ONE PER CENT. 



81 



innocent of mischief; it may do no good, but it 

 does not impoverish. But what are savings ? 

 The surplus of wealth made over wealth con- 

 sumed. If it is turned into capital and applied 

 to increased production, the nation becomes rich- 

 er ; if it is expended on any luxury or any folly, 

 the nation is where it was. But if the outlay, 

 however wise and ultimately profitable, once 

 passes the limits of saving, harm instantly begins. 

 There arises a loss of wealth which is taken from 

 capital ; the means of producing are diminished ; 

 fewer goods are made. There is less for mer- 

 chants, with their ships and their railway-wagons, 

 to exchange ; there is less to divide among the 

 people, poverty has actually set in, and it may 

 easily advance to stagnation and distress. A 

 rich man with £50,000 a year may spend £10,000 

 on fox-hounds, or game-keepers, or race-horses, 

 or on servants, without lessening the national 

 wealth ; but, if he applies £100,000 to the im- 

 provement of his estate, with the certainty of 

 great benefit to the whole neighborhood later, if 

 he cannot borrow, he inevitably falls into trouble 

 and real poverty. What such a man might do, 

 America has done with railway-making ; and she 

 has not recovered from the consequent prostra- 

 tion to this hour. The departing emigrants, the 

 depressed wages, the lowered profits, the smaller 

 trains, all proclaim that there is less wealth in 

 the country, less to divide among its inhabitants. 

 That particular kind of over-consumption of 

 wealth which consists in excessive investments in 

 fixed capital generates effects which greatly ag- 

 gravate the commercial disorder and the subse- 

 quent distress. The construction of railways or 

 docks beyond what the savings of the country 

 can afford creates consequences of an infinitely 

 wider range and deeper mischief than would re- 

 sult from a loan to a foreign country of the same 

 amount as the cost of these works. A nation 

 living beyond its means, even when a useful end, 

 and not mere enjoyment, is the object, exhibits 

 many of the qualities of the spendthrift. It bub- 

 bles up with excitement. The large number of 

 orders given for coals and iron raises prices, 

 sends up wages, and enlarges profits. Imagina- 

 tive estimates are spread of the expanding pros- 

 perity of these trades, as well as of the many 

 others which are associated with them. Iron- 

 mines are opened at heavier expense than what 

 the actual demand for coal and iron justifies, 

 thus increasing the destruction of capital. The 

 retail, the shipping, and other trades, feel the 

 stimulus ; buildings are raised, steamers and 

 shops are constructed, costly establishments are 

 6 



formed, each in its turn setting other business 

 in motion. Every one prospers, and every one 

 makes arrangements, at further expense of cap- 

 ital, for still greater prosperity. Thus, new rail- 

 ways, costing ten millions, generate an excite- 

 ment which may easily raise the outlay to twenty. 

 So stimulating are high prices and high profits, 

 so creative of more factories and workshops to 

 swell them further. The collapse becomes all 

 the severer — with the special disaster that this 

 increase of outlay is a pure waste, a child of 

 wild hopes. 



Nor does the mischief stop even here. Along 

 with these cheery feelings and high prices, per- 

 sonal consumption rapidly expands. Employers 

 and workmen alike indulge in more expensive 

 living, and this impulse, acting on numbers, 

 swells the waste to a still more formidable 

 amount. 



What occurred in America occurred else- 

 where. We now pass on to Germany. Here 

 we find the circumstances different, but the sub- 

 stance of the facts the same. Germany became 

 engaged in a gigantic war with France. In these 

 modern days, the cost of armies and of their 

 armaments is enormous, far exceeding that of 

 preceding ages. Immense numbers of troops 

 took the field, and their maintenancf alone cre- 

 ated a vast consumption of wealth, without any 

 return for it in the shape of fresh wealth. Men 

 were carried from their labor in the fields and 

 factories in huge hosts, paralyzing domestic in- 

 dustry, and devouring the existing stock of the 

 national wealth. No more rapidly impoverish- 

 ing process can be conceived than such a war. 

 That commercial distress should follow such de- 

 struction can create no surprise. Suffering and 

 impoverishment are the natural offspring of war. 

 But did not the indemnity make all right for 

 Germany ? Two hundred and twenty millions of 

 English pounds might seem enough to lift any 

 people to the summit of prosperity. But it is 

 not sums of money which enrich and bestow wel- 

 fare and happiness, but what is done with them. 

 A large portion of this money was applied to the 

 making of fortifications and to other military 

 works. No improvement of their condition, no 

 relief to their distress, was got out of that by 

 the nation. On the contrary, such an applica- 

 tion of the French gold made matters distinctly 

 worse for Germany. German labor, and German 

 food and clothing, were taken away from that 

 production of wealth which would have brought 

 better times, and were applied to the piling up 

 of military stores in a very unproductive way. 



