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THE POPULAR SCIENCE MONTHLY 



found convenient in keeping accounts, and 

 has no analogue in the accumulations of a 

 community. The word capital, as used by 

 Prof. Price and economists generally, means 

 the nation's accumulated stock of food, 

 clothing, and the other necessaries of life. 

 So long as these commodities remain uncon- 

 sumed, they are called free capital ; when 

 they are employed to sustain laborers en- 

 gaged in building a warehouse, a bridge, or 

 a railway, the capital is said to become 

 " fixed," or sunk in such enterprise. If the 

 investment is a paying one, returning the 

 cost with interest, the capital is in time 

 released ; if it loses money, ultimately be- 

 coming worthless, then the capital is fixed 

 forever, or lost. And the true cost of these 

 works to the community is correctly ex- 

 pressed by the price paid for them, Mr. 

 Bunco to the contrary notwithstanding ; 

 for, traced to its ultimate source, the cost 

 of the material used is simply the amount 

 of labor that has been put upon it. Of the 

 vast amount of labor which has been so 

 misapplied, not one stroke can be consid- 

 ered as " released energy labor not other- 

 wise required." It was labor that was 

 needed elsewhere, as is plainly proved, if 

 proof were needed, by the sharp competi- 

 tion and high wages paid for it. But the 

 assertion that there is no labor that could 

 not be put to better use than to throw it 

 away, needs no proof. "But," he asks, 

 triumphantly, " how is it if the savings of 

 a country have been impaired that capital, 

 at the same moment, should be seeking in- 

 vestment at any rate of interest, that all 

 financial circles are choked with an excess 

 of money ? " 



" When / use a word," said Humpty 

 Dumpty, scornfully, to Alice in Wonder- 

 land, "it means just what I choose it to 

 mean, neither more nor less." It is only by 

 attributing a similar mental attitude to Mr. 

 Bunco that tlie confusion of terms which 

 marks his article is to be explained. Cap- 

 ital has been already defined ; money, it 

 may be simply said, is a measure of value, 

 a medium, a commodity, at times a tran- 

 sient representative for capital, when there 

 is capital to represent, but either may ex- 

 ist without the other. The reader will 

 excuse these elementary definitions, as they 

 seem to be called for. Savings, capital, 

 money, it is hardly necessary to say, are 

 not convertible terms; and it requires no 

 profound reasoning to show that idle 

 " money " undoubtedly the immediate re- 

 sult of lessened trade may find its ulti- 

 mate cause in impaired savings. It is be- 

 cause savings have been impaired that 

 economy and retrenchment are enforced ; it 

 is because people cannot save, and at the 

 same time go on consuming high-priced 

 commodities with the old recklessness, that 

 prices fall and trade operations become re- 



stricted and less profitable ; it is because 

 commerce no longer offers high-paying in- 

 vestments, that money accumulates in busi- 

 ness centres, and is offered, like other com- 

 modities, at low prices. And in view of 

 the fact that it is the cost and not the amount 

 of production that needs to be lowered in 

 order to renew the activities of trade, this 

 is a most cheering sign. 



As has been said, the cause of our trou- 

 ble, as assigned by Mr. Bunco, is over-pro- 

 duction. That is to say, too much labor 

 has been usefully employed, too much ma- 

 chinery has been put in motion, too much 

 cotton has been spun, too much leather 

 made in short, not to particularize, the 

 wants of the people have been too freely 

 supplied. The economist will, of course, ad- 

 mit, as Mr. Bunco says, that there may be 

 over-production of certain things, but the 

 ill efl'ects resulting from undue production 

 of certain things would be partial and local- 

 ized, and would tend rapidly to correct 

 themselves. Nothing short of general over- 

 production would account for general de- 

 pression. And so we are brought face to 

 face with the proposition that there is an 

 unhealthy excess of industrial energy in the 

 world, and that it produces more of the 

 necessaries of life than the workers can 

 profitably assimilate ! 



A few words as to the proposed remedy. 

 Of course, if it be admitted that over-pro- 

 duction is the cause, the cure is obvious : 

 it is to check production, and Mr. Bunco 

 does not hesitate to recommend a coopera- 

 tion of producers for that purpose. The 

 adjustment of industrial activity cannot be 

 left to natural laws, but combinations must 

 be formed which shall see to it that the 

 forge-fires are not relit, and that the id!c 

 operative shall remain idle. With millions 

 of laborers waiting for work, this seems like 

 heroic treatment, but there is no way to 

 limit production but to limit the amount of 

 labor employed. And now we begin to see 

 how " peculiarly erroneous " have been the 

 commonly accepted views. The man who 

 makes two blades of grass grow where one 

 grew before ; the inventor who, by machin- 

 ery, increases and cheapens the aggregate 

 of things made ; the industrious and frugal 

 operative, who works long hours and saves 

 his earnings have hitherto been regarded 

 as useful members of society. But this is 

 all wrong; the "tramp " is your true con- 

 servator of public welfare. He takes a 

 sliare in that destruction which leads to 

 abundance, and he at least cannot be 

 charged with contributing to the evil of 

 over-production. 



Regarding the example of France, Prof. 

 Price attributes the successful payment of 

 the indemnity to the fact that France had 

 " saved " accumulated. It would perhaps 

 have been better to sav it was because she 



