
ress in the several cities and counties ; but
this class of employee is at all times suffi-
ciently large to exercise a pronounced
influence upon surrounding labor, and to
form an important factor in regulating the
hours of the working-day. It is only of
late years that legislatures have ventured
to positively regulate the employment of
women and children in the interest of
public health and morality. The idea
that the parent was the natural guardian
of the child and that the law was power-
less to interfere, had prevailed from time
out of mind, and the right of any man to
sell his labor for as many consecutive



SEMINARY NOTES.



hours as he may choose, has never, until
very recent years, been seriously ques-
tioned ; and while it is conceded that the
struggle for shorter hours must be made
mainly by the working-people themselves.



the conviction that legislative action is
not only necessary but legitimate in ac-
complishing the result, is rapidly forcing
itself upon the public mind.

F. H. Betton.



THE RELATION OF POLITICAL ECONOMY TO DEMOCRATIC

GOVERNMENT.



' \y; FTER the formation of the constitu-
tion and its adoption as the funda-
mental law of the union, two great ques-
tions arose in American politics which
overshadowed all others, and upon these
public opinion remained divided up to the
period of the late war between the states.
Those questions related to slavery, and
the nature of the bond and relationship
existing between the states and the federal
union. Many other questions arose from
time to time, connected with the adminis-
tration of our domestic and foreign affairs,
but these were of comparatively transient
interest. They received a coloring and
bias from the two supreme questions indi-
cated, and they affected the current of
our national life and history chiefly
through their bearing upon these. All
other questions were subordinate, whether
they related to fiscal policies or tariff, to
the settlement of international complica-
tions, or the administration of our great
public land system, but these great ques-
tions were fundamental and vital, and
upon their true solution depended the
future solidarity and perpetuity of the
union. The question whether or not the
United States were a confederation merely
of consenting states, or a national repub-
lic welded together by the constitution
into a solid and indivisible unit, enlisted,
the loftiest eloquence of the statesman and
the most luminous judicial exposition, and
the country was steadily marching towards
its true solution when an outburst of war
put. an end to peaceful discussion, and set
at rest forever the two questions that had
vexed our national life.



The more elaborate system of taxation
which the exigencies of war forced upon
the country, has given rise to a new set of
questions of very grave import and of far
reaching consequences. These have rela-
tion to the nature of, and the extent to
which the power of taxation may be used
to foster and protect special interests. In
them are involved questions of justice and
expediency, rather than points of law. It
is contended, however, that the power of
federal taxation is subject to constitu-
tional limitations ; on the one side it is
held that the primary object should be to
raise necessary revenue for the objects of
government, and that whatever of protec-
tion results from a distribution of the bur-
den of taxation is incidental ; on the other
it is contended that the whole subject is
at large in the discretion of Congress, and
that that body is not limited either as to
the objects of taxation or its chief pur-
pose. There is no express limitation of
the power of taxation in the constitution,
and the argument for legal limitation upon
the exercise of the power must rest upon
such implications as arise out of consider-
ations connected with the primary purpose
of government by a democracy, and that
equality of rights and justice among all the
people which underlies the constitution.
It is no part of my purpose to discuss the
legal aspects of this matter, but to set
forth briefly several of the questions that
are upon us and the importance of a cor-
rect settlement of them.

These questions were somewhat sharply
defined in the platforms of the parties
which, at the late presidential election,



SEMINARY NOTES.



sought the suffrages of the people for their
respective nominees for president and
vice president of the United States. Those
which I have selected for consideration
relate to the tariff and the coinage.

The Democratic platform denounces
protection as the taxation of the great
majority for the benefit of the few. It
declares it to be a fundamental principle
that the federal government has no con-
stitutional power to impose and collect
tariff duties except for the purposes of
revenue only, and demands that the col-
lection of such taxes shall be limited to
the necessities of the government when
honestly and economically administered.
The platform further points to an array
of evils claimed to have arisen from a
pursuit of the opposite policy, chief among
which is a reduction instead of a promised
increase in the rate of wages of laboring
men, a depression in business, frequent
strikes in various branches of industry,
and the heavy and increasing burden
borne by agriculture consequent to the
restriction of foreign trade.

The Republican platform, on the other
hand, reaffirms the doctrine of protection,
and attributes the prosperous condition of
the country largely to the adoption of
that policy. It affirms the principle that
on all imports coming into competition
with the products of American labor there
should be levied duties equal to the differ-
ence between wages abroad and at home,
and it further asserts that the prices of
manufactured articles of general consump-
tion have been reduced under the opera-
tions of the tariff' act of 1890, a statement
which, if true, would indicate that its
operation had been contrary to the pur-
poses of its framers. The platform of the
People's party exhibits an appalling state-
ment of public evils, but attributes them
to other causes than the tariff. The Pro-
hibition party believes in a retaliatory
tariff] that is, if foreign governments tax
their people on their importations, we
should follow their example and tax ours
likewise. It will thus be seen that there



is a wide divergence of opinion among
the people in respect to governmental pol-
icy upon subjects of most grave and
immediate importance.

Upon the question of the currency, the
Democratic and Republican parties speak
the same voice. The Democratic plat-
form holds to the use of both gold and
silver as the standard money of the coun-
try, and to the coinage of both gold and
silver without discriminating against either
metal or charge for mintage, but the dol-
lar unit of coinage of both metals must be
of equal intrinsic and exchangeable values,
or be adjusted through international
agreement or by such safeguards of legis-
lation as shall, insure the maintenance of
the parity of the two metals and the equal
power of every dollar at all times in the
markets and in the payment of debts ; and
that all paper currency shall be kept at
par with and redeemable in such coin.
The Republican platform holds that "The
American people, from interest and tradi-
tion, favor bimetallisni and it demands the
use of both gold and silver as standard
money, Avith such restrictions and under
such provisions, as will secure the main-
tenance of the parity of values of the two
m.etals, so that the purchasing and debt
paying power of the dollar, whether of
silver, gold or paper, shall be at all times
equal. "

At first glance it would seem that this
agreement of the two great parties upon
the legislative policy to be pursued in
respect to the coinage and currency would
leave no element of uncertainty or ground
for contention. But as a matter of fact.
it settles nothing. It leaves every diffi-
culty connected with the subject unsolved.
So long as the coinage is made up of two
metals of diverse values there must be a
ratio fixed to express the unit of each.
At this point the men who framed and
supported the coincident propositions of
the platforms of the two great parties are
in conflict with each other and among
themselves. Yet this is the vital point.
Upon its determination depends whether



112



SEMINARY NOTES.



the exchange value of gold and silver dol-
lars shall be equal. It is contended on
the one hand that the intrinsic and ex-
changeable value of the dollar, whether
of gold or silver, is dependent upon the
market price of those metals, on the other
that the government stamp creates the
dollar, and that it is not a material con-
sideration whether the metal of which it
is composed is worth sixty cents or one
hundred, or whether the metal in the
silver dollar is equal in market value to
the metal in a gold dollar, that the
stamp of the government will equalize the
exchangeable value of the two metals
notwithstanding the wide difference at the
present ratio of coinage between the two.
This is an old superstition which, in spite
of reason and experience, still dominates
the minds of many persons.

All exchangeable commodities, includ-
ing gold and silver, are the products of
labor. In the long run, or speaking gen-
erally the exchange value of all commodi-
ties is determined by the cost of produc-
tion. By this it is not meant that every
man who expends labor upon the produc-
tion of any particular commodity is as-
sured of a price which will compensate
his outlay, nor yet that the like labor of
all men will meet with equal reward.
There are numberless circumstances that
tend to destroy, or rather render imposs-
ible, an equality of compensation for like
kinds and amounts of labor. Take for
example the labor expended in the raising
of grain, the amoimt of each producer's
profit depends upon the fertility and situ-
ation of his land, the amount of capital
invested in it, and the favbrableness or
unfavorableness of the season for growth
of crop and harvest. The compensation
derived from this line of production will
be as various as the diversity of condi-
tions and circumstances of the producer.
When at any time by reason of favoring
conditions the amount of wheat produced
exceeds the demand for it, the least favor-
able wheat lands will be turned to other
lines of production. And when the sur-



plus has disappeared and the price has
risen so as to compensate for the cost of
production on the poorer lands these will
be restored to that line of production.
When production is no longer profitable it
will cease, while increasing profits stimu-
late production, and by this means the
equilibrium between supply and demand
is irestored. The inequality in circum-
stances and conditions attending indus-
trial pursuits, the inability to apportion
production to demand so that no excess
will be left of one commodity over
another, leads to fluctuation in price or
exchangeable value, inflicting losses at
one time and affording unusual profit at
another. But the ultimate criterion or
regulator of exchangeable value is the
labor cost of commodities.

This is as true of gold and silver as of
anything else. If the exchangeable value
of these metals diminishes, that is, if it
requires a greater amount of the metal
than formerly to purchase the same num-
ber of shoes or amount of cloth, their
production will cease to be profitable
in the least productive mines, just the
same as the production of wheat must be
abandoned in the poorer fields when the
price is low, and production will diminish.
This process will go on until the equilib-
rium is restored between supply and
demand. Is it the duty of the govern-
ment to attempt to create or maintain
artificial prices for labor and capital
engaged in one line of industry rather than
another? There is only one way in which
it can accomplish this as to silver produc-
tion, viz., to prohibit all importations and
buy up most of the product of our own
mines. This last it has been doing for
several years, and for the past two years,
it has purchased and hoarded up half of
the annual product of the world, suffering
thereby an immense loss by reason of its
constantly diminishing price. If the pro-
duction of silver at present market prices
for that commodity was unprofitable, its
aggregate product would diminish. The
fact that it does not is proof that its



SEMINAR Y NO TES.



113



production is attended with fully, if not
more than, the average profit derived from
other industrial enterprises.

Philip I, King of France, mixed with the
livre tournois of Charlemagne one-third
alloy, imagining that since he held the
monopoly of the power of coining money
he could do what every merchant does
who holds the monopoly of a product.
As soon as the fraud was suspected his
money was reduced to its true value.
During the reigns of the Stuarts of Eng-
land the practice prevailed of clipping
and hammering the silver coins of the
realm. This was rendered possible with-
out easy detection by the defective method
of coinage. This debased coinage
sank in exchangeable value in even
greater proportion in many instances
than the amount of silver clipped from
them, from the element of uncertainty
surrounding them. All except the cred-
ulous accepted the coins by weight
and these were systematically robbed. In
the reign of William it was determined
that this debased coinage should be called
in and recoined. In that day there were
men who insisted that a shilling contain-
ing ninepence worth of metal would pass
as readily and for as much as a twelve
penny shilling. Macaulay thus describes
them: ^' Those politicians whose voice
was for delay gave less trouble than
another set of politicians, who were for a
general and immediate recoinage, but who
insisted that the new shilling should be
worth only ninepence or ninepence half-
penny. At the head of this party was
William Lowndes, Secretary of the Treas-
ury, and Member of Parliament for the
borough of Seaford, a most respectable
and industrious public servant, but much
more versed in the details of his office
than in the higher parts of political philo-
sophy. He was not in the least aware
that a piece of metal with the king's head
on it was a commodity of which the price
was governed by the same laws which
govern the price of a piece of metal fash-
ioned into a spoon or buckle, and that it



was no more in the power of parliament
to make the kingdom richer by calling a
crown a pound than to make the kingdom
larger by calling a furlong a mile. He
seriously believed, incredible as it may
seem, that if the ounce of silver were
divided into seven shillings instead of five,
foreign nations would sell us their wines
and silks for a smaller number of ounces.
He had a considerable following composed
partly of dull men who really believed
what he told them, and partly of shrewd
men who were perfectly willing to be
authorized by law to pay a hundred
pounds with eighty. " This was two hun-
dred years ago. Since then the world
has been flooded with arguments to illus-
trate and enforce the obvious truth stated
by Macaulay.

Yet to-day a majority of the senators
and a large number of the house of repre-
sentatives of the American congress stand
where William Lowndes stood two hun-
dred years ago. It requires constant
watchfulness and struggle on the part of
the enlightened part of the American con-
gress to prevent the credit, and business of
the country being swamped by the ideas
of William Lowndes. If you will take the
pains to follow the debates in those two
bodies upon economic questions of nation-
al importance and concern, you will dis-
cover that one-half the members believe
that the laws of the universe have no
application to the United States of
.\merica.

It is a familiar and constant claim on
the part of those who advocate unlimited
coinage of silver, with the restoration of
full legal tender quality, that the decline
in the market price of that metal is due
to its demonetization by the United States
and the nations of Europe. Doubtless
this has in a measure contributed to that
result, but to what extent it is impossible
to say. But the primary cause of demon-
etization was the too rapid increase in the
volume of silver and the decline in its ex-
changeable value. The annual product
having more than doubled within recent



114



SEMINARY NOTES.



years over former periods, that commod-
ity began to experience the influence of
the same law that determines the ex-
changeable value of all other products of
human labor. If a man produces twenty
bushels of wheat when ten will suffice for
the demand, the twenty bushels would sell
for less than ten if ten only had been
produced.

A recent and famous illustration of the
operation of this economic law is furnished
us in the beef and cattle trade. Twenty
years ago the butchering and meat pack-
ing business began to be organized upon
a large scale. Great packing establish-
ments were organized in several commer-
cial centers, and facilities were provided
for economizing in a most remarkable
manner the processes of preparing meats
for consumption. Simultaneous with this,
and as one of its attendant facilities, ar-
rangements were made by transportation
companies to give this meat product a
wide distribution over the country, and to
countries beyond the seas, by means of
cars and ships constructed with cooling
compartments. The effect of this was
soon felt in cheapening meats for con-
sumption and increasing the demand.
This greatly and rapidly augmented the
demand for beef cattle and their price
rose rapidly and the breeding and pre-
paration of live stock for market became
extremely profitable. This soon became
a favorite business and very large amounts
of additional capital and labor Avere de-
termined by the unusual profits attending
the business, into that line of production.
With careful breeding and preservation of
herds live stock multiplied with amazing
rapidity, and in a few years the great
plains to the west of us were swarming
with vast herds where not a hoof had
been seen before. These as fast as they
became fit were thrown upon the market.
The herds continued to increase and the
number carried to the slaughter house
increased likewise. This continued until
the demand for fresh beef at the old
prices was more than sujjplied and the



price declined. The declining tendency
continued in proportion to the excess of
supply over demand at the last price, until
the cattle raisers were annihilated with
the superabundance of their own wealth.
What had actually occurred was this, the
cattle raisers had produced an excess of
beef over that proportion of all other
commodities which was available for ex-
change for beef. This excess could only
be disposed of by accepting in exchange
for beef a less amount in quantity or value
of other commodities than before, and
this is effected by what is termed lowering
the price. The distress and disaster that
overtook the cattle men was of so dire a
character as to strongly attract public at-
tention, and congressional and legislative
committees were appointed to inquire into
and report upon the causes of these low
prices for live stock with a view to legis-
lation to arrest this destructive tendency
towards a great industrial interest. It was
boldly proclaimed by these wise men upon
the floor of congress and the state legisla-
tures that the low ruling price of beef
cattle all over the world was due to the
wicked conspiracy of four American
butchers, who were called by way of
distinction "the big four." It was con-
fidently and gravely announced that "the
big four" had cornered and were ruthless-
ly dominating the price of the meat pro-
ducts of the civilized world. These
committees investigated, but whether their
inquiry increased their knowledge on the
subject was never revealed. Many ruined
cattlemen still think that they were the
victims of "the big four," but science
teaches that they were tossed upon the
horns of too many Texas cows. At the
present time the rate or price of beef
cattle is advancing. What has taken
place to bring this about is the increase
in quantity of other commodities and a
decrease in the excess of beef in its rela-
tion or ])roportion to those other com-
modities.

The production of silver is undergoing
the like process of degeneration with less



SEMINARY NOTES.



"S



chance of recovery, since the cattle were
consumed, but the stock of silver still
remains, and each added increment of
production swells the volume. It must
not be supposed that the act of 1873
demonetizing silver arrested the coinage
of that metal. For the eight years suc-
ceeding the passage of that act the silver
coinage of the United States exceeded by
$6,619,385 the total silver coinage of the
country up to that period. Subsequently
the government has vastly increased its
purchases of silver making that metal the



Online LibraryKansas. UniversitySeminary notes published by the Seminary of historical and political science → online text (page 52 of 62)