OVER-CONSUMPTION OR OVER-PRODUCTION ? 307 



Cent." ' is eminently readable ; the professor knows how to give lit- 

 erary grace and vivid interest to a theme commonly considered 

 u (jj.y . >> \^ jg further true that anything he may utter on the topic is 

 entitled to great respect and. consideration. At the same time there 

 is no reputation so exalted that the assertions and arguments made 

 public under its sanction should not be and may not be examined and 

 tested. Now, to our mind Prof. Price is often logically wrong in his 

 essay referred to ; we can but think that many of the reasons he as- 

 signs for the great business depression which now prevails in Amer- 

 ica, England, and Germany are fallacious and misleading, and, with 

 all modesty, it is our present purpose to give the reasons why. 



The title of" One per Cent." is given to Prof. Price's article be- 

 cause one per cent, has been for some time the ruling rate of discount 

 in the London money-market (just as from two to three per cent, has 

 been for many months the quotation for call loans in Wall Street), 

 funds in the hands of bankers being in excess of the needs of borrow- 

 ers and traders. Trade is curtailed, production restricted, stagnation 

 is evident in every branch of industry, and this general paralysis 

 causes in the financial centres such a flow of money that it is offered 

 to loan at an almost nominal discount. 



The cause of this wide-spread depression, according to Prof. Price, 

 is one, and one only " over-spending, over-consuming, destroying 

 more wealth than is produced. This," he says, " is the real fons 

 mail, the root of all the disorder and the suffering, the creator of the 

 inevitable sequence of cause and effect. Men have acted as a man 

 who farmed his own land and had consumed not only the portion of 

 the crops which were his true income . . . but had himself and his 

 dependents devoured a portion of the seed-corn and the breeding- 

 stock, had exchanged a portion of the produce which was required 

 for wages in the coming year for foreign luxuries, or had consumed 

 these necessary reserves on an excess of drainage, however valuable 

 in itself and ultimately enriching." 



This is the core of Prof. Price's argument. The prostration of 

 trade has arisen from extravagance, he repeatedly declares. " The 

 commercial depression, so long, so monotonous, so heavy, and so dull, 

 came from the excessive consumption of English capital in unwar- 

 ranted constructions beyond savings, and unwarranted expenditure in 

 living by all classes, which destroyed wealth without repairing it 

 with new productions." 



But elsewhere he says : "Up to the extent of the savings of the 

 nation, expenditure on railways can do no economical or financial 

 harm ; and these invaluable developers of wealth may on such a basis 

 be rationally acquired for the public good. Any outlay made out of 

 savings, be what it may, is innocent of mischief; it may do no good, 



1 Contemporary Review, London, and reprinted here in The Popular Science Month- 

 ly SCPPLEMENT, No. 1. 



